Insurance, Financial and Actuarial Analysis

Faculty of
Business Administration
Bachelor of Business Administration in
Insurance,
Financial and
Actuarial Analysis
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http://ifaa.baf.cuhk.edu.hk

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Bachelor of Business Administration in

Insurance, Financial and Actuarial Analysis
Introduction
The BBA Programme in Insurance, Financial and Actuarial Analysis (IFAA),
which is run by the Department of Finance of the Faculty of Business
Administration, was started in September 2002. The programme provides
an in-depth education in insurance, finance, and actuarial science to
individuals who wish to build careers as actuaries, financial analysts,
risk managers, and other financial service providers. Since its inception,
IFAA has attracted among the most outstanding and academical y
accomplished students in Hong Kong.
Initial courses in the IFAA programme focus on fundamental business and economics issues and provide students
with the necessary grounding for the more specialized courses that fol ow. Subsequent courses in risk management,
insurance, and finance further enhance the knowledge necessary for those who wish to become insurance professionals
and financial analysts. In addition to the comprehensive training that they receive in the actuarial courses, students are
also prepared for the actuarial exams that are offered by the Society of Actuaries (SOA) and the Casualty Actuarial Society
(CAS). In sum, students who complete the IFAA programme wil be in a strong position to begin exciting and rewarding
careers in the insurance industry and related fields.
Learning Outcomes
The learning outcomes of the IFAA programme are as follows.
1 To understand the social, ethical and legal responsibilities of insurance companies.
2 To learn effective written and oral communication skills in a business context.
3 To learn the essential business skills and functions.
4 To understand the purpose and design of different insurance products, and how these products are distributed.
5 To gain basic knowledge in finance and its applications in insurance.
6 To acquire actuarial knowledge for the pricing and financial management of insurance products.
7 To learn the basic quantitative skills that are essential in actuarial analysis.
8 To learn how to manage an insurance company in a local, global and multi-cultural environment.

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Bachelor of Business Administration in
Insurance, Financial and Actuarial Analysis

Career
Actuaries serve the broader financial community by bringing their expertise in
Students who wish to be
mathematics, statistics, and financial theory to the quantification and evaluation
Actuaries
of risks that are related to uncertain future events. This expertise is particularly
valuable in relation to insurance and pension programmes. Actuaries may work
for insurance companies, consulting firms, government bodies/agencies or in
the employee benefits departments of large corporations, banks, and investment
firms. In fact, any business that has substantial financial risk to manage will
benefit from the services of an actuary.
The first step toward a career as an actuary is to study in an actuarial (or
actuarial-based) programme such as the Chinese University’s IFAA programme,
which offers students the opportunity to pass two or more of the actuarial
exams that are held by the Society of Actuaries (SOA) or the Casualty Actuarial
Society (CAS). Most employers in Hong Kong require university graduates to
pass one or two of these exams. Students who have passed three or more
are very marketable upon graduation. Employers generally prefer their junior
actuaries to gain knowledge and experience while working and are, therefore,
likely to be supportive of exam-related study.
Students who wish to be
IFAA graduates are equipped with the necessary training to pursue a variety of
Insurance Professionals
professional insurance careers; this can include work as underwriters, insurance
adjusters/examiners, or risk managers.
Underwriters evaluate insurance applications to determine the risks entailed in
issuing a policy. They scrutinize applications and decide whether to accept them
and, if so, determine the terms that would be acceptable and set a premium
to accurately capture the risks therein. Insurance adjusters or examiners
determine whether particular claims are covered by a customer’s policy, confirm
payments and, in certain circumstances, investigate the background issues
surrounding a claim. Risk managers assess risks, such as the physical, liability,
and financial losses that are faced by both insurance and non-insurance
companies. In so doing, they are able to advise top management on risk-
financing measures (including insurance purchases). Both buyers and sellers
gain from the services of risk managers.
Students who wish to be
Holders of the Chartered Financial Analyst (CFA) qualification are likely to
Financial Analysts
have an advantage in a number of finance-related areas. Securities analysts,
treasury (or money-market) managers, corporate investment advisors (who focus
principal y on securities and investment issues), and other investment advisors
are likely to reap significant benefits from a CFA qualification in relation to their
subsequent career development. The CFA qualification is awarded by the CFA
Institute (original y AIMR), which administers examinations and sets standards
in experience, education, and ethics. Graduates of the IFAA programme will be
well-positioned to pursue careers as financial analysts in investment firms.
You can find out more about the CFA qualification from the CFA Institute Web
site: www.cfainstitute.org.

