The SOA just released the new LAM syllabus for Fall 2022. Overall, the changes were small. They added one new reading and made no other changes for this sitting. The new reading is:
Standards of Practice, Canadian Institute of Actuaries Actuarial Standards Board, 2022, 1440-1490
One question we often get from students is whether we recommend they take LAM or ERM to fulfill the 2 or 4 hour FSA exam requirement. We thought it would be helpful to organize our thoughts in this blog post. As you would probably guess, there is no one-size-fits-all answer, and we will outline the main considerations below. Eddie and me (Zak) have co-taught ERM and LRM/LAM for a while now, so we do think we can definitely give you some helpful guidance here.
First, if you are looking for a shorter exam, then you want LAM. Not only is the ERM syllabus much longer, but also ERM has a case study and LAM does not.
Here is a rough sketch of what you’re looking at:
LAM Syllabus ~ 800 source material pages
ERM Syllabus ~1200 source material pages + 200 page case study
Above are “source material pages” meaning the actual readings the SOA puts on the syllabus. This is not the number of pages for the TIA study manuals, but they are roughly similar proportions. Please note that these are approximate figures, and they do change over time, but this should give you a good general idea of the relative syllabus size.
As far as difficulty, since the exams are on a curve it does come down to relative performance. I would recommend downloading a few past exams and glancing at them. You might get a feel which is easier to you after looking at a few past SOA exams. For me, LAM is simpler – it might require a bit more technical knowledge of the life track, but that’s something I enjoy. ERM, on the other hand, is much more verbose – the questions can often span 3 pages. The case study for ERM takes a significant amount of preparation and effort. There is no case study for LAM so that will save you time. The case study is a major factor to consider.
I figured it’s also good to discuss potential challenges with LAM to fully lay out both sides. LAM is a newer exam so there won’t be as many past SOA exam questions to practice with. LAM started in 2019 compared to ERM which started in 2012. The other challenge is that since LAM is only a 2 hour exam, you run the risk of failing from “bombing one question”. You have a bit more of a cushion with ERM since it’s a 4 hour exam.
It may be worth briefly mentioning that the SOA LAM exams have had some quality issues. In particular, for the Spring 2021 exam, the SOA had to throw out 4 out of 40 points. When studying for any FSA exam, understand that the past SOA questions and solutions are often not perfect. They are written by volunteers with busy full time-jobs. Often the question and solution creating process goes through many iterations; there can be communication breakdowns in this process which lead to errors.
We also wanted to mention that LAM and ERM have very small overlap in terms of syllabus readings. Years ago, there was more of an overlap between the exams. Currently, there are just a few readings that crossover between the exams. You can essentially think of them as entirely separate exams with separate syllabi.
These links might also be helpful:
http://theinfiniteactuary.com/blogs/exam_ila_lrm/2019/07/10/what-does-it-take-to-pass-an-fsa-exam/
To summarize, we recommend doing the following to help guide your decision:
Here’s a list of pros/cons which you may find helpful. Keep in mind this is just our opinion!
Pro LAM
Pro ERM
Lastly, we highly recommend once you make a decision to not second guess yourself. Make a well-informed choice of which exam to take, and then go for at it with 100% effort. We hope this helps you decide and good luck on your FSA exams!
The SOA released the updated LAM syllabus today for the Fall 2021 / Spring 2022 exams. Overall the changes were small – with just two readings added and two removed. We will update the seminar over the coming weeks for these changes.
There were no changes to Sections A/C/D. All changes below are Section B only.
Add
1. LAM-149: Application of Professional Judgement by Actuaries, 2020
2. Assumption Governance, The Actuary, Jan 2021
Remove
1. LAM-145 Expert Judgment
2. Making Spreadsheets Great Again
Good luck to everyone on your last push of studying for the Fall 2020 LAM exam! I wanted to mention a few quick updates here:
1. Spring 2020 exam solutions are now posted! Apologies that these did take a bit longer than expected to release – the good news is we have expanded coverage with 2 videos and also a spreadsheet in addition to our normal PDF solutions. The first video gives general exam commentary and the second video walks through spreadsheet solutions. Make sure to watch both videos and download both files for the Spring 2020 exam in the “Supplementary Materials > Past Exam Questions” section of the seminar!
2. LAM-135 Correction: We added a final video at the very bottom of the seminar with one technical correction to LAM-135. Overall it’s pretty minor, but still worth checking out.
3. Importance Sampling Videos: We want to emphasize these are an optional, deeper dive of material and mostly intended for 1-2 months before the exam for those with extra time that want to see an in-depth example of importance sampling in action. I would not stress about these in the week before the exam, and you’re going to get the most efficient use of your study time in the last week by focusing on the main syllabus materials.
