IFoA SA2 common mistakes
IFoA SA2 · Understand the traps and how to avoid them.
Writing a generic answer on product design or pricing that never names the specific contract features (guarantees, options, participation, surrender terms) in the question's scenario, so the marker cannot award scenario-specific marks.
Candidates memorise standard product lists and reproduce them under time pressure, treating the question as a recall prompt rather than a case. SA2 questions reward applying the stated features to the stated problem.
What to do instead
Before writing, underline the scenario's distinctive features (e.g. unit-linked with a guaranteed minimum maturity benefit, or with-profits with a smoothing policy) and force each paragraph to reference at least one of them. Practise by re-answering past-style scenarios in 5 bullet points that each cite a scenario fact.
Answering a 'discuss the risks' question with a list of risk names (mortality risk, lapse risk, expense risk) but no mechanism, no direction of impact, and no link to the insurer's solvency or profitability.
Risk lists are the easiest thing to recall, and candidates stop at naming because it feels like coverage. SA2 marks are for explaining how the risk arises and what it does to the balance sheet.
What to do instead
Use a fixed sentence template for each risk: source of risk -> how it crystallises in this product -> effect on assets/liabilities/capital -> possible mitigation. Aim for 3-5 fully developed risks rather than 12 named ones.
Ignoring the capital and regulatory dimension: answers on pricing, reserving, or investment strategy that never mention capital requirements, the supervisory regime, or the cost of holding capital.
Candidates focus on the actuarial mechanics they have drilled and treat capital as a separate topic. In SA2, capital is the connecting thread across almost every question.
What to do instead
After drafting any answer, add a short capital paragraph: how the proposal consumes or releases capital, what the regulator requires, and how the cost affects pricing or shareholder value. Build a one-page capital checklist and apply it to every practice question.
Giving one-sided answers to 'discuss' or 'evaluate' questions, listing only advantages or only the policyholder perspective, and never reaching a conclusion.
Under time pressure candidates write the first points that come to mind and run out of time before balancing. The command word 'discuss' is read as 'list'.
What to do instead
Count the marks and allocate roughly half to each side before writing. Finish with an explicit judgement sentence ('on balance, the guarantee is likely to be underpriced unless...'). Practise opening each 'discuss' answer with a two-line plan that names both sides.
Misallocating time: spending 40 minutes on a 20-mark question and leaving a 15-mark question answered in three lines, or writing long preambles before reaching the marks.
Candidates write what they know in depth and avoid questions where they feel less confident, and they underestimate how long handwritten explanation takes.
What to do instead
Convert marks to minutes at roughly 1.8 minutes per mark and keep a visible clock. Write the plan first, then answer in bullet form with the technical point in the first clause of each bullet. Do at least two full timed mocks before the exam.
Treating the SA2 paper like a calculation exam: reproducing a reserve or profit-test formula with numbers but not commenting on what the result means, its sensitivity, or its limitations.
Candidates carry over habits from the more numerical earlier subjects and believe a correct number earns the marks. In SA2 the calculation is usually a small part of the credit.
What to do instead
For every calculation, reserve marks for interpretation: state the result, explain the drivers, comment on sensitivity to the key assumptions, and note any professional judgement involved. Practise writing two commentary sentences per calculation in past-paper style questions.
Answering a question about a specific regime, report, or role (for example an actuarial function report, an ORSA, or a with-profits governance requirement) with generic risk-management language that does not name the document, its audience, or its required content.
Candidates learn principles rather than the specific deliverables and governance structures, so they generalise when precision is being tested.
What to do instead
Build a one-page reference sheet for each key deliverable: who produces it, who receives it, what it must contain, how often, and what the regulator does with it. Test yourself by writing the contents list from memory.
Failing to use the scenario's quantitative data: ignoring given mortality rates, expense levels, surrender values, or asset shares, and writing a qualitative answer where the numbers were provided to be used.
Candidates skim the data under time pressure and default to the qualitative material they have rehearsed. Some believe using numbers is only for the calculation part of the question.
What to do instead
Highlight every number in the question before planning, and explicitly decide whether each is a distractor or a required input. In qualitative answers, quote the figures when making a point ('an expense loading of X% is unlikely to cover...').
Writing answers with no structure: one dense block of prose where points overlap, are repeated in different words, and cannot be marked point by point.
Candidates write as they think, and anxiety leads to restating the same idea in slightly different language to fill space, which earns no extra marks.
What to do instead
Use numbered points with a short heading per point, one idea per point, and no repetition. Before writing, list the distinct points and cross out duplicates. If a point does not add a new idea, delete it and use the time on an unattempted question.
Neglecting professional judgement and communication marks: never stating assumptions, never flagging uncertainty or data limitations, and never addressing how the result would be communicated to a board or policyholders.
Candidates see these as soft extras compared with technical content, so they omit them even where the question explicitly asks for advice or a recommendation.
What to do instead
Keep a short 'professionalism' checklist: state key assumptions, note data quality and limitations, flag areas of judgement, and say who the advice is for and how it should be presented. Add one or two such sentences to every advice-style answer in practice.