Published by Danny Wilding on
Estimated reading time: 5 minutes
Danny Wilding argues the need for teamwork in actuarial consultancy.
This links in with the findings that Paul Houghton, Head of Actuarial Consulting, sets out in his introduction to the report – that the role of the actuarial consultant is changing. Trustees now require actuarial consultants to perform multiple roles, be it business partner, service provider, strategic adviser or outsourced administrator. These different roles bring different client expectations, service standards and required skillsets at different points of the client relationship.
This is perhaps best illustrated by the findings to the right. What surprised me most is that there are no clear “winners” in terms of the ideal qualities of an actuarial consultant. No one quality was considered to be the most important by a majority of the survey respondents. On the other hand, every single quality was one of the most important for at least one in four of these trustees.
Similarly, there are no clear “losers” in terms of the qualities that actuaries have been seen to fall short on. Again, no quality was found to be one of the most common shortcomings by more than half of the survey respondents, but every quality was one of the most frequent for at least a quarter of trustees.
This means that it is not simply that actuaries need to be better communicators in future, or need to keep an eye on accuracy, to keep clients happy. For some clients at one point in time, these are the most important issues, but at other times it is different qualities that clients need to see coming to the fore from their actuary.
We could conclude that the ideal actuarial consultant is therefore someone who is both accurate but also free thinking. Knowledgeable, but also a good communicator. Client-focused and ready to exceed expectations, but also collaborative, proactive and trustworthy.
And all of this is expected from a technical specialist whose most obvious quality in early life was being top of their maths class!
It is unrealistic for individual actuaries to aspire to personal perfection in every one of these areas. Instead, actuaries should be mindful of which areas are personal strengths and recognise areas for development. Personal development plans should seek to develop their individual skillset, but we also need to recognise the need to build teams of qualified actuaries and trainees who have complementary skillsets, so that the consulting team as a whole ticks all the boxes. This will work best when actuarial team leaders identify different individual skills, delegate and support development accordingly.
Of course the Scheme Actuary is a recognised individual role under UK pension legislation. However, these individuals will clearly be more effective working in a balanced team of people with a range of skills, and clients should be encouraged to meet and build relationships with the wider team wherever possible. Clients may even come to recognise that certain questions should be referred to particular team members with particular skills (for example if the Scheme Actuary is not a natural “free thinker” but their deputy is).
There is evidence that actuarial consultants have done a pretty good job so far as the role evolves over time. This is supported by the ratings to the right, showing that actuaries do score consistently, and consistently well, across different areas of consultancy advice.
Pleasingly, it shows high scores for both “big picture” advice (such as high-level strategic advice) as well as getting the detail right (such as regulatory compliance). It also shows good scores for both traditional work (such as scheme funding) as well as more contemporary work (such as de-risking).
Again, nothing stands out as being a specialist task such that actuarial performance in this area is materially higher than performance in other fields. Similarly, nothing stands adrift as an area of work where actuaries are not currently up to scratch.
Building teams with a balanced skillset requires a diverse range of potential teammates to choose from.
Building teams with a balanced skillset requires a diverse range of potential teammates to choose from. It doesn’t work if every colleague of the Scheme Actuary is the same gender, of a similar age and shares similar characteristics. However, contrary to what some might visualise of a “typical” actuary, I think the actuarial profession is fortunate to have a pretty diverse membership and is moving in the right direction of becoming more diverse over time.
This is evidenced by us currently seeing greater diversity amongst trainee actuaries and new entrants to the profession. For example, the gender balance was already up to 40% women amongst actuarial students by the end of 2016, there was an increased number of younger members, and admissions to the profession came from an increasingly diverse range of higher education institutions. This then flows through to the population of qualified actuaries over time – for example the proportion of newly qualified actuaries who are women has increased in each of the last few years that data has been collected.
This is supported by an active diversity policy within the Actuarial Profession itself. A Diversity Advisory Group monitors progress against some specific strategic diversity objectives for the future membership of the profession.
Being an actuary is consistently voted as amongst the most satisfying all round careers, both in the UK and abroad (by the likes of CareerCast and others) and the appeal of an attractive work environment and career path does appear to help to attract a diverse population of applicants. In fact, the latest CareerCast survey separately lists all of Actuary, Research Analyst, Data Scientist, Statistician and Mathematician amongst its top ten careers out of more than 200 analysed. There is definitely a theme there!
Actuarial employers can (and do) take advantage of the exceptional ratings for actuarial careers and actuarial workplaces, and the support of the profession itself, to recruit the next diverse generation of consultants. In doing so, Navigating Change sets out a useful checklist of qualities that interviewers of trainee actuaries should be looking out for (alongside that key membership of the university recreational maths club).
For me there is a clear lesson here: the most successful future actuarial consultants will be those who can build a diverse team to ensure that, between them, they can demonstrate the full range of qualities of the ideal consultant that their clients will require from them.
So, the ideal actuarial consultant doesn’t look like anyone in particular, it looks like a team.
Paul Houghton, Partner and Head of Actuarial Consulting talks about the changing landscape for schemes and how this offers the potential for a fresh start and change of actuarial consultant.