Don’t wait for pensions and insurance to shrink, IFoA’s president tells actuaries
Pardon the Interruption
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Actuaries need to drive change in the profession instead of waiting for the sectors they are employed in to change. This is the message from Matt Saker, president of the Institute and Faculty of Actuaries.
During his presidential address yesterday, Saker highlighted the IFoA’s desire to broaden the actuarial profession into wider fields.
Presenting a breakdown of IFoA’s members employed by sector, he said some practitioners are already working in asset management and the banking sector but an overwhelming majority (85%) of the faculty’s members work in traditional fields such as pensions, life or general insurance.
Saker described the actuarial profession as a “victim of its own success” for struggling to broaden beyond traditional fields, as demand in these areas is likely to continue in the foreseeable future.
However, he added: “Don’t get me wrong. I'm not expecting to see [a] material shift in demand for actuaries in the next couple of years, or even perhaps the next decade.”
But, he added that it was likely to happen within the careers of many of the current members and “almost certainly” within the working lives of those who are just starting out their careers today. “In that context, I think it would be naive of us to think these changes will not require the actual progression to adapt and transition,” said Saker.
He told actuaries not to wait for changes in the pension and insurance sectors to prompt them to switch careers.
“I'm optimistic that in 15 years’ time, the profile of our membership will be much broader than it is today. I generally do think that the changes that are happening in the pension sector, with the gradual decline of defined benefit schemes, [and] automation within insurance companies will make that a necessity at some point, within the careers of many of our members. But I'm keen that we don't wait for it to be a necessity. We get on the front foot and start driving that change now.”
Climate change, healthcare and other sectors
Saker said climate change could broaden the use of the actuarial skillset, with the IFoA soon launching a climate risk and sustainability course so this risk is understood and considered by its members in the same way as other major risks.
The president also urged members to “get more visibility” in other areas of work. For instance, he said one of the faculty’s members who was advising NHS Trusts provided “massive insights” at work simply by performing “what probably we would consider to be quite straightforward cash flow projections for them”.
Another example where actuaries could provide their skillset is the energy sector. Saker said energy providers that collapsed recently could have used actuaries to highlight the risks of their business model in “a few simple calculations”.
“I'm not saying that every one company should be employing an actuary, but I think our skills are quite applicable outside of our traditional homes,” he observed.
Do you agree pension actuaries will continue to be employed for many years to come?