THE PREMIER DESIGNATION OF THE INSURANCE INDUSTRY.
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CPCU® STUDY MATERIAL
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ABOUT THE CPCU®
The CPCU® or Chartered Property Casualty Underwriter designation is the premier designation in the property casualty insurance industry. This insurance designation is held by only about 4% of the insurance industry and covers a wide array of insurance topics including property insurance, auto insurance, liability insurance, insurance law, risk management and personal insurance operations.
CPCU® designation holders gain the necessary skills and experience needed to quickly move into management positions and often see an immediate career improvement and salary increase. According to a study by the CPCU® Society, 75% of survey respondents reported that the CPCU® led to a salary increase, with about half of their salaries increased by as much as 15%.
WHO SHOULD PURSUE THE CPCU®
This unique designation should be pursued by those interested in entering the property casualty field and by those currently employed in the property casualty industry who would like to advance their current knowledge and improve upon their current career position.
Although I recommend these courses should be pursued by everyone in the insurance industry, the designation is most popular for underwriters, agents, brokers, adjusters, claims managers, risk managers and business analysts.
The CPCU® designation is highly respected in the insurance world and can help anyone in the property-casualty field gain the necessary skills and experience to reach that next level of employment while at the same time helping to build a more knowledgeable insurance industry.
HOW TO EARN THE CPCU®
The CPCU® designation is achieved after the completion of a series of eight exams and an ethics requirement course. The exams include: four foundation courses, three personal lines or commercial lines courses, and one elective course. The sequence in which these exams are taken does not matter, the individual may choose the exam order depending on their interests or background.
These courses cover a wide array of topics and advanced subjects used in our day to day jobs such as risk management, underwriting, loss exposure analysis, property-casualty insurance, coverage options, insurance law, managing insurance operations and much more.
These courses are required for both the Personal and Commercial CPCU®
Personal Lines Courses
These three courses are required for the personal lines CPCU®
Commercial Lines Courses
These three courses are required for the commercial lines CPCU®
- CPCU® 551
- CPCU® 552
- CPCU® 553
Only one elective course is required. There is a wide array of courses that count as an elective credit including:
- CPCU® 560
- AAI™ 83
- AIC™ 31
- AIC™ 32
- ARE™ 144
- ARM™ 56
- AU™ 67
- ERM™ 57
CPCU® DESIGNATION COST
The CPCU® designation will, in total, cost over $6,000. ($6,160 to be exact). Below we are breaking down the total cost of the CPCU® designation, showing the cost for each exam’s study material and cost to take the exam. You must pay separately for the exam registration and study material.
Industry Average CPCU® Cost
Below is the industry average cost of study material and the cost to register for each exam. Using this method, the CPCU® designation will cost $6,160 in total:
- CPCU® 500 – $400
- CPCU® 520 – $400
- CPCU® 530 – $400
- CPCU® 540 – $400
- CPCU® 551 – $450
- CPCU® 552 – $450
- CPCU® 553 – $350
- CPCU® 555 – $450
- CPCU® 556 – $450
- CPCU® 557 – $350
- Elective course (ARM™ 56) – $350
- Exam registration cost: $370 per exam
Total CPCU® designation cost: $6,160
According to a report by the CPCU® Society surveying 174 CPCU® designation holders, 91% of all survey respondents stated that completing the CPCU® designation has provided them with increased job opportunities. Out of these 174 respondents, 75% also reported that the CPCU® designation has led to a salary increase, with about half of their salaries increasing by as much as 15%.
According a study by payscale.com, the median CPCU® salary for insurance company employees is $74,338. The median CPCU® salary broken down by job type is as follows
- Insurance underwriter – $65,486
- Senior underwriter – $80,809
- Insurance broker – $74,798
- Insurance underwriter commercial property – $64,901
- Claims manager – $89,062
- Risk manager – $94,875
CPCU® EXAM PASS RATES
The CPCU® exams are tough; the average pass ratio of a CPCU® exam is around 74%. That means on average 1 out of every 4 will fail the CPCU® exam. According to publicly published data, these are the pass rates of the CPCU® exams:
CPCU® 500 EXAM
This exam is the first exam in a series of eight exams required to earn the Chartered Property Casualty Underwriter designation (CPCU®). The concepts of the CPCU® 500 exam build the foundation upon which the remaining CPCU® exams will be focused, it is vital to fully understand the concepts of the CPCU® 500 exam.
