Hostname: page-component-cd9895bd7-jn8rn Total loading time: 0 Render date: 2024-12-21T11:42:29.887Z Has data issue: false hasContentIssue false
  • English
  • Français

The roles of actuaries in UK life offices: changes and challenges

Published online by Cambridge University Press:  20 May 2015

C. D. O’Brien ,
G. A. Gallagher ,
R. J. Green ,
D. W. Hughes ,
F. Liang ,
S. A. Robinson ,
P. Simmons  and
A. J. W. H. Tay
Get access Rights & Permissions [Opens in a new window]

Abstract

We examine the roles of actuaries in UK life offices, along with trends, challenges to and opportunities for actuaries. We carry out an analysis of senior roles in life offices, a questionnaire survey and interviews with relevant senior personnel. We find that actuaries occupy many important roles in life offices and are regarded as having good industry knowledge and technical skills, especially in financial modelling. There are fewer executive directors and more non-executive directors of life offices who are actuaries compared with the position in 1990. A higher proportion of reserved roles is outsourced to consultants than was the case in 1990. Only a small number of Actuarial Function Holders are directors. Actuaries are more siloed than was the case in the past, although actuaries are well represented in the finance and risk functions of many offices. Although actuarial work in connection with the preparation for Solvency II will decline, there will be important ongoing requirements for actuaries following Solvency II implementation. We also see opportunities for actuaries in four areas: in risk management, in financial analysis and management based on Solvency II and international financial reporting standards, in connection with “big data”, and in product development and the customer proposition. There are implications for the examination syllabus, continuing professional development and research.

