CPCU® 550 Difficulty

The CPCU® 550 exam is the fifth CPCU® exam in a series of eight required exams to complete your CPCU® designation.

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. This blog comes straight from our CPCU® 550 online course where we break down the difficult concepts and convey the topics in simple terms and plain English.

How Difficult is the CPCU® 550?

Here’s the good news. The CPCU® 550 is not too difficult. In fact, compared to all the CPCU® exams, we rank this as the second easiest exam. But, that doesn’t mean that it’s easy! Here’s our breakdown of the CPCU® 550 exam difficulty.

Why It’s Easy

The content of the CPCU® 550 is relatively simple and straightforward. It’s new content that you likely do not have experience with in your day-to-day job, but, the content is easy to read, comprehend, and memorize. Making this one of the easiest of the CPCU® exams.

Why It’s Hard

The content is easy to read and comprehend, that’s the good news. You will have no problem reading through the course and understanding the topics. The bad news is, that this exam will still be difficult. Here’s why:

1). New Topics – Typically, there is a lot of overlap between the CPCU® exams. That is not the case with the CPCU® 550 exam. This exam covers completely new content. The CPCU® 550 exam is all about data and technology. The exam feels like it was written for Data scientists and Information Technology Specialists. None of which you will have experience on the previous CPCU® exams.

2). Unique Topics – Unless you work in information technology or data science, then the topics of this exam will feel very new to you. Many of these topics you have probably never seen before. Topics such as Big Data, data-driven decision-making, predictive modeling, artificial intelligence, cluster analysis, probability distributions, and data privacy. This exam feels more like a data science exam than an underwriting exam. That being said, everything is tied back to the insurance industry, but the topics are data and technology-related, and how those aspects are used in the insurance industry.

3). Every CPCU® Exam is Difficult – The average pass rate of a CPCU® exam is around 74%. Meaning, that out of everyone who attempts the exam, 1 out of every 4 will fail. These exams are tough. The questions on these CPCU® exams will be much different than what you may have experienced on a typical exam that you took in high school or college. Every question on the exam is scenario-based. These questions require you to fully understand and apply every minor detail of each main topic. When I say you must be able to apply your knowledge from these topics, I mean these questions will put you in the shoes of an insurance professional and it will be your job to analyze each question in order to select the best answer for the given scenario. You will NOT be simply repeating a definition. You must study, please do not take these CPCU® exams lightly; I cannot stress this importance enough.

CPCU® 550 Most Difficult Topics

In our opinion, the four hardest parts of the CPCU® 550 exam include:

  • Probability – There is a major section on probability that includes topics such as types of probability, probability distributions, and continuous probability. This used to be part of the CPCU® 500 exam (it was moved to the CPCU® 550). This used to be one of the most difficult parts of the CPCU® 500. It involves a bit of math, understanding mathematic concepts, and some formulas.
  • Predictive Models – The predictive modeling and data mining part gave me some trouble. This was all new to me. It’s very data science-heavy heavy including topics such as training data, holdout data, training models, and evaluating models. Evaluating models is tough. There are a number of mathematic equations you will need to calculate model accuracy, model precision, and recall.
  • Insurance Application – A major aspect of this exam will be tying in the data science concepts with the insurance industry. You must know how departments such as the claims team, underwriting team, and marketing team utilize data science functions to conduct an analysis. For example, in one section, you will learn how the underwriting department uses predictive modeling and cluster analysis to conduct an analysis. You will be required to understand this for the exam, as the exam is all scenario-based application questions, you must understand how data science can be applied in the real world in the insurance industry.
  • Minor Details – One of the hardest parts of the CPCU® 550 will be learning the minor details and complexities of each data science and information technology function. Even if you’re an expert on the topic, you’ll need to fully study each section because the CPCU® exams are known for testing you on the most minor little details; missing one detail can cause you to choose the wrong answer.

CPCU® 550 Difficulty (Summary)

The hardest part of the CPCU® 550 exam is the new and unique content, combined with the difficult format of the CPCU® exams. This content will feel new to you. You have not seen these topics on any of the previous CPCU® exams, and unless you are a data scientist, then you likely are not working with these concepts in your day-to-day job. In fact, there’s a good chance that you have never seen these topics before in your entire life (that was the case for me). Topics like supervised data mining, entropy, holdout data, cluster analysis, change analysis, energy transfer theory, probability distributions, Privacy Impact Assessment, and GDPR compliance. Combine that with the difficult exam question format that puts you in the shoes of a data scientist to answer the given case question, and you have yourself quite a difficult exam!

The good news is, the topics are relatively simple, straightforward, and easy to comprehend. Although it will be new, you should have no problem reading through the course and understanding exactly what each topic is about.

Free Practice Exam

Ready to get started studying? We’re here to help (for free). Download our free CPCU® 550 practice exams 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 CPCU® 550 exam, check out some of our other free resources:

Disclaimer

Remember, every CPCU® 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® 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® 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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