Queen’s University Belfast

15 October 2008Georgina WarrenSecretary to the Education Committee

The Actuarial Profession

What does an actuary do?

• Actuaries apply their statistical and mathematical expertise to the financial world

• Actuaries analyse past events, assess current risks and use problem solving skills to propose the best solution to business decisions

What does an actuary do?

• Actuaries help inform future investment decisions companies need to make to ensure that all risks, big or small, are calculated

• Actuaries communicate complex financial issues in an understandable way

Where do actuaries work?

• Consultancies• Insurance companies• Investment and retail banks• Government/Civil Service• Capital Projects

The Actuarial Profession

• Professional qualification• Well respected profession• Variety, flexibility and a challenging career• Internationally recognised business

qualification with overseas opportunities• Excellent rewards and benefits

Professional qualification

• The Faculty and Institute of Actuaries are the UK professional bodies for actuaries

• On average it takes 3-6 years to qualify

Professional qualification

• Once qualified, members become Associates or Fellows of either the Faculty of Actuaries (AFA/FFA) or the Institute of Actuaries (AIA/FIA)

Well respected profession

• Actuaries are amongst the most influential of the financial professions

• Actuaries have a commercial, as well as technical role

• They are responsible for upholding the highest professional standards

Well respected profession

• Actuaries work with senior people from other professions or organisations

• Actuarial skills are well placed as the world’s financial markets become more complex

Variety, flexibility and a challenging career

• Actuaries work in diverse industries and areas of business

• They are analysts, risk assessors, consultants and troubleshooters

• As the skills of actuaries are being increasingly recognised, wider opportunities are becoming available

Variety, flexibility and a challenging career

• Actuaries can move between different areas of actuarial work

• Actuarial work offers management opportunities, often at the highest level

• Good work/life balance

Internationally recognised qualification

• Our qualifications are recognised throughout the world

• Actuaries work around the world

• Opportunities for secondments overseas, even at trainee level

Excellent rewards and benefits

• Graduate entry salaries are offered between £20-£26K, according to the sector and location of the position

• Student actuaries are supported throughout their training with paid study leave, tuition support and mentoring

Excellent rewards and benefits

• Salaries increase as student actuaries pass the exams

• A recently qualified actuary will earn in excess of £53,000 however senior actuaries can earn £100,000+

Actuaries are experts in assessing the financial impact of tomorrow’s uncertain events by:

• Analysing the past

• Modelling the future

• Assessing the risks involved

• Communicating what the results mean

What do employers look for?

• A good academic record• Good communication skills• IT skills• An interest in business• Language skills• Commitment to the exams and your career• Enthusiasm

The Examination System

CoreTechnicalCT1-CT9

ST1 ST2

ST3

ST4ST5

ST6

SA6

SA1SA2

SA5

SA4

SA3

The Examination SystemComponents

– Core Technical – 9 subjects inc 2 day Business Awareness course

– Core Applications – 3 subjects inc 2 day Modelling course

– Specialist Technical – 2 from 6 subjects soon to be 2 from 8

– Specialist Applications – 1 from 6 subjects

– Alternative routes at ST and SA level

– Practice Modules

– 3 years’ experience + WBS

Intermediate qualifications

• Diploma in Actuarial TechniquesAll Core Technical and Business Awareness

• Certificate in Finance & InvestmentCT1, CT2, CT4, CT7, CT8, CA1 + Business Awareness

• AssociateAll Core Technical + Core ApplicationsBusiness AwarenessAssociate ProfessionalismWork-based skills

Exemptions

Accredited Universities

Agreement in place e.g. BSc in Actuarial Studies at Queen’s

Agreed criteria for blocks of exemptions

Independent Examiner appointed by the Profession to:- Review the examinations and coursework- Make recommendation on exemptions for others

You need to apply to the Registry in Oxford to pay for and formalise your exemptions

Exemptions

Non-Accredited Universities

– No formal agreement in place

– Need to submit details of courses studied and grades

Exemptions

– Details and application forms are on our website

– You need to apply to the Registry in Oxford to pay for and formalise your exemptions

Professionalism

• characteristics of a profession

• controls over the Profession

• the Professional Conduct Standard

• the Disciplinary Scheme

Characteristics of a profession

6 key characteristics of a profession are:

• Members join together to apply a specialised skill

• The skill has been developed through appropriate education

• Members have a special relationship with those served

Characteristics of a profession

6 key characteristics of a profession are:

• Recognised by the public as an authority in field of expertise, able to serve the public interest

• Standards re competence and conduct of members

• High level of integrity by members in exercising judgement

What do members and their clients, and the public gain from the existence of the

Profession?

Members

• Agreed standards• Mutual support• Lobby strength• Status• Income

Clients, Public

• Specialist skills• Confidential service• Integrity• Input into public

debate• Statutory roles

Controls over the Profession

The Profession’s Controls

• Professional Conduct Standard

• CPD Scheme• Disciplinary Scheme• Non-technical Guidance

Notes• Practising certificates• Education

External Controls

• Financial Reporting Council• Professional Oversight

Board • Board for Actuarial

Standards• Accountancy and Actuarial

Disciplinary Board• Technical Guidance Notes• UK regulation of investment

activities – impact on actuaries

• All other relevant legislation

Regulation of the UK ProfessionFinancial Reporting Council

Professional Oversight Board

CouncilsFaculty and Institute

Board for Actuarial StandardsAccountancy and

Actuarial Disciplinary Board

Professional Conduct Standard (‘PCS’)

12 key aspects of the PCS

All members must conform – spirit and letter Conscience of members to maintain highest standards Profession regulates individual members Obligation to serve the public interest Judgement of individual members People must have absolute confidence in us

Professional Conduct Standards (‘PCS’)

12 key aspects (cont’d)

Proper regard for professional guidance Must not give advice unless competent Breach of PCS – disciplinary procedures Need to disclose a conflict or a financial interest Avoid unfairly injuring reputation of another member Publicity that detracts from standing of the profession – not

allowed, unless in public interest

Disciplinary Scheme applies to all members and can result in …

Disciplinary Scheme can result in

Reprimand Retraining Fine Withdrawal of Practise Certificate Suspension from membership Expulsion

Some recent cases …

Recent Adjudication/Tribunal Panel cases

• Exam cheating – exclusion from readmission to membership for up to 5 years

• Failure to reply to Trustees in timely fashion and to comply with Guidance Note – reprimand and attendance at Professionalism Course.

• Using incorrect value of assets, not checking accuracy of data, not stating audited accounts not available – reprimand, attendance at Professionalism Course, £5,000 fine.

• Breaches of PCS, ignoring order of DPB Committee, advising while not licensed, failing to pay fine – expulsion for 5 years and costs of £14,000.

• Equitable Life - expulsion

Why is it a good career?

• An actuarial career is:• Interesting• Challenging• Different day to day• The chance to impact on real lives in real

ways• It’s provides great opportunities• . . .and it pays well• . . .and people still have time to enjoy life

outside work

Any questions?