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					        actuarial
         studies
        Undergraduate Information




                       financial
                   mathematics
             actuarial modelling
             actuarial statistics
          models for insurance
                   and finance

Bachelor of Commerce
                        Actuarial Studies   a
         www.bcom.unimelb.edu.au
Contents
What is actuarial studies?                   1    Bachelor of Commerce graduate pathways 6
Majoring in actuarial studies                2      Honours                                           6
 Specialist areas                            2      Careers                                           7
 Double majors                               3      Professional accreditation                        7
 Sample course plan                          3      Graduate study in actuarial studies               7
Focus on first year actuarial studies        5    Breadth in actuarial studies                        8




                                                                      “Actuarial studies at the University of Melbourne is
                                                                   well recognised throughout the world by international
                                                                   standards for Actuaries and by employers. I knew that
                                                               studying this degree at the University of Melbourne would
                                                                  well equip me with the knowledge and skills to fuel my
                                                                   career ambition as an Actuary or in the finance sector.
                                                                           The course offers a wide range of opportunities
                                                                     including competitions that add value to our learning
                                                                      and opportunities to liaise with other similar minded
                                                                  individuals both locally and globally. Being part of U21,
                                                                  the University can support and promote its students to
                                                                  follow their ambitions of studying overseas and gaining
                                                                        industry exposure to enhance their future careers.
                                                                       I have been able to embrace the university culture
                                                                           and the graduate attributes such as academic
                                                                     excellence, knowledge across disciplines, leaders in
                                                                           communities and being active global citizens.”
                                                                                                        Dinuka Jayasuriya
                                                                    Dinuka is currently undertaking a Bachelor of Commerce,
                                                                             majoring in actuarial studies. He is also currently
                                                                           working as a Business Banking Associate at NAB




The Melbourne Model
The Melbourne Model aims to produce graduates who are suited to the challenges of changing workplaces
in the twenty-first century and equip them with a range of abilities to enable them to engage with local and
global communities. The Melbourne Model is based on a core undergraduate degree, leading to one of
three post-degree options: a career, a graduate professional degree, or a research higher degree. Under the
Melbourne Model, students undertaking a New Generation undergraduate degree specialise by completing
a major in a specific discipline (depth), and gain knowledge across disciplines by taking subjects from outside
their core program (breadth).
What is actuarial studies?
The work of an actuary involves the assessment, evaluation and management of the financial risks
faced by individuals, companies and governments as they plan for the future. These risks vary
from an illness, disability or death to the effects of a cyclone, earthquake or major economic or
social change. The actuary’s work is based upon a multi-disciplinary background of mathematics,
statistics, demography, finance and economics.
As a result of this multi-disciplinary       Five reasons to choose actuarial studies at Melbourne
background and their strong analytical
skills, actuaries serve as financial         1. Teaching excellence                     3. Professional accreditation
advisers to a wide range of commercial         The Centre is committed to the highest     The University of Melbourne is one
organisations including life, general          standards of teaching. You will be         of only four universities in Australia to
and health insurance companies,                taught by experts in their fields. The     be fully accredited by the Australian
superannuation funds, banks, other             approach to teaching balances the          actuarial profession. As such, our
financial institutions and governments.        theoretical and practical aspects          students are on a fast track to a
In most cases they are asked to tackle a       (one does not go without the other).       professional actuarial qualification.
wide range of problems, most of which          We devote significant resources to
involve some uncertainty about the future.     teaching, for instance: all material     4. Strong industry links
                                               online, qualified tutors and small         Staff bring a wealth of industry
                                               tutorial groups.                           experience to the program. Additionally,
                                                                                          leading practitioners contribute to the
                                             2. Research excellence                       teaching of the program, exposing
                                               The Centre is a leading international      students to the latest developments
                                               research group. Our teaching is            in their fields.
                                               research led so that our students
                                               are exposed to current developments      5. Active Students’ Society
                                               in the field.                              The Actuarial Students’ Society
                                                                                          provides support to students and
                                                                                          encouragement to enjoy university
                                                                                          life outside of studies.




   “Choosing the Bachelor of
   Commerce at the University of
   Melbourne was the best decision
   I could have made. I enjoy
   every moment of my studies,
   have made many friendships
   among my classmates, and am
   confident the skills I’ve developed
   in my degree will be useful and
   relevant to my employment upon
   graduation.”
   Shona Wills
   Shona completed the Bachelor of
   Commerce (Honours) in 2009. She
   majored in actuarial studies and
   commenced a graduate position
   with McKinsey & Company in 2010.
   Shona was a Melbourne National
   Scholar and went on to receive the
   Commerce Honours Scholarship as
   well as the Goldman Sachs JBWere
   Final Year Scholarship.




