Balancing theory and practice in actuarial education

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Balancingtheory and practicein actuarial
education

• John Shepherd
• Associate Professor of Actuarial Studies
• Macquarie University
• Sydney, Australia

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Balancing theory practice in actuarial
education(A work in progress )

• 1 Reflecting on 25 years of teaching actuarial
  students ?
• 2 Implications for the structure of actuarial
  education ?
• 3 Balancing theory and practice

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Presentation outline

• Setting a framework learning and teaching
• What is teaching?
• What is the curriculum?
• 1 Learning objectives/outcomes
• 2 Assessment tasks
• 3 Teaching/learning activities
• Digression Actuarial capabilities
• Implications for actuarial learning
• Implications for professional accreditation
• Conclusions

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Presenters perspective

• Over 25 years teaching thousands of actuarial
  (and other) undergraduate students at Macquarie
  University in Sydney
• Teaching actuarial students face-to-face in
  Canada, USA, Kazakhstan, PRC, HK, Singapore,
  Malaysia
• Teaching Actuarial Control Cycle students in many
  countries via internet
• SoA Course 7 Seminars 2001-2006
• UK Professions CA2 seminars 2006-2009
• Grad Dip Ed Masters in Higher Ed
• Academic focus student learning

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What is teaching?

• On reflection three main stages in my
  development as teacher
• Different focus at each stage
• 1) Mastering the content
• 2) Achieving better communication of the content
• 3) Getting learners doing the sorts of things
  that will result in them learning what we want
  them to learn

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Characteristics Stage 1

• Teacher must know the content thoroughly, and be
  able to answer any question that students might
  ask
• Different learning outcomes some students learn
  well and others not so well are due to
  differences between students
• There are good and poor students
• Students role is to attend classes, listen
  carefully, take notes, read the textbook, do the
  exercises and
• regurgitate it accurately in the exam!

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Characteristics Stage 2

• Now more comfortable with the content
• Emphasis on transmitting that content more
  effectively
• Focus on developing teaching capabilities
  better lectures, better lecture notes, more and
  better exercises for students, clearer
  explanations, from OHP to PowerPoint, IT-enhanced
  learning, etc
• Central focus still on teachers activities

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Characteristics Stage 3

• Teaching expertise has no value if no learning
  takes place
• No longer possible to say
• I taught these students about Markov chains last
  term but they didnt learn a thing!
• What does it mean to learn or understand?
  How best to support, and test for, the
  achievement of understanding?
• Role of teaching is to stimulate and facilitate
  learning
• Analogy between teaching and coaching a sporting
  team coach can help by guiding and advising but
  students/athletes must perform

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What the student does

• It is helpful to remember that what the student
  does is actually more important in determining
  what is learned than what the teacher does.
• Thomas J Shuell (1986)

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What is the curriculum?

• Much discussion of actuarial education focuses on
  knowledge content
• Knowledge content is just one (small) component
  of the curriculum
• Three major components
• 1 Desired learning outcomes
• 2 Assessment tasks (how we evaluate how well the
  desired outcomes have been achieved)
• 3 Teaching/learning activities

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1 Desired learning outcomes

• What do we want our students to know and be able
  to do?
• Not just knowledge content
• What do we want our students to be able to do
  with that knowledge?
• What capabilities do our students need to be
  developing?
• What capabilities are needed to practise as an
  actuary?
• Need for capabilities is implied by fitness
  for purpose and (eg) by Solvency II emphasis on
  modelling process rather than models

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2 Assessment tasks

• Assessment is in several ways the most important
  of the three components
• To many of our students, assessment IS the
  curriculum!
• Assessment speaks louder than words
• Conventional examinations are not well suited to
  assessing many of the capabilities our students
  need to be developing
• Its not about the numbers!
• What do the numbers mean?
• Words! (Why?)