Keywords

Actuarial ProfessionActuarial Function HolderAppointed ActuaryLife InsuranceWith-Profits Actuary
Type
Sessional meetings: papers and abstracts of discussions
Information
British Actuarial Journal , Volume 21 , Issue 1 , March 2016 , pp. 134 - 164
Copyright
© Institute and Faculty of Actuaries 2015 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Akhurst, R.B. (1992). Some thoughts on the actuary of the future. Journal of the Institute of Actuaries, 119, 13–31.Google Scholar
Barrow, G.E. (1976). Actuaries and long-term insurance business. Journal of the Institute of Actuaries, 103, 137–146.CrossRefGoogle Scholar
Bellis, C.S. (2000). Professions in society. British Actuarial Journal, 6, 317–344.CrossRefGoogle Scholar
Brindley, B., Dumbreck, N., Thomson, C. & Thompson, S. (1990). Policyholders’ reasonable expectations, first report of the working party of the Institute and Faculty of Actuaries, 25 April.Google Scholar
Chancellor of the Exchequer (2014). Freedom and choice in pensions. Presented to Parliament, Cm 8835, Chancellor of the Exchequer.Google Scholar
Collins, D., Dewing, I. & Russell, P. (2009). The actuary as fallen hero: on the reform of a profession. Work, Employment & Society, 23, 249–266.CrossRefGoogle Scholar
Daykin, C. (1999). The regulatory role of the actuary. British Actuarial Journal, 5, 529–549.CrossRefGoogle Scholar
Deighton, S.P., Dix, R.C., Graham, J.R. & Skinner, J.M.E. (2009). Governance and risk management in United Kingdom insurance companies. British Actuarial Journal, 15, 503–556.CrossRefGoogle Scholar
Department of Trade and Industry (DTI) (1990). Strengthening the appointed actuary system, consultation paper. London: DTI.Google Scholar
Dewing, I. & Russell, P. (2006). Corporate governance – regulation and reform: the actuarial governance of UK life insurers. Corporate Governance, 14, 172–180.CrossRefGoogle Scholar
Dewing, I. & Russell, P. (2010). Implementing new financial regulation: actuaries and UK with-profits funds. The Services Industries Journal, 30, 1955–1966.Google Scholar
Diacon, S., O’Brien, C., Drake, L. & O’Sullivan, N. (2004). Corporate governance in mutuals: a contribution to the debate, Report No. 2004.I. Nottingham: Centre for Risk and Insurance Studies.Google Scholar
Dixon, S.W. (1992). The role of the appointed actuary [notes on a seminar]. Journal of the Institute of Actuaries, 119, 365–368.CrossRefGoogle Scholar
Dowd, K. & Blake, D. (2006). After VaR: the theory, estimation, and insurance applications of quantile-based risk measures. Journal of Risk and Insurance, 73, 193–229.Google Scholar
Dumbreck, N.J. (2007). Raising our game. British Actuarial Journal, 13, 1–22.CrossRefGoogle Scholar
Financial Services Authority (FSA) (2003a). With-profits governance, the role of actuaries in life insurers, and the certification of insurance returns, Consultation Paper No. 167, London: FSA.Google Scholar
Financial Services Authority (FSA) (2003b). With-profits governance and the role of actuaries in life insurers. Feedback on CP167, made and near-final text, Policy Statement. London: FSA.Google Scholar
Financial Services Authority (FSA) (2006). Risk management in insurers. London: FSA.Google Scholar
Financial Services Authority (FSA) (2009). A Regulatory R esponse to the Global Banking Crisis. London: FSA.Google Scholar
Foote, N. & Wilson, A. (1996). Pension transfers, opt-outs and non-joiners; an issue for the profession. Paper presented to the Staple Inn Actuarial Society, London, 23 January.Google Scholar
Frankland, R., Smith, A.D., Wilkins, T., Varnell, E., Holtham, A., Biffis, E., Eshun, S. & Dullaway, D. (2009). Modelling extreme market events. British Actuarial Journal, 15, 99–201.Google Scholar
Frost, A. (2002). Corporate governance – an introduction. Paper presented to the Staple Inn Actuarial Society, London, 26 November.Google Scholar
Goford, J., Bellis, C.S., Bykerk, C.D., Carne, S.A., Creedon, S., Daykin, C.D., Dumbreck, N.J., Ferguson, D.G.R., Goodwin, E.M., Grace, P.H., Henderson, N.S. & Thornton, P.M. (2001). Principles of the future education strategy. British Actuarial Journal, 7, 221–240.CrossRefGoogle Scholar
Hitchcox, A.N., Klumpes, P.J.M., McGaugheky, K.W., Smith, A.D. & Taverner, N.H. (2011). ERM for insurance companies – adding the investor’s point of view. British Actuarial Journal, 16(2), 341–383.CrossRefGoogle Scholar
Institute and Faculty of Actuaries (IFoA) (2014a). APS L1: duties and responsibilities of life assurance actuaries, IFoA.Google Scholar
Institute and Faculty of Actuaries (IFoA) (2014b). The regulation of actuarial roles under the Solvency II regime, consultation paper issued by the Regulation Board, IFoA.Google Scholar
Institute and Faculty of Actuaries (IFoA) (2014c). What does an actuary do?, available at http://www.actuaries.org.uk/becoming-actuary/pages/what-does-actuary-do (accessed 24 January 2014).Google Scholar
Institute of Actuaries of Australia (2014). Actuaries provide clarity in a complex business world, press release.Google Scholar
International Accounting Standards Board (2013). Insurance Contracts. Exposure draft ED2013/7. London: IFRS Foundation.Google Scholar
International Association of Insurance Supervisors (2013). Insurance Core Principles. International Association of Insurance Supervisors.Google Scholar
Johnston, E.A. (1989). The appointed actuary. Journal of the Institute of Actuaries, 116, 27–78.CrossRefGoogle Scholar
Kaye, G. (2008). The death of the with-profits actuary? The Actuary, March, 40–41.Google Scholar
Manning, A. (1991). City Financial Insurance Register 1990/91, United Kingdom, Croner, Kingston-upon-Thames.Google Scholar
Morris, D. (2004). Morris Review of the Actuarial Profession, interim assessment. Norwich: HMSO.Google Scholar
Morris, D. (2005). Morris Review of the Actuarial Profession, final report. Norwich: HMSO.Google Scholar
Needleman, P., Chamberlain, A., Eastwood, A., Hewitson, W., Saunders, A. & Shelley, M. (2002). Actuarial governance: a discussion paper. A paper prepared by the Actuarial Governance Working Party of the Life Board, London, February.Google Scholar
Parliamentary and Health Service Ombudsman (2008). Equitable Life: A Decade of Regulatory Failure. London: The Stationery Office.Google Scholar
Penrose, H. (2004). Report of the Equitable Life Enquiry. London: The Stationery Office.Google Scholar
Professional Oversight Board (2012). Report to the Secretary of State for Business, Innovation and Skills 2011/12. London: The Stationery Office.Google Scholar
Prudential Regulation Authority (PRA) (2013). Solvency II: Applying EIOPA’s Preparatory Guidelines to PRA-Authorised Firms. London: PRA.Google Scholar
Prudential Regulation Authority (PRA) (2014). Senior insurance managers regime: a new regulatory framework for individuals, Consultation Paper No. CP26/14. London: PRA.Google Scholar
Shelley, M. (1992). The role of the appointed actuary in practice. Presentation to Seminar on the Role of the Appointed Actuary, Staple Inn, London, 18 March.Google Scholar
Taylor, N.H. (2002). Actuarial governance. Paper presented to the Staple Inn Actuarial Society, London, 26 November.Google Scholar
Thornton, M.D. (1979). Actuaries and long-term insurance business. Transactions of the Faculty of Actuaries, 37, 24–35.CrossRefGoogle Scholar