ARM™ 402 – My Answers to The Most Common Questions
The ARM™ 402 is a difficult exam. This exam focuses on the topics of risk financing, insurance, reinsurance, and financial risk.
In this blog, I’m going to answer some of the most common questions that we receive about the ARM™ 402 exam. In this blog we will answer the following questions:
- What is the ARM™ 402 exam format?
- What is the passing grade for the ARM™ 402?
- What is the cost of the ARM™ 402 exam?
- What is the most difficult aspect of the ARM™ 402?
- What study material do you recommend for the ARM™ 402?
What is the ARM™ 402 exam format?
The ARM™ 402 exam consists of 75 multiple choice questions broken up into two types of questions, part A and part B.
- Part A: Concept questions – The first section of the exam will be concept questions; these questions will test your understanding of a definition or topic. The multiple-choice answers will generally provide 2 or 3 partially correct answers and one “best” answer.
- Part B: Case questions – The second section of the exam will be case questions; these questions will require you to apply your knowledge to a specific scenario or event. You will be given a real-life scenario; your job will be to select the best recommendation to solve the given scenario.
The ARM™ 402 exam focuses on the topics of risk management. This exam is broken up into three topics:
- Part A – Risk Treatment
- Part B – Types of Risk (Property, Fleet, and Legal)
- Part C – Financial risk, Operational Risk, and Strategic Risk
What is the passing grade for the ARM™ 402?
The passing grade for the ARM™ 402 exam is 70%. This means you must answer 70% of the questions correctly to receive a passing grade on the ARM™ 402.
Since the ARM™ 402 exam is 75 questions long, this means you must answer 53 questions correctly (you can get 22 wrong) to earn a passing grade on the ARM™ 402.
What is the cost of the ARM™ 402 exam?
The cost of ARM™ 402 exam varies depending on your choice of study material and exam registration. Each exam costs about $320 and study material ranges between $250 to $400 per exam.
This means the total ARM™ 402 exam cost is around $600.
I recommend this study material from AB Training Center for $295. It comes with a print book, digital book, and audiobook and is definitely worth the money.
What is the most difficult aspect of the ARM™ 402?
The hardest part of the ARM™ 402 will be memorizing the math-intensive topics. There is a ton of information to digest and comprehend. Not only do you need to understand and memorize each formula, but you must comprehend the content to a high enough degree that you can apply the concepts and formulas in a real-life scenario.
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.
For more information checkout our blog detailing the ARM™ 402 exam difficulty.
What study material do you recommend for the ARM™ 402?
Unfortunately we do not offer an ARM™ 402 course at this time I do recommend this study material from AB Training Center. This is the study material I use; it does a great job breaking down the materials into the most important topics in simple notes (about 6 pages per chapter) so I could easily memorize the content. It also includes an “educational objectives” section at the end that reflected a lot of the most important topics and a full practice exam to prepare for the official exam. The material comes with a print book, digital book, and audiobook. Here are the three ARM™ courses I recommend:
Free Practice Exam
Ready to get started studying? We’re here to help (for free). Download our free ARM™ 402 practice exams to get a feel for the type of questions you will see on the exam.
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For more information about the ARM™ 402 exam, checkout some of our other free resources:
- ARM™ 402 exam questions
- ARM™ 402 exam format
- ARM™ 402 exam difficulty
- ARM™ 402 flash cards
- ARM™ 402 passing grade
- ARM™ 402 Q&A
- ARM™ Designation Overview
- ARM™ Exam Pass Rates
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.
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 ARM™ 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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