Exam 5 Intro

Introduction

Exam 5 consists primarily of 2 source texts covering Reserving (Estimating Unpaid Claims), and Pricing:

• Estimating Unpaid Claims Using Basic Techniques, Friedland, J.F., , Casualty Actuarial Society, Third Version, July 2010.
• BASIC RATEMAKING, Fifth Edition, May 2016, Geoff Werner, FCAS, MAAA & Claudine Modlin, FCAS, MAAA

You can start with either Reserving or Pricing but you should do the chapters in order because later chapters depend on material from earlier chapters.

There are also several much shorter readings including: SOPs (Statements of Principle), ASOPs (Actuarial Standards of Practice), and appendices from Werner & Modlin

How is Exam 5 Different

Here are a few things to be aware of if Exam 5 is your first upper-level exam:

• Some people who have easily gone through the earlier exams, can still be thrown off by 5. The more you know what to expect and how to adjust your study style, the less likely this will happen to you.
• Exam 5 covers more material than earlier exams.
• About 25-35% of Exam 5 is short answer essay-style questions (versus multiple choice).
• Exam 5 has a lot of calculation problems.
• Exam 5 focuses more on specific actuarial techniques that involve simple arithmetic vs highly theoretical math topics found in earlier exams. You need to switch from number crunching to analyzing a scenario and presenting a recommendation in a short space of time.
• Time management on exam day is especially important! People say the hardest thing about Exam 5 is time management on exam day.

Studying for Exam 5

Take a little extra time up front to get organized and you will save yourself a lot of time in the end.

• Focus your study time. Use the Exam 5 Readings Ranking Table. We’ve ranked the readings and indicated how much time to spend on each one!! Tip - For Exam 5, you can start with either topic (Reserving or Pricing) but you must do the chapters in order because later chapters depend on material from earlier chapters.
• Not all topics are tested equally, so they don’t deserve equal amounts of your attention.
• Set up a study schedule. Look at a calendar to see how much time you have until exam day. Use our recommendations on how much time to spend on each article to draw up a study schedule. Leave the last few weeks for review and practice exams.
• Start studying. We recommend you do a quick read through of the wiki article, then scan the source article and go back again to the wiki article for in-depth studying. Some people choose to skip reading the source material.
• Memorize and practice the fundamentals. Use our quizzes (BattleCards) to help memorize the material. Once you have mastered the fundamentals, move on to what is less frequently tested.
• Test your retention. Remember to practice by writing or typing out the answers and use active studying by explaining the concepts in your own words. Use our BRQ score to provide you with an objective measure of how well you know the material.
• Stay motivated. Use the Leaderboard to see how you're progressing versus everyone else. (You can appear anonymously if you wish.)

Measure Your Exam Readiness

• Quizzes You’ll find our interactive quizzes within each article. Score checkmark if you got the answer right or X if it was wrong. Check out the short video for more tips. https://www.battleactsmain.ca/video/BA_Promo_3_Battle_Cards.mp4
• BRQ - (Battle Readiness Quotient) Keep track of your exam readiness!! Your BRQ score goes up when you get an answer right. Find your score on the top right of the home page by your username.
• Quiz Filters Use the filters to customize your study experience. Check out our how to video. https://www.battleactsmain.ca/video/BA_Promo_6_Quiz_Filter.mp4

Tips for a short answer exam

• You need to be able to recall information vs recognition. It takes longer to memorize for recall than it does for recognition.
• You can get partial credit for any given problem.
• There is an emphasis placed on "showing your work".
• Exam graders focus on (1) do you understand the process? and (2) do you communicate it effectively so someone else can follow what you did?
• Many problems have steps that require judgment and there can be a range of acceptable answers, or even the question may be unclear. If you are not sure, then state your assumption or how you are interpreting the question.
• In a long multi-step problem, it’s sometimes difficult to get all the way to the end without making a small mistake. Don’t stress over this. If your method is correct, you’ll get most of the points for the problem.
• Look at the point value of the question to determine how long your answer should be. You should roughly have one bullet point or one significant answer for each quarter of a point.
• Use commonly used abbreviations to save time on exam day.
• Answer questions efficiently on exam day. You’ll see tips in our wiki articles to help you with this.
• You have to have a well-rehearsed, time management strategy exam day. See the On BattleDay article for more on this.

Last 3 Weeks Before Exam

Use this time to review and do at least one practice exam.

• Read the On BattleDay article.
• Use the Battlecard filtering function page BattleCard Filter to filter and display questions you need to practice more. The color-coding of BattleCards is a popular feature!
• Do at least one practice exam. You can find the practice exams here. Practice Exam

Common Reasons for Not Passing

Memorization

• If you have to memorize 10 facts, you can probably do it in 10 minutes. But if you have to memorize 20 facts, it will take more than twice as long. To learn facts reliably, you need to go over each one dozens of times, and you have to do it carefully. There's a difference between merely recognizing a question and truly thinking through the answer. After writing out 10 or 20 BattleCard answers in full, you can switch to saying the answer out loud, or train yourself to recite it mentally.
• Use the Shuffle button on the BattleCard page. Once you've done a set of BattleCards several times, do them in a different order every so often.

Time Management

Running out of time is a heart-breaking way to fail an exam. If you're well-prepared, then time management will be a smaller issue because you'll know how to answer most (or all) of the questions. You have to make sure you finish, even if that means writing less than you want to for a particular question. Make sure you don't miss a question you know how to do.

Bloom's Taxonomy

This is something that's hard to teach because being good at answering these types of questions improves mainly through experience. Bloom's Taxonomy questions are based on facts, but facts alone aren't enough to give a complete answer. The best advice here is to study the answers in the examiner's reports, and just try to absorb how these problems are done.

Calculations

This is already an area of strength for actuaries, however, you need to be able to do the calculational problems quickly during the exam. Make sure to practice practice, practice using our web-based problems and practice problems in excel. Focus on doing each problem many times over the course of your study.

Points to Keep in Mind for the Computer Based Testing Environment

• In the Pearson platform, you won't be able to write out formulas in the same way as with paper and pencil. It has to be clear what steps you follow so the grader will know you understand the method, even if you don't do the whole problem correctly. For a more complicated calculation, try to avoid putting the whole calculation in one cell. If possible, break the calculation up into two or three cells so the graders can clearly see your steps. You want to label your calculations so the grader understands what you are doing. Remember, the graders will see the formulas you put into the cell.
• You don't need to spend time on formatting such as underlining or bolding. Exception: It can help the grader if you highlight your final answer to each sub-part of a question when there's a lot of work on a page.
• Something that hasn't changed for the CBT format is the need to justify any judgmental selections. Common examples are LDF and trend selections. All you need is a phrase in the cell next to your selection such as, "based on an upward trend" or "based on seasonality". It can be short but you have to at least mention the key point you used in making your decision.
• On past exams, it was sometimes required to draw diagrams or graphs as part of your answer, or to provide mathematical derivations of formulas. This cannot be done in the Pearson platform. Note however that drawing a diagram on your scrap paper may assist you in solving a problem even if the diagram cannot be included as part of your answer.

Now you are ready! Go to the Ranking Table and start reading / studying / calculating!

Disclaimer

The BattleActs study system is designed to help you focus on what we believe to be the most important and most frequently tested topics on the exam. Questions may come up from material not covered in our study system. We suggest that you use your own judgement where to use your time when reading the source material.