IFoA SP7 study guide
IFoA SP7 · Work through your exam, one topic at a time.
SP7 is the Institute and Faculty of Actuaries' Specialist Principles exam in general insurance. It is aimed at candidates who already have a grounding in actuarial mathematics and are moving into, or consolidating a role in, non-life work: pricing, reserving, capital, risk, or consultancy serving general insurers. The IFoA SP7 study guide has 9 sections and about 2,459 words.
01General insurance products, markets and the operating environment
This domain tests whether you can place a general insurance product in its commercial, distribution and regulatory context, and explain how that context changes pricing, reserving and capital outcomes. Product design: indemnity versus valued policies; occurrence versus claims-made cover; per-risk, aggregate and annual aggregate limits; deductibles, warranties and conditions.
320 words, about 2 min02Risk assessment, underwriting and pricing of general insurance
This domain tests the pricing chain from exposure to technical premium: identifying hazards, setting underwriting terms, estimating frequency and severity, loading expenses and profit, and deciding whether the market premium is adequate. Exposure, hazard and vulnerability: exposure is the amount at risk; hazard increases the chance or size of loss; vulnerability is the loss given an event.
309 words, about 2 min03Reserving for general insurance liabilities
This domain tests whether you can estimate ultimate claims and the reserve needed, choose an appropriate method, allow for inflation and recoveries, and communicate uncertainty. Reserve components: case reserves, IBNR, IBNER, claims-handling costs and ULAE.
281 words, about 1 min04Reinsurance and other risk transfer mechanisms
This domain tests the structure, pricing, accounting and risk effects of reinsurance, plus alternative risk transfer. You need to explain what is ceded, what is retained and how recoveries interact with limits and reinstatements.
277 words, about 1 min05Capital management, solvency and financial reporting for general insurers
This domain tests solvency capital, own funds, technical provisions and the reporting chain. You must distinguish best-estimate liabilities, risk margin, SCR, MCR and available capital, and explain how management actions affect coverage.
278 words, about 1 min06Asset-liability management and investment strategy
This domain tests whether you can align asset cash flows and risks with insurance liabilities, and explain the consequences of mismatch for solvency, earnings and liquidity. Matching: cash-flow matching, duration matching and immunization.
249 words, about 1 min07Enterprise risk management and governance
This domain tests how a general insurer identifies, measures, manages and governs risk across the business, including risk appetite, controls, board oversight and conduct. Risk appetite and tolerance: appetite is the willingness to accept risk; tolerance is the acceptable deviation from appetite.
248 words, about 1 min08Data, modelling and actuarial judgement in general insurance
This domain tests the quality and use of data, the choice and validation of models, and the disciplined exercise of judgement when data are limited. Data quality: completeness, accuracy, granularity, consistency and relevance.
256 words, about 1 min09Professionalism, ethics and communication of actuarial advice
This domain tests professional standards, ethical judgement and the communication of uncertain actuarial advice to boards, regulators and clients. Actuaries' Code principles: integrity, competence and care, impartiality, compliance, and communication.
241 words, about 1 min