ST9 April 2015

[Edwin]

Hi, what do others think?

I thought this was a wonderful display of what a “RISK” person should be…it was difficult for me but very enjoyable. I may have not fully met the standard due to time pressures and being tired and being stupid and exam technique…but I am impressed with the examiners.

Question 1 on the t-distr was what we had been battling with at work. Someone fitted a t-distr and left the company and I was asked to assess what he was doing and I asked here;-

http://wilmott.com/messageview.cfm?catid=4&threadid=98391

I think here you needed a lot of theoretical and practical points. I alluded to Hull and White who show that 4 degrees of freedom is a good fit for market data and then put a few theoretical and practical points down then drew a graph and super-imposed the t-distr.

As expected PCA was in but straight-forward.

For the hedging question a similar question was asked in a past SA5 paper and also it was similar to a problem from work, I asked here in the ST6 forum;-

http://www.acted.co.uk/forums/showthread.php?t=10562

The pensions question and Investments under diminishing natural resources was also nice.

Overall a good standard for a modern day RISK person, whether I pass or fail.

 

[oreiln23]

I thought it was a a a very tough paper. It was my first ST exam paper to sit after passing CA1 and it was a lot more application based than I was expecting/hoping.

There wasn't really a soft landing into the paper like past papers I had done. You really had to work for every mark. As a result, I took a while to get going and struggled to finish the paper.

I thought some of the questions were interesting as well but thought the paper was weighted a bit too heavily towards difficult application questions.

 

[Actuarial Trainee]

I found this paper really difficult, was my 1st attempt and felt prepared before the exam. Had done well on my assignments and mock. This paper totally threw me. fingers crossed I've passed but I'm not confident.

 

[Edwin]

Lets wait and see but in general if you always think deeply about staff this was your time.

 

[ActPass]

I thought this was an imbalanced paper to test what a well-rounded risk expert should have.

Most of the questions appear to be financial risks related. But some very important risk themes, such as operational risks, risk appetite which can bring down a company were not mentioned at all.

I tend to agree with some of the comments above - (some) people might be totally lost if they tracked the past papers and assignments etc as a guide when doing the exam preparation.

 

[jollyfakey]

The paper was difficult in my opinion. I dont know if the reason is my lack of preparation or the questions that were asked.

But lets wait till July!

 

[Edwin]

I thought this was an imbalanced paper to test what a well-rounded risk expert should have.

Most of the questions appear to be financial risks related. But some very important risk themes, such as operational risks, risk appetite which can bring down a company were not mentioned at all.

I tend to agree with some of the comments above - (some) people might be totally lost if they tracked the past papers and assignments etc as a guide when doing the exam preparation.

The people that pass will be better risk people than those who remembered Kendall's tau and spearman's rho formulas in the previous sitting...

....there are so many reasons you can't award people a qualification because they remembered a first year formula. At work you can sit and do it with the book open or surf the net.

But you can't hedge or comment successfully on how an ERM framework can help a company exposed to sovereign default without being well accustomed to thinking & reading about risk.

If I fail this one, it will be worth it and I will gladly sit again.

 

[oreiln23]

Isn't the exam supposed to be a specialist technical subject? One thing that strook me was just how applied the whole paper was. The tutor said that the exam was becoming more applied in nature but still didn't expect a paper like that. I was expecting that there would be at least a few marks on a straight forward bookwork question.

Maybe it's my fault in a way but when I started reading that paper, panic quickly set in and I took a while to get going. I think Actpass is spot on about getting lost if you tracked the past papers and assignments etc as a guide when doing the exam preparation.

If that's the standard going forward, maybe they should switch it to an SA? It's one thing to spend a while going over course material to remember it and understand it - it's another thing altogether to be able apply it under time pressure imo. There is so much learning in ST9 as it is for an ST.

 

[Edwin]

Isn't the exam supposed to be a specialist technical subject? One thing that strook me was just how applied the whole paper was. The tutor said that the exam was becoming more applied in nature but still didn't expect a paper like that. I was expecting that there would be at least a few marks on a straight forward bookwork question.

Maybe it's my fault in a way but when I started reading that paper, panic quickly set in and I took a while to get going. I think Actpass is spot on about getting lost if you tracked the past papers and assignments etc as a guide when doing the exam preparation.

If that's the standard going forward, maybe they should switch it to an SA? It's one thing to spend a while going over course material to remember it and understand it - it's another thing altogether to be able apply it under time pressure imo. There is so much learning in ST9 as it is for an ST.

