Whether you’re new to the insurance industry or are a seasoned professional, you’ve probably heard of the CPCU designation. CPCU stands for Chartered Property and Casualty Underwriter. It’s a professional certification that’s specific to insurance and is widely respected in the industry.
Many people view the CPCU as the equivalent of a master’s degree in property-casualty insurance. To earn the designation, individuals must complete nine rigorous courses in insurance-related topics like risk management, finance, accounting, and commercial underwriting.
The CPCU program is administered by The Institutes, a non-profit research and educational organization that oversees all aspects of the CPCU program for insurance professionals. It sells courses, study materials, and exams on its website (https://web.theinstitutes.org), and only The Institutes is authorized to grant CPCU designations.
Why Earn a CPCU?
If you’re considering pursuing a CPCU, you might be wondering what benefits you’ll get from completing the program. A CPCU designation has many potential advantages:
1. Boost Knowledge and Expertise
You’ll get a broad understanding of underwriting, claims, risk control, accounting, and other insurance company functions. You’ll also learn how insurers use data and technology to make day-to-day decisions.
2. Gain Respect and Credibility
The CPCU designation has broad recognition in the insurance industry. The CPCU program is widely respected for its rigorous courses, relevant content and strict code of conduct.
3. Get Flexibility and Choice
The CPCU program offers some flexibility. For instance, candidates can follow the standard program or choose the Associate in Risk Management to CPCU option, earning both designations.
4. Up Your Confidence
The knowledge and prestige you’ll gain can make you feel more confident, which can help with getting new clients and retaining the ones you have, as well as forming new connections in the industry.
5. Provide Better Service
If you’re an agent or broker, the knowledge you’ll gain will enable you to better serve your clients. The more you know about risk and insurance, the better equipped you’ll be to educate your customers.
6. Advance Your Career
A CPCU designation will help you stand out from the crowd. It can facilitate a promotion or help you get a new job.
7. Earn More Money
With this additional professional designation, you’re in a better position to ask for more money. On average, CPCUs earn a salary of $106,391.
8. Get Networking Opportunities
CPCU designees and candidates get the chance to meet other insurance professionals, which can help you find and leverage opportunities in the industry.
9. Earn Continuing Education Credits
If you currently hold an insurance license, your CPCU courses may help satisfy your state’s continuing education requirements.
10. Your Employer May Foot the Bill
Because your employer gains prestige from your CPCU designation, they may be willing to pay all or a portion of your costs.
While there are many benefits to earning a CPCU, the program has some drawbacks. One is the time and effort required to complete the courses and pass the exams. According to The Institutes, a CPCU course generally takes six to eight weeks to complete. Once you’re done, you’ll also have to spend additional time reviewing the material and taking the exam. Completing the entire CPCU program can take two or three years (or more).
Another disadvantage of the CPCU program is the cost. A candidate who completes the program at current prices will likely pay around $5.720. That’s because The Institutes charges $345 to $425 for each online course (except the ethics course, which is free). And remember, there are six to eight courses required that charge a fee.
When you pay $345 per course, you’ll get assignment-level quizzes, unlimited practice exams, a simulated timed credentialing exam, and a printable workbook. If you decide to pay the higher tier in pricing, you’ll get everything included in the $345 package plus a printed workbook.
Neither package includes the exam, which costs an additional $370. The Institutes also charges a $90 fee to file the matriculation form. These costs can add up quickly, and in total that’s $2,760 ($345 times eight) for the courses and $2,960 ($370 times eight) for the exams, which ends up being about five grand.
How to Get Started
Suppose you’ve decided to pursue the CPCU designation and are wondering where to start. Your first step is to go to The Institutes’ website and review the CPCU course options. You’ll need to choose a path (commercial or personal).
Next, discuss your educational plans with your employer to determine whether the company will cover some or all of your CPCU-related costs. Thirdly, return to The Institutes’ website and buy study materials for your first course.
You should also submit a completed CPCU matriculation (enrollment) form. You’ll remain a candidate until your designation is conferred. Note that you must have at least two years of work experience in risk management and insurance to be eligible for the designation. If you’re new to the insurance industry, you can fulfill the work requirement while you’re taking your courses.
The fourth step is to register for your exams and choose a testing window. As of 2022, all CPCU exams will be online only. In-person exams have been discontinued. Remember, you’ll have to take AND pass six to eight exams—one for each course—to earn your designation.
What Courses Do You Need to Take?
