Undergraduate Studies in Economics Undergraduate Studies in ...

2009
Undergraduate
Studies in Economics
Undergraduate Studies 2009
actuarial studies
www.bcom.unimelb.edu.au

contents/
Welcome from the Director 3
What is an actuary? 4
Why major in actuarial stuDies? 5
careers 6
Why enrol in actuarial stuDies at the university of melbourne? 8
tutorials - making actuarial stuDies come alive 10
the honours Program in actuarial stuDies 11
Diversity of actuarial Work 12
graDuate Profiles 14
staff Profiles 16
What they are saying 18
Compiled by Preeta Phillips, Department Manager and Heidi Bacher,
Manager, Academic Support Services, Department of Economics
Welcome from the Director
Welcome from
Professor David
Dickson, Director
of the Centre for
Actuarial Studies
Actuarial Studies
is an area of study
within the Bachelor
of Commerce degree
at the University of
Melbourne. The Centre for Actuarial Studies is part
of the Department of Economics in the Faculty of
Economics and Commerce, but functions largely
as an autonomous unit. Academic staff in the
Centre have diverse backgrounds and interests,
and contribute both to the local actuarial community
through seminars and other presentations, and
internationally through research publications and
conference presentations.
The actuarial program is designed for students who
wish to enter the actuarial profession. As such, it
provides students with a solid grounding in actuarial
techniques, and, through the Centre’s accreditation
with the Institute of Actuaries of Australia (IAAust),
students have the opportunity to obtain exemption
from Parts I and II of the IAAust examination
requirements to qualify as an actuary.
However, the actuarial program is broadly based
and students obtain an education that includes
economics, accounting, management, finance,
mathematics and statistics. Indeed the first two
years of the program are general rather than
specialised, although unlike other commerce
students, students majoring in Actuarial Studies
must enrol in mathematics subjects in their first
year of study.
Specialisation in actuarial subjects takes place in
the third year of study, and continues in the honours
year. The actuarial specialisation is designed as a
four year program, but entry to honours is restricted
to students who perform at an appropriate level in
third year subjects.
Actuarial Studies is a demanding but rewarding
discipline. Students find their university actuarial
subjects challenging, but know that the skills they
obtain as part of their degree are in great demand
from employers. I hope that the information in the
brochure will inspire you to become an actuarial
student.
2 3

What is an actuary? versatile career oPPortunities
The work of an actuary involves the assessment,
evaluation and management of the financial
risks faced by individuals, households, investors,
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 a major economic or social change.
Hence the actuary’s work is based upon a multidisciplinary
background of mathematics, statistics,
demographics, finance and economics.
As a result of this diverse multi-disciplinary
background and their strong analytical skills,
actuaries serve as financial advisers to a wide range
of commercial organisations including life, general
and health insurance companies, superannuation
funds, banks, other financial institutions and
governments. In most cases, they are asked to
tackle a wide range of financial problems, often
involving future uncertainty. An ability to express
their conclusions in clear and concise language,
both in the written and verbal form, also represents
an essential part of their work.
Actuaries are commonly employed by insurers,
banks and specialist actuarial consultancies.
The work of consulting actuaries, who offer their
professional services for a fee, covers a wide
range of areas and includes:
Y advice on the design and financing of
superannuation funds and other employee
benefit schemes
Y measurement and analysis of the investment
performance of financial institutions
Y valuation of a life insurance company in the
event of its purchase
Y advice to a range of financial institutions,
concentrating on future plans and strategy
Y carrying out financial projections for general
insurance and financial companies and, on
occasions, providing advice to potential
purchasers or sellers
Y statistical and financial advice in many other
areas including friendly societies and
health funds.
In recent years actuaries have developed their
role in banking and finance. The analytical skills of
actuaries are now seen as invaluable in banking
activities including security pricing, valuations
linked to mergers and acquisitions and project
finance, and also the development of enterprise risk
management programs.
The skills that you develop in an actuarial studies
degree are readily transferable and actuaries
are now called upon to provide expert advice in
diverse areas including valuation of students’ HECS
liabilities, providing financial planning type advice
to retirees and people approaching retirement and
providing advice to government through bodies
such as the Australian Prudential Regulation
Authority (APRA) and the Australian Securities and
Investments Commission (ASIC).
