ARM™ 401 Difficulty 

The ARM™ 401 exam is all about risk, in particular, focusing on the different types of risk (such as hazard risk, cyber risk, and financial risk) and the methods of analyzing risk (such as the five whys, root cause analysis, and fault tree analysis).

In this blog, we will break down the most difficult aspects of the exam. We will detail exactly what you should focus on when studying to pass this exam. The information in this blog post comes directly from our ARM™ 401 Online Course.

ARM™ 401 – Pass Rate

According to nationally published ARM™ pass rates, the ARM™ 401 is one of the harder exams published by The Institutes. The pass rate is typically around 75% or lower. This means, out of everyone that attempts the ARM™ 401 exam, 75% pass.

In terms of pass rate, this exam is more difficult than most CPCU® exams. In terms of pass rates, this exam is failed as often as the CPCU® 540 and CPCU® 500 (two of the most failed exams from The Institutes).

Compared to the other ARM™ exams, the ARM™ 401 is right in the middle in terms of pass rate. Though students often say that the ARM™ 401 is the hardest of the exams, simply because of the sheer amount of content that you need to memorize (lots of definitions and concepts).

The ARM™ 400 and ARM™ 402 exams also have pass rates that typically range between 70% and 75%. This just goes to show, that the ARM™ Designation is tough. You need to spend a little extra time preparing for these exams.

ARM™ 401 – Most Difficult ARM™ Exam

The ARM™ 401 is considered by most students to be the single most difficult ARM™ exam.

This exam gives students trouble because there is a lot of content to memorize.

Most notably, there is a lot of math on this exam. You will need to memorize and compute complex formulas including the current ratio, debt-to-equity ratio, RAROC, standard deviation, coefficient of variation, and normal distribution curve. In total, there are over 20 math formulas that you will need to memorize and understand how to compute.

Note: If you have passed the CPCU® 500 exam, you will be familiar with these formulas. Most of these formulas are exactly the same. 

In addition to the difficult math concepts, the content of the ARM™ 401 varies widely. Covering a number of complex concepts including financial statements (balance sheet, income statement, etc…), probability, risk identification techniques (HAZOP, SWOT, and Delphi), analysis techniques (Change analysis, Energy Transfer, Job Safety), and risk types (cyber risk, hazard risk, operational risk). And that is just a small fraction of the content covered in this exam!

The hardest part of the ARM™ 401 will be memorizing every topic and math formula. There is a ton of information to digest and comprehend. Not only do you need to understand and memorize each topic, but you must comprehend the content to a high enough degree that you can apply the concepts in a real-life scenario. You will see these concepts formatted as scenario questions on your exam. You must memorize each concept AND be able to apply the concept in a real-life scenario on your exam.

Luckily we know exactly which topics and minor details you need to know. You can click here to download the list of ARM™ 401 topics that you need to memorize (we’ll also include a free practice exam with the download).

Download: Free Practice Exam (CPCU® | ARM™ | AINS™ | API™)

ARM™ 401 –Study Tip

A lot of students fail the ARM™ 401 because there is just too much content on the exam. It is too much information to memorize all at one time. Here are our three biggest tips to passing the ARM™ 401 exam:

  • 1) Fully read the online course or attend an ARM™ class. This is by far the most important tip. These ARM™ exams are tricky and the exam questions will relate to very minute details from your ARM™ course. Skimming through the course will not cut it, you must read EVERYTHING. Even reading it just once will help you recall the information on your exam
  • 2) Take notes. This doesn’t mean you should rewrite every single word from the ARM™ 401 Course. Use shorthand and bullet points to quickly jot down the most important topics. This will help you better retain the information for easier recall on the test and will give you a “study guide” to refer back to (rather than rereading the full course!)
  • 3) Practice, practice, practice. Take as many practice exams and quizzes as you possibly can. This will help you familiarize yourself with the ARM™ question format and help you determine which topics you need to re-study. Once you go through a few practice quizzes and exams, return to your notes from step 2 and review any section that you failed to comprehend on the practice exam.

Free Practice Exam

Ready to get started studying? We’re here to help (for free). Download our free ARM™ 401 practice exam (comes with study guide and coverage guide) to get a feel for the type of questions you will see on the exam.

Download: Free Practice Exam (CPCU® | ARM™ | AINS™ | API™)


More Information

For more information about the ARM™ 401 exam, check out some of our other free resources:



Remember, every CPCU® and ARM™ exam is different. No single exam is the same. Be sure to study ALL topics (not just our recommendation). This resource is intended to provide you with a general idea of where your focus should be. Make sure to thoroughly study every topic of this exam.

Difficulty rank, importance rank, and the advice provided in this resource are solely the opinion of AssociatePI. This resource is intended to provide you with a general idea of where your focus should be. Each exam administered by The Institutes is different. AssociatePI is not affiliated with The Institutes or involved in the exam writing process. Please be sure to thoroughly study every chapter and every topic of this course.

CPCU® and ARM™ exams are administered by the American Institute for Chartered Property Casualty Underwriters (“The Institutes”). AssociatePI does not administer the actual exams, we are an independent resource of free content, advice, and study material for professional insurance education. This blog is intended for informational purposes only, to inform prospective students of the benefit of the CPCU® designation.

CPCU®, ARM™, and API are trademarks of the American Institute for Chartered Property Casualty Underwriters (“The Institutes”). AssociatePI LLC is not affiliated with, associated with, endorsed by or otherwise supported or recognized by The Institutes in any way. AssociatePI LLC is not authorized by The Institutes to offer courses, practice examinations, or any other resources related to the Institutes’ designations or other programs.

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