If you want to be an actuary, you have a lengthy series of professional certification exams in your future. These tests that lead to required certification are inevitable if you want to work in, and advance in, the actuary occupation. However, what you might not know is when you should begin taking these difficult exams. The time for preparing for your first actuary exam is sooner than you might think, with many actuarial science students passing their first exam as early as the summer after their freshman year of college.
The Actuary Certification Process
Certification is non-optional for actuaries. Unlike certification in many other careers, certification for actuaries is not a simple process. It takes four to seven years to pass just the exams required for associate-level certification and another two or three years to complete the exams needed for fellowship-level certification, the United States Bureau of Labor Statistics (BLS) reported.
All actuaries take the six preliminary exams to achieve certification: Probability, Financial Mathematics, Models for Financial Economics Exam, Models for Life Contingencies, Statistics and Probabilistic Models and Construction and Evaluation of Actuarial Models. Students typically take either the Probability or Financial Mathematics exam first and the other exam second, since the remainder of the preliminary actuarial exams build on these two topics. Beyond the preliminary exams, your path to certification will depend on which type of actuarial work you want to do. You will need to take advanced exams to complete your full professional certification with either the Society of Actuaries (SOA) or the Casualty Actuarial Society (CAS).
What takes so long? Every exam requires actuaries to spend months studying, with a few hundred hours of study needed to pass each one.
Starting the Certification Exam Process
The long and difficult process of attaining full actuarial certification can seem daunting. Successful actuaries accomplish it by planning ahead, working hard and breaking the process down into attainable goals.
During your freshman year of college, make sure you take courses in calculus and in probability and statistics, financial mathematics or both. This coursework will begin your preparation for the first two certification exams, but you will need to study independently, as well.
Students who complete these courses during their first year of college can often start taking their exams the following summer, provided they give themselves enough time for independent exam preparation. Other students wait until later in their college careers to take their first exam, but students shouldn’t wait too long. Many actuary employers expect candidates fresh out of college to have already passed two exams, according to the professional actuary societies. Since preparing for each exam takes so much time, you can’t plan to cram both exams in at the end of your studies. Not having passed at least one exam may also make it challenging for you to gain internship experience, since employers typically prefer to hire interns who have demonstrated their technical skills by passing at least one exam.
Generally, the Probability exam is offered in odd-numbered months, and the Financial Mathematics exam is offered in even-numbered months.
Preparing for Actuarial Exams
The SOA recommends spending 100 hours of study for each hour of the exam. Both of the first two exams are three hours long, requiring a total of 300 hours of study, while the remaining preliminary exams are three to four hours in length. You should plan to spread out these hundreds of hours of study over months, allowing you time to master the concepts and techniques needed to pass the tests, rather than trying to cram all 300 hours of study in as the exam approaches.
While the college coursework you take will count for some of the study time expected – traditionally, your courses are considered equal to around 100 hours of study – they are not enough in and of themselves for you to expect to pass the exam. To pass their actuarial exams, students should purchase or find for free study manuals, sample tests and practice problems from the professional organizations or from third parties that will help them become familiar enough with the material to perform well on a timed test.
When studying for an actuarial exam, it is important for students to study all of the material outlined on the exam syllabus and to take practice exams under the same conditions – including the time limit – as required during the real exam.