IFoA SP9 study guide
IFoA SP9 · Work through your exam, one topic at a time.
SP9 - Specialist Principles: Enterprise Risk Management is one of the Specialist Principles subjects in the Institute and Faculty of Actuaries (IFoA) professional qualification, the stage that sits between the Core Principles subjects and the Specialist Advanced subjects that lead to Fellowship. It is aimed at candidates who already have a grounding in actuarial risk concepts and who want to work - or already work - in risk, capital, regulatory reporting, model governance or consultancy, where the ability to reason about risk across an entire organisation matters more than any single technical calculation. The IFoA SP9 study guide has 9 sections and about 2,255 words.
01Enterprise risk management framework and governance
This domain examines whether you can explain how an ERM framework is designed, governed and made to operate. SP9 questions often present a board or insurer scenario and ask you to critique the framework, identify governance gaps and recommend improvements.
350 words, about 2 min02Risk identification, classification and risk registers
Risk identification and classification: sources, taxonomies and register design. SP9 tests whether you can produce a usable register, not a list of worries.
271 words, about 1 min03Risk measurement, quantification and modelling
Quantification: choosing measures, building and validating models, and communicating uncertainty. Expect calculations and critique of model assumptions.
250 words, about 1 min04Risk appetite, tolerance, limits and risk-reward trade-offs
Risk appetite: translating appetite into tolerances, limits and risk-adjusted decisions. Questions ask you to critique appetite statements and design limit frameworks.
244 words, about 1 min05Risk culture, conduct and behavioural aspects of risk
Culture, conduct and behaviour: how incentives, leadership and group dynamics shape risk outcomes, and how to assess and change culture. Tone at the top is necessary but not sufficient; middle management and incentive design drive behaviour.
231 words, about 1 min06Risk reporting, communication and stakeholder engagement
Risk reporting and communication: tailoring information to boards, regulators, investors and policyholders, and ensuring it drives action. Reports should be audience-specific: the board needs aggregated, forward-looking, appetite-linked information; operational managers need granular, timely data.
214 words, about 1 min07Capital management, allocation and solvency risk
Capital management and solvency: regulatory versus economic capital, allocation, diversification, fungibility and stress. Regulatory capital is the minimum required by the supervisor; economic capital is the firm's own estimate of risk.
232 words, about 1 min08Emerging and strategic risk
Emerging and strategic risk: identifying risks that are new, evolving or outside historical data, and linking them to strategy. Emerging risks are new or changing, with high uncertainty and potentially high impact; historical frequency-severity models are weak.
233 words, about 1 min09Embedding ERM in decision-making
Embedding ERM: making risk information change decisions in strategy, pricing, products, capital and operations. Embedding means risk is considered before decisions, not documented afterwards.
230 words, about 1 min