Curriculum 2019 Review

April 2019 saw the first exam sitting under the new Curriculum 2019 structure for FIA qualification. Curriculum 2019 was introduced by the IFoA to ensure the actuarial exams continue to reflect the evolving actuarial landscape. The changes included the redesign of the exams, the addition and removal of content and changes to the qualification process.

The first set of exams under this new umbrella was met with trepidation from students, with concerns over the format of the new assessments.

In this article we provide a one-stop summary and analysis of the new curriculum, also taking in a review of the April exams based on the experience of APR’s students. We also take a look at how employers may consider updating study policies and how they can best support their students on the road to qualification.  And as this article was first published in July, as a footnote we include a quick report on another great set of results for APR students from the April session – well done to all!

Core Principles Exams

The old Core Technical exams (CT1-9) have been replaced by Core Principles exams. There are 3 flavours of Core Principles exams: Actuarial Statistics (CS1 and CS2), Actuarial Mathematics (CM1 and CM2) and Business (CB1, CB2 and CB3). The important thing to note here is that there is not a one-to-one mapping from old exams to new; some exams have been merged.

The CS and CM exams have seen a computer-based exam added to the usual written paper – for CS exams this paper tests the student’s ability to model using R, and for CM exams Excel is the software used. These computer-based exams last 1hr45 and contribute 30% to the total mark for the exam.

The reasoning behind the introduction of computer-based papers is clear: technical skills are just as important to actuaries as knowledge of actuarial concepts, and therefore proficiency in these skills should be assessed as part of the qualification process. Excel has been used in every actuarial department for years, and R is being increasingly utilised as a statistical modelling tool. Also, there are plenty of concepts in the exams that lend themselves well to computer processing. The days of hurriedly calculating run-off triangles and chi-squared test statistics manually in the exams are hopefully behind us!

However, the initial implementation of these computer-based exams has not been completely smooth. The response to the papers from APR students was, almost unanimously, that they were incredibly time-pressured! The April 2019 papers are available online, and I recommend you try one. The significant time constraints result in students focussing on getting straight to the answer, and anything else (good coding practices, clear spreadsheet design, production of visually attractive graphs, etc) is secondary. Perhaps this is a deliberate move from the examiners, who may argue modelling skills are assessed in CP2. However, we feel a better approach would be for good quality of code written and spreadsheets produced to be rewarded in these papers. If this means extending the assessment time, or removing a question, then so be it.

As well as having significant time pressure, the R papers require strong technical skills in the language. Whilst there are some easy marks available for simple tasks like entering data and calculating averages, the majority of the paper requires students to perform more complex tasks. In the April 2019 sitting, the CS1 paper asked students to perform hypothesis testing, fit generalised linear models to data and plot a variety of graphs. The CS2 paper saw students create and analyse Markov Chains, code probability distributions and fit time series models to data. For students to perform well on these papers, they will need to have developed strong technical skills in R, as well as having a good understanding of the underlying statistical concepts.

Another implication of the new curriculum is that it is no longer clear what order exams should be sat in. Under the old CT structure, almost all students would sit CT1 in their first sitting, potentially alongside another CT or two. Now, the choice is less clear. CM1 is one option. The rationale here is that it covers the basics of actuarial mathematics and has probably the most relevant content for most new actuarial students. However, the feedback we collected was that this was a challenging first exam and that some topics required previous knowledge from CS1 and CS2 – despite CM1 not having any formal prerequisites.

The other candidate for a first exam is CS1. This has a lighter workload and students will most likely be familiar with some of the theory, especially those students from a more mathematical background. The difficulty with sitting this exam first is that actuarial students may not have any previous knowledge of R. The online resources on R provided by ActEd are good, but most students will still probably be more experienced with Excel. This is especially true where companies do not provide any formal introductory R training in-house.

The mappings from CT to Core Principles exams isn’t quite as simple as the table above suggests. There are instances where content has been shuffled in the move to Curriculum 2019. One example is CM2, where concepts like ruin theory and run-off triangles projection have moved across from the old CT6 exam. Students tend to understand these topics well, and so this could make the CM2 written paper slightly easier than its predecessor CT8. However, the inaugural CM2 sitting only had a pass rate of 32% (for comparison CT8 had an average pass rate of 52% over the last 10 sittings).

Finally, the Business exams haven’t seen much change. CB1 corresponds closely to the old CT2, as does CB2 with CT7. The CB3 exam, which replaces CT9, is still in development, but is expected to be broadly similar in structure to what came before.

Core Practice Exams

The old CA exams have been rebranded as Core Practice exams. There is a straightforward mapping between the old and new exams:

There has been a slight change to the structure of the CP1 exam. Previously, CA1 was made up of two 3hr15 written papers, each consisting of questions from across the course. Under Curriculum 2019, CP1 is still made up of two 3hr15 papers. Paper 1 is much like old CA1 papers, but Paper 2 contains two case studies. Students have 45 minutes to read the case studies and plan answers to the accompanying questions. This leaves 2hr30 writing time, which makes an already notoriously time-pressured exam even more demanding on students. The case studies themselves allow for a broad range of questions, which is a positive; as an example a life student shouldn’t be in a position where they are at a disadvantage because their case studies are focussed on pensions and GI.

