Qualifying as an actuary in the UK

Before starting off this post, it’s important to note that I am from the UK (as mentioned in the title) and so I am a member of the Institute and Faculty of Actuaries.

The exam names I discuss below will be different to those that you’d have to take if you’re from America or Canada (SoA or CAS), but the content should be very similar!

Skillset:

Actuaries deal with numbers, so being able to do basic arithmetic quickly and correctly is usually a requirement on job descriptions. However, the maths associated with actuarial science can be a lot more complicated than that. Communication skills are also essential in becoming an actuary because you need to be able to articulate difficult topics to non-specialists, and you will also need to develop the capacity to give expert advice to non-actuaries and the general public.

Now onto the academic side of it:

The majority of employers within the actuarial profession look for graduates with a 2:1 or above (some employers will accept candidates with a 2:2), and ideally they’d want it to be in a numerical subject,

• Actuarial science

• Maths

• Statistics

• Economics

• Other finance-related degree

I’ve also known people that studied physics and even engineering that have settled in well to the actuarial career. So you’re not just restricted to having to study actuarial science or maths at university, but studying actuarial science can help with passing the official exams quicker!

It is also required that you achieve good grades at A level or whatever the equivalent exams are for you. So ideally you’d need a grade B or higher in your Maths A level.

So now I’m going to talk a bit about the exam structure for the IFoA

There are 13 exams that need to be passed in total an they are split across 4 areas:

• Core principle exams

• Core practise exams

• Specialist principle

• Specialist Advanced exams

So the Core Principles cover three main areas. These are: • Actuarial Statistics (CS) • Actuarial Mathematics (CM) • Business (CB). These exams are compulsory and are usually sat first by students.. These are also the most common exams for which you can get exemptions from in your undergraduate degree because you’ve already covered the same material on your course. You will get the most exemptions from studying actuarial science at uni but can also get a few exemptions if you studied maths, economics or statistics.

-       The Actuarial Statistics and Actuarial Mathematics modules, CS1, CS2, CM1 and CM2, have two elements of assessment. For each of those 4 subjects you will have a 3 hours 15 minutes written paper and a 1 hour 45 minutes online problem-based assessment. The two papers are weighted 70% for the written paper and 30% for the problem based assessment. For actuarial statistics, the computer-based exam is taken on R and for actuarial mathematics, the computer-based exam is taken on excel.

-       Of the 3 business exams, CB1 and CB2 would usually be 3 hours 15 minutes paper-based exams which will now also be online for the next sitting and CB3 is a ‘Business Awareness Module’ that is sat online but it’s slightly different to the other exams discussed.

The Core Practices cover three areas. These are: • Actuarial Practice (CP1) • Modelling Practice (CP2) • Communications Practice (CP3).

-       For CP1, there are two elements to this assessment: Paper 1 is a 3 hours 15 minutes paper-based assessment and Paper 2 is a 2 hours 30 minutes paper-based case study assessment with 45 minutes extra planning time at the start.

-        CP2 also consists of two papers which involve using excel to carry out tasks on a spreadsheet and write out an audit trail explaining all the steps carried out and a summary report discussing the tasks and results in the spreadsheet.

-        CP3 tests your ability to explain actuarial concepts in a simple, easy-to-understand manner. The exam involves writing an email/letter/report addressed to a non specialist who may not understand actuarial jargon and techniques.

The Specialist Principles (SP) subjects require individuals to demonstrate an understanding of the concepts of specific specialist areas ranging from life insurance, pensions, health and care, investments and finance, general insurance reserving and pricing etc.

-        Two of these SP subjects have to be passed to be eligible to qualify as a Fellow.

The Specialist Applications section allows the candidate to choose one area for which they take the SA paper and attain full Fellowship;

-        There are 6 papers to choose from between SA0: Research Master’s Thesis, SA1: Health and Care, SA2: Life insurance, SA3: General Insurance, SA4: Pensions, SA7: Investment and Finance

Just for some context on how difficult the exams are, the pass rates tend to be below 50% for the later exams with the exception of a few. In fact for the April 2020 exams, the pass rates were as follows:

• CB1: 59.6% | CB2: 70.7%

• CP1: 44.5% | CP2: 65.7% | CP3: 50.3%

• SP1: 41.7% | SP2: 39.9% | SP4: 26.0% | SP5: 42.6% | SP6: 59.5% | SP7: 20.5% | SP8: 40.0% | SP9: 23.9%

• SA1: 47.8% | SA2: 48.9% | SA3: 30.9% | SA4: 29.1% | SA7: 39.1%

If you have studied a university course that has been accredited by the IFoA or if you have studied a course with a significant amount of Maths included in the content then you may be eligible for exam exemptions, and it’s worth looking into so that you can avoid sitting an extra paper – because there’s 13 exams to get through and it takes people an average of 5 years to qualify 

One thing I will say though is that although we have all these exams to sit, we are rewarded really well when we pass and so unlike other professions, we’ll actually get a pay rise for each exam that we pass as well as a qualification bonus after becoming a qualified actuary. And that doesn’t included the pay rises you get for progressing and being promoted, so honestly it’s a really good incentive to work hard towards these exams

Passing the professional exams is one part to becoming an actuary, and the other part is the requirement of at least three years’ practical experience to fully qualify.

It takes a lot of hard work, so if this is something you want to go into then make sure that you work towards your actuarial qualifications with a firm that really supports you, and will cover the costs associated with your exams and study, and will provide you with a sufficient amount of study leave.

I hope you found this blog post informative and helpful - be sure to check out my video below where I discuss everything mentioned above in a bit more detail.