CPCU® 500 Exam – Difficulty
The CPCU® 500 exam is not too difficult. If you have experience in the insurance industry, you should not have trouble with the concepts of the CPCU® 500 exam. One of the main focus of this exam will be on risk control and risk financing techniques, which are used daily in the life of an insurance professional.
The hardest part about the CPCU® 500 exam is preparing for the type of questions that will be asked. These questions will be tricky, worded strangely and will not directly quote any study material. This means that you must understand how to APPLY the material you have studied, not just simply repeat definitions.
CPCU® 500 Exam – Topics
The major focus of the CPCU® 500 exam is risk and risk management techniques used by individuals and organizations. The main topics covered in this exam include Risk, risk management, risk control, risk financing, insurance, and big data.
A majority of the questions on this exam will be based on how individuals and organizations can use risk control and risk financing techniques, such as insurance, to mitigate risk. These questions will require you fully understand the job of a risk management professional and how various techniques can help to reduce the severity and frequency of loss.
CPCU® 500 RESOURCES
For more information about the CPCU® 500 exam, checkout some of our other free resources:
CPCU® 520 EXAM
The CPCU® 520 exam is the second CPCU® exam in a series of eight required exams to complete your CPCU® designation. This exam consists of 75 multiple choice questions split up into two sections: 49 part A questions (concept questions) and 26 part B questions (case questions).
The CPCU® 520 exam focuses on insurance operations, such as insurance regulation, underwriting, premium auditing and claims. The reason this exam is easier than most is because insurance professionals gain a solid understanding of the core material from on the job training and experience, meaning you won’t have to learn something completely new. This background knowledge is a HUGE help for understanding the basics of each core insurance operation but unfortunately, the CPCU® 520 will test you on much more than just the basics.
CPCU® 520 Exam – Difficulty
The hardest part of the CPCU® 520 will be learning the minor details and complexities of each insurance 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.
Although this exam has one of the highest pass ratios, DO NOT take it lightly. All CPCU® exams are tough and require you to fully study the online course. Be sure to fully study each chapter for the best results on your exam, even if you consider yourself an expert on one topic.
CPCU® 520 Exam – Topics
The major focus of the CPCU® 520 exam is insurance and insurance topics. The main topics covered in this exam include insurance operations, regulations, risk control, reinsurance, and premium auditing.
CPCU® 520 RESOURCES
For more information about the CPCU® 520 exam, checkout some of our other free resources:
CPCU® 530 EXAM
The CPCU® 530 exam is the third CPCU® exam in a series of eight required exams to complete your CPCU® designation. This exam consists of 85 multiple choice questions split up into two sections: 55 part A questions (concept questions) and 30 part B questions (case questions).
CPCU® 530 Exam – Difficulty
According to nationally published CPCU® pass rates, the CPCU® 530 has one of the lowest success rates out of all the CPCU® exams. The pass rate is typically around a 72% pass ratio. The numbers don’t lie! In my opinion, the CPCU® 530 was one of the toughest of all the CPCU® exams. For my non-lawyer brain, the CPCU® 530 content just didn’t click. It took a lot of reading and re-reading to drill down the complex legal concepts.
The hardest part of the CPCU® 530 will be memorizing each statute, definition, and concept. There’s a LOT to memorize. We have personally reviewed the content and counted over 600 legal definitions that you need to be familiar with for this exam. Almost every single question on the CPCU® 530 exam will be based on some type of definition, there really isn’t any analytical questions on the 530. Focus first on memorizing the definition, then memorize the minor differences and complexities between each definition. The CPCU® 530 will try to trick you by asking about the minor differences between statutes and will even makeup the name of a statute to try and trick you!
CPCU® 530 Exam – Topics
The major focus of the CPCU® 530 exam is legal principles and concepts. The main topics covered in this exam include tort law, contract law, U.S. law, sales contracts, and business law.