                                                                                                                     Actuarial Studies   1
    Majoring in actuarial studies
    Students who complete a major in actuarial studies will have a firm grounding in the traditional
    actuarial skill set of probability and statistics, financial mathematics, and life insurance mathematics.
    Specialist areas
    Financial mathematics                      Life insurance mathematics                  Actuarial statistics
    Studies in financial mathematics cover     Studies in life insurance mathematics       The analysis of actuarial statistics is
    the basics of the theory of interest,      involve building probability models of      important in all areas of actuarial work,
    investment mathematics and stochastic      human mortality and morbidity, and          perhaps most so in the field of general
    models for asset returns. These skills     combining these with a financial model      insurance. General insurance refers to
    are relevant to all actuaries and have     in order to price and reserve for life      any type of insurance that is not
    wide applicability throughout the          insurance policies. This is called the      insurance on a human life and includes
    financial sector.                          “valuation” of insurance policies, and      common forms of insurance such as
                                               is performed by all actuaries working       motor vehicle insurance. Actuaries
     First year    Introduction to Actuarial   in life insurance. It is also important     calculate quantities such as premiums
                   Studies                     in superannuation, in which case the        and the appropriate level of no claims
                                               valuation is often undertaken by firms      discount for different types of general
     Second year Financial Mathematics I       of consulting actuaries.                    insurance. Actuaries working in general
                 Financial Mathematics II                                                  insurance are usually employed either
                 Probability                    First year     Introduction to Actuarial   by general insurance companies or
                 Statistics                                    Studies                     by firms of consulting actuaries.

     Third year    Financial Mathematics III    Second year Financial Mathematics I         First year      Introduction to Actuarial
                   Models for Insurance                     Financial Mathematics II                        Studies
                   and Finance                              Probability
                                                                                            Second year Financial Mathematics I
                                                            Statistics
     plus advanced study at honours level                                                               Financial Mathematics II
                                                Third year     Actuarial Modelling I                    Probability
                                                               Contingencies                            Statistics
                                                               (double subject)
                                                                                            Third year      Actuarial Modelling II
                                                                                                            Actuarial Statistics
                                                                                            plus advanced study at honours level




2   Bachelor of Commerce
     “The Bachelor of Commerce has definitely
     enhanced my ability to think analytically and
     numerically. On top of this, it has enhanced
     my ability to think critically and to question
     everything in life. I’m sure these indispensable
     life skills have equipped me well for wherever
     my career takes me.”
     Zezan Tam
     Zezan completed a Bachelor of Commerce
     with a major in actuarial studies. He served
     as President of the Actuarial Student Society
     and was part of the winning team in the Citi
     International Case Competition. He has been
     offered a place as a Management Consultant
     at the Boston Consulting Group.




Double majors
Students choosing the actuarial major with the intention of pursuing full professional accreditation cannot complete a double major
in the Bachelor of Commerce.

Sample course plan
 YeAR 1

                           Introductory                 Accounting Reports               Accelerated
 Semester 1                                                                                                     Commerce elective
                         Microeconomics                    and Analysis                 Mathematics 1

                           Introductory               Accounting Transactions            Accelerated               Introduction to
 Semester 2
                         Macroeconomics                    and Analysis                 Mathematics 2             Actuarial Studies

 YeAR 2
                          Organisational
 Semester 1                                                 Probability             Financial Mathematics I      Business Finance
                            Behaviour
                          Intermediate                                                                            Breadth subject
 Semester 2                                                  Statistics             Financial Mathematics II
                         Macroeconomics                                                                             (non-maths)

 YeAR 3
                                                                                                                  Breadth subject
 Semester 1          Actuarial Modelling I             Actuarial Modelling II       Financial Mathematics III
                                                                                                                    (non-maths)

                                                                                                                Models for Insurance
 Semester 2                    Contingencies (double subject)                          Actuarial Statistics
                                                                                                                   and Finance

   Compulsory subjects           Actuarial subjects           Accounting subjects          Finance subjects         Breadth subjects

Commerce elective subjects


The above example shows how you can major in actuarial studies, meet honours entry and professional accreditation requirements.
Students pursuing accreditation in actuarial studies (defined as those students who successfully complete Actuarial Modelling I) are
not required to complete at least 75 breadth points (six subjects). However they must take at least 75 points outside the core program
including two mathematics subjects, probability and statistics.
Each subject is usually worth 12.5 points.


