LOOKING BACK…focused on the future CIA Annual Meeting LOOKING BACK…focused on the future

Chris Daykin CB, MA, DSc, FIA, FSA UK Government Actuary Past-President, Institute of Actuaries

SYSTEMIC FACTORS consolidation of insurance industry growth of conglomerate groups decline of defined benefit pensions rise of international accounting standards need for advanced solvency tools emphasis on risk management greater public expectations

PRESSURES ON THE ACTUARIAL PROFESSION need to eradicate conflicts of interest peer review will have to become routine regular re-tendering of appointments independent review of advice whistle-blowing roles external influences on standard-setting demonstrably independent discipline

CONSEQUENCES FOR ACTUARIAL EDUCATION strengthen understanding of and interaction with financial economics need for familiarity with international accounting framework ability to value complex embedded options measurement and communication of uncertainty and risk broader skills in risk management

IS ACTUARIAL PROFESSION UNDER THREAT? Has it failed to adapt? not enough expertise in related subjects criticised for favouring certain groups too dominated by commercial interests not responsive to public opinion self-serving and introspective

WHAT ARE OUR SKILLS? mathematical modeling understanding of probability and statistics strong financial toolkit (discounted cash flow; pricing; setting provisions; risk; managing solvency) helping companies to be profitable protecting the interests of stakeholders risk management of financial institutions

WHAT ARE OUR WEAKNESSES? poor communication skills capture by employers and clients difficult to maintain multi-skilling slow to change and adapt poor level of implementation of intellectual capital inadequate levels of academic research and linkage into profession

WHAT ARE THE OPPORTUNITIES? - 1 financial engineering enterprise risk management health care financing design and management of retirement products asset-liability modeling and management banks and other financial institutions personal financial advice

WHAT ARE THE OPPORTUNITIES? - 2 utility pricing all types of financial management design of frequent flyer/loyalty schemes evaluating contingent liabilities nuclear decommissioning environmental liability issues assisting the Courts in valuation measuring and communicating risk

obstacles to financial stability need for immediate expertise A GLOBAL ENVIRONMENT global skill shortage obstacles to financial stability need for immediate expertise skill transfer support for education development of professional bodies

A global profession

Survival of the fittest