Actuaries are playing an ever increasing role in
health and long term care. Actuarial advice has
been sought by private health insurance companies
advising governments on alternatives to community
rating pricing methods.
Why Major in Actuarial Studies?
The main reason for majoring in actuarial studies
is to enter the actuarial profession. Actuaries are
highly respected in all areas of insurance and
superannuation. Actuaries are also called upon to
provide advice and to work in areas of investment
management and finance. By entering the actuarial
profession you will enjoy a very rewarding career.
You will routinely be involved in solving real world
business problems either for management or for
external clients using a unique skill set.
Actuarial studies will give you the ability to apply
mathematical and statistical methodology to
problems that businesses regularly face. You
will develop the confidence to build computer
spreadsheet models and be able to use these to
answer complex questions and most importantly
you will learn how to communicate these results.
The actuarial undergraduate training provides an
ideal foundation for further study in areas as diverse
as finance, econometrics, applied statistics and of
course actuarial studies itself!
Whichever path you decide to take after completing
your actuarial degree you can be sure that your
actuarial skills will be useful and highly sought after.
actuarial
stuDies at the
university of
melbourne
a stuDy choice
With great
returns
4 5

careers
Versatile Career Opportunities
There are currently over 1000 actuaries in active
employment in Australia. About 33 per cent of
these actuaries work in life insurance, 18 per cent
work in general insurance and 18 per cent are
engaged in superannuation, with the remainder
employed in finance and investment, management,
government service and within universities. There
are more than 300 Australian qualified actuaries
working overseas.
Career Examples for Actuarial
Graduates
Banking and Finance
Capital and Risk Management
Energy and Environment
Financial Planning (Retail)
Financial Reporting and Performance Management
General Insurance
Health Insurance
Investments / Asset Management
Life Insurance: Product Pricing, Design and
Distribution
Superannuation
Valuations of insurance liabilities,
financial instruments
Potential Private Sector
Employers
Banks:
ANZ, Westpac, NAB, Commonwealth Bank,
Macquarie Bank, Deutsche Bank.
Business Consulting Firms:
Mercer HR Consulting, PricewaterhouseCoopers
Actuarial, KPMG Actuarial, Finity Consulting, Rice
Warner Actuaries, Taylor Fry Consulting Actuaries,
Ernst & Young.
Financial Service Providers:
AIG, AMP, Aviva, AXA Australia, CGU Insurance,
Russell Investment Group.
Reinsurers:
Munich Re, Swiss Re.
Government Based Employment:
Australian Prudential Regulation Authority (APRA),
Australian Government Actuary’s Office,
Victorian WorkCover Authority.
The Institute of Actuaries of Australia maintains an
up to date listing of current employers of Actuaries.
This list can be found at www.actuaries.asn.au.
Starting on the Career Path
To qualify as an actuary, a student must pass (or
be exempt from) three parts of the professional
accreditation as prescribed by the Institute of
Actuaries of Australia (IAAust). The first two parts
can be undertaken as a part of the Bachelor of
Commerce (Honours) degree at the University of
Melbourne.
If you complete relevant subjects at the University
of Melbourne, and perform sufficiently well, you
will be recommended for exemption from the
corresponding subjects offered by the Institute
of Actuaries of Australia. Should you receive
exemption from all corresponding subjects you will
be exempt from both Part I and Part II by the end
of your honours degree. Successful completion of
Parts I and II of the IAAust requirements earns you
the Associateship of the Institute of Actuaries of
Australia (AIAA). However, if you do not obtain the
mark needed to achieve exemption you do not need
to repeat the subject. As long as you achieve a
pass mark or above the subject will still be credited
towards your Bachelor of Commerce degree.
Part III of the professional accreditation is set
by the Institute of Actuaries of Australia. These
examinations are held in May and October each
year and are undertaken after university, while a
person is working full time.
The length of time taken to qualify varies from
student to student. The qualification can be
achieved in a minimum of five years, but the
average time to gain full accreditation is between
seven and eight years.
What Would I Study?
At first year level students in the Centre for
Actuarial Studies take introductory subjects in
microeconomics and macroeconomics, accounting,
mathematics and actuarial studies. These subjects
provide a foundation for your future studies. They
also serve to give you a knowledge of the general
economic and business environment in which
actuarial problems are found. At second year level
you will take subjects in probability and statistics.
