ARM™ 402 Difficulty

The ARM™ 402 exam is all about risk, in particular, focusing on the different types of risk (legal risk, financial risk, strategic risk) and risk treatment (holistic treatment, insurance, reinsurance, non-insurance transfer).

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™ 402 Online Course.

ARM™ 402 Pass Rate

According to nationally published ARM™ pass rates, the ARM™ 402 is one of the easiest exams published by The Institutes. The pass rate is typically up to 76% or higher. This means, out of everyone that attempts the ARM™ 402 exam, 76% pass. As of writing this blog, the pass rate is 80% for the ARM™ 402 exam. This makes it one of the easier exams from The Institutes.

Although the pass rate is high do not take this exam lightly. This exam is very content-heavy, it can be deceivingly difficult.

ARM™ 402 Exam Difficulty

The ARM™ 402 is mostly content and concepts. There is a lot to learn and memorize, but it is not too difficult.

The hardest part of the ARM™ 402 will be memorizing the wide array of content ranging from types of insurance (large deductible, self-insurance, etc…) to financial terminology (forward contract, swap, option, etc…), to specific types of risk management (strategic risk, financial risk, operational risk, etc…). Not only do you need to understand and memorize each concept, but you must comprehend the content to a high enough degree that you can apply the concepts and formulas in a real-life scenario.

There is a little bit of math on this exam, but not much. You will see some questions that require you to calculate how much the insurance company will pay in a real-life scenario. For example, ABC Company is insured under a large deductible plan with $100,000 per person coverage, $250,000 per accident coverage, and a $1 Million aggregate limit. An employee of ABC Company causes an auto accident resulting in $150,000 of medical expenses incurred by the driver of the other car, $50,000 of medical expenses incurred by the passenger of the other car, and $250,000 in damage incurred by the employee of ABC Company that caused the accident. How much will ABC’s insurance company pay for this loss under the large deductible plan?

You will see some difficult questions like this that require you to understand all of the complex concepts of the ARM™ 402 and require you to apply your knowledge in a real-life scenario acting as a risk management professional.

Luckily we know exactly which topics and minor details you need to know. You can click here to download the list of ARM™ 402 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™ 402 –Study Tip

Students fail the ARM™ 402 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 for passing the ARM™ 402 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™ 402 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™ 402 practice exam (which comes with a 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™ 402 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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