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3 Teaching/learning activities

• Gradual move away from conventional lectures to
  workshops (even for up to 500 students)
• Students are actively involved
• If there are too many students for all to
  interact with the teacher then have students
  interact with each other (teach each other)
• Old adage Best way to learn is to teach
• Problem based approach (Heres a problem )
• Students think about and tackle the problem
  individually, then discuss in groups of 2 or 3
• Teacher models solving the problem (start with
  blank OHP transparency and talk it through)
• Tension with need to cover the syllabus

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What are actuarial capabilities?

• Presentation at joint GC/IAA education seminar in
  Tallinn (May, 2009)
• Bridging the Gap Between Theory and Practice
  (Enrique de Alba, 2009)
• Outline of an investigation undertaken for a
  Mexican insurer
• Find a way to price earthquake risk for insurance
  purposes
• Premium and probable maximum loss
• Involved collaboration between academic
  actuaries, geophysicists, insurers and reinsurers

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What are actuarial capabilities?

• Capabilities required for successful completion
• Up to date technical knowledge
• Able to perform complex modelling (process)
• Collaborate with other experts (eg insurers,
  geophysicists, reinsurers)
• Communicate results to a range of audiences
• Appreciate the broad context of the problem
  (regulation, insurance, reinsurance, local,
  global)
• Research capabilities (diligent, systematic,
  careful, reflective)
• Ready to try different approaches (flexible,
  creative)
• Professional (standards of practice, code of
  conduct integrity, care, skill, responsibility)
• Such capabilities are unlikely to develop when
  the learning context is based purely on drill
  and practice exercises

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What are actuarial capabilities?

• Consider this list of personal abilities needed
  by engineers in the early part of their career
• (Compiled by Moulton
  Lowe, 2005)
• Being willing to face and learn from errors and
  listen openly to feedback
• Understanding personal strengths and limitations
• Being confident to take calculated risks and take
  on new projects
• Being able to remain calm under pressure or when
  things go wrong
• continued

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What are actuarial capabilities?

• Having the ability to defer judgement and not to
  jump in too quickly to resolve a problem
• A willingness to persevere when things are not
  working out as anticipated
• Wanting to produce as good a job as possible
• Being willing to take responsibility for
  projects, including how they turn out
• An ability to make a hard decision
• A willingness to pitch in and undertake menial
  tasks when needed
• Having a sense of humour and being able to keep
  work in perspective

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A students perspective

• A 2009 Macquarie Uni Control Cycle student,
  commenting on an excerpt from Trevor Thompsons
  IAAust Presidential Address
• Trevor Thompson expresses surprise that there
  are so few actuaries who are also entrepreneurs.
• I'm not at all surprised, at least for the ones
  who make it through the UK Part I exams it
  seems to me that the exam process selects people
  with the ability to memorise detail, use
  calculators fast and accurately and take
  meticulous care in complicated calculations.
  These may well be good skills for actuaries to
  have (at least in the pre-computer days), but I
  would guess that they rarely come together with
  the skills of the entrepreneur.

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A key ingredient Feedback

• Students receiving timely and relevant feedback
  on their learning so far and acting on that
  feedback
• Feedback from whom?
• Possible sources of feedback teachers, teaching
  assistants (usually more senior students), fellow
  students (peers), self
• Learning to give, and to receive, peer feedback
  is valuable preparation for the workplace and for
  professional responsibilities
• Old adage The best way to learn something is to
  teach it!
• A small tip Use green (or any colour but red!)
  for annotating students work with comments

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Implications for actuarial learning

• Actuarial students are more likely to develop the
  desired capabilities if their learning is more
  active than passive more discovering than
  reproducing
• Suggests a problem based approach
• Education for other professions (and
  quasi-professions) is often problem based
• eg medicine other health sciences engineering
• Problem Based Learning (PBL)
• PBL has not yet been tried in actuarial education
  (to the best of my knowledge)
• Perhaps not suitable for new high school leavers
  what does an actuary do?
• Other weaker forms of problem based
  learning are possible

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Extent to which learning is problem based
Weaker
Stronger
eg traditional exercises
eg PBL (as in medicine)
Problem characteristics Narrow context Clear
definition Clean data Correct solution
Large number of smaller problems Solved
individually No need to interpret Not ongoing
Problem characteristics Broad context Fuzzy
definition Dirty data Multiple solutions
Small number of larger problems Solved in
teams Interpretation? Ongoing
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Classes of problem