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Bachelor of Business Administration in

Insurance, Financial and Actuarial Analysis
As of August 2009, most of the IFAA students graduating in 2008 and 2009
Student Career
had secured jobs upon graduation. Most of them are now working in insurance
Placement
firms, such as AIA, AXA, BOC Life, HSBC Insurance, ING, Manulife, New York
Life, and Prudential. A few graduates have also decided to pursue careers in
other areas, such as investment banking. The salary for a fresh IFAA graduate
clearly depends upon the position attained, the individual qualities of the
applicant, and the overal state of the market. However, we believe that the
IFAA programme offers good opportunities for advancement in a number of key
fields in the financial-services industry.
Distribution of Employed Graduates
(2005-2009) of IFAA Programme
12.2%
1.4%
7.9%
3.6%
1.4%
57.6%
13.7%
Actuarial
Accounting / Auditing
2.2%
Insurance Management / Regulatory
Education
Investment / Commercial Banking
Further Study
Business Consultancy
Others

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Bachelor of Business Administration in
Insurance, Financial and Actuarial Analysis

Some of the opinions
rendered by recent
IFAA graduates are
“Everything seems to be just minutes ago.
offered here.
It was one of the afternoons during the post-exam period. A group of students
sat quietly in an air conditioned room, waiting for the briefing session to be
conducted by professors. It might seem like any other normal day for others,
but for us, the incoming IFAA students, it marked the commencement of our
odyssey through student life, IFAA, CUHK and entry into the actuarial industry.
The next three years, participating in student exchanges, internships, actuarial
exams and student organizations provided an eye-opening experience. The
tough chal enges provided me with invaluable opportunities to explore my
potentials to the ful . Harsh though it was, I was never alone for I had you, my
?
beloved IFAA-mates, to rely on and seek help from whenever I was in need.
Pinky Chau , 2009 Graduate
Now, with eyes closed, hearts open; we flash back through memories - al the
laughter and tears that brought unity and inspiration. Special thanks go to
our professors and the lovely ladies who run the programme for their help,
without which I couldn’t have survived!”
“I am working in AIA, a major insurer in Asia Pacific. During the three years
here, I have chance to engage in various actuarial functions like product
development, liability valuation, planning and budgeting, etc.
Like any occupation, you may have tedious tasks to do when you start. Yet, I
always remind myself of the value of insurance.

The value is simple - it is a promise of financial security and the peace of mind
that it brings (with a cost). As a junior actuary, you wil do financial projections
?
and risk assessments before product launch. This is to evaluate if you are,
William Yeung , 2005 Graduate
financial y, capable of making the promise. Similarly, when you do liability
valuation to comply with regulations, you are demonstrating, financial y, that
you are keeping your promise.

Along with the promises, you wil be performing different actuarial functions
and taking the actuarial exams simultaneously. This is chal enging, but
certainly meaningful.”
“Hi all! My name is Sheryl and I graduated from IFAA in the class of 2008. The
reason I chose this CUHK Actuarial Science program rather than other schools’
was mainly because this program is offered under the Business Faculty. The
benefit of this is, on one hand, you can acquire a strong quantitative foundation,
on the other, you wil be given many invaluable opportunities to get yourself
closer to the commercial markets. The curriculum of IFAA supports its students
to pursue the career of actuary; most of my fel ow classmates completed 3
to 4 professional exams before graduation. At the same time, the business
school provides other out-of-classroom training such as overseas study tours,
?
case competitions, business seminars etc. to broaden our business horizon.
Sheryl Wong , 2008 Graduate
The faculty and IFAA professors have good connections with the industry and
they enabled me to spend internships with AXA, HSBC, Merrill Lynch and ABN
AMRO. I am currently an equity derivatives structurer at RBS (ABN AMRO).”

