 By Karin Warwick Thompson, Partner, Financial Services Practice, CT Partners
Traditionally, actuaries have ben employed in life insurance and retirement providers, general insurance and reinsurance. Today, actuarial knowledge is increasingly required in non-traditional insurance organisations such as retail and investment banks, asset managers, risk management and financial advisory firms, strategy consultants and healthcare. While the UK insurance industry has fared well relative to other financial sectors in the face of the global financial crisi, it is facing significant challenges arising from the new European regulatory changes on the distribution of products and tougher capital requirements.
These heavy regulatory demands come on top of an insurance industry that is facing the ageing demographics of an increasing number of actuaries with experience of twenty-five years or more retiring. In addition, there is a high-level concern within the UK insurance industry of the shortage of talent for succession planning at senior management and executive level. All of these changes are pointing towards a future in which there are widening career opportunities for actuaries. Essentially, the shortage of talent at senior management level in the insurance industry is giving rise to a new breed of actuary willing to stand out and take a leading role in the future of the insurance industry. The demand for actuaries is at an all-time, mainly high due to Solvency II. Because of this legislation, the insurance industry is looking to hire the most adept actuarial professionals in their field to keep up with the new regulations presented by Solvency II.
The actuarial landscape is also changing and with it we are seeing a new breed of actuary emerging. Younger actuaries, those who have qualified within the last ten years and who are prepared to voice their opinions are much in demand. Equally, specialist actuaries with general business skills and who have the ability to “think outside of the box” and make quick decisions are being fast tracked to senior management.
Strategy has never been more challenging, or more important to UK insurers, than in today’s environment of global insurance competition. More and more insurance organisations are learning that past experiences is not always the best basis for developing future strategies. Actuaries have technical skills to help make financial sense of the future and for those that show vision with an interest in wider business affairs, there are increasing opportunities to influence upper management on the strategic direction of an insurance business.
Because of an actuary’s unique position in the insurance company, an actuary is able to look across the entire organization and see the impact his or her decisions make on the company’s profitability. Insurance companies are increasingly calling on actuaries to challenge an organisation’s approach to risk. Although many insurance companies see the value that Actuaries are able to bring to the risk management function, the actuarial profession still faces challenges from accountants and investment bankers for senior risk management roles.
The challenge for the insurance industry is that the world is changing. Actuaries need to think with them about the key drivers shaping the future of the business beyond the recent financial crisi, the impact of regulation and other issues such as climate change. The trends in demographics the emergence of social networks as a business communication is creating opportunities for the new breed of actuary to develop smarter and better value insurance products for a new generation of consumers.
In this new climate, insurance executives are turning to the finance function for their corporate leadership where actuaries find themselves well placed to influence the strategic direction of an insurance business.
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