These two subjects are fundamental to your future
success in actuarial subjects and will give you the
confidence to model random phenomena using
mathematical techniques.
During your second year you will also take two
subjects in financial mathematics. In these subjects
you will learn how to model the expected cash
flows that arise from a variety of financial contracts
including loans, bonds and basic insurance
contracts. You will also learn how to account for the
uncertainty in future earnings rates and projected
cash flows. Your second year of study will also
include subjects in intermediate macroeconomics
and business finance.
During the first two years of study students will also
take two non-mathematical subjects taught outside
the Faculty of Economics and Commerce to satisfy
the breadth component of the BCom degree.
The third year of the actuarial program is the most
highly prescribed with seven actuarial subjects to be
studied. The subjects you will take in your third year
form the backbone of your technical training as an
actuary. The third year subjects cover the technical
side of pricing and valuation for both life insurers
and general insurers, the construction and use of
life tables and survival models, and model portfolio
theory. What you learn in your third year will set you
apart from other Commerce graduates as you will
begin to appreciate what makes actuarial studies so
unique and so valuable.
A fourth year of study (Honours) is available to
students who perform sufficiently well in their third
year of undergraduate study. For more detailed
information about the prestigious Honours year in
Actuarial Studies see page 11.
6 7

Why enrol in actuarial stuDies
at the university of melbourne?
Fully accredited by the Institute
of Actuaries of Australia
The Centre for Actuarial Studies at the University
of Melbourne is fully accredited by the Institute
of Actuaries of Australia. We are one of only four
such accredited university centres in Australia,
and the only one in Victoria. This means that our
subject offerings at the University of Melbourne
are recognised as being equivalent to Parts I and II
of the Institute of Actuaries of Australia education
program. Subject to sufficiently meritorious
performance during your degree you will graduate
from Melbourne’s actuarial Honours program as an
Associate of the Institute of Actuaries of Australia.
A Centre of Excellence
The Centre for Actuarial Studies has been
designated a Centre of Excellence by the Institute
of Actuaries of Australia. Centre of Excellence
status is given only after a number of criteria
relating to quality of staff, research standing and
educational commitment are met by the University.
Teaching excellence
Staff within the Centre for Actuarial Studies have
won teaching awards at both the Faculty level and
the University level. The Centre is also committed
to the production of high quality educational
resources. Professor David Dickson, the Director
of the Centre for Actuarial Studies, has written
two internationally published text books covering
material that is taught to our undergraduate
students in the actuarial program. Associate
Professor Mark Joshi is the author of a textbook
on mathematical finance that is used in many
universities around the world, including Melbourne.
We have also developed a piece of actuarial
software called Advance which is used throughout
our undergraduate courses. This software gives
students the opportunity to see the results of
applying actuarial theory in a number of traditional
actuarial contexts.
Leading actuarial research
The Centre for Actuarial Studies is a leading
actuarial research group. Our international
reputation for research has been developed from
our work in risk theory and financial mathematics,
in particular the pricing of derivative securities.
We also conduct research into practical areas
including disability income insurance and
investment management. The wide scope of our
research means that our upper level undergraduate
courses include recent developments in the
field of actuarial science. This ensures that our
graduates not only learn the required actuarial
syllabus but also begin to appreciate the thought
process required for modern research into Actuarial
Science. Our research profile also means that we
can provide a very diverse honours program with
students able to choose research essay topics from
a very broad spectrum.
Close links with industry
The full time actuarial staff have worked for a
range of employers including insurance companies,
banks, actuarial consultants and government
departments. This experience means that our
lectures can include reflections on actuarial practice
as well as providing sound development of actuarial
theory.
Our Part II program is taught by leading actuarial
practitioners in Melbourne. This ensures that our
honours graduates have sound knowledge of
actuarial models and also the ability to apply and
extend these models in practical contexts. It is
this ability to learn, apply and extend modelling
techniques that is so highly valued by employers
of our graduates.
Teaching and learning support
The Teaching and Learning Unit in the Faculty
of Economics and Commerce offers students
assistance with study methods and assessment
techniques. We also have a very active Actuarial
Students’ Society and a Mentoring program
specifically tailored to help first year actuarial
students.
