How to best prepare for your first actuarial exam
By Nancy Stevenson
Actuarial exams are never easy. To pass the exams requires many hours of independent study and the right resources. For first time actuarial students, the task can be even more challenging. It is very difficult for first–timers to understand what is expected on the exams and how they are going to be tested. In addition, many students are not aware of the numerous resources available to help them best prepare. This leads many students to under prepare or to fail to obtain the necessary study materials required to pass or both.
Problem: Lack of Preparation
It is quite common for many first–time actuarial students to simply underestimate the amount of study time required to pass the first exam. Too often students start studying only a few weeks before the exam, underestimate the amount of material covered in the exam or frankly feel overconfident because of their strong aptitude for math.
Solution: Start Early
There is no substitute for starting early. No matter how well you have done in your math classes, it is best to start at least eight weeks prior to the P/1 exam. Keep in mind that everyone taking this exam has excelled in mathematics. The exams are very rigorous and are designed to test knowledge of the material at a very high level. That is why the pass rate on this exam typically ranges only in the 30 to 40 percent range.
Solution: Take One Exam at a Time
Make sure that you have passed or are nearly certain of passing SOA/CAS Exam P/1 before beginning your studies for FM/2. There is no sense getting two "5s" when you can get one 6!
Problem: Inadequate Resources
The SOA and CAS do not make study material recommendations beyond the suggested or required textbooks. In fact, many first time students are completely unaware that a huge number of materials are available to help them prepare for each exam. These materials include:
- Study manuals that condense and explain the entire syllabus material and typically provide many sample exam questions with solutions.
- Flashcards to help with the memorization of critical equations and other material.
- Live seminars, DVD seminars and online courses taught by leading actuarial science educators that explain the entire syllabus material and include exam questions and solutions.
- Practice tests that seek to replicate what you'll face during a real exam with detailed solutions provided.
- Many other specialty products such as the Calculus Review guide designed specifically to prepare actuarial students for Exam P/1.
Solution: Obtain the right study materials
You will save yourself a tremendous amount of time and energy, and significantly increase your odds of passing your first exam(s) by purchasing supplemental actuarial study materials for each exam. There are many competing products offered by distinguished actuarial authors and publishers so you really cannot make a wrong choice. To help you make your choices, online samples of many of these products can be viewed prior to purchase and all the actuarial bookstores offer 30–day refund policies on most products. Another option to help you select the right materials for you is to contact the bookstore and ask for a recommendation. Personally, I recommend calling because it allows for more "give and take" than e–mail. The three primary bookstores specializing in actuarial study materials are:
At the very least we recommend purchasing a study manual for each exam. For most actuarial students, the study manual becomes their primary studying resource along with the required/suggested readings. The price of study manuals begins around $75.00 for the first two actuarial exams. In most instances, you'll want to purchase the most recent edition of the study manual as they are updated regularly to match changes in the syllabus, to correct errata and to add additional sample questions and solutions. Other materials may also be considered based upon how well your studying is going or depending upon what weaknesses you may have with respect to the material. For example, if your studying is going well but you want more practice with exam taking, then purchasing a set of complete practice exams may be very beneficial. Or if you haven't seen calculus in a few years, then you may want to consider the Calculus Review product as it was designed for actuarial exams. The broad array of choices allows each student to choose supplemental materials that are most appropriate for their needs.
Of course, this same advice will improve you odds of success for all of your actuarial exams. Start early, study diligently and make sure that you have all the right materials to help you best prepare. Best of luck in your exams and your career!