Xiaotian Zhou is a Master of Science student in Actuarial Science at Boston University. He plans to graduate in December 2018. We spoke to him in October 2018.
Please tell us about the Actuarial Science program at Boston University.
The Master’s program here is very comprehensive. The courses here are not limited to helping you prepare for actuarial exams. We have the opportunity to learn advanced techniques, such as using SAS to analyze data. We also learn the basics that you need to know to be an actuary, such as Microsoft Excel and Access. We have a course that specifically teaches you how to use the concepts and theorems you learn from other classes in order to calculate insurance premiums based on certain data sets.
In our classes, we also cover interesting topics in the insurance industry, including group insurance and individual insurance, which helps you understand how the industry works. There are also investment courses and most importantly, the courses are taught by either retired, experienced actuaries or actuaries still in the insurance industry.
I think it is a great program for students who want to learn advanced knowledge about actuarial science or for students who did not major in actuarial science as their undergraduate major and want to be in the insurance industry.
My classmates and the study environment are pretty great here. Students around you are very smart, and you can learn a lot from them. I feel like it’s pretty competitive, and you have to study hard to keep up with the courses. Most exams here are very hard. Some of the students are part-time students working in the insurance industry, so you can learn from them how things really work in the industry in addition to the theorems that you learn from the books.
The city of Boston and Boston University, specifically, has a great location. We are situated along the Charles River, and our main campus is located on Commonwealth Avenue, which makes it one of the most unique college campuses in the world. We have an above-ground subway (the MBTA Green Line) that runs through our campus, and there are many shops and supermarkets.
Student life here is unique because you get both campus life and urban life. Movies are even filmed here! Just last week, Mark Wahlberg was shooting his new movie Wonderland here on our campus.
I really like it here. I would recommend this program to anyone who wants to learn more about actuarial science and pursue the insurance industry.
How did you decide to study actuarial science?
I finished my Bachelor’s degree at the University of Central Oklahoma in actuarial science, where I first became interested in the field. I was told by a friend of my parents that if I wanted to pursue a career in the financial industry, actuarial science could be a great choice because you learn intensive math. You gain knowledge that is not limited to financial markets, but you also learn to use technology and statistics to analyze data.
Before that, I did not know actuarial science had so many applications. I thought it was only for the insurance industry. After I started studying actuarial science, I realized this is really a great major for students who want to learn skills they can use in the entire financial industry, and the applications are not limited to insurance. More importantly, after starting this major, I realized the insurance industry is a great industry and pretty attractive as well. So, I decided to find a big city like Boston to pursue my Master’s degree.
What are the differences between your undergraduate and Master’s actuarial science programs?
I would say the biggest difference is that the Master’s program is more career-related. In undergrad, we didn’t have that many courses that gave us real-world experience. We did calculations mostly by hand and though we understood the theorems and memorized the formulas, we never knew how those formulas were created.
In the Master’s degree, you learn why the formulas are created and how to build the formulas yourself. You also learn how to analyze, solve, and understand problems. There’s more of a focus on logical thinking to solve problems and more focus on solving real-world problems.
Please tell us about your courses at Boston University.
In my Master’s program, there’s a theorem course to help you prepare for the actuary exams. Most of the time, when you are in class, you learn something about the insurance industry in addition to learning the exam material. Most of the professors here are retired, experienced actuaries. Often, they will teach you not only the theorems and the math behind the calculations, but they will also tell you how it works in the real world.
Hal Tepfer, the director of our program, teaches some classes. Hal is a Fellow of the Society of Actuaries and also is a pension and health insurance consultant. His class teaches you to understand the complex math and concepts, but besides that, he also teaches you how to explain those complex ideas in an easy way for people without an actuarial background. I have never had this experience before in other courses. This course prepares you to both learn the concepts and explain them to others.
There are also courses like corporate finance which I had with Dr. Creegan. In this course, I learned both corporate finance and also learned from the experience of Dr. Creegan. He is a retired, experienced actuary, and he held important positions with many major insurance companies. He always drew from his experience in the past at the manager level and explained how he used the skills from the book in real life.
The other courses which I felt were most useful were the programming courses. AT602, Laboratory for Actuarial and Financial Data Analysis, taught me how to use Excel, Access, and VBA. Before taking this course, I was really bad at computer programming, but after taking this course, I felt more confident in programming and coding. This course was helpful because it was designed for actuaries, unlike the courses in the computer science department. The other programming course that was useful was SAS programming. SAS is one of the most commonly used software programs in many insurance companies, so it’s an important skill you have to learn.
Tell us about a real-world experience you’ve had with insurance.
After I learned about actuarial science, I felt like I was able to help a lot of my friends and fellow students purchase their personal insurance. In most places in the United States, you have to have a car for transportation, and if you have a car, you also need auto insurance.
Most freshmen and sophomores in college do not understand how to purchase insurance. Especially if they have a high-cost premium, they end up buying liability-only insurance. Sometimes, their coverage wasn’t really protecting their car. I used my insurance knowledge to help them buy full coverage at an affordable price by increasing their deductible or lowering their coverage limits in order to lower their premium.
Have you had any insurance related internships?
During the summer I was fortunate enough to intern at AIG. I had a great experience during my internship with the reserving department. My main job was to work on the Schedule P adjustment, which is a complex and large section within the annual statement for insurance companies.
I was working on an Excel spreadsheet to produce a real-time Schedule P, rather than using accounting software to produce the report. My main work on the project was to perform data analysis where I reconciled accounting data to actuarial science data.
AIG has a really great networking program for interns. I met a lot of friends and also found many mentors. The people are very nice and helpful, and you learn the latest ideas from the insurance industry and see the real work that is being done.
We also had many classes for actuary interns. All the interns would get together to share ideas about what we have learned from our internship. Since there are many lines of business within AIG, there was always something new to learn.
The other thing I found helpful was the senior speaker series. I gained a lot of knowledge not specifically related to actuarial science, but more related to the insurance industry and the insurance business.
What are your future aspirations or career plans?
For the past five years, my goal has been to become an actuary, and I’d like to continue in this industry. I’d especially like to learn how the insurance business really works and also learn more technology as we are in a fast-evolving technology environment.
There is always something new to learn about actuarial techniques. In the future, I probably will look for more responsibility inside an insurance company. That’s my goal for the future: to join an insurance company, learn more skills, and use my skills to help people in this industry.
What are the latest developments or trends in insurance?
Everyone is talking about artificial intelligence and machine learning. In my opinion, these technologies are definitely going to help actuaries. AI and machine learning are already here, so they aren’t just big fancy words. AI and machine learning are based on statistics, so most actuaries will have the skills to use these technologies already.
These technologies are useful skills for us to learn and will help actuaries be more efficient in their jobs. But it won’t limit the jobs for actuaries because, in my opinion, most insurance companies want more data interpreters. Being an interpreter who can analyze data results is much more important than only knowing how to perform a specific task.
What advice would you give someone interested in the insurance field?
I suggest that they get involved in the industry as much as they can and not only limit themselves to the courses they are taking. I feel that it is difficult when you are trying to pass exams if you don’t have that many resources or people to study with. I would suggest that to pass the actuary exams as soon as you can, find more study groups and classmates to help you prepare. On the career side, I suggest getting involved in an actuarial science club to show your interest in this industry.