Entry Requirements to
Major in Actuarial Studies
To major in actuarial studies you will need to meet
the admission requirements for entry into the
Bachelor of Commerce.
For more information on admission
requirements please visit:
www.bcom.unimelb.edu.au/bachelor/entry.html
In order to gain entry to the first year mathematics
subjects you will need a study score of at least
37 in VCE Units 3 & 4 Specialist Mathematics
or equivalent. Alternative study programs are
possible for students who attended a school
where VCE Specialist Mathematics or equivalent
was not available, and for students who do not
have the required study score in VCE Specialist
Mathematics. For more information contact the
Undergraduate Commerce Student Centre.
Teaching and Learning
in the Centre for Actuarial Studies
8 9
Dr David Pitt
Y ANU Vice Chancellor’s Award for
Teaching Excellence, Winner 2004
Y Australian Teaching Awards,
Nominee 2004, 2008
Y University of Melbourne Faculty of
Economics and Commerce,
Outstanding Lecturer Award, April 2006
“In the eight years that I have taught Actuarial
Studies I have aimed to provide a lecture
environment where students are motivated to
learn. This motivation is created through careful
development of actuarial and statistical theory
in a way that draws on student experience and
knowledge and gives students a clear view of
subject objectives. It is so important that students
can see how their studies will help them in their
actuarial careers.
Students in the Centre for Actuarial Studies are
given high quality lecture and tutorial material in all
the subjects that they study. Students are able to
download course materials that include exercises
and solutions, spreadsheet programs and links to
actuarial research papers from specialised learning
management web based software. Teaching is
viewed as a very important part of what we do in
the Centre for Actuarial Studies”.

tutorials -
making actuarial stuDies come alive
Ash Evans
Tutor in Actuarial
Studies
Current PhD student
Tutorials provide
participants with an
opportunity to confront
ideas and issues
presented at lectures
in a less formal atmosphere. This dynamic allows
students to become comfortable with material
through cooperation and participation. The tutorial
setting offers students time to reflect on the
course before gathering to discuss topics, reinforce
knowledge and address any problems. This is an
ideal follow up to the formal lecture.
It is my role to ensure that students in the class
are confident in their ability to apply the theory
from the course. Having completed the degree
fairly recently, I am able to offer a perspective
on the material that is not too far removed from
how it is usually best understood by the students.
Participants find this very useful, since actuarial
studies in particular benefits from a personal and
intuitive demonstration of the coursework.
In my experience, students gain enormously from
tutorials when asked to solve a problem in a group
environment. Being able to actively participate in
the classroom exposes the participant to different
approaches and allows me as a tutor to recognize
where students have the greatest difficulty. The
format can be easily adjusted to focus on the
students’ needs. Group interaction also gives the
participant the chance to meet fellow actuarial
students and future colleagues. As a tutor, I make
myself approachable and readily available to cater
for the students’ needs. I have found that this
creates a comfortable setting where students are
eager to explore their ability with the knowledge
that additional help can be easily accessed. It is
amazing the difference that a little guidance, a
different point of view and some friendly interaction
can have on a student’s success in the actuarial
program at Melbourne.
Chris Beveridge
Tutor in Actuarial
Studies
Current PhD student
Tutorials are a very
important component
of the actuarial
learning experience
at the University of
Melbourne. First and
foremost, they provide students with an interactive
and friendly environment in which they can
discuss lecture material and the numerous practice
questions made available on a weekly basis. The
tutorials are designed to be highly flexible, so that
they can cater to the students’ needs on a weekto-week
basis. The students can highlight areas of
difficulty, and as a tutor I can focus on improving
their understanding in these areas. The chance to
gain different perspectives on material covered, as
well as being able to work through problems while
asking questions helps particularly in improving
understanding and building confidence. In addition,
by working through problems based on the theory
covered in lectures, students are able to see how
the material they study is used in a more practical
context.
Tutorials also provide a wonderful opportunity
for students to discuss all things actuarial with
someone who has recently been in their position.
Whether it be particular subjects, which subjects
to take in the future, applying for jobs, or the
numerous possibilities open to someone with an
undergraduate degree in actuarial studies, in my
experience students enjoy being able to discuss
these topics informally.
the honours Program in actuarial stuDies
Why do Honours
in Actuarial Studies?
