SOA Exam ASTAM – Advanced Short-Term Actuarial Mathematics

Develop Advanced Expertise in Insurance Risk Modelling, Claims Reserving and Actuarial Pricing

Exam ASTAM – Advanced Short-Term Actuarial Mathematics is an actuarial examination conducted by the Society of Actuaries (SOA), USA, and forms part of the pathway towards the Associate of the Society of Actuaries (ASA) designation.

The examination focuses on applying advanced actuarial techniques to model short-term insurance risks, estimate claims liabilities, develop insurance premiums and evaluate uncertainty.

ASTAM builds upon the concepts developed in Fundamentals of Actuarial Mathematics (FAM), Probability (P) and Financial Mathematics (FM).

The subject combines loss distributions, aggregate risk models, statistical estimation, credibility theory, insurance pricing and claims reserving, developing essential analytical and modelling skills for actuarial applications in general insurance, health insurance and risk management.

Course Structure & Syllabus

Exam ASTAM covers advanced actuarial techniques used in modelling, pricing and reserving for short-term insurance coverages.

Key Topics Covered:

1. Severity Models & Extreme Value Theory:
   Loss severity distributions, heavy-tailed distributions, Generalised Pareto and Generalised Extreme Value distributions, tail risk measurement and extreme loss modelling.
2. Aggregate Claims Models:
   Compound distributions, aggregate loss calculations, convolution techniques, recursive methods, compound Poisson models and numerical evaluation of aggregate claims.
3. Insurance Coverage Modifications:
   Policy deductibles, coverage limits, coinsurance, inflation adjustments, loss elimination ratios, increased limits factors and reinsurance arrangements.
4. Statistical Estimation & Model Selection:
   Maximum likelihood estimation, parameter estimation, confidence intervals, hypothesis testing, goodness-of-fit tests and selection of appropriate statistical models.
5. Credibility Theory & Bayesian Methods:
   Bayesian credibility, Bühlmann and Bühlmann-Straub models, experience rating, empirical Bayes methods and credibility-weighted loss estimates.
6. Claims Reserving Techniques:
   Expected Loss Ratio, Chain-Ladder, Bornhuetter-Ferguson, Bayesian reserving, frequency-severity methods and estimation of outstanding claims liabilities.
7. Stochastic Reserving & Insurance Pricing:
   Mack’s model, Poisson and Overdispersed Poisson models, reserve uncertainty, loss trend analysis, loss cost methods and insurance ratemaking.

The ASTAM syllabus focuses on advanced loss modelling, statistical estimation, credibility theory, claims reserving, insurance pricing and quantitative risk assessment.

Syllabus Topics & Weightages

The SOA Exam ASTAM syllabus comprises six principal areas:

Topic weightages are indicative ranges rather than fixed percentages. Actual question distribution may vary between examination sittings.

Examination Structure

Exam ASTAM is a written-response actuarial examination administered at authorised Prometric testing centres, combining theoretical, numerical and Excel-based assessments.

Important Examination Guidelines

• Written-Response Questions:
  Five questions require detailed written solutions, calculations, explanations and actuarial reasoning in the answer booklets provided.
• Excel-Based Question:
  One question must be completed in the provided Excel workbook, assessing practical actuarial calculations and modelling techniques.
• Question Structure:
  Each question may contain multiple parts covering different actuarial concepts and applications.
• Partial Credit:
  Candidates may receive partial marks for correct methods, calculations and explanations, even if their final answers are incomplete.
• Examination Resources:
  An electronic formula sheet is provided in accordance with SOA examination instructions.
• Calculators:
  Only calculators approved under SOA examination rules are permitted.
• Examination Booking:
  Candidates must register through the SOA and schedule their examination appointment within the applicable examination window.
• Examination Conduct:
  Candidates must follow SOA and Prometric regulations regarding identification, permitted materials, answer submission and examination security.

Eligibility Criteria

Exam ASTAM is an advanced actuarial examination suitable for students specialising in short-term insurance risk modelling, pricing and reserving.

• No prior actuarial examination pass is required solely to register for ASTAM, subject to SOA’s applicable examination entry requirements.
• A strong understanding of Exam FAM – Fundamentals of Actuarial Mathematics is highly recommended.
• Knowledge of Exam P – Probability, Exam FM – Financial Mathematics and VEE Mathematical Statistics is assumed.
• Familiarity with loss distributions, statistical estimation, actuarial modelling and insurance mathematics is beneficial.
• Candidates must comply with SOA’s applicable registration, identification and examination requirements.

Learning Objectives

Studying Exam ASTAM develops the ability to:

• Analyse severity distributions and extreme insurance losses.
• Apply aggregate claims models and compound distributions.
• Evaluate the impact of deductibles, limits and reinsurance arrangements.
• Estimate parameters and select appropriate statistical models.
• Apply Bayesian and credibility-based estimation techniques.
• Calculate outstanding claims reserves using actuarial methods.
• Evaluate reserve uncertainty through stochastic models.
• Apply loss trending and ratemaking techniques.
• Perform actuarial calculations and modelling using Microsoft Excel.
• Develop advanced statistical reasoning and insurance risk assessment skills.

Practical Applications of Exam ASTAM

The knowledge gained in Exam ASTAM is applicable across several actuarial and financial disciplines:

1. General Insurance:
   Modelling claims frequency and severity, estimating outstanding claims liabilities and developing insurance premiums.
2. Health Insurance:
   Analysing healthcare claims, evaluating benefit structures and assessing short-term medical insurance risks.
3. Reinsurance:
   Evaluating deductible structures, coverage limits, risk transfer arrangements and reinsurance recoveries.
4. Actuarial Pricing & Reserving:
   Applying statistical models, credibility techniques and loss development methods to pricing and reserving decisions.
5. Enterprise Risk Management:
   Assessing extreme losses, analysing aggregate risk exposures and quantifying uncertainty in insurance portfolios.

ASTAM develops advanced actuarial knowledge in short-term insurance modelling, claims reserving, statistical estimation and insurance pricing, supporting practical actuarial applications and progression towards the ASA designation.

Technical Requirements – AEI Learning Application

To access online classes, recorded lectures and digital study resources, students must ensure their devices meet the following minimum technical requirements of the Actuators Educational Institute (AEI) Learning Application.