                                                                                                                         Actuarial Studies   3
                                “The Melbourne BCom is the only degree
                            available in Victoria that is fully accredited by
                             the Institute of Actuaries of Australia, and is
                            ranked as having the best university actuarial
                                  studies program in Australia. I never had
                                  a single reason to even consider another
                           university. Pursuing actuarial studies has been
                                 a thoroughly challenging and invigorating
                                     experience. Some of the mathematics
                               behind the models presented is incredible
                             – it is exciting to know that I am learning the
                                 frameworks which real companies use to
                                    assess their investment opportunities.”
                                                               Ben Burger
                                  Ben completed the Bachelor of Commerce
                              (Honours) in actuarial studies. He now works at
                                Taylor Fry Consulting Actuaries in Melbourne.




4   Bachelor of Commerce
  The Basement Lecture Theatre
  in the new Business and
  Economics building




Focus on first year actuarial studies
Subject name: Introduction to Actuarial Studies

Contact hours                               In actuarial practice, you are given        Skills developed
3 hours per week, comprising 2 lectures     a broad overview of the main areas          You will develop your mathematical
and one tutorial                            of actuarial practice and the problems      modelling skills and learn the techniques
                                            faced by actuaries working in these         required to price basic financial contracts.
Topics covered                              areas. You will be exposed to real          You will also develop an awareness
The subject provides an introduction        insurance and superannuation products       of the environment in which actuaries
to four main areas of study: financial      and will be able to perform calculations.   operate and of the problems they face.
mathematics, demography (the study          For example, from information given
of populations), actuarial practice, and    on the UniSuper website (UniSuper is        Assessment
the valuation of contingent payments.       the superannuation fund for Australian      The subject is assessed by a mid-
                                            university staff), you can work out the     semester test (10%), an end of semester
In financial mathematics, you will          amount of superannuation benefits a         exam (70%) and two assignments
learn about compound interest and           person would receive on leaving the         (10% each). The assignments are usually
how to place a value on payments to         superannuation fund.                        computer based and are designed to
be made in the future – for example,                                                    test skills that cannot be examined in
how much money do we require now            In contingent payments, you combine
                                            ideas from financial mathematics,           a traditional examination.
to make a payment of $1 million five
years from now?                             demography and probability theory to        Please check the Course and Subject
                                            place a value on a payment, or set of       Handbook to confirm subject details.
In demography, you will learn about         payments, to be made in the future.
human populations and the key               For example, if a person retired from       Teaching methods
factors of fertility and mortality. Using   work at age 60 and wanted an income         The subject is taught by a mixture
mathematical models of human                of $50,000 throughout their remaining       of lectures and tutorials. The lectures
mortality, you can answer questions         lifetime, what sum of money should          have a fairly formal structure, whilst
such as: what is the probability that an    the person save before retirement to        tutorial classes are much more
individual aged 25 will live to age 60?     secure this income?                         interactive, where you are expected
                                                                                        to contribute to solving problems.




                                                                                                                      Actuarial Studies   5
    Bachelor of Commerce graduate pathways
    Upon completing your Bachelor of Commerce with a major in actuarial studies, there are a
    number of graduate pathways to employment, further study and research.

     Bachelor of Commerce                  Honours                                                                  Graduate research degrees1
     Duration: 3 years full time           Duration: 1 year full time                                               Duration: 2-3 years full time
     Choose from the following             Available in: accounting, finance, actuarial studies,                    The Graduate School of
     major areas of study:                 economics, management or marketing or a combination                      Business and Economics
                                           of two areas.                                                            offers a range of Masters by
     > Accounting                                                                                                   Research and PhD programs.
                                           An honours year enables you to extend your knowledge
     > Actuarial studies                                                                                            See www.gsbe.unimelb.edu.au
                                           of your major or area of specialisation through higher level
     > Business                                                                                                     for more information.
                                           honours subjects and by undertaking an independent
     > Economics                           research thesis in a single area of study under the guidance
                                           of an academic supervisor.
     > Finance
     > Management
     > Marketing
                                           Graduate professional development degrees1
     www.bcom.unimelb.edu.au
                                           Duration: Generally 2 years full time
                                           The Graduate School of Business and Economics offers a full suite of graduate business and
                                           economics programs with an emphasis on career entry programs for recent graduates and
                                           specialist education for professionals. Our expertise spans the fields of accounting, actuarial
                                           studies, business and IT, economics, finance, human resource management, international
                                           business and marketing. See www.gsbe.unimelb.edu.au for more information.