• 1) Standard or familiar Problems that students
  have seen or attempted previously numeric and
  other values have been changed
• 2) Slightly different Problem is changed such
  that standard formulas, equations and processes
  need to be modified some understanding of basic
  principles required
• 3) Significantly different A shift or transfer
  is required in application of basic principles
  formulas, equations and processes need to be
  constructed from a good understanding of basic
  principles
• Example Application of rate interval concept
  to economic forecasting
• How do we help students to make the shift from 1
  through 2 to 3?

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Making the shift

• How do we set up learning in such a way that
  students cannot avoid focusing on the underlying
  meaning instead of just manipulating symbols?
• What is the best way to change students
  behaviour?
• Change the nature of assessment
• Key Ask for translations from mathematics into
  words ask what it means in your own words
• Ask for explanations to different stakeholders
  peers (other students), non-technical people
  (clients, policyholders, journalists), senior
  actuaries, etc
• Ask why?, how?, what if ?, etc
• Process of explaining (teaching) leads to better
  understanding (learning)
• Yes it takes longer to read and assess!

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University/profession relationship

• Some thoughts on the relationship between the
  profession and university programs
• Recognising a whole degree program
• A principles-based approach to accreditation
• Quality learning materials through collaboration

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Recognising a whole degree

• Currently IAAust awards exemptions from
  professional subjects individually
• For example, a grade of a minimum level (say, B)
  in a specified university subject earns an
  exemption from Subject CT5
• Problem Creates actuarial degree programs with
  two classes of subject exemption and
  non-exemption subjects
• Implicit message Learning in non-exemption
  subjects is not important to becoming an actuary
  and is not valued by the profession
• Solution Recognise a whole degree (as other
  professions do law, medicine, accounting, etc)

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Accrediting university programs

• Adopt a principles-based approach
• ltActuarial organisationgts approach to
  accreditation of university actuarial education
  is principles-based rather than relying on
  prescriptive rules. A principles-based approach
  is one that emphasises learning outcomes in
  setting educational requirements and
  expectations, but does not seek to specify or
  prescribe the exact manner in which those
  outcomes must be achieved.
• Adapted from APRAs approach to regulation

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Accrediting university programs

• Current approach Universities seeking
  accreditation are asked to demonstrate that their
  programs cover a minimum proportion of the
  detailed, micro-level, knowledge-based syllabus
• Recommended approach Universities seeking
  accreditation are asked to demonstrate how their
  programs support development of the specified
  learning outcomes (capabilities) and how the
  achievement of those outcomes is assessed
• Universities are encouraged to be innovative (not
  necessarily uniform) in how they educate future
  actuaries

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Generating cases problems

• Imagine
• the experience, energy and time currently spent
  by volunteer actuaries on writing course notes,
  exercises, model solutions, exams and model
  answers, reading and marking exam answers,
  setting pass/fail cut-offs, in committee
  meetings
• is invested instead in writing case studies,
  real world problems, role plays and research
  assignments, building or adapting data sets to
  support them, and writing model solutions
• (in collaboration with university teachers)
• so that students can practise applying their
  technical knowledge
• (at a level appropriate to their stage of
  development)
• Existing example UK subject CA2 (Model
  documentation, analysis and reporting)

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John Dewey said

• learning is based on discovery, guided by
  mentoring, rather than on the transmission of
  information

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Conclusions

• Anyone who teaches actuarial students operates at
  the intersection of two academic disciplines
  actuarial science and education
• A question for both university actuarial programs
  and professional bodies
• Is expertise in one of those areas good enough
  for a teacher of future actuaries?
• What the student does is actually more important
  
• Good actuaries have broader capabilities than
  just technical expertise
• Assessment speaks louder than words
• Problem based learning supports capability
  development
• When evaluating university actuarial programs,
  professional bodies should focus less on
  syllabus coverage and more on learning outcomes

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What do you think?

• John Shepherd
• jshepher_at_efs.mq.edu.au