A team of four students from the School of Mathematical and Statistical Sciences’ actuarial science program at Arizona State University took first place in the Society of Actuaries Research Institute Student Research Case Study Challenge.
A team from ASU also won the highly competitive international challenge in 2020.
The case study challenged student teams to act as consulting firms hired to design a social insurance program for the fictional country Storslysia, aimed at effectively managing its exposure to displacement risks arising from catastrophic climate-related events. The proposed coverage would aim to address voluntary, proactive relocation as well as involuntary displacement that may occur in the aftermath of severe occurrences such as tornadoes, hurricanes, and other similar disasters.
Students worked over the course of the nine-week competition to develop an innovative plan for the open-ended case study, representing realistic actuarial challenges. Each team submitted a 10-page report and finalists presented their recommendations to a panel of judges.
All members of the Relocation Station winning team graduated in May from The College of Liberal Arts and Sciences. Neil Bhardwaja, Charlotte Cliatt and Isabelle Welsh all earned their master’s degrees in actuarial science through ASU’s Accelerated Masters degrees program, and Lainey Waldman earned her bachelor’s degree in actuarial science with a minor in economics as a student in Barrett, the Honors College.
The team was awarded a grant of $5,000 for Arizona State University, as well as cash awards of $500 for each student.
“The case study presents a realistic depiction of the challenges actuaries often encounter throughout their professional journeys. Unlike traditional classroom projects that follow predefined instructions, the SOA’s case study challenge requires students to approach problems in an innovative and comprehensive manner,” said Hongjuan Zhou, professor of practice and the faculty advisor to the team.
“This year’s challenge demands students to not only design social insurance program features but also evaluate and manage the associated risks. They must navigate imperfect data and select suitable actuarial models, utilizing given datasets to derive parameter values for their models. In cases where pertinent data is unavailable, students must make informed assumptions by referring to external resources and employing actuarial justifications. These technical skills honed through participation in case study competition prove invaluable for students embarking on their careers.”
Relocation Station’s solution to the case study challenge stood out due to their innovative program features and their remarkable proficiency in constructing intricate actuarial models.
“In addition to covering basic necessities and housing support as usually seen, the program offers childcare services and extra financial assistance for low-income families in the event of catastrophic incidents,” Zhou said. “Furthermore, with regards to voluntary relocation, the program incorporates a buyout feature that is offered by the government, aiming at acquiring the properties of residents in the risky regions. This strategic approach actively encourages residents to move from hazardous regions to safer areas.
“Second, the team performed a thorough analysis and employed solid actuarial modeling techniques. ... Their designed social insurance program effectively manages the societal displacement risk while enhancing safety and alleviating the economic burden faced by residents.”
Bhardwaja describes how the team was in investigation and discovery mode during the first few weeks of the competition.
“All of us read through academic and scholarly papers about natural catastrophes as well as similar government programs and initiatives that could assist with our task. ... There were so many little details to learn and understand along the way — how to define a hazard event like a flood, how to predict hurricane frequency and severity, how CO2 levels affect future catastrophes, and how population and migration patterns could be modeled," Bhardwaja said
“The most challenging aspect of the case study was certainly the timeframe,” Welsh said. “Despite having a long period of time to work on the project, with so many things to consider we were constantly wishing we had more time on our hands to spend working on the project.”
Waldman said that during the last two weeks of the case every member of the team spent anywhere from 40 to 60 hours per week doing analysis, writing and proofreading.
"I am so proud of the entire team for pushing through and remaining driven and inspired to do well on this project when it would have been much easier to quit," Waldman said. "It meant the world to know all that hard work paid off.”
The group was also appreciative of their faculty advisor’s guidance through the program.
“Dr. Zhou’s astuteness and supportive nature were invaluable throughout the process,” Waldman said.
“This year’s case study involves a fascinating topic that is very relevant for current times, where the increasing frequency and severity of natural disasters are causing instability in people's lives,” Bhardwaja said. “Learning more about these topics was incredibly eye-opening and useful to our future careers and working together with my teammates to construct a full insurance program (that could feasibly be used in the real world) was a valuable experience.
“Alongside the high visibility the competition has, the SOA Case Study enables students to really develop their technical and business skills by thoroughly analyzing data, constructing models and forming big ideas. These skills are essential to the workplace and will give students a competitive edge when transitioning from college to work.”
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