CPCU® 530 RESOURCES
For more information about the CPCU® 530 exam, checkout some of our other free resources:
CPCU® 540 EXAM
The CPCU® 540 exam is the fourth CPCU® exam in a series of eight required exams to complete your CPCU® designation. The CPCU® 540 exam consists of 85 multiple choice questions broken up into two sections, part A and part B.
CPCU® 540 Exam – Difficulty
According to nationally published CPCU® pass rates, the CPCU® 540 is the hardest CPCU® exam. The pass rate is typically around 72%. The numbers don’t lie; the CPCU® 540 exam is the largest in terms of content (12 chapters) and is by far the most math intensive of all the CPCU®exams. This exam will test your will to complete the CPCU®; many students get stuck on the CPCU® 540 and give up after failing a couple of times. Prepare yourself now and set aside a little extra study time for the CPCU® 540 because there are a lot of new concepts to grasp and a lot of formulas to memorize.
The hardest part of the CPCU® 540 will be memorizing and learning how to use each formula. The concept questions of the CPCU® 540 are pretty straight forward, nothing more challenging than the CPCU® 530; the difficult part is reading a question and knowing which formula to apply without the question directly telling you. For example, a question will give you the beta, expected market return and risk free rate for five different companies and ask you to “select the best investment”. Without the question directly asking, you’ll need to understand that this question requires you to apply the Capital Asset Pricing Model (CAPM) to each company in order to determine the best investment. To make the test even harder the CPCU® 540 will attempt to trick you by giving more information than need for the formula meaning you’ll need to know exactly what information is relevant to the formula and what information is unnecessary .
CPCU® 540 Exam – Topics
The CPCU® 540 exam focuses on the topics of finance and accounting including financial statements, valuations, investment management, and capital management. The reason this exam is so tough is because the questions are heavily math intensive. There are A LOT of formulas to know for the CPCU® 540 exam. According to the nationally published estimates, there are 34 math formulas that you’ll be required to know to pass the CPCU® 540 exam, but we estimate that there’s closer to 80 formulas that you need to pass the CPCU® 540. Of these 34 formulas; 7 of them are provided to you at the exam and 27 are not provided to you at the exam (meaning you’ll have to memorize the formula). In addition, you will be given four tables to use on the CPCU® 540 exam including: future value table, present value table, future value of an annuity table, and present value of an annuity table. You not only have to memorize the formulas, but you must also know when to use each formula and how to apply the formulas to a given case question.
CPCU® 540 RESOURCES
For more information about the CPCU® 540 exam, checkout some of our other free resources:
CPCU® 555 EXAM
The CPCU® 555 exam is the fifth CPCU® exam in a series of eight required exams to complete your CPCU® designation (personal insurance track). The CPCU® 555 exam consists of 85 multiple choice questions broken up into two sections, part A and part B.
CPCU® 555 Exam – Difficulty
The CPCU® 555 exam questions are tough, these questions focus on the minor details and differences of the personal insurance product. It is extremely important that you memorize all of the endorsements and coverages for each type of personal insurance product. This is the hardest part of the 555 exam.
CPCU® 555 Exam – Topics
The major focus of the CPCU® 555 exam is insurance and personal insurance coverages. The main topics covered in this exam include auto insurance, homeowners insurance, watercraft insurance, and personal insurance profitability.
Below we are outlining some important CPCU® 555 exam topics. We recommend you master these topics before attempting the CPCU® 555 exam. This is our opinion of the topics that are important on your exam.
- Auto insurance – we recommend you heavily focus on the auto insurance chapter, in our opinion this is one of the most important topics of the CPCU® 555 content. Understand the auto insurance contract, provisions, endorsements, and coverages.
- Homeowners insurance – we highly recommend you master the topics of homeowners insurance. Memorize all of the available endorsements, coverages, and contract sections.
- Endorsements – this is a common theme throughout every section of the CPCU® Each section will touch on the specific endorsements of the personal insurance product covered in the section. For example, the auto insurance section will cover auto insurance endorsements. There are hundreds of endorsements to memorize for this exam. We highly recommend you write down every endorsement in your notes, be sure to memorize each and know how each endorsement is applied. The exam will try to trick you, you must know the minor differences between each endorsement and how each endorsement can be applied to the personal insurance product.