                                           Graduate professional entry programs1
                                           Duration: Generally 2-3 years full time
                                           Title: Master of, unless otherwise specified:
                                           Including: Engineering, Forest Ecosystem Science, Information Systems, Juris Doctor (Law),
                                           Science (Management Science), Teaching, Urban Horticulture, Urban Planning.
                                           See www.futurestudents.unimelb.edu.au for more information.




      employment
      Melbourne Commerce graduates enjoy careers both locally and abroad in areas such as accounting services, finance, insurance
      and superannuation services, banks, mining, manufacturing, utilities and transport services, business, management, advertising,
      market research and statistical services, legal services, retail and wholesale, and computing and telecommunications services.
      See www.bcom.unimelb.edu.au/pathways/careers.html for more information.



    1 Selection into these programs is based on performance in an undergraduate degree and additional selection criteria may also apply.
    Note this information indicates many but not all the possible pathways to graduate study.


    Honours
    An honours year provides an advanced             producing some research into an area
    knowledge of actuarial studies and the           of actuarial science that has not been
    opportunity to develop your research             widely considered previously. Employers
    and communication skills through either          of actuarial graduates are becoming
    a research essay or a set of research            increasingly interested in students who
    projects.                                        can demonstrate an ability to learn, to
                                                     adapt to changing situations and to
    The honours year also fulfils all the            work well within a team. These skills
    requirements for Associateship of the            are all honed during the honours year.
    Institute of Actuaries of Australia. In
    this fourth year of study you will take          To be eligible for entry to honours,
    advanced coursework in the areas of              students must satisfy the requirements
    risk theory and financial mathematics.           of the BCom degree and obtain a grade
    Importantly you will also develop your           of H2B (70%) in at least four level-3
    business and academic writing skills             actuarial studies subjects.
    and your communication skills by


6   Bachelor of Commerce
Careers                                       Professional accreditation                     Graduate study in actuarial
The fast-growing actuarial profession         The Centre for Actuarial Studies is fully      studies
provides employment opportunities             accredited by the Institute of Actuaries
                                                                                             Career entry programs
throughout Australia and the world.           of Australia (IAAust), which is the
There are currently over 1,500 qualified      professional actuarial body in Australia.      Master of Actuarial Science (from 2011)
actuaries in Australia. More than 25%         This accreditation means that students         This is a two year program designed
work in life insurance, where the actuarial   can obtain exemption from Parts I              to provide initial actuarial education for
profession has its foundations. Nearly        and II of the IAAust professional              graduates with a first degree that includes
20% work in superannuation, with the          exams, leading to the designation              a strong mathematical or statistical
remaining actuaries typically working         Associate of the Institute of Actuaries        component, for example commerce,
in general insurance, investment              of Australia (AIAA).                           mathematics, physics or engineering).
management, asset consulting,                                                                The program enables students who
financial planning and in government.         To qualify as an actuary, you must pass
                                                                                             perform at a sufficiently high level in
                                              (or be exempt from) three parts of the
                                                                                             university subjects to receive exemption
Demand for qualified actuaries is growing     professional accreditation as prescribed
                                                                                             from all of Part I of the professional
in health insurance, risk management          by the IAAust. The first two parts can
                                                                                             actuarial examinations conducted by
and financial services. Actuaries also        be undertaken as a part of the Bachelor
                                                                                             the Institute of Actuaries of Australia or
work in non-traditional areas, for example    of Commerce (Honours) degree at the
                                                                                             from the corresponding examinations
information technology and public             University of Melbourne.
                                                                                             of the Institute of Actuaries (UK).
infrastructure. In recent years actuaries
have played a growing role in banking         If you complete relevant subjects at the
                                              University of Melbourne, and perform           Research higher degree programs
and finance. The analytical skills of
actuaries are seen as invaluable in           sufficiently well, you will be recommended     Master of Commerce in Actuarial Studies
banking activities including security         for exemption from the corresponding           This is a one year research degree
pricing, valuations linked to mergers         subjects offered by the IAAust. Should you     with no coursework component.
and acquisitions, project finance and         receive exemption from all corresponding       Candidates are assessed on the basis
also the development of enterprise risk       subjects you will be exempt from both          of their research thesis. The degree is
management programs.                          Part I and Part II by the end of your          primarily aimed at honours graduates
                                              honours degree. If you do not obtain           from the disciplines of actuarial studies,
Typically, a newly qualified actuary would    the mark needed to achieve exemption           financial mathematics, mathematics
earn around $95,000-$110,000 per              you do not need to repeat the subject. As      and statistics.
annum, with at least an $11,000 increase      long as you achieve a pass mark or above
per year for several years. More senior,      the subject will still be credited towards     PhD in Actuarial Studies
experienced professionals would earn          your Bachelor of Commerce degree.              This is a three year research degree
in the vicinity of $200,000 per annum.                                                       with no coursework component.
                                              Part III of the professional accreditation
                                              is set by the Institute of Actuaries of        Candidates are assessed on the basis
Career examples for actuarial
                                              Australia. These examinations are held         of their research thesis. The degree is
studies graduates                                                                            primarily aimed at honours or masters
                                              in May and October each year and are
> Banking and finance                                                                        graduates from the disciplines of
                                              undertaken after you graduate, while you
> Capital and risk management                 are working full time.                         actuarial studies, financial mathematics,
                                                                                             mathematics and statistics.
> Financial planning (retail)                 The length of time taken to qualify varies
> Financial reporting and                     from student to student. The qualification
  performance management                      can be achieved in a minimum of five
> General insurance                           years, but the average time to gain full
                                              accreditation is between seven and eight
> Health insurance
                                              years (including completion of the four year
> Investments/asset management                Bachelor of Commerce (Honours) degree.
> Life insurance: product pricing,
                                              International recognition
  design and distribution
                                              Overseas actuarial bodies give recognition
> Superannuation                              for the qualification of Fellow of the
> Valuation of insurance liabilities          Institute of Actuaries of Australia, subject
  and financial instruments                   to some supplementary training. There
                                              is also partial recognition for exams
Source: Institute of Actuaries of Australia
                                              passed (or obtained through
and Graduate Destinations Survey,
University of Melbourne
                                              exemptions) under the IAAust.