This is more of Risk fellowship than simple ST, remember you get a CERA qualification with it. So maybe the stakes really need to be high.

 

[RobWat]

I was extremely pressured for time. I just managed to answer each question, but there were many occasions where I felt I could have and needed to write more, yet had to move on due to time pressure. I felt like I really didn't have much time to think, and often I just put down the first points that came to mind.

This wasn't helped by the amount of reading. I found it particularly tough with the first question, which was so long I had to keep referring back to the rest of the question to see if there were points I had forgotten about.

As I often find with ST9, I found it very hard to judge what emphasis the examiners are looking for. Sometimes it seems they're looking for the complete obvious, other times to think outside the box; sometimes they want a breadth a points, other times they want more in depth analysis etc. Most questions you could write pages on if you had the time, so you need to figure out what are the key points that they are looking for you to make and into how much depth do they want you to go. I find this particularly hard with ST9 compared to what I remember other subjects being like.

In the latest exam, I'd go as far as saying that I found some of the questions to be cryptic, such as the question along the lines of "describe the PCA approach (without describing the PCA approach)". I took this to mean it wanted a broad overview without the detailed maths, but I could have been wrong.

Anyway, rant over.

 

[Edwin]

I was extremely pressured for time. I just managed to answer each question, but there were many occasions where I felt I could have and needed to write more, yet had to move on due to time pressure. I felt like I really didn't have much time to think, and often I just put down the first points that came to mind.

This wasn't helped by the amount of reading. I found it particularly tough with the first question, which was so long I had to keep referring back to the rest of the question to see if there were points I had forgotten about.

As I often find with ST9, I found it very hard to judge what emphasis the examiners are looking for. Sometimes it seems they're looking for the complete obvious, other times to think outside the box; sometimes they want a breadth a points, other times they want more in depth analysis etc. Most questions you could write pages on if you had the time, so you need to figure out what are the key points that they are looking for you to make and into how much depth do they want you to go. I find this particularly hard with ST9 compared to what I remember other subjects being like.

In the latest exam, I'd go as far as saying that I found some of the questions to be cryptic, such as the question along the lines of "describe the PCA approach (without describing the PCA approach)". I took this to mean it wanted a broad overview without the detailed maths, but I could have been wrong.

Anyway, rant over.

I agree that nearly all questions required a lot of thinking that wasn’t possible in the time given; I also remember having to force myself to move forward. The unfairness is that all the questions were not straightforward, including the 2 markers!
For the PCA, I think they were trying to say don’t focus on the Eigenvalue Maths if you don’t know it. I agree with you here, it was just a read through the ‘algorithm’ by Sweeting.

 

[cw812]

I have sat ST9 for a couple of times and I agree that this was the hardest paper I have ever seen. Normally I can finish reading the whole paper during reading time, but this time it took me 20 mins to read the whole paper! There were no time for me to brainstorm the answers at all. I prepared a lot for this paper but a lot of core stuff such as solvency II or operational risks were not tested

Also this paper was very likely to be set by a life actuary - unit-linked, annuity, pension scheme, reverse mortgage etc. which could be a problem to people from a different background like GI or banks. In particular the question with contingent business interruption insurance was unusual in the context as it was a reinsurance for a life insurance company in which the customers and suppliers were not apparent to me as those terms usually appear in manufacturing companies. If anyone here can shed me some light that would be great.

I guess the pass mark this time would be quite low given the difficulty. Anyone think it would be at low 40s?

 

[oreiln23]

The wording on the PCA question threw me as well. I actually didn't fully read through Q1 while doing it so when i read that question, i wasn't sure whether they wanted the general description of a model or if they wanted a general description of the PCA approach without going into technical maths.

I ended up giving an answer based on the general modelling approach. When I finished Q1, I realized they didn't use PCA at all apart from that question so it likely meant they did want the PCA approach description. I obviously didn't have time to go back and change that. That question was definitely cryptic and I hope they accept points on a general model due to the wording.

 

[oreiln23]

The main problem I have with that paper is how imbalanced it was. A huge chunk of the marks went on discussing different types of modelling approaches. I thought the whole paper was very heavy on the middle section of the course. They stayed away from pure mathsy questions but really focussed in on modelling approaches (the first few parts of Q1 and Q3 also had a few marks on it). It probably really suited some candidates but left others gasping for air.