An honours year provides an advanced knowledge
of actuarial studies and the opportunity to develop
your research and communication skills through
either a research essay or a set of research
projects.
The Honours year also fulfils all the requirements
for Associateship of the Institute of Actuaries of
Australia. In this fourth year of study you will take
advanced coursework in the areas of risk theory
and financial mathematics. Importantly you will also
develop your business and academic writing skills
and your communication skills by producing some
research into an area of actuarial science that has
not been widely considered previously. Employers
of actuarial graduates are becoming increasingly
interested in students who can demonstrate an
ability to learn, to adapt to changing situations and
to work well within a team. These skills are all
honed during the Honours year.
Career advancement is more rapid for honours
graduates. Initial salary rates for honours graduates
are higher than those for ordinary degree graduates
and job tasks tend to be more varied, interesting
and research orientated.
Possession of a quality Honours degree assists in
obtaining scholarships and other forms of financial
support to undertake higher degrees.
By studying for Honours, you have the opportunity
to obtain exemption from all subjects that comprise
Part I of the Institute of Actuaries of Australia’s
professional examinations. Additionally, Part II
of the qualification as a Fellow of the Institute of
Actuaries of Australia is covered in the honours
year. It can be advantageous to study these
subjects as a full time honours student, rather than
attempting them on a part time basis while you
are working.
What are the Criteria
for doing an Honours Year?
To be eligible for an honours year in Actuarial
Studies, you must have satisfied the requirements
for a Bachelor of Commerce degree, and have also
completed the following third-year subjects with
a grade of at least H2B (70%) in four of these
subjects.
Y Actuarial Modelling I
Y Actuarial Modelling II
Y Contingencies
Y Actuarial Statistics
Y Models for Insurance and Finance
Y Financial Mathematics III
Note that Contingencies counts as two subjects.
Thus, a mark of 74 in Contigencies would count
as two H2B grades.
You should also note that meeting these two
requirements does not guarantee a place in
honours. For example, a student who completed
eight third year actuarial subjects with four marks of
70 and four marks of 50 meets the requirements,
but would not be admitted. The Centre will only
admit students who it believes can successfully
complete the honours year.
Application Process
Applicants must apply on line at https://sis.unimelb.
edu.au/cgi-bin/course-application.pl
Selection takes place in December after third year
results become available. You will be informed in
early January to advise if your application has been
accepted or not. You can then enrol as part of the
normal enrolment process.
10 11

Diversity of actuarial Work
Actuaries and Banking
and Finance
Banking has become a more mathematical
discipline in the last 25 years. Firstly, the paradigm
has shifted from the banker using his judgement
about a deal and a company, to using historical and
market data to develop mathematical models that
allow the assessment of risk versus return.
Secondly, there has a been massive growth in the
trading of complex derivative products in recent
years. The Bank of International Settlements
recently estimated that there are 27 trillion USD
notional of interest-rate derivative contracts
outstanding. Such products can only be valued
by using complex mathematical techniques, and
for this the blend of mathematical, financial and
personal skills of an actuary is ideal.
To properly assess the risk versus return of a
deal requires not just a model of the quantities
underlying the deal and its hedging, but also of how
these quantities interact with the bank’s existing
portfolio. Thus one wishes to build a model of all
the deals currently held and measure its risk and
return profile, and compare that with the portfolio
extended by adding the new deal. To do this
requires building models not just of the distribution
of each underlying risk exposure, but also of how
they vary together. These need to be extrapolated
from historical data and here actuarial skills are
essential.
Actuaries are involved in the modelling of financial
risks typically faced by banks and in the calculation
of capital requirements for banks. This is a growing
area for actuaries.
Actuaries and
Life Insurance
Life insurance has been an important practice
area for the actuarial profession for more than
a century. In the last 20 years the life insurance
industry has seen some radical changes with the
rising importance of unit-linked contracts and the
restructure of long established mutual companies.
The role of the actuary in life insurance has evolved
and life insurance continues to be an important
employer of qualified actuaries and new graduates.
The business of life insurance revolves around longterm
financial contracts (called policies) between
life insurance companies and their customers or
policyholders.
