CAS Exam 5 study guide
CAS Exam 5 · Work through your exam, one topic at a time.
CAS Exam 5 is one of the ACAS exams listed in the Casualty Actuarial Society's navigation: the link text on casact.org identifies it as "Exam 5" pointing to a page titled "exam-5-basic-ratemaking-and-est-claim-liabilities." From that title, the exam covers two areas: basic ratemaking and estimating claim liabilities. It sits in the ACAS group alongside Exam 1 and 2, Exam MAS-I, Exam MAS-II, the CAS DISCs, and the Course on Professionalism, and precedes the FCAS exams (7, 8, 9). It is written for candidates progressing toward Associateship who need working command of property-casualty ratemaking and loss reserving. This page is independent study material and is not affiliated with, endorsed by, or sponsored by the CAS. Note that as of the retrieval date the CAS exam pages returned "Page not found," so verified details such as question count, duration, passing score, fee, format, and retake policy are not confirmed here and are marked for review; candidates should confirm them against the current CAS syllabus. To prepare, work through the two domains in parallel: ratemaking mechanics (loss costs, expenses, trend, credibility, classifications, deductibles) and reserving mechanics (development triangles, expected loss methods, Bornhuetter-Ferguson, case reserves, diagnostics). Topics on this exam: Basic Ratemaking and Estimating Claim Liabilities. The CAS Exam 5 study guide has 2 sections and about 912 words.
01Basic Ratemaking
Basic Ratemaking tests whether you can convert loss experience, expenses, and target profit into a prospective rate per exposure, then adjust for trend, development, credibility, classification, limits, and deductibles. CAS questions emphasize the loss-ratio and pure-premium methods, on-leveling, expense treatment, and how those pieces interact. A rate is prospective: expected loss and LAE per exposure plus fixed and variable expenses plus underwriting profit or contingency, with risk load and catastrophe loads where needed. Express everything on a common exposure and rate-level basis.
463 words, about 2 min02Estimating Claim Liabilities
Estimating Claim Liabilities tests the actuarial estimate of unpaid claims: case reserves, IBNR, ultimate losses, development patterns, expected-loss methods, ULAE, discounting, and tail. You must choose a method that matches data maturity and explain why it is reasonable. Ultimate = paid + case + IBNR. IBNR is the provision for claims not yet reported plus development on known claims; do not confuse it with case reserves.
449 words, about 2 minMore study resources for CAS Exam 5
- Practice questionsAn insurer writes a book where the pure premium for each class is $400.
- FlashcardsWritten vs earned premium. Written premium is booked when the policy is issued for its full term; earned premium is recognized as coverage is provided over time.
- Cheat sheetWritten premium is recorded at policy inception for the full term; earned premium recognizes exposure as coverage is consumed.
- Key termsPure premium. The expected loss and loss adjustment expense cost per exposure unit, computed by dividing total losses by total exposures.
- Study planMap the Basic Ratemaking syllabus into a one-page topic outline covering exposure bases, premium and loss data, and ratemaking components.
- Common mistakesCandidates memorize 'trend to the projected period' as one operation and skip the intermediate step of restating historical premium at current rate levels using parallelogram or extension-of-exposure methods, especially when the problem gives both a rate change date and a trend rate.
- Exam-day guideBring the original, unexpired ID with signature that matches the name on your exam registration.