SOA Exam SRM Study Guide (2026)

SOA Exam SRM (Statistics for Risk Modeling) is a 3.5-hour, 35-question multiple-choice exam testing statistical and predictive modeling techniques used in actuarial risk analysis (SOA). The pass rate is approximately 50 to 55% (SOA). Exam SRM sits in the SOA's preliminary exam sequence, typically taken after Exams P, FM, and FAM.

Exam SRM is where the actuarial exam sequence shifts from pure mathematics to applied data science. The content overlaps significantly with what data scientists and quantitative analysts learn, but framed through an actuarial lens. If you enjoyed the statistics and modeling courses in your degree, SRM will feel natural.

What the Exam Covers

The SOA syllabus organizes SRM into five topic areas (SOA):

1. Linear Models (20 to 25%)

Simple and multiple linear regression, assumptions and diagnostics, residual analysis, multicollinearity, interpretation of coefficients, R-squared and adjusted R-squared.

Linear regression is the foundation. Every other modeling technique on the exam builds on or extends concepts from linear regression.

2. Generalized Linear Models (30 to 35%)

GLMs are the heart of the exam. Topics include:

  • Link functions (log, logit, identity)
  • Distributions in the exponential family (Poisson, binomial, gamma, normal)
  • Logistic regression for binary outcomes
  • Poisson regression for count data
  • Deviance, AIC, BIC for model comparison
  • Variable selection (forward, backward, stepwise)
  • Overdispersion and how to address it
Key Concept

GLMs are the single most important topic on Exam SRM. They account for roughly a third of the exam and form the basis for how actuaries actually model insurance data. Invest at least 40% of your study time here.

3. Time Series (15 to 20%)

Autoregressive (AR), moving average (MA), and ARIMA models. Stationarity, differencing, autocorrelation and partial autocorrelation functions (ACF/PACF), model identification, and forecasting.

4. Principal Components Analysis (10 to 15%)

Dimensionality reduction, eigenvalues, proportion of variance explained, and when PCA is appropriate. The exam tests conceptual understanding and interpretation of PCA output.

5. Decision Trees and Cluster Analysis (10 to 15%)

Classification and regression trees (CART), pruning, random forests, bagging. K-means clustering, hierarchical clustering, and evaluation of cluster quality.

Common Trap

Candidates who studied machine learning in school sometimes rush through GLMs, thinking logistic regression is "easy." The exam tests GLMs at a depth that goes beyond what many intro ML courses cover. You need to understand deviance residuals, link function selection, and overdispersion diagnostics, not just how to fit a model.

The ISLR Advantage

The primary reference text for Exam SRM is An Introduction to Statistical Learning (ISLR) by James, Witten, Hastie, and Tibshirani. The book is freely available from the authors' website. This is a significant advantage over other actuarial exams where the reference texts cost $100+.

ISLR is well-written and accessible. If you read it carefully and work through the conceptual exercises, you will have solid coverage of most Exam SRM topics. The main gap is that ISLR does not cover GLMs in the depth the SOA requires, so you need supplementary material for that topic.

Study Timeline (13 Weeks)

The SOA recommends approximately 250 to 300 hours for SRM. A 13-week plan at 20 to 23 hours per week:

Weeks 1 to 3: Linear Regression

Build a thorough foundation. Do not rush this. Every GLM concept extends from linear regression. Practice interpreting regression output, checking assumptions, and understanding what each diagnostic tells you.

Weeks 4 to 7: GLMs (The Core)

Spend the most time here. Work through Poisson regression, logistic regression, and gamma regression examples. Practice calculating deviance, comparing models with AIC/BIC, and identifying overdispersion. This is where the exam differentiates passing from failing candidates.

Weeks 8 to 10: Time Series, PCA, Trees, and Clustering

These topics are lighter weight individually but appear on every exam. Time series is the most calculation-intensive of these. PCA and clustering are more conceptual.

Weeks 11 to 13: Practice Exam Phase

Full-length practice exams (35 questions, 3.5 hours). You have 6 minutes per question on average, which is generous compared to Exams P and FM. Use the extra time to read questions carefully and double-check your reasoning.

Key Concept

Exam SRM gives you 6 minutes per question (versus 6 minutes for a 30-question, 3-hour exam). The extra half-minute per question reflects the interpretive nature of the material. Use it. Read output tables carefully before answering.

Practice Strategy

Aim for 700 to 1,000 practice questions before exam day.

Exam SRM questions often present model output (regression tables, deviance statistics, ACF plots) and ask you to interpret it or choose the best model. This is different from Exams P and FM, where you are doing calculations from scratch.

FreeFellow offers free Exam SRM practice questions with adaptive difficulty and detailed solutions covering all five topic areas.

Practice benchmarks:

  • After 300 questions: scoring 45 to 55% on mixed practice
  • After 600 questions: scoring 55 to 65% on practice exams
  • Exam ready: scoring 65%+ consistently on full-length mocks

Common Mistakes

Rushing through GLMs. Candidates who underinvest in GLMs and over-invest in topics like PCA or clustering are making a poor trade. GLMs are 30 to 35% of the exam.

Memorizing formulas without understanding. SRM tests interpretation, not computation. Knowing the formula for AIC is less important than understanding when AIC leads to a different model choice than BIC.

Ignoring model diagnostics. The exam frequently asks "what is wrong with this model?" or "which diagnostic suggests a problem?" Practice reading residual plots and goodness-of-fit statistics.

Common Trap

Some candidates study SRM like Exam P, drilling calculations. SRM is fundamentally an interpretation exam. You need to understand what the numbers mean, not just how to compute them.

Free Resources

  • FreeFellow Exam SRM Practice - free practice questions with adaptive difficulty, solutions, and analytics
  • ISLR (free textbook) - the primary reference, freely available from the authors
  • SOA sample questions - official SRM practice questions with solutions
  • SOA study note on GLMs - supplementary material covering GLMs beyond what ISLR provides

Start your Exam SRM preparation with free practice questions on FreeFellow.