Life insurance policies involve payments in the
event of specified circumstances involving the
death or survival of nominated lives. For example,
individuals with dependents will often take out a
temporary contract providing a lump sum payment
in the event of their death within the contract
period. Such a contract typically provides financial
security for a family in the event of
the premature death of the main bread-winner.
Life insurance companies would normally rely on
their actuaries to calculate the appropriate charge
(or premium) for contracts providing such death
benefits. In performing such calculations, actuaries
apply mathematical techniques involving probability
and compound interest. These contracts usually
involve funds being set aside and actuaries use
similar techniques to assess the amounts required
to ensure the financial integrity of life insurance
policies.
As a result of their understanding of life insurance
business actuaries are often found in senior
management roles within the industry or regulatory
bodies.
Actuaries and General Insurance
General insurance is a very broad term which
essentially covers all types of insurance which are
not classified as life insurance. Most individuals
will effect a general insurance policy during their
lifetime. Examples include motor vehicle insurance,
home contents insurance, and travel insurance.
One of the major roles an actuary plays in
general insurance is modelling risks. As a simple
example, consider motor vehicle insurance. A
typical insurance policy covers an individual for
one year, but when a policy is issued, the insurer
does not know how many motor vehicle accidents
the individual will have during the year, or how
much vehicle repairs will cost as a result of these
accidents. Based on previous years’ data for similar
insurance policies, an actuary will construct models
both for the number of accidents an individual will
experience and for the costs associated with these
accidents. A fundamental use of such models is in
the pricing of an insurance policy. The actuary must
decide on the amount (known as the premium) to
be paid by an individual for insurance cover.
Another illustration of general insurance would be
a policy covering a manufacturing company against
losses arising from an industrial accident or a fire.
Consider the situation where a large factory was
completely destroyed by fire. The losses associated
with this would run into millions of dollars, and it
would take a number of years before the insurance
claim was finally settled as the factory was rebuilt,
new machinery installed and so on. One of the
tasks for an actuary would be to set a reserve level.
This is an estimate, required for statutory purposes,
of the cost to the insurance company of eventually
settling the insurance claim. An actuary must also
be able to perform calculations to ensure that an
insurance company is solvent. Broadly speaking,
this means that the insurer has enough funds to pay
insurance claims as they arise.
A further role of actuaries in general insurance
is in determining reinsurance arrangements. An
insurance company may wish to limit the amount
it pays on an insurance claim. It can achieve this by
sharing the insurance risk with a reinsurer in return
for the payment of a reinsurance premium. A role
for the actuary is to decide on the most appropriate
type of reinsurance, and how much of the insurance
risk should be shared with the reinsurer.
12 13

graDuate Profiles
Yen Ni Tan
Current employer:
KPMG Actuaries
Yen Ni Tan completed
her Honours degree
in Actuarial Studies
at the University of
Melbourne in 2003 and
joined KPMG Actuaries
as an actuarial analyst
upon graduation. Yen has worked in the General
Insurance practice, assisting in insurance liabilities
valuations for workers compensation for a large
self-insurer and in audits of several Australian and
Singaporean insurers.
Involvement in outstanding claims valuations has
allowed Yen to put into practice the knowledge
she gained pursuing Honours at the University of
Melbourne. Yen’s role in the valuation of liabilities
includes building models and analysing the
experience of claims.
While insurance liabilities valuation gives Yen
the opportunity to develop technical skills, audit
assistance provides the opportunities to develop
a sense of business acumen.
Audit assistance requires Yen to provide actuarial
expertise to the KPMG’s Audit practice to deliver
independent assurance on the valuation of liabilities
conducted by other actuaries. This allows her to
understand the dynamics of the industry and how
social, economic and legal factors impact the claims
of the various lines of business including public
and product liability, professional indemnity,
CTP and a variety of short tail classes. As audit
assistance involves constant client contact Yen
has been able to develop good communication
and interpersonal skills.
Yen found Honours in Actuarial Studies an
intellectually stimulating and immensely rewarding
experience. It not only provided her with a number
of exemptions from the Institute of Actuaries of
Australia exams but also the necessary analytical
and diagnostic skills which form the basis of her
role as an analyst with KPMG Actuaries. Honours
presented Yen with the opportunity to undertake
independent, self motivated research especially
in writing her thesis on pricing Asian options and
helped build a strong foundation for her career.
