You’ve probably heard that becoming an actuary is one of the best career decisions you can make. The job ranks high in most career previews you’ll see online, and there are good reasons for that. First, it’s a very rewarding career with a relatively good remuneration structure to go with the work you’ll put in. There are also more than enough job vacancies for job seekers, so you’ll not have to spend ages searching for a job. But there’s one hurdle between you and becoming a certified Actuary – the Actuarial exams. What are actuarial exams like? How difficult is it? We’ll find out in this article.
What are Actuarial Exams?
Actuarial exams are a series of exams that potential or aspiring actuaries must take to qualify for the actuary certification. Without the certification that this exam qualifies you for, you can’t get a practice license as an actuary. The actuarial exams contain different categories, and each candidate must pass all the different exams to become certified. These exams serve as the foundation for becoming a professional actuary. There are about seven subcategories of this exam that each candidate must take, namely;
- Probability (Exam P)
- Financial Mathematics (EXAM FM)
- Investment and Financial Markets (EXAM IFM)
- Statistics for Risk Modelling (EXAM SRM)
- Short Term Actuarial Mathematics (EXAM STAM)
- Long Term Actuarial Mathematics (EXAM LTAM)
- Predictive Mathematics (EXAM PA)
These series of exams are written over several years for one to be certified as an actuary. In countries such as Denmark, these exams are to be taken while still in University, while in other countries like the U.S, these exams can be taken even while the person is fully employed. Some other countries, like the United Kingdom, adopt a hybrid exam scheme.
What is the Actuarial Test Passing Score?
The actuarial test is usually rated on a scale from 0 -10. with 0 being the lowest and ten the highest. The test passing score is from 6-10, while a score of 0-5 is considered a fail. This is not the actual grade of each candidate; it’s just a scaling system. Candidates are not graded based on their scores in each exam. Instead, they are graded based on cumulative results from all exams and subsections. That is, candidates would only be judged based on the total score from all the preliminary tests required. These tests include;
- Exam P/1: Probability
- Exam MFE/3F: Actuarial Models
- Exam FM/2: Financial Mathematics and Interest Theory
- Financial Economics.
A score of 6 is given to candidates who score 120% and above. The higher the grades, the higher the score on the scale. For a candidate who scores 0 on the scale, it doesn’t mean they didn’t score any points at all. It just means their grades were below 90%.
Usually, a remark of “pass” or “fail” is sent to each candidate almost immediately after the exams, within 8-11 working days, while the cumulative results are sent a few months later. Candidates who wish to see their score can visit the body’s website.
Are Actuarial Exams Hard?
One question we always come across in online forums is, “are Actuarial exams hard?” The truth is that one cannot be certified as an Actuary with just a degree from the University. Other exams have to be written even while fully employed to earn the certificate and a title as an Actuary. Whether the exams are hard or not will vary from person to person as different individuals have different learning abilities. The amount of time put into study materials and how valid and recent the materials are will combine to determine how hard the exams will be for different candidates.
Are Actuarial Exams Harder Than the Bar Exam?
If you have a passing interest in actuary, or you intend to take up a full-time career in actuary, this is a crucial question to ask. Are actuarial exams the hardest? Are they harder than the Bar exams?
Considering the rigorous series of exams candidates must take to become certified actuaries, this comparison is not out of place. Actuarial exams come in several batches as one progresses in this field, and the higher you climb up the ladder, the more difficult it gets. Experts recommend that people willing to go this path must have an excellent knowledge of mathematics, economics, finance, and accounting, to mention a few. Below are some of the courses every actuary is required to have mastered and conquered.
Required Mathematics Courses
- MATH 1300/APPM 1350 Calculus 1 5/4 cr.
- MATH 2300/APPM 1360 Calculus 2 5/4 cr.
- MATH 2400/APPM 2350 Calculus 3 4 cr.
- MATH 3130/APPM 3310 Linear Algebra 3 cr.
- MATH 4510/APPM 3570 Probability 3 cr.
- MATH 4520/APPM 4520+ Statistics 3 cr.
- MATH 4540/APPM 4540+ Intro to Time Series 3 cr.
Required Economics Courses
- ECON 1000 Intro to Micro/Macro 4 cr.
- ECON 3070 Intermediate Micro 3 cr.
- ECON 3080+ Intermediate Macro 3 cr.
- ECON 4070+ Topics in Microeconomics 3 cr.
Required Finance/Accounting Courses
- BCOR 2000*+ Intro to Accounting 4 cr.
- BCOR 2200 Intro to Finance 3 cr.