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Bachelor of Business Administration in

Insurance, Financial and Actuarial Analysis
Study Scheme of
the IFAA Programme
Required Courses
ACY 1111 Introductory Financial Accounting
FIN
3210 Risk Management and Insurance
ACY 1112 Management Accounting for Decision Making
FIN
3220 Actuarial Models I
DSE 1030 Economics for Business Studies I
FIN
3230 Life and Health Insurance
DSE 1040 Economics for Business Studies II
FIN
3240 Corporate Property & Liability Insurance
DSE 2050 Information Systems and E-Commerce
FIN
4210 Actuarial Models II
FIN
2010 Financial Management
MGT 1020 Principles of Management
FIN
2210 Interest Theory and Finance
MKT 2010 Marketing Management
FIN
2220 Foundations of Actuarial Analysis
STA 2006 Basic Concepts in Statistics and Probability II
Recommended Elective Courses
For Future Actuaries
Other Elective Courses
CSC 1580 Visual Programming
FIN
3260 Internship Experience
FIN
3080 Investment Analysis and Portfolio
FIN 3270 Actuarial Internship


Management
FIN
4030 Selected Topics in Finance
FIN
3250 Derivatives for Actuaries I
FIN
4130 Empirical Finance
FIN
4220 Construction and Evaluation of
FIN
4140 Computational Finance


Actuarial Models I
FIN
4150 Quantitative Methods for
FIN
4230 Reinsurance and Alternative Risk Transfer


Financial Derivatives
FIN
4250 Applications of Risk Models
FIN 4160 Intermediate Financial Theory
FIN
4260 Construction and Evaluation of
FIN 4270 Research Project in Insurance,


Actuarial Models II


Financial and Actuarial Analysis
FIN
4280 Derivatives for Actuaries II
MAT 2010 Advanced Calculus I
STA 3007 Applied Probability
MAT 2080 Essential Mathematical Methods I
STA 3008 Applied Regression Analysis
MAT 2310 Linear Algebra and Applications
STA 4005 Time Series
RMS 4001 Simulation Methods for Risk


Management Science and Finance
For Future Insurance Managers
STA 4008 Survival Modeling
ACY 3050 Business Law
ACY 3161 Taxation
FIN
3010 Financial Markets
FIN
3030 Management of Financial Institutions
FIN
3080 Investment Analysis and


Portfolio Management
FIN
3088 Corporate Finance: Theory and Practice
FIN
4120 Fixed Income Securities Analysis
FIN
4230 Reinsurance and Alternative Risk Transfer
FIN
4240 Employee Benefits, Retirement and


Estate Planning
MGT 2510 Introduction to International Business
MGT 4010 Business Policy and Strategy

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Bachelor of Business Administration in
Insurance, Financial and Actuarial Analysis

SOA Examinations
To become an actuary, students should pass the actuarial
examinations that are held by the Society of Actuaries
(SOA). These exams are divided into two parts: public
Exam
Relevant IFAA Courses
examinations and Validation by Educational Experience
Exam P
FIN 2220
(VEE). The courses below are relevant to the SOA
professional examinations, which are held at least twice
Exam FM
FIN 2210, FIN 3250
a year. Graduates of the IFAA programme will normally
Exam MFE
FIN3250, FIN4280
pass three or four examinations in SOA preliminary
Exam MLC
FIN 3220, FIN 4210, FIN 4250
education components. From 2005 onwards, knowledge
Exam C
FIN 4220, FIN 4250, FIN 4260
of Economics, Corporate Finance, and Applied Statistics is
no longer tested by formal exams, but students will receive
VEE validations for these subjects as long as they obtain a
Internally Validated Area
Courses offered for Validation
B- or above in qualified university courses.
Economics
DSE 1030, DSE 1040
Actuarial-based programmes such as IFAA require
Corporate Finance
FIN 2010
these courses, so a student who has completed such a
Applied Statistics
STA 3008, STA 4005
programme wil have fulfil ed the requirements of SOA in
these areas. Our graduates, therefore, have an advantage
You will find more details about the actuarial profession on the SOA Web site
over graduates of other programmes.
at www.soa.org or on the CAS Web site at www.casact.org.
Internship Programme
IFAA offers two internship programmes to our students, the “Actuarial Training
Programme” and the summer internship programme. IFAA is a pioneer of the
“Actuarial Training Programme,” in which participants work in the actuarial
departments of insurance and related companies (such as actuarial consulting
firms and reinsurers) for at least six months. Since the establishment of IFAA,
we have had a good relationship with well-known insurance companies. They
offer a large number of internships to IFAA students every year and provide
actuarial training to students through their normal activities. Students use
these golden opportunities to get involved in the real business world, to
gain practical work experience, and to enhance their interpersonal and
communication skills. In 2008-2009, 50 of our students worked as trainees in
AIA, AXA, HSBC Insurance, ING, Manulife and New York Life Insurance.
In addition to the “Actuarial Training Programme”, we also offer our students
summer internship programmes, as organized by the Faculty of Business
Administration (BAF). Jobs relate to various fields, such as investment banking,
insurance management, marketing, and accounting. In addition to the BAF’s
summer internship programme, quite a few internship places are offered
exclusively to IFAA students. Many IFAA students were offered insurance-related
jobs in the summer of 2009. Work in a variety of departments, such as the
actuarial, accounts, financial and underwriting departments, afforded them
the opportunity to experience different aspects of an insurance company’s
operations. This has helped enrich their learning experience and serves
as a useful launch-pad for their future career development. In the summer
of 2009, some of IFAA students received internship offers from insurance
companies and reinsurance companies, including multinational companies
such as AIA, AIG, HSBC Insurance, Manulife and Prudential.

