Actuarial Science program builds momentum

Author(s): Tim Brouk
Photographs by: Tim Brouk

Emily Austin

Emily Austin is a standout in the Purdue Actuarial Science program.

One of the hottest jobs in America is one of the hottest programs in the College of Science.  

In 2013, dubbed actuary as the top job in America. The profession was No. 2 in 2012 on the website’s annual list. It’s no surprise that the actuarial science program at Purdue has gained steam in recent years. In December 2013, the program graduated the third most seniors in the College of Science, exceeded only by the departments of Computer Science and Biological Sciences.

Although a huge success, actuarial science is not a department but a program jointly governed by the departments of Mathematics and Statistics. The greatest benefit to actuarial science students is the well-rounded education provided to them via math and statistics faculty and staff, who work together to ensure future actuaries receive access to a wide range of opportunities before they embark on careers.

“I would say it’s a very symbiotic relationship between the departments,” says mathematics professor Richard Penney, who codirects the program with statistics and mathematics lecturer and Society of Actuaries fellow Jeffrey Beckley.

While educational support for the students is 50/50 between the departments, the sharing gets a little more complicated when it’s commencement time, Beckley says.

Analytical alliances

Located in Discovery Park, the Regenstrief Center for Healthcare Engineering (RCHE ) has a longstanding relationship with the actuarial science program.

Dr. Steve Witz, director of the center, points out two links he has with actuarial science.

“First, RCHE finds the perspectives and analytic skills of actuaries to be very complementary to our research on
health care delivery improvement. The analyses of population health risks conducted in actuarial science plays an important role in developing innovative programs to improve population health status,” Witz states.

“Second, RCHE has hosted teams of actuarial science students who complete a summer research internship for the past three years. These students conduct analyses of health care cost and utilization data that allow them to apply the skills they have learned in class to actual data made available through the Agency for Health Research
and Quality. We believe this enables the application of their actuarial skills to projects that provide experience in conducting healthcare engineering and health policy analyses.”

Witz says he enjoys working with Purdue actuarial science students, citing their enthusiasm and inquisitiveness as “infectious” for the whole center.

“Some of the actuarial students choose to continue working at RCHE after they complete their internship,” he adds. “They function as members of a research team and are able to advance our research as team members conducting data analyses.”

“Interestingly, by the University’s means of counting graduates, on paper it looks like the actuarial science program is administered solely by the mathematics department. At Purdue only one department can receive credit for awarding a degree. Since mathematics is alphabetically before statistics, mathematics gets the credit. Our students actually receive an actuarial science and statistics degree, thus administratively it is much more complicated than a 50/50 split, but in terms of support and cooperation it is equal.”

Dealing with the financial impact of risk and uncertainty, actuaries thrive in health care firms, insurance companies and financial security systems. Actuaries are needed to calculate long-term insurance rates for everything from a single home to entire towns devastated by tornado damage. They are running into big data more and more, which is where statistics knowledge comes into play.

“It’s an insurance-based industry, and in good times or bad times, you need insurance,” Penney says. “And in recent times, the changes in the health care laws have really created a lot of work for actuaries.”

The seeds of the Purdue actuarial science program were planted in 1984 when then-students Dan Rubin, Tracy Choka and Kent Somers pitched the idea of an actuarial science club to their academic advisor, Keith Schwingendorf. A decade earlier, an actuarial science option was made available to math majors before it became the program that it is known today.

Mark Daniel Ward, associate professor of statistics, teaches in the program. Discrete, continuous and random variables are scrutinized, and Ward gives his students a lot of practice problems in anticipation of the Society of Actuaries/Casualty Actuarial “P1” (Probability) exam. Actuaries usually forgo graduate school but a number of exams are required to advance in the field.

“We believe our program is training our students like a lot of master’s programs are,” Ward explains. “They routinely come out of Purdue having passed exams. They learn material for the first five exams while still in undergrad.”

The CareerCast list rated occupations by median salary, job growth and ratings. Ward believes there are less tangible reasons why actuaries thrive.

“Our graduates’ opinions are highly valued at firms. Companies are seeking a lot of advice from these students,” he says. “Alumni have wonderful stories of impacts they’ve made and quickly rising through the ranks. A common thread is that they are considered valuable members of the company and their opinions are respected.

“Moreover, current actuarial science students take responsibility for deciding what companies get invited to campus to recruit within the program. The same companies return again and again to recruit at Purdue because they are finding a lot of very talented students.”

One of those students is junior Emily Austin from Jeffersonville, Ind. After coming to Purdue for pre-pharmacy, she realized her math homework was the favorite part of her studies. She transferred over to the actuarial science program for her sophomore year.

“I was looking for different fields in math that I could get into and actuarial science came up,” Austin recalls. “The program really sounded interesting to me.”

Austin says she does not feel pulled between mathematics and statistics. She sees the successful collaboration within the departments and recognizes the diverse education she is receiving.

“It really incorporates math, statistics, management and economics — it’s not just one thing,” Austin says. “That keeps it interesting.”