- FNCE 3010+ Corporate Finance 3 cr. * BCOR 1020, Business Statistics, is a prerequisite for BCOR 2200.
Considering all we’ve discussed, it’s safe to say that the actuarial exam is harder than the Bar exams. However, it still boils down to individual ability and the amount of time you give to adequate studies.
How Long Should You Study for Actuary Exams?
The amount of time you should put into studying for the Actuary exams depends on your abilities. For starters, you must consider factors like your educational background, learning abilities, available materials, and the level of confidence you already have going into the exams. Experts will advise 100 hours of study for each hour of the exams so that you can cover all areas of the course and its materials. So if an exam lasts for 2 hours, you should be looking at studying for 100 hours per hour of the exams. That makes for a total of 200 hours for one-course exams.
It is safer to have an ample understanding of the materials and have the actuarial exams practice in exam-like conditions over and over again to gain complete confidence before sitting for the exams. Having the most recent study materials is an added advantage as you would be familiar with the recent additions to each course material.
How to Pass the Actuarial Exam?
Although the actuarial exams are quite rigorous and could be harder than the CPA exams, it is still possible to pass the exams on your first trial. You just have to be mentally and physically prepared before the exam date. That said, here are a few tips to help you prepare better and get ready to pass the Actuarial exam.
Actuarial exams practice
Of course, as with every other exam, practice makes progress. You don’t want to get into the exam hall unfamiliar with the exam mode and question structure, and that’s where practice comes into play. With the actuarial exams coming up, you want to start your preparations by going over several practice questions. You don’t have to start with the tough questions; start with simpler ones that help you better understand the course, then move up to more challenging questions and tackle them. Fortunately, there are tons of actuarial exam questions available online, and most of these actuarial exam practice questions feature exam conditions so that you can get familiar with the time frame and everything else.
You don’t have to wait till it’s a month or a few weeks before your exams before you start to study. Start early, about 8-10 weeks before the exam date. Give yourself enough time to cover all materials at hand and enough time to prepare yourself for the exams physically. Go through every material diligently and cover as many topics as possible. Consult with colleagues that have taken the exams before and gather as much information as possible about the exams.
Get the right materials
The actuarial exam pass rate is between 30-40 %. With the low pass rate, you can tell that the exam is challenging and requires better preparation. One of the most effective ways to prepare is to ensure you’re studying approved materials. There are several exams to take over the years, so getting suitable study materials can never be over-emphasized. The Society of Actuary provides various study materials and updates materials from time to time. So while taking advantage of their study materials, ensure they are up to date. Here are some websites where you can find study materials and videos.
Sample videos and solutions.
- SOA – Exam P
- SOA – Exam FM
- SOA – Exam IFM
- SOA – Exam STAM
- SOA – Exam LTAM
- SOA – Exam SRM
- CAS – Exam 1
- CAS – Exam 2
- CAS – Exam 3F
Take one step at a time
Simply put, take one exam at a time. These exams are taken over several years. An actuary’s advantage over most professionals is that they can work and study simultaneously. In fact, actuaries are promoted and given bonuses for every exam they pass. This gives you the utmost advantage. There’s no rush and so take one exam at a time. Take enough time to prepare for one exam, write it, ace it, then study for another. There’s no need to rush to write all the exams at once and fail all when you can take them one at a time and pass them in the first sitting.
The first step to studying for any exams is knowing your learning abilities. These abilities include:
- How fast do you understand study materials
- How well do you understand study materials
- What time of the day do you find most convenient for studying, and
- What environment do you feel more comfortable learning in (does it have to be entirely quiet or preferred when there’s soft music in the background?).
These self-evaluation questions will help you get the maximum results from your study time. When the time is right, and the environment is set, studying is easier and more effective. Another point to consider is your educational background. All actuaries need a solid foundation in mathematics and economics; if these are lacking, you might want to take a step backward and sort it out before forging ahead.
Wrapping Things Up: How Hard are Actuarial Exams?
Actuary has become one of the most sorts after professions because of how well actuaries are compensated. Unfortunately, many people do not care to know how hard actuary exams are before diving in. The truth is that, like every other well-paid profession, it takes a lot of work to become an actuary. But unlike lawyers and doctors, actuaries must pass a series of difficult actuarial exams to earn full actuary certification.
These exams are very hard, and it takes dedication to hard work to pass them. But why are the actuary exams so hard? We’ve answered that in this article. We’ve also provided a detailed guide to help you prepare better for the exam. Don’t forget that it takes diligence, perseverance, and hard work to pass the exams.