                                                                                                                         Actuarial Studies   7
    Breadth in actuarial studies
    One of the cornerstones of the New Generation undergraduate degrees is the opportunity for all students to take subjects from
    outside their major area of study. The breadth component enables you to tap into other bodies of knowledge, methods of enquiry
    and personal and professional skills. Students in the Bachelor of Arts, Biomedicine, Environments, Music or Science may take
    breadth subjects in actuarial studies.
    Actuarial studies provides complementary breadth to students who are taking mathematically based subjects as their major
    area of study. The following sequences of subjects are available only to students who have completed two first year mathematics
    subjects and second year subjects in probability and statistics. Completion of these mathematics subjects usually requires VCE
    Units 3&4 Mathematical Methods (either), with a minimum study score of 25 and Specialist Mathematics, with a minimum study
    score of 27 (or equivalent).
    Depending on the structure of your degree and subject to prerequisites, you can complete one of the following breadth sequences
    in actuarial studies:

    Actuarial statistics                                               Financial mathematics
    Learn how to apply techniques from probability and                 Learn how to apply mathematical techniques to a range of
    statistics to problems in areas including financial modelling,     financial problems, including personal financial problems and
    life insurance and general insurance.                              analysing financial instruments such as bonds and shares.

     First year      Introduction to Actuarial Studies                   First year     Introduction to Actuarial Studies
     Second year Financial Mathematics I                                 Second year Financial Mathematics I
                 Financial Mathematics II                                            Financial Mathematics II
     Third year      Actuarial Modelling II                              Third year     Financial Mathematics III
                     Actuarial Statistics                                               Models for Insurance and Finance

    Introductory financial mathematics                                 Life insurance mathematics
    Learn the basics of financial mathematics, including how           Learn the techniques required to build models of human
    money accumulates and techniques for analysing instruments         mortality, analyse life insurance data, and price life insurance
    such as home loans.                                                contracts.

     First year      Introduction to Actuarial Studies                   First year     Introduction to Actuarial Studies

     Second year Financial Mathematics I                                 Second year Financial Mathematics I
                 Financial Mathematics II                                            Financial Mathematics II

     Third year      –                                                   Third year     Actuarial Modelling I
                                                                                        Contingencies (double subject)




       Sandhya is currently in her first year
       of the Bachelor of Commerce majoring
       in actuarial studies. Sandhya was one
       of the two inaugural recipients of the
       Commerce Opportunity Bursary.


8   Bachelor of Commerce
Actuarial Studies   9
Need more information?
Commerce Student Centre
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     Toll free: 1800 666 300
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W    www.bcom.unimelb.edu.au


University Information
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Call the University Information Centre: 1800 801 662


Information Centre
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The University of Melbourne
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The University of Melbourne
Victoria 3010, Australia




www.bcom.unimelb.edu.au




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