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Bachelor of Business Administration in

Insurance, Financial and Actuarial Analysis
“The three-month internship at Prudential Corporation Asia (PCA) and eight-month
internship at AXA Regional Actuarial Services served as valuable opportunities to
practise what I have learnt in lessons.
From the Economic Scenario Generator Calibration and Equity Market Research
conducted in PCA as wel as the Valuation work and Projects done in AXA, my
view of financial market and actuarial concepts was greatly broadened. The
Excel, Bloomberg and modeling skil s gained from different tasks also enhanced
my analytical skills and logical thinking.
Candy Chan,
Actuarial Department,
Though sometimes I needed to work overtime and faced some chal enging
Prudential Corporation
Asia and IFRS Team,
problems, it was enjoyable and rewarding to work with a team of actuarial
Regional Actuarial
Services of AXA China
professionals. I was delighted to meet different people in PCA and AXA that
Region Insurance
helped me develop my interpersonal and communication skills.
Company Limited
I want to thank IFAA and my internship colleagues for giving me such fruitful
and memorable experiences. It has confirmed my determination to build a
long-term career as an actuary.”
“In the Marketing Actuarial Department of Manulife Financial, I experienced
the life of a ful -time actuary for five months. My job duties included preparing
quotations and running user acceptance tests. The programming skil s, and
the financial and insurance knowledge learnt in the IFAA programme helped
equip me for the job. I was exposed to a large variety of insurance products
with ever changing features. I improved my programming skil and learnt new
actuarial concepts. New problems arose everyday. Confronted by chal enging
problems I investigated them on my own, discussed them with colleagues, and
obtained guidance from supervisors, changing hectic tasks into useful learning
Mandy Chan, Marketing Actuarial, Manulife Financial
experiences. I took the initiative to learn and ask, and came to understand that
communication skil s are crucial. One must know the actuarial concepts, as
well as how to explain them to others. You can cooperate with colleagues from
different departments to greatly enhance the efficiency and accuracy of team
work. Thank you Manulife for giving me this memorable experience!”
“After studying in IFAA for 2 years, it was time to put my knowledge to practical
use. I worked as an actuarial intern under the Group and Credit Life Insurance
Department of AIA (Home Office). The actuarial team is not a very large one,
but the bonds between team members are very strong. I was assigned a wide
range of tasks, which included, but were not limited to, doing research for new
products, reviewing pricing models by carrying out different kinds of actuarial
studies and preparing monthly / quarterly valuation statements.
I am truly thankful for this invaluable half-year internship opportunity as it gave
me a taste of the real actuarial world, and an understanding that language
skil s do come in handy at work from preparing reports for documentations
Lucy Cheung, Group and Credit Life Insurance Department,
AIA (Home Office)
to communicating with colleagues from local offices in Mainland China.
I definitely gained a clearer picture of my future career path from this
experience.”

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Bachelor of Business Administration in
Insurance, Financial and Actuarial Analysis

