What Is the Associate In Research And Planning (ARP) Designation?
Associate in Research and Planning (ARP) is a professional designation awarded by the Insurance Institute of America (IIA). It certifies those who have completed a series of courses and exams designed to support research and decision-making in the insurance industry.
In essence, the role of ARPs is to assist actuaries and insurance companies in understanding the likely risk of and cost of certain events. This in turn allows insurance companies to make more intelligent and profitable decisions around what insurance contracts to enter into, and what insurance premiums to charge.
- The Associate in Research and Planning (ARP) designation prepares professionals to help guide policy-writing decisions in the insurance sector.
- ARPs require a strong grounding in mathematics, research methods, and communication skills.
- ARPs often hail from diverse industry backgrounds, with many ARPs choosing to become actuaries later in their careers.
Understanding the Associate In Research And Planning (ARP) Designation
In order to be successful, insurance companies must rely on the expertise of skilled professionals who use mathematical and statistical techniques to estimate the probability and likely impact of certain events. This process can involve extensive research to help improve the accuracy and reliability of these estimates.
ARPs play a central role in this process, performing functions such as estimating the likely profitability of new market segments, summarizing financial statements and other relevant information, and stress-testing financial models to estimate the likelihood and impact of higher-than-expected claims. At times, ARPs may also act as expert consultants for legal cases in which there is a dispute regarding insurance claims.
Depending on the type of insurance being offered, ARPs may find it necessary to draw on background knowledge from a variety of fields. For example, ARPs working in the health insurance sector may benefit from prior experience in medicine, while those insuring complex financial instruments may leverage experience working in the capital markets. For these reasons, it is not unusual for professionals to enter into the ARP profession from a variety of prior careers, such as accounting, economics, or the legal profession. Similarly, many ARPs subsequently choose to become actuaries to further their careers in the insurance industry.
Real World Example of an Associate In Research And Planning (ARP)
Michaela is a recent college graduate who specialized in mathematics. Following her graduation, she worked as a financial analyst for a real estate development company, performing due diligence on potential new projects and acquisitions. In that role, she gained firsthand knowledge about the kinds of risks that can affect the costs, revenues, and viability of buildings long term. This includes not only financial factors, such as interest rates and rents, but also physical factors such as humidity, water and fire damage, and vandalism.
Recently, Michaela decided to pursue a career change in which she could continue to leverage her mathematical strengths while also applying her practical knowledge of real estate development. She therefore pursued and obtained the ARP designation, allowing her to conduct research and analyses supporting actuaries and other professionals in the insurance sector. Given her background, Michaela was well positioned to find employment at an insurance company specializing in risks related to real estate. Through her research, she helped her employer manage their risks when selling insurance products to tenants, landlords, real estate developers, and other customers with exposure to real estate.