One final note – read our prior blog posts, as we’ve made quite a few over the past month with recommendations for CBT exams. In particular, check out this YouTube video if you haven’t already.
We are now accepting student photo submissions for the TIA instagram account! We will also give FREE GIVEAWAYS (e.g. TIA T-shirts) to all students who submit a photo that is featured on our instagram page. Submit your photo here now!
We just posted some updated materials for LAM-135. The main change is there was an “in thousands” label we removed. Additionally, we incorporated a spreadsheet example into the Part II video for LAM-135.
Today (July 16th) we did some final updates to the LAM seminar to get it fully in place for Fall 2020.
I have already updated the new study guides, and will be updating the supplemental material section over the next few hours.
For those who already got an early start, you may notice that we have updated the version on our files from V1 to V2. We wanted to note here that there were no major changes, and there’s no need to reprint if you’ve already done so. The majority of the changes were cosmetic/formatting changes.
We did correct one formula in LAM-135. The equation St = S0 exp(mu+ sigma * epsilon) should not have had the S0 term and we have corrected it to say St = exp(mu+ sigma * epsilon). This was the only substantive update between V1 and V2.
Good luck on your exams!
Today the SOA released the new Fall 2020 / Spring 2021 LAM syllabus. The changes were fairly small and are documented below.
We will have updated detailed study guide materials available very soon (today or in the next few days).
ADD
1. (4 pages) Beware of Stochastic Model Risk!, Stroman, Risk & Rewards, SoA, Aug 2019
2. (5 pages) Common Misunderstandings of Risk-Neutral Valuation, Stroman, Financial Reporter, SoA, June 2019
3. (7 pages) ASOP 56: Modeling, sections 3 & 4, Dec 2019
4. (4 pages) The Importance of Centralization of Actuarial Modeling Functions, Part 1: Focus on Modularization and Reuse, The Modeling Platform, Nov 2019
DROP
1. (8 pages) LAM-136-19: Modeling, ASB, Third Exposure Draft, sections 3 & 4
2. (4 pages) End-to-End Assumption Documentation Practices, Financial Reporter, March 2016
We posted a few bonus items to the course and I wanted to document them here:
1. TIA LAM Formula Sheet – the TIA LAM formula sheet is now posted in the supplementary materials section of the seminar! Keep in mind to read through page 2 for our recommendations on approaching the formula sheet
2. Importance Sampling Example – we thought it would be helpful to give a concrete example of importance sampling. We added a video series and spreadsheet example to illustrate simulation under standard monte carlo simulation and using importance sampling as a variance reduction technique for out-of-the-money puts. Hopefully this concrete example helps solidify your understanding of this topic! This is located in the supplementary materials section of the seminar
3. LAM-117 KRD Drill Problems – we added a drill problem set on this reading
4. LAM-135 Intro Video – this is the most minor of the four changes. We made a short intro video for this reading
We hope you enjoy these new additions to the seminar! I think this is likely the last update for this sitting. For next sitting, our main goals will be to add a third practice exam and many more drill problems. Good luck on the exam everyone!
As many of you know, this is the first sitting for the new LAM exam! Lately I’ve been getting a lot of questions about LAM vs LRM, so I wanted to collect some thoughts here.
1. LAM Syllabus: First of all, the LAM syllabus is very different from the LRM syllabus. You should think of it as basically an entirely new exam. There is no longer a case study (which I think many people will be happy about!). There were only 2 readings that got carried over fully from the Spring 2019 LRM Syllabus (Key Rate Durations: Measures of Interest Rate and Revisiting the Role of Insurance Company ALM w/in a RM Framework). A few other readings got partially carried over, but with changes to pages/chapters (ESG: A Practical Guide and Diversification: Consideration on Modelling Aspects & Related Fungibility and Transferability, and LAM-116)
2. TIA Materials: We’ve got you covered and will be updating the seminar for these syllabus changes! Eddie and I are working hard getting these updates in as soon as possible, while still making sure our materials are the highest quality possible. If you want to see a full list of product features, go the product page and download the first sample (Fall 2019 LAM Release Date Schedule). There are some seminar materials in place (~25 videos), and we will continue to roll-out materials over the coming weeks and months!
You can purchase the LAM seminar at any time, and you’ll have access through the Fall 2019 exam sitting. You will get complete access to all the TIA LAM materials as they are rolled out.
Hopefully that helps clarify some common questions you might have! Good luck on your exams!