CAS Parts 5 and 6

[Examinator]

In your opinions, which of these exams is more difficult? I'm taking 6 for my frist upper level exam and am curious about what I'll be gearing up for in the spring. Thanks for your input.

[Smooth Verona]

I believe 6 is harder than 5, unless you've done a lot of reserving at work and little pricing. However, I like 6 much better. On 5, the Intro to Insurance material (old 3B) is not fun at all.

[Bullfrog1220]

It's completely different for different people. I personally do pricing in my day-to-day work, and I still thought that CAS 6 (the reserving exam) was easier. I can't explain why. If we took a poll, I'd guess that it's close to 50-50.

Even then, they're both difficult and you have to pass them both for ACAS. So just dive in.

[Examinator]

Thanks. I work in pricing and had only a superficial knowledge of reserving before beginning to study for 6. The material has been pretty rough for me, so I'm trying to get a little hope into my head for the spring. I know none of them are easy, but if I can at least look forward to something to some degree, then that's a start.

[VernSchil]

Thanks. I work in pricing and had only a superficial knowledge of reserving before beginning to study for 6. The material has been pretty rough for me, so I'm trying to get a little hope into my head for the spring. I know none of them are easy, but if I can at least look forward to something to some degree, then that's a start.

I'm in the same boat although I just started even on the pricing. I've pretty much accepted failure on 6 this Fall as the influx of totally new material completely overwhelmed me and will use the time just to get a taste of what's out there. I'll go gun ho on 5 in the Spring.

[Examinator]

Definitely the same boat. I certainly don't think that 5 is in the bag for me. Heck, it could be worse based upon what other people have said. I do think I'll fare better than 6, on which I know I'll tank, as I have at least a general familiarity (in several cases quite solid) with most of the topics discussed. Even if I can do well on 5 without passing it would be good psychologically.

[Utanapishtim]

I think six will be more difficult for me on account of not having worked in reserving, but only pricing, so far. Five was nice in that a lot of -- well, some of the material was actually relevant to my work. I haven't decided yet which is worse, though, the CPCU stuff from five or the accounting stuff in six. Ask me in November (;

[Morrison]

Just wait until you get to the accounting and legal stuff in Part 7. It makes the CPCU material in Part 5 seem delightful in comparison.

[Examinator]

I've heard several people say 7 is the worst, and I make no claim against that. Those on my plate right now are 5 and 6, so I'm just looking for a ray of light from one to the other.

[MNBridge]

6 is easier (IMO) -- But it is essential you have someone to explain how all the ideas mesh (All 10 is the best).

The reserving stuff on 6 is all basically the same concept with a different twist. Trying to figure this out on your own with just papers will be a nightmare.

The people who thinks exams are "pure memorization" and try to just memorize the formulas from each paper without seeing how they tie will will have a very very difficult time with 6, and will probably complain about there being to much material.

You need to understand the concepts.

For example:
Bornhuetter Ferguson = Chain Ladder except the development is based on 'expected losses' not losses to date
Stanard = B-F except we use a certain way to find out 'pick' for expected.

Sorry I can't remember everything on the exam so the above are examples only, I think there is more than one Stanard.

[Examinator]

It seems to be a preference issue when it comes to comparing 5 and 6 to one another. I'm using the All 10 and I agree that going just by the articles and papers would be horrendous. You're right about the reserving all being the same idea with different approaches. Their concepts, as should be no surprise, are similar. Only the technique or what's actually being reserved changes. Pure memorization, and nothing deeper, would be impossible. You might memorize facts and statements but you'll need the reasoning and relationships behind it to answer the questions the CAS will ask.

I'm telling on myself by asking this, but how does the accounting and reinsurance rate when compared to the reserving material?

[MNBridge]

I'm telling on myself by asking this, but how does the accounting and reinsurance rate when compared to the reserving material?

I work in reinsurance so I am very biased in saying the reinsurance is not to bad.

Clark is one of the best articles ever written, I actually have any new people here read it (even if they aren't actuaries). Learn that first, then go to the others. They are basically just long winded articles saying the same thing with some new twist.

Experience Rating:
Bring Premium on Level, Trend, Develop

Exposure Rating:
Learn how to calc loss in layer all the various ways (that really are the same)
LEV's
ILF's
etc.

Reinsurance Structures (and variations):
Excess Per Risk
Aggregate Covers
Quota Shares and variations i.e. Surplus shares (really just QS's where QS % changes based on policy limit)
Sliding scale ceding commissions
etc.

There is accounting on exam 6 :-? Don't even remember that.

[Maine-iac]

The reserving material is more difficult to grasp than the accounting and reinsurance concepts, if you haven't already got a feel for reserving from your work.

HOWEVER, the accounting and reinsurance can be boring, especially the accounting, leading people to underestimate the amount of work required. You MUST memorize this stuff. You must slog through it and retain large chunks of it. Do not underestimate this material, and likewise, do not underestimate the CPCU material on 5.

[Utanapishtim]

The reinsurance material does contain a lot of duplication. I haven't looked at what the All10 has on it, but you might save time and be just as well off to go right to their summary and skip the readings themselves, becasue of this.