The CPCU program consists of nine courses: four foundation courses, three concentration courses (in either the commercial track or the personal track), one elective course, and an ethics course. Course waivers may be available for candidates who have completed certain courses or designations or who have advanced degrees. For example, candidates who have earned an MBA or MFA degree can waive CPCU540. The Institutes notes that waivers may change as courses and programs are updated.
Here are the foundation courses:
- CPCU 500: Managing Evolving Risks. Provides an introduction to the fundamentals of risk management, including risk identification, risk control, and risk financing. Also addresses data analytics and the structure of an insurance policy.
- CPCU 520: Connecting the Business of Insurance Operations. Explains how property-casualty insurers operate. Topics include insurance regulation, product marketing and distribution, underwriting, risk control, premium auditing, rate development, and reinsurance.
- CPCU 530: Navigating the Legal Landscape of Insurance. Explains how U.S. laws apply to property-casualty insurance. Provides an introduction to federal law, contract law, commercial and property law, tort law, agency law, and employment law.
- CPCU 540: Impacting the Bottom Line of Insurance Financials. Focuses on finance and accounting. Topics include GAAP financial statements, insurer financial statements, understanding stocks and bonds, maximizing insurer investment income, meeting insurer capital needs, and breaking down capital requirements.
For your concentration courses, you can choose either the Commercial Track or the Personal Track.
Commercial Track Courses:
- CPCU551: Addressing Commercial Property Risk. Concerns the management of commercial property risks. Provides an overview of building and personal property insurance, including common coverage extensions. Also explains how to insure business income and transit exposures, and how to mitigate crime losses.
- CPCU 552: Addressing Commercial Liability Risk Explains the basics of commercial liability insurance, including business auto, workers’ compensation, professional liability, excess liability, and marine and aviation coverages.
- CPCU 553: Understanding Personal Insurance and Finance Explains personal coverages like personal auto and homeowners coverages. Also addresses financial planning, life and health insurance, retirement funding, and estate plans.
Personal Track Courses:
- CPCU 555: Developing Personal Insurance Solutions. Focuses on personal risks and insurance coverages. Explains how to customize personal auto coverage, protect residential property, manage homeowners’ liability, explore residential coverage options, and maximize personal lines profitability.
- CPCU 556: Planning Personal Financial Strategies. Explains how to recommend life insurance and annuities, maximize disability and health insurance, evaluate investment strategies, fund post-secondary education, fund retirement, establish an estate plan, and plan for taxes.
- CPCU 557: Understanding Commercial Risk. Provides an introduction to commercial risk and insurance. Explains building and personal property coverage, business income coverage, crime insurance, commercial general liability coverages, business auto insurance, and workers’ compensation.
- AIC 30: Claim Handling Principles and Practices. Explains the claim handling process, setting case reserves, investigating and documenting claims, dealing with fraud, and negotiating and litigating claims.
- AIDA 181: Big Data Analytics for Risk and Insurance. Provides an introduction to big data analysis, including data management, predictive modeling, and smart products technology.
- ARE 144: Reinsurance Principles and Practices. Provides an overview of reinsurance, including the types of reinsurance, the placement process, treaty clauses, and the various types of treaties.
- AU 60: Evaluating Commercial Underwriting Risks. Explains the commercial underwriting process, including the evaluation of insurance applicants, premium calculation, and effective communication and collaboration.
- Cyber 301: Managing Cyber Risk. Explains the fundamentals of cyber risk, including cyber exposures and mitigation, cyber regulation, and addressing cyber risk with insurance.
Finally, the CPCU program includes a mandatory (but free!) ethics course. Among other things, it explains why ethics is so important in the insurance industry. It also provides an overview of the nine CPCU Canons, and Disciplinary rules and procedures.
How To Prepare for an Exam
All CPCU exams are 65 minutes long and consist of 50 multiple-choice questions. The exams test your understanding of the material and your ability to apply what you’ve learned. You’re unlikely to pass a test based on memorization alone. Candidates who fail an exam can retake it up to four times in one year or twice within the same testing window. If you retake an exam within the same testing window, the retake will cost $80 less than the regular exam price.
CPCU exams are known for being rigorous so it’s important to prepare. You can study on your own using the materials provided by The Institutes or enroll in an instructor-led class. While a class will cost more than self-study, it may be a better option if you prefer to learn in a group setting or need extra guidance. You can find instructor-led classes on The Institutes’ website. Because of the pandemic, most classes are online.
If you don’t want to sign up for a formal class and are looking for help or just moral support, you should consider joining the CPCU Candidates Facebook Group. The latter is a study group for people working on their CPCU designation. The group is public so any comments you post will be visible to all users.
