What are Actuarial Exams?

Overview of the Actuarial Exam Process

Actuaries have to take a bunch of professional exams to become fully certified. These exams are notorious for being some of the hardest professional exams to pass (comparable to the BAR and CPA). There are two main types of actuaries and hence two main actuarial societies in North America. The SOA or Society of Actuaries deals with insurance relating to life, health and pensions. The CAS (Casualty Actuarial Society) relates to insurance around property and casualty. This includes car, home and disaster insurance. The first four exams are common to all actuarial streams and are also known as the preliminary exams.

The Preliminary Exams

The first four preliminary actuarial exams are:

  • Exam P: Probability
  • Exam FM: Financial Mathematics
  • Exam MFE: Models for Financial Economics
  • Exam C: Construction and Evaluation of Actuarial Models

  • After this the pathway splits and the exams are no longer common between each designation. Before going further decide which actuary stream resonates with you.

    Note: Successfully passing all the preliminary actuary exams above does NOT make you an ASA (associate of the socieity of actuaries) or an associate of CAS. To do so you must meet all the SOA requirments and CAS requirements outlined.

How much should you study?

Mileage will vary depending on your background, learning ability, how fresh the material is, and how prepared you want to be and feel going into the exam. Typically, the amount of time spent studying is around 100 hours per hour of an exam. So if Exam P is 3 hours, typically spend around 300 hours studying in total. Again this will vary greatly from student to student. It is wise to plan to study well ahead of the exam. Understand concepts thoroughly rather than cram and memorize. Finally, leave time for practice exams and practice them under exam-like conditions. For more tips visit How to pass and actuary exam the first time.

What order can you take the exams in?

Exam P or Exam 1 is typically the first actuarial exam taken, though any of the first four exams can be taken in any order. It is highly unusual for someone to not take Exam P or Exam FM as their first Exam since the later Exams build off the knowledge from Exam P and Exam FM. Exam P and exam FM are also offered the most frequently with a exam sitting occuring every two months. The later preliminary exams are offered every 4 months.

EXAM P: Probability


The exam covers basic to intermediate probability concepts covered typically in a first and second year university stats class. Knowledge of first year calculus is expected. The exam is typically quite a bit harder than a university exam setting with a pass rate around 50-60%. Part of the challenge comes from the time limit. 30 questions need to be solved in 3 hours with most of the questions invovling indepth calculations on probablility or expected values. A calculator is allowed but no formula sheet. This means students must memorize all probablility distrubitions covered in the exam topics. A non graphing calculator is allowed and a formula sheet with z-tables and pencil are provided. Exam P by far has the shortest amount of material, yet often poses as a more challenging exam then FM to some due to the depth and difficulty of some of the questions asked.

What's Covered?

The following topics could be covered in Exam P (as of 2018). The things you should know are:

  1. General Probability (10%- 20%)
  1. Random variables and probability distributions (35% -45%)
  1. Multivariate distributions (35%-45%)

EXAM FM: Financial Mathematics


There is a lot of material in FM covering financial mathematics. Many of the problems involve finding the present and accumulated values of cash flows under a variety of different settings. You should have a BA II Plus and TI 30X calculator

What's Covered?

The following topics could be covered in Exam P (as of 2018). The things you should know are:

  1. Time value of money
  1. Annuities
  1. Loans
  1. Bonds
  1. Financial Analysis
  1. General Cashflows
  1. Immunization
  1. Interest Rates
  1. Yield Rates
  1. Amortization
  1. Financial Instruments

EXAM MFE: Models in Financial Economics


The exam is a three hours with 30 multiple choice questions. An understanding of topics covered in Exam P and Exam FM is essential.

What's Covered?

The following topics could be covered in Exam MFE (as of 2018).
Note: The exam topics will be revised in mid 2018:

  1. Introduction to derivatives
  1. Binomial Pricing Model
  1. Black-Scholes
  1. Hedging
  1. Asian,American and Bermudan Options
  1. Option derivatives
  1. Sharpe Ratio
  1. Monte Carlo Simulations
  1. Interest rate models
  1. Brownian Motion
  1. Stochaistic Integration
  1. Black Formula

Exam C: Construction and Evaluation of Actuarial Model


The Exam is 3.5 hours with 35 multiple choice questions and covers a vast amount of material. A TI 30X calculator is strongly recommended. Students should be very comfortable with the topics covered in Exam P.

What's Covered?

The following topics could be covered in Exam C (as of 2018).

  1. Severity Models
  1. Frequency Models
  1. Collective Risk Models
  1. Collective risk models with both severity and frequency
  1. Computing Measures of Risk
  1. Emperical Models
  1. Parametric Models
  1. Bayesian, Buhlmann and Buhlmann-Straub models
  1. Simulating random variables

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