Actuarial Credentialing

Becoming a fully certified actuary requires passing a rigorous series of exams taking several years. In some countries, such as France, most study takes place in a university setting. In others, such as the U.S., most study takes place during employment.

United States

In the U.S., for life and health actuaries exams are given by the Society of Actuaries, also known as the SOA (www.soa.org). Whereas for property and casualty actuaries the exams are administered by the Casualty Actuarial Society, also known as the CAS (www.casact.org). These align with the two major actuarial disciplines discussed above. The Society of Actuaries' membership requirements include passing six examinations for Associateship and two additional exams for Fellowship. The Casualty Actuary Society requires the successful completion of seven examinations for Associateship and two additional exams for Fellowship. In addition to rigorous exam requirements, actuarial candidates must also complete other educational and professional development requirements.

Preliminary Exams

The first four exams ("Preliminary Exams") consist largely of core mathematics related to actuarial science including probability, statistics, interest theory, life contingencies, and risk models. Exams 1, 2, & 4, recently renamed P, FM, and C, are common to both the SOA and the CAS. However, while the third examination of the SOA, also known as Exam M, is accepted by the CAS, the reverse does not hold. These exams are also approved by the Canadian Institute of Actuaries. This joint sponsorship allows students to work on the initial requirements before they choose a specific discipline to pursue.

Upper-Level Exams

The upper-level exams differ between the two societies, however, both societies' upper-level exams focus on more qualitative information than the preliminary exams. Another difference is that upper-level exams also have an essay/short answer component, whereas preliminary exams are solely multiple choice. Upper-level exams sponsored by the CAS have been exhibiting a tendency to remove multiple-choice questions entirely. Upper-level exam topics for the CAS include: ratemaking, insurance accounting, loss reserving, and reinsurance. Fellowship exams for the CAS include such topics as advanced investments/finance, advanced ratemaking, and risk rating plans. Upper-level exam topics for the SOA include plan design, risk classification, ratemaking, valuation, and finance & investments. Fellowship exams for the SOA cover applied modeling and an area of specialization chosen by the candidate.

Exam Support

As these qualifying exams are rigorous, support is often available to people progressing through the exams, or "actuarial candidates." Often, this includes paid on-the-job study time and paid attendance at seminars designed to prepare students for the exams. Also, many companies which employ actuaries have automatic pay raises or promotions when exams are passed. As a result, actuarial students have strong incentives for putting in adequate study time during off-work hours. A common rule of thumb for actuarial students is to put in roughly 400 hours of study time per full exam taken. If 6–9 exams need to be taken to reach a desired level of credentialing, anywhere from 2,400 to 3,600 hours of study time should be anticipated over several years, assuming no failures. In practice, as the historical passing percentages remain below 50% for these exams, the "travel time" to credentialing is extended and thus more study time needed.

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