Whether you choose self-study, an instructor-led class, or an online study group, it’s important to read the entire course book (electronic or paper textbook). Be sure you understand each chapter before you move on to the next one. Also, be sure to use the study materials provided with your course, including the workbook, quizzes, and practice exams. All are designed to help you pass your exam.
Another key to passing your CPCU exam is an effective study schedule. You can plan your study timetable as soon as you have your course materials. First, decide when you want to take your exam so you can gauge your preparation time. For example, suppose you plan to take your exam in four months. Your CPCU course book contains 10 chapters and you want to complete the book in 10 weeks. Accordingly, you list all of the chapters in your calendar, one for each week. You also schedule one hour each day, say between 7 and 8 P.M., to read the textbook or review the workbook and quizzes. Once you finish the textbook, you’ll spend the remaining weeks taking practice exams. A few days before your exam you’ll take the simulated timed credentialing exam.
When Can I Take an Exam?
The Institutes offers exams during the four testing periods listed below. Once you’ve elected a testing window, you must take your exam during that two-month period.
- Quarter 1: January 15 – March 15
- Quarter 2: April 15 – June 15
- Quarter 3: July 15 – September 15
- Quarter 4: October 15 – December 15
If you register for your exam before the exam window opens, you’ll get an $80 discount on your exam fee.
What is the CPCU Code of Professional Conduct?
Because insurance is an industry in which relationships are based on trust, insurance professionals have a duty to behave ethically. To emphasize this concept, The Institutes have created the CPCU Code of Professional Conduct. The Code applies to all CPCU candidates and designees.
The Code consists of nine canons, each of which contains rules for professional conduct. The canons are broad, aspirational goals while the rules are enforceable standards. For example, Canon One states that insurance professionals should endeavor to place the public interest above their own. Rule 1.1 stipulates that a CPCU should avoid even the appearance of impropriety when performing their professional duties. They should act in a manner that ultimately will best serve their own professional interests. However, when conflicts of interest arise, CPCUs must place the public interest above their personal interests or financial gain.
The purpose of the Code of Professional Conduct is to communicate the minimum standard of conduct for CPCU candidates and designees. Individuals who violate the Code may be sanctioned or (in extreme cases) stripped of their designation.
Is Continuing Education Required?
Unlike an insurance license, a CPCU doesn’t expire and has no mandatory continuing education requirements. Insurance professionals who’ve earned their CPCU aren’t obligated to take courses to maintain their designation. Nevertheless, CPCUs do have an obligation to improve their level of proficiency in their field. Canon 2 of the CPCU Code of Conduct requires CPCUs to continually maintain and improve their professional knowledge, skills, and competence.
To help CPCUs comply with Canon 2, the Institutes created a program called CPCUs in Good Standing. Individuals who complete 24 credit hours of continuing education in a two-year period and report it to The Institutes are added to the company’s list of CPCUs in Good Standing.
CPCUs can earn credit hours in various ways, such as by taking online courses, a state licensing exam, attending a webinar, or completing a college-level course. The firm charges a $189 reporting fee.
Network with the CPCU Society
If you’d like to network with CPCU candidates and designees, you should consider joining the CPCU Society. For many years, only CPCU designees could join the CPCU Society, but the rules have changed. Nowadays, membership is open to anyone who works in insurance or risk management.
The Society (which is affiliated with The Institutes) operates both online and through local chapters across the United States. Its mission is to provide knowledge and leadership opportunities for risk and insurance professionals.
The Society offers five types of memberships: CPCU professional (for CPCUs), Pathways (for non-CPCUs), Student (for full-time undergraduates), Academic, or Post Career. The cost of an annual membership ranges from $20 to $200. Each type of membership affords some benefits, such as free webinars, online courses, and access to a mentor matching program.
Alternatives to the CPCU
Suppose you want to advance your insurance career but don’t have the time or inclination to commit to the CPCU program. Fortunately, you have many other options. The Institutes offers a range of professional designation programs. Each program is intended to provide a broad education in a specific area, such as risk management, claims, or insurance technology. The program you choose will depend on your interests, job responsibilities, and career goals. For instance, someone new to insurance might start with the Associate in Insurance (AINS), which provides a general introduction to the insurance industry. The AINS program includes four courses (plus ethics).
The Institutes also offers various certificate programs, which are narrower in focus than designation programs. An example is the California Workers’ Compensation Claims Administration (WCCA) certificate, a five-course program designed for California claims professionals. Another example is the two-course Program in Supervisory Management. This program can help supervisors learn how to motivate employees, manage workflows, and deal effectively with performance issues.
