There has been a lot of speculation on the effects of Solvency II and CP 73 on the actuarial job market.
The actuarial requirements of solvency II mean that there is more of a defined actuarial career around risk. Actuarial roles have always been specialised with many individuals starting off as trainee actuaries in a specialist area such as pricing or reserving or financial reporting and remaining in these areas throughout their careers before reaching senior management positions. Solvency II just brings a further specialisation but as this area is focused on general business risk as well it should lead to more diverse industry opportunities in the future. Incidentally those wishing to continue with their career in risk should take the ST9 qualification. ST9 is a nice to have now but we can see that in the future this will be mandatory for any individuals wanting to follow the path to senior risk and eventual CRO roles. Other industries do employ risk professionals but they tend not to be as highly qualified as actuaries but they also cost less. The question is do employers pay for what they get? Actuaries will need to position their skills with employers and display the benefits that they bring above and beyond other risk based professionals.
In summary Solvency II is and will create increased demand in the short term but there are many who say that once the deadline passes and this work moves into maintenance mode it’s possible that the needs for qualified actuaries will decrease. This is all expense led. In particular those companies running standard models will not need highly qualified modelling actuaries to satisfy the requirements. The cynics out there also state that these regulations are part of tick box exercises and very much like other quality systems it’s likely that only 20% of companies will embrace the standard to aid their businesses and incorporate the regulations into their culture.
On the other hand CP73 affecting non-life companies will have the complete opposite effect. CP73 requires that those companies who are high impact firms should employ their own signing actuaries. This ruling has a significant cost burden to companies. The more serious impact is the need for independent review. There is already a shortage of qualified non-life actuaries and CP73 is going to make this situation even more difficult. Companies may sign up to these regulations later this month in good faith but despite huge effort may find it difficult to recruit or engage the right level of actuarial resources. Where will all the new non-life actuaries come from? One solution would be to hire candidates from abroad. However, these actuaries most likely have not qualified under the Institute and Faculty of Actuaries, UK. The qualification system in other countries bar the American system is not seen as comparable in many instances. Add to this the fact that it may take up to 12 months for these actuaries to really become useful for companies and the risk remains that an individual may only stay for a couple of years to satisfy the need for international experience on their cvs. Add to this the decrease in the number of non-life trainee actuary vacancies and Ireland has a non-life actuarial shortage for many years to come. If you have any views on this area then please do share these with me by emailing me at Jacqui.firstname.lastname@example.org