Aspiring Actuary: Exam Basics

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You know nothing about what it takes to become an actuary. At least, that is what I’m going to assume for this post. I know from experience that without guidance it can be difficult to find all the information you need to make an informed decision on pursing an actuarial designation – through this series of posts I aim to alleviate some of your concerns.

This posts assumes you are pursuing a designation in the US or Canada, there are separate organizations in the UK.

What exams do I need to take to become an actuary?

The first thing you should know is that there are two main regulating bodies that offer exams in North America to qualify actuaries. The Society of Actuaries – which will be my focus – offers exams for life insurance, pension and health actuaries (among others). The second is the Casualty Actuarial Society, who focus on property and casualty insurance.

At some point in your career you will have to decide which designation to pursue. Both societies offer two levels of designation at the associate (ASA or ACAS) level and the fellowship (FSA or FCAS) level. Each level involves writing a number of rigorous exams on your own time and have a large study commitment requirement.

Luckily as of January 2016 there are still four exams that are offered jointly by the SOA and CAS. This means that you aren’t locked into one path right away, you have some time to wet your feet in the profession before you narrow your focus.  Often, as I did, the companies that you do your co-ops or internships at will determine which exams you write. If you are doing an internship for a life insurance company you will be writing the life insurance (SOA) exams and vice versa. Many companies offer financial support to students to help with exam writing.

The ASA (Associate to the Society of Actuaries) designation requires completed of five exams: P, FM, MFE, MLC and C. Note that all of these except for MLC will also count towards an ACAS designation.

Contents of ASA Exams

Click the links to be redirected to the SOAs homepage for each exam. Registration, syllabi and study materials are all available there.

Exam P (Probability)

Exam P is where most people will begin writing exams. Overall it has little to do specifically with actuarial topics, it is more of a way to develop the mathematical background that comes with later exams. You’ll find that a good understanding of calculus (Calculus II at Waterloo) and a basic understanding of statistics will help you pass this exam.

Exam FM (Financial Mathematics)

This exam is split into two sections. The first deals with interest theory and the time value of money. You will learn about discounting cash flows, annuities, loans and bonds. The second section deals with derivatives (of the stock market type, not calculus!), forward rates and different types of investment strategies. If you are early in your undergrad and are not in an actuarial science program I would expect you to have less exposure to this material – adjust your study time accordingly.

Exam MFE (Models for Financial Economics)

In many ways Exam MFE is the second level to exam FM. It is a very math intensive exam that will require you to know how to use your calculator accurately to stay on time. Recently updated, the syllabus now focusses mainly on the valuation of financial derivatives – you’ll learn to love (read: “love”) the Black-Scholes model.

Exam MLC (Models for Life Contingencies)

I have less to say about MLC as I have yet to take it (studying for the May 2016 sitting!) – I’ll be sure to update this post once I have finished. MLC takes many of the concepts from previous exams and adds a new twist: Payments only occur while the policyholder is alive. Here you will learn about life contingent annuities and the math behind the different types of insurance policies. Many people will say that MLC was the hardest of the ASA level exams, so be sure to set aside a lot of time to study for this one.

Exam C (Construction of Actuarial Models)

Covering a large array of topics, Exam C is the most statistics intensive of the ASA level exams. Personally, I also found it to be the most interesting of the exams I’ve taken. The syllabus is split into loss models, credibility and simulation. Loss models encompasses the bulk of the exam and requires a high understanding of calculus, sums of series and random variables. Many fellow students I have spoken with about Exam C agree that in addition to the mathematics much of the difficultly comes from the breadth of the syllabus and the time it takes to learn it all.

Okay, I know the basics of the exams. Now what?

I plan on continuing to write posts related to exams. Hopefully some of the study habits I have picked up can help others to study more efficiently. If you have any specific questions please leave a comment or shoot me an email, maybe it will spark inspiration for a new article.



  1. Great post! Simple and straightforward, thank you for the information!
    I was wondering if you could write a post about info on entry level jobs, like where to find them, how much do they usually offer, and what types of jobs could be an alternative if there’s not much open positions inside the actuarial department. Also could you mention if it’s possible to find one with only exams and no internship/experience? Thank you!


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