“In the past two years, I joined two internship programs in HSBC (Asia) Insurance
Limited and AIA. Both were eye-opening and definitely colored my university life in
several aspects, though duties of the two jobs are totally different.
As a summer intern in HSBC, I dealt with some management projects as wel as
excel work, while during my half-year actuarial intern in AIA, my duties included
actuarial work such as data analysis and preparation of monthly valuation reports.
Although duties of both jobs are far from similiar, I got a vital message out of these
two internships: the knowledge and attitudes I got in my university study equipped
me not only for actuarial work but also for other business management duties.
Mikey Ho, HSBC (Asia) Insurance Ltd –
MPF Administration Department and AIA –
The al -round nature of courses provided by IFAA real y helped. On the other hand,
Corporate Actuarial Department (Home Office)
the tremendous learning opportunities and abundant resources in the workplace
offered me great chance to get a thorough understanding of actuaries. As a result,
I gained a deeper insight into my career path helping me make prudent decisions
for my career.”
Exchange Programme
The exchange programme is one of the most popular programmes
available to BA students. It aims to provide students with international
insights developed via connections with well-known overseas
universities. Through such exchange, students learn about different
cultures, the communication skills necessary for the global market and,
importantly, a variety of unique business practices.
As undergraduates of the Faculty of Business Administration (BAF),
IFAA students enjoy many opportunities for exchange. For 2009-2010,
more than 500 exchange places will be offered by the BA Faculty, the
University, and its four colleges. Students can go on exchange for one
term or, in some cases, for one year. They can enrol in courses at their
host universities and transfer the credits gained to CUHK. Students
usually do not need to extend their exchange study period beyond one
term. The University and the BA Faculty provide scholarships to help
students with their financial needs during the exchange period.
IFAA students have shown great enthusiasm for
the international exposure offered during the
summer breaks. In the past, students have been
sent on summer exchange to a number of renowned
universities including Harvard, the University of
California at Berkeley, the University of Toronto, and
Queen’s University. In 2008, around 60% of the
students in the IFAA programme received offers to
study abroad at universities such as the University
of Toronto, the University of Alberta, the University
of Copenhagen, the University of Waterloo, the
University of California and Tilburg University.

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Bachelor of Business Administration in
10
Insurance, Financial and Actuarial Analysis
Frequently Asked Questions
1 What is the difference between the IFAA programme, the
4 The IFAA programme is in the Faculty of Business
Quantitative Finance programme (QFN), and the Risk
Administration, but shouldn’t actuarial training be offered
Management Science programme (RMS) at CUHK?
by the Faculty of Science?
There are two major differences. First, IFAA and QFN both
One can see that the actuarial profession has moved
belong to the BA Faculty (BAF), whereas RMS operates
somewhat in the past decade or so from a very quantitative
under the Faculty of Science. The extra-curricular activities
discipline towards a more business-orientated approach.
that are organized by the BAF, such as the mentorship,
This is reflected in recent changes (in 2005) in the
internship, and exchange programmes, therefore apply to
examination system offered by the Society of Actuaries and
students enrol ed in both the IFAA and the QFN programmes.
Casualty Actuarial Society. The IFAA programme not only
Second, the focus of the three programmes is different.
provides students with basic quantitative actuarial training,
The IFAA programme aims to provide in-depth knowledge
but also gives them the business exposure that is essential
to persons who wish to pursue careers in the insurance
for actuaries to advance to senior management positions.
and actuarial professions, whereas the QFN programme
aims to provide in-depth knowledge to those who seek
5 What does an actuary do?
careers in investment and finance. The RMS programme
Typical actuarial projects include the following.
focuses more on a statistical and mathematical analysis of
various risks, whereas the IFAA programme concentrates
i. The development and implementation of financial and
on the practical and financial analysis of risk as faced by
risk management programmes formulated to ensure
insurance companies.
that an insurance company is able to meet obligations
to policyholders
2 What are the advantages of the IFAA programme over other
ii. The design and pricing of financial/risk products
similar programmes offered in Hong Kong?
iii. The signing and certification of the Actuary’s Report

The IFAA programme provides comprehensive training in
on the financial status of an insurance company
the four interrelated components of the insurance industry
(which means that the appointed actuary must act
(business, insurance, actuarial science, and finance), while
independently and prudently in the sole interest of
allowing students to tailor their studies to suit their career
policyholders)
goals. Moreover, the BAF of CUHK provides its students
with various activities to prepare them for the ever-changing
iv. Estimation of premium reserves, company pension
business world.
liabilities, and fair premiums for new insurance
products
3. Does the IFAA programme provide courses and training to
iv. Participation in corporate financial planning and
cope with the broad needs of the insurance industry or the
restructuring activities, such as mergers and
financial services industry?
acquisitions
The programme has been designed with four key learning
areas in mind.
i. Basic business knowledge – accounting, economics,
marketing, and management
ii. Knowledge of the purposes, designs, and applications
of various insurance products – life and health
insurance, property and liability insurance, pensions,
and reinsurance
iii. Knowledge of mathematical, statistical, and actuarial
techniques – calculus, linear algebra, statistics, interest
theory, actuarial model ing, risk theory, and survival
study
iv. Knowledge of financial and investment tools –
corporate finance, investment tools, and analysis

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