The areas of real bookwork in the exam were really specific and in general areas that took me a while to refresh in my head. If you didn’t remember them, you probably weren’t picking up many marks. For example, I knew the the principals of good governance for q2 but it really took me a while to squeeze them out. And then in the case of PCA, the wording of the question was so confusing, I didn't get to show I knew the the PCA approach! It wasted time you really didn't have with the consuming application questions.

When I came out of that exam, my first thoughts were wow, I really did waste my time going over so much of that course – I’m not sure it helped me at all.

 

[RobWat]

Normally I can finish reading the whole paper during reading time, but this time it took me 20 mins to read the whole paper!

Me too.

Also this paper was very likely to be set by a life actuary - unit-linked, annuity, pension scheme, reverse mortgage etc. which could be a problem to people from a different background like GI or banks. In particular the question with contingent business interruption insurance was unusual in the context as it was a reinsurance for a life insurance company in which the customers and suppliers were not apparent to me as those terms usually appear in manufacturing companies. If anyone here can shed me some light that would be great.

Fair point about it being life focussed. Though, as a life actuary, I'm not always sure it's an advantage as it's easy to go off on a tangent and answer the questions with my life actuary hat on instead of from the perspective of a risk actuary.

I also struggled to think of what suppliers they had in mind. Thinking of suppliers for a manufacturer is easy, but could mean a host of very different things for an insurer, e.g. office stationery suppliers, office property suppliers, couriers, technology suppliers, reinsurers, sub-contractors, staff suppliers, contractors, consultants, asset managers. Who knows if they meant a particular type or whether they were looking for you to think broadly. More to the point, I don't see how it tests your ability as a risk actuary to think of these things and work out what they're after. In my view, they'd better differentiate between candidates (the entire point of any exam) if they gave you more guidance as to what they're after.

 

[Edwin]

What do the tutors think before seeing the examiners' report?

 

[Simon James]

What do the tutors think before seeing the examiners' report?

Challenging.

 

[David Wilmot]

What do the tutors think before seeing the examiners' report?

Yes challenging indeed!

I agree with prior comments that this felt even more 'SA' than 'ST' than has been the case with prior ST9 exam papers. Whether that is 'good' or 'bad' depends on your personal perspective!

 

[Viki2010]

I felt this exam was close to SA level exam in its style:
- 3 questions
- high level applications

rather than ST level exam which I remember taking.

I also felt that the time pressure was so huge that I struggled to explain my points in sufficient detail.

I feel it is a trade of how many different points can you cover (in bullet points) and how well you can explain your points....

I am never sure if my exam technique meets expectations.

 

[cw812]

Unfortunately the server error happened when I made my posts, all my previous comments were lost.... anyway let me re-post again:

I also struggled to think of what suppliers they had in mind. Thinking of suppliers for a manufacturer is easy, but could mean a host of very different things for an insurer, e.g. office stationery suppliers, office property suppliers, couriers, technology suppliers, reinsurers, sub-contractors, staff suppliers, contractors, consultants, asset managers. Who knows if they meant a particular type or whether they were looking for you to think broadly. More to the point, I don't see how it tests your ability as a risk actuary to think of these things and work out what they're after. In my view, they'd better differentiate between candidates (the entire point of any exam) if they gave you more guidance as to what they're after.

With hindsight, having seen the recent Greek government debt crisis, I think I got some clues now. At first I could not associate business interruption with sovereign debt default as there must be a consequential loss to the premises due to disasters. Perhaps we can talk about the shutdown of the government can lead to suspension of government service like public transport, utility, post, hence there will be denial of access or inability to travel to work, IT service is down due to lack of electricity which impacts communication. All this will incapacitate customers/suppliers to conduct business, which lies in the SARS's supply chain. Government may impose capital control so banks as distribution channels will be incapacitated too. Lastly, the social unrest element may potentially lead to riots or vandalism which could lead to physical damage to the premises (a bit far-stretching). Not sure if I am on the right track though.

Now we have less than a week to know our results. I was doing some self-marking and I think I am getting low 50s which are borderline (as I have seen somewhere you need 50%-55% in ST/SA to ensure a pass). However having seen the above comments regarding the difficulty of the paper, I wonder if the pass mark will be at the lower end like 50% or even lower like high 40s.

That being said, I only considered the samples in this forum when majority of candidates could do very well so pass mark could still be high. Or the examiners may see the not-so-good attempts (due to time constraints, poor question wordings) as unfit and only pass a low number of candidates.

Really hope our hard work can pay off!

 

[Edwin]

Passed!