- Coverages – similar to endorsements, each section will touch on the specific coverages of the personal insurance product covered in the section. For example, the watercraft insurance section will cover the available watercraft coverages. Be sure to memorize each available coverage and know how each coverage is applied to the personal insurance product.
CPCU® 555 RESOURCES
For more information about the CPCU® 555 exam, checkout some of our other free resources:
CPCU® 556 EXAM
The CPCU® 556 exam is the sixth CPCU® exam in a series of eight required exams to complete your CPCU® designation (personal insurance track). The CPCU® 556 exam consists of 85 multiple choice questions broken up into two sections, part A and part B.
CPCU® 556 Exam – Difficulty
The CPCU® 556 exam questions are tough, these questions focus on the minor details and differences of the investing and retirement funding vehicles. It is extremely important that you memorize the tax treatment of each vehicle, this is the hardest part of the 556 exam.
These questions will test your application of the information by putting you in the shoes of a financial advisor. These questions will give you a real-life scenario; your job will be to select the best recommendation to solve the given scenario. For example, a question may give you a scenario in which a 55-year-old man is planning to retire but would like to use a retirement funding vehicle with little risk and tax free distributions. You will have to choose from the multiple-choice answers to select the best option for this individual. All of the multiple-choice options may be partially correct, such as Roth IRA, 401(k), Traditional IRA, and Mutual fund, but you must choose the best option.
CPCU® 556 Exam – Topics
The CPCU® 556 exam focuses primarily on personal financial planning including retirement funding, investing, annuities, life insurance, and health insurance. The CPCU® 556 exam counts towards both the Associate in Personal Insurance designation (API™) and Chartered Property Casualty Underwriter designation (CPCU®).
To fully prepare for these types of questions you must completely understand how each retirement funding vehicle operates meaning you should understand the tax treatment, required minimum distributions, contribution limits, age limits, etcetera… Memorize every minor detail. (Yes, the minor details are very important!)
CPCU® 556 RESOURCES
For more information about the CPCU® 556 exam, checkout some of our other free resources:
CPCU® 557 EXAM
The CPCU® 557 exam is the seventh CPCU® exam in a series of eight required exams to complete your CPCU® designation (personal insurance track). The CPCU® 557 exam consists of 85 multiple choice questions broken up into two sections, part A and part B.
CPCU® 557 Exam – Difficulty
This exam is tough because there is so much content to memorize. In particular, there are a ton of different insurance products and coverages that you need to memorize. We have personally reviewed the content and counted over 20 different commercial insurance products (such as commercial auto, commercial crime, cyber risk, and employer’s liability) that you need to be familiar with for this exam. Almost every single question on the CPCU® 557 exam will be based on some type of coverage, exclusion, or endorsement.
For comparison purposes, this exam is most similar to the CPCU® 555 exam (except this one is based on commercial insurance). Much like the CPCU® 555 exam, for the CPCU® 557 exam you will be required to memorize every aspect of each insurance product including the coverages, conditions, exclusions, and endorsements. In total, there are over 20 commercial insurance products that you need to memorize to pass this exam.
The hardest part of the CPCU® 557 will be memorizing each coverage, condition, exclusion, and every minor aspect of each commercial insurance product. The reason people fail this exam is because they underestimate the amount of content. There is a LOT to memorize. For each commercial insurance product, such as the commercial general liability policy (one of the most important topics of the 557 exam), you must know the insurance limit, covered losses, optional coverages, additional coverages, coverage extensions, loss conditions, coverage conditions, exclusions, and endorsements. You have to know this for EACH of the 20 commercial insurance products covered in this exam (that’s a lot to memorize).
CPCU® 557 Exam – Topics
The CPCU® 557 exam focuses on the commercial insurance products, including topics such as the commercial general liability policy (CGL), the building and personal property coverage form (BPP), and business auto coverage form (BACF).
We have personally reviewed the content and counted over 20 different commercial insurance products (such as commercial auto, commercial crime, cyber risk, and employer’s liability) that you need to be familiar with for this exam. Almost every single question on the CPCU® 557 exam will be based on some type of coverage, exclusion, or endorsement.
CPCU® 557 RESOURCES
For more information about the CPCU® 557 exam, checkout some of our other free resources:
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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