Jim
Hennington
Current Employer:
PrismXpat,
Global Financial
Advisers
Jim Hennington is
an Australian actuary
who graduated from
the University of
Melbourne in 1993 with a Bachelor of Commerce
degree. Since then he has become a specialist in
the field of retirement funding for corporations and
individuals, especially when people move country.
He has worked in the UK for over eight years now
after transferring to London in 1997 when working
for superannuation consultants, Watson Wyatt.
Before that he worked in their Melbourne office,
which he joined in 1991 whilst at University.
Actuarial studies at the University of Melbourne
was very small in 1991, with many subjects being
done by correspondence with Macquarie University
in Sydney. It was tough going with the 50 or so
starters in first year whittling down to about 10 in
third year. However this training gave Jim a kick
start towards his actuarial career and was enough
to attract Watson Wyatt to provide
a scholarship and a job afterwards.
In the UK Jim worked in the international employee
benefits field, consulting to multi-national
companies with a particular emphasis on retirement
benefits. He also had jobs working on the UK’s
Pension Mis-selling review and was involved in
setting up a specialist pensions administration
office for Hazell Carr plc (the UK’s fastest growing
unlisted company in 2001). Here he was one of
a small group of actuaries responsible for training
250 plus staff to bring them up to speed with
the intricacies of UK pensions. He has also been
working closely with solicitors who have complex
issues with retirement assets on divorce or in
litigation cases.
As well as being a Fellow of the Institute of
Actuaries of Australia and an Affiliate of the UK
Institute of Actuaries, he has completed the UK’s
Financial Planning Certificate and holds the G60
qualification (required to advise on pension matters
that are restricted by the UK’s Financial Services
Authority). He established PrismXpat in 2002 with
Darion Pohl, another graduate of the University of
Melbourne actuarial program, and has never looked
back. He has a keen interest in the macroeconomic
and investment impacts of various government
retirement savings systems worldwide.
14 15

staff Profiles
Professor David Dickson
In 1993 David joined the Centre for Actuarial Studies as a Senior Lecturer, having previously
worked at the Government Actuary’s Department in London and at Heriot-Watt University,
Edinburgh. He was promoted to Associate Professor in 1997 and appointed to the Chair of
Actuarial Studies in March 2000. David’s main research interest is ruin theory and he has
published numerous articles on this topic in leading international actuarial journals.
He is also author of the books “An Introduction to Actuarial Studies” (with M E Atkinson)
and “Insurance Risk and Ruin”, which was awarded the H M Jackson Memorial Prize of
the Institute of Actuaries of Australia in 2006.
David is a Fellow of the Faculty of Actuaries (Scotland) and of the Institute of Actuaries of Australia. He is also Adjunct
Professor in the Department of Statistics and Actuarial Science at the University of Waterloo, an Associate Editor of
Insurance: Mathematics & Economics, of North American Actuarial Journal and of British Actuarial Journal, and
a member of the Editorial Board of the ASTIN Bulletin.
Professor Daniel Dufresne
After doing a first degree in mathematics, Daniel worked in actuarial consulting and then did
a PhD in actuarial science. A Fellow of the Society of Actuaries, Daniel has since been teaching
and doing research in probability and financial mathematics, in Canada and Australia.
His research topics have included pension funding and accounting, stochastic difference
equations, perpetuities, integral functionals of Brownian motion, average options, simulation
for option pricing, bank credit line commitments.
Associate Professor Mark Joshi
Mark obtained a BA in mathematics (top of year) from the University of Oxford in 1990,
and a PhD in pure mathematics from the Massachusetts Institute of Technology in 1994.
He was an assistant lecturer in the department of pure mathematics and mathematical
statistics at Cambridge University from 1994 to 1999. Following this he worked for the Royal
Bank of Scotland from 1999 to 2005 as a quantitative analyst at a variety of levels, finishing
as the Head of Quantitative Research for Group Risk Management. He joined the Centre for
Actuarial Studies in November 2005 as an Associate Professor. Mark has written two books
on mathematical finance, “The concepts and practice of mathematical finance,” and “C++
design patterns and derivatives pricing.”