Get Ahead with Insurance Education Programs
A CPCU designation offers many benefits, including increased knowledge, prestige, and the potential for career advancement. However, the program requires considerable time, effort, and money to complete, so it isn’t for everyone. Fortunately, The Institutes offers many other insurance education programs. If the CPCU program seems too daunting, you can choose one that better matches your interests, job responsibilities, and career goals.
1. Introducing Yourself
Your introductory email needs to pack a lot of information into a small package. Try something like this:
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My name is John Doe and I work for ABC Agency, where we provide business insurance policies to many of Dallas' rockstar small businesses.
Congratulations on your new business, Jane's Bakery. Are you wondering if you have all the insurance you need? Or if your policies will really cover you in a pinch?
At ABC Agency, we pride ourselves on providing robust, comprehensive coverage options to companies like yours with flexible, pay-as-you-go plans.
Are you available this week to talk more about how we can help? I can help you find the most affordable rates and the best policies out there.
I look forward to speaking with you soon.
2. Presenting a Quote
Once you've met with your potential client, a quick reply with their quote will get the ball rolling.
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Thanks so much for meeting with me this morning. I loved touring Jane's Bakery–I can still smell those delicious chocolate chip cookies baking! You have a great location, and I'm sure you're going to do great on Front St.
After reviewing my notes, I've pulled together an insurance quote for you (attached). I recommend a business owner's policy. A BOP includes several insurance products in one: liability, property insurance, and business interruption insurance. It offers robust coverage at a competitive price.
I'll call you in a few days to see what you think about this insurance plan. In the meantime, if you have any questions, don't hesitate to email me or call me at [phone number].
Again, thank you for your time today. I look forward to working with you in the future.
3. Thanks for Purchasing a Policy
Gratitude is important! It's never a bad idea to thank your clients for their business.
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Thank you for choosing a business owner's policy with ABC Agency. We know it's so important to get the right coverage for your business, and we are honoured you've placed your trust in us.
We're excited to work closely with you, and our no. 1 goal is to make sure you're business is always protected.
Do you have any questions? We are here to help. Reach out whenever something comes to mind.
Thank you again for choosing ABC Agency to insure Jane's Bakery.
4. Welcome Email
A welcome email helps clients feel like you're there to help–and can softly pitch other insurance products you offer.
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Welcome to the ABC family! We are thrilled to have you as a new customer and can't wait to meet all of your insurance needs.
As an independent insurance agency, we work with multiple insurance providers to find the best coverage options for all our customers. If you need any other type of insurance–like [include additional offerings unique to your agency, like life insurance, health insurance, home insurance or anything else]–we can help you too.
Do you want to discuss any of these policies?
5. Introducing a New Product
A happy client may want to expand their business with you.
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I hope all is well with you and Jane's Bakery. I stopped in yesterday for a blueberry muffin and coffee, and they were delicious. I loved the hint of cinnamon in the muffin! Was that your idea?
I wanted you to be the first to know we are now offering commercial vehicle insurance to our policyholders. Auto insurance for your catering vans is super important since your personal car insurance won't cover them.
We're offering this insurance coverage solely to our current business clients at the moment and have some very competitive rates.
Would you like me to work up a quote for you?
As always, thanks so much for being a part of the ABC family.
6. Asking For Referrals
Once your relationship is established and comfortable, let your clients help you grow.
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You've been a valuable member of the ABC family for two years now, and we so appreciate your business–not to mention the muffins you supply for our monthly meetings!
Because you are a valued policyholder, I wanted to ask a quick favour. I know you are active in the local Chamber of Commerce, and I'm hoping you might know some colleagues who would benefit from working with our insurance company.
Referrals are one of the most effective ways to connect with our community since people really trust their friends, family and colleagues. Is there anyone you'd recommend I speak with?
Remember that in addition to business insurance products, we offer everything from life insurance policies to pet insurance.
As a thank you for your help, we will send you an Amazon gift card of $100 when your referrals buy insurance from us.
Thanks so much for your help!
7. Policy Renewal
If your client needs to renew their policy with you, send an email like this:
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I hope you're doing well! What a year it's been—from being listed as one of the top 5 bakeries in Dallas to being an official vendor for the city—you have so much to be proud of.
Just a heads up that your business owner's policy is up for renewal soon and will expire on June 15, 2023.
If you're still happy with the coverage, we can easily renew it for you.
Do you have some time to chat this week?
Looking forward to serving you again!