CP2 replaces the Excel modelling exam CA2 and CP3 replaces the written communication exam CA3. Neither is much different from their predecessors.

Specialist Principles Exams

The Specialist Technical exams (old STs) have been restructured as Specialist Principles exams:

The content of these exams is largely similar to their ST exam equivalents.

Specialist Advanced Exams

The Specialist Applications exams (old SAs) have been restructured as Specialist Advanced exams:

The content of these exams is largely similar to their predecessors. The exception is SA7 (the investment and finance exam) which takes content from the previous SA5 and SA6 exams.

Associateship and Fellowship

As part of Curriculum 2019, the IFoA have made changes to the qualification structure. There are now two levels of qualification for actuarial students: Associateship and Fellowship.

Associateship requires students to pass all Core Principles and Core Practice exams, and complete a level of PPD. For students who joined the IFoA before 2 January 2019, this requirement is one year of PPD. For students who joined the IFoA after 2 January 2019, this requirement is two years of PPD.

Fellowship requires students to pass all Core Principles and Core Practice exams, as well as two Specialist Principles exams and a Specialist Application exam. In addition, all students must have completed at least three years of PPD.

All students joining the IFoA from 2 January 2019 are required to qualify as an Associate before choosing to progress to Fellowship. This is a significant constraint that managers and students need to consider, and without proper planning this requirement could delay students reaching Fellowship membership. For example, consider a student who has passed everything except CP3. They sit CP3 in a sitting, and pass. They have completed all their exams (and let’s assume three years of PPD). The CP3 pass grants them Associateship, but not Fellowship. This is due to the requirement for an extra year of PPD following reaching Associate status to get to Fellow. This in effect delays qualification by a year.

The solution to this is to (as far as possible) make sure Associateship exams are passed before Fellowship exams. By getting all Core Principles and Core Practices exams passed before other exams, students can minimise the PPD requirements they have to attain and expedite qualification to Fellowship status.

Key takeaways for students and managers

Things to consider:

• Route to qualification: Managers should discuss with their students the best route through the exams. This is particularly important for new graduates joining, who will rely on the experience of previous students to decide whether CM1 or CS2 (or something else!) is the best exam to take in their first sitting.
• Study day allocation: Firms are likely to have updated their study policy in advance of Curriculum 2019. It may be necessary to reflect on whether these study allowances are appropriate. In particular, CB3 may require a different number of study days if it changes significantly from CT9.
• Provision of Excel / R training: Proficiency in Excel and R are required to pass the CM and CS exams respectively. At APR, we’ve reflected on the training we provide to new starters in both these areas to see how we can best develop these technical skills.
• Achieve Associateship as early as possible: For new students, it may be more efficient to sit Core Principles and Core Practice exams before the later ones. This should be considered when developing study plans.

Further observations from the September 2019 sitting

The September exam session saw the second sitting of actuarial exams restructured under Curriculum 2019. We collected the thoughts of APR students to identify any emerging trends.

One source of much discussion when Curriculum 2019 was announced was the addition of online exams to some of the ex-CT exams. The feedback from APR students from the April 2019 sitting was that these exams were challenging, but that most of the difficulty came from excessive time pressure rather than required advanced technical knowledge. In September, there are signs that this has been addressed to an extent, with some exams (particularly CS1) appearing to be more manageable in the 3 hour 15 minute time given. However, this was not universal across all exams. One student, sitting CS2, noted that despite using R on a day-to-day basis, there was simply not enough time to complete the online paper. There was no discernible increase in the technical difficulty of the online papers, beyond the time pressure.

Another emerging trend concerns CP2, which examines Excel modelling. The exam, like its predecessor CA2, consists of two papers, one focussing on producing a model and audit trail, and the other developing an existing model and writing a summary report. The problems to be modelled have historically come from both actuarial and non-actuarial settings. However, the September 2019 sitting saw two non-actuarial problems to be modelled (wine production and parcel delivery) – the first time neither paper has contained an explicitly actuarial scenario since September 2015 (and even that depends on whether you classify the mortality of dogs as actuarial!). Whether this is a move to more neutral exam topics, where students aren’t advantaged or disadvantaged by the actuarial area they work in, or simply an outlier, remains to be seen.

APR will continue to monitor trends in the exams to support our students with any exam tips, and will continue to share these insights more widely.  In the meantime, we wish you and your students the best of luck for the December results!

Adam Smith

July 2019 (updated November 2019)

Footnote on APR results from April sitting

“With results from the new curriculum published a couple of weeks ago, it’s been yet another hugely successful set of results for APR staff, with 24 exams passed out of a total of 27 sat.  Particular highlights this time around include:

• James Cooper passed his last outstanding exam required to achieve FIA qualification.
• Troy Cruickshank and Jack Davies for passing three exams each.
• And to finish on the theme of this article, Sid Prabhu-Naik and Michael Scanlon each took and passed two exams under the new syllabus.

A huge well done to these and all of our successful students.”