His principal research interest is derivatives pricing. This involves computing the prices of complicated contracts defined
in terms of interest rate movements and the prices of company stocks. A very simple example of such a contract is a stock
option - the right, but not the obligation, to buy a stock on some fixed date in the future at a pre-agreed price.
Dr David Pitt
David completed a BEc, majoring in Actuarial Studies and a BSc, majoring in Statistics at
Macquarie University in 1997 with an Actuarial Scholarship from the AMP. After graduation,
David worked with the AMP as an actuarial analyst for two years, specialising in the pricing
and valuation of both personal and commercial lines of general insurance business. In addition
to working at the AMP, David also completed the requirements for Fellowship of the Institute
of Actuaries of Australia. He then returned to academia in 2000 and completed his PhD
specialising in the use of modern statistical methods in the analysis of income protection
insurance.
David’s current research interests include flowgraph modelling, income protection insurance and reverse mortgages.
He has published in the Australian Actuarial Journal, Agenda, Teaching Statistics and the Annals of Actuarial Science. He
is also a very enthusiastic teacher having been awarded the Vice Chancellor’s Award for Teaching Excellence at the ANU
in 2004 and The University of Melbourne Faculty of Economics and Commerce, Outstanding Lecturer Award, April 2006.
Dr Shuanming Li
Shuanming obtained a BSc in Applied Mathematics from Tianjin University in 1992,
and MEc from Renmin University of China in 1995. After graduation, he worked as a lecturer
in Renmin University from 1995-1999. Shuanming joined the Centre for Actuarial Studies as
a senior lecturer in December 2004, after finishing his PhD in Actuarial Science from Concordia
University (1999-2004). He is also working to complete the requirements for an Associate
Member of the Society of Actuaries.
Shuanming’s research interests cover Risk and Ruin Theory, Stochastic Modelling in Insurance
and Finance, and Applied Probability. Since he finished his PhD, he has published more than
ten papers in the leading international actuarial and applied probability journals, such as Scandinavian Actuarial Journal,
ASTIN Bulletin, Insurance: Mathematics and Economics, North American Actuarial Journal, and Advances in Applied
Probability. He is currently involved in teaching the Honours subject (Risk Theory I) and the third year subject (Models
for Insurance and Finance).
Dr Xueyuan Wu
Xueyuan obtained a BSc (Probability and Mathematical Statistics, 1997) and an MSc
(Probability and Statistics, 2000) from Nankai University, China. He finished his PhD in Actuarial
Science from the University of Hong Kong in 2004. In early 2006, he joined the Centre for
Actuarial Studies as a Lecturer, and he will teach and co-ordinate the 3rd year actuarial subject
Contingencies and the 2nd year subject Financial Mathematics I.
His research interests mainly focus on correlated risk models, ruin theory and recursive
calculations for ruin probabilities. So far he has published several research papers in one of
the top international actuarial journals.
16 17

What they are saying
A recent article by Catherine Baldwin, former
CEO of the Institute of Actuaries of Australia:
Actuaries may always have been associated with
insurance, but, argues Catherine Baldwin, their
skills are in demand elsewhere as the regulation
revolution continues.
It is commonly observed that “what gets measured
gets managed”. But historically many organisations
assessed risk on a subjective or qualitative basis
rather than by using quantitative disciplines.
Today, risk management has become core to good
corporate governance. The understanding and
management of risk using both quantitative and
qualitative measures is increasingly recognised as
a means of achieving strong performance against
financial, social and environmental business
objectives.
The actuarial profession has its origins in risk
quantification. The traditional role of actuaries
involves quantifying risk to set adequate insurance
premiums. This role has developed over the years
into providing high quality analysis for management
and boards of varying financial services
organisations - and also for regulators.
More recently, actuaries have become involved in
other activities where the demand for better
financial risk management has been increasing,
including banking, funds management, project
finance and in the utilities and the resources
industries. Actuaries are relied upon through their
professional education and affiliation to ensure their
advice is unbiased and candid.
US Jobs Almanac said:
The job of actuary was rated as the most desirable
profession in the American economy. The actuary,
a mathematician specializing in the problems of
evaluating insurance risks, enjoys a good salary,
interesting and challenging job assignments, and
a well-defined career path.
18 19

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unDergraDuate stuDies in
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the university of melbourne,
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authorised by: the general manager
Published by: Department of economics
Date published: june 2008
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