State of the Profession Study (Phase 1) Report highlights

Transcription

1 State of the Profession Study (Phase 1) Report highlights From 2010 to 2015, the number of fully qualified actuaries (FQAs) grew at an annual rate of over 5% on average. Changes in the regulatory environment and economic growth increased the demand for actuaries in the job market (although the impact of the latter was muted in Europe). Actuaries are widely employed in life insurance, pensions & retirement, general insurance and consulting industries where they perform a range of tasks including, but not limited to, product development, pricing, regulation, reinsurance, modeling, forecasting, cash flow testing, and reserving. Data analytics and business intelligence is seen as an emerging area of responsibility for actuaries, by half of associations surveyed. Other promising areas include Enterprise Risk Management (ERM) and Risk Capital Management. Associations plan to optimize these opportunities by raising member awareness of them, and enhancing member skills through education and training. Associations will also reach out to industry partners, regulators and other actuarial groups to collaborate in new ways that will highlight actuarial talent. Actuaries enjoy strong reputations with their employers and regulators for excelling in a range of highly-valued skills, such as attention to detail, quantitative ability, problem solving, trustworthiness and industry knowledge. To a lesser degree, they are also seen to demonstrate business acumen. Based on this skill set, their education and experience, actuarial pioneers have successfully transitioned into emerging roles in pricing analytics, business intelligence, investments and asset liability management. However, actuaries in general are perceived by employers to lack effective communication and interpersonal skills. IAA members consider these particular soft skills to be essential in positioning actuaries as influential advisors and in transitioning them into senior leadership roles and newer non-traditional jobs. The greatest challenges and threats to the profession arise from the loss of traditional actuarial work, competition from non-actuaries, regulatory changes and the public s low familiarity. These challenges are prompting organizations to focus their resources on educating their professionals to improve their competitiveness against statisticians, data scientists and others. Efforts are also underway to collaborate with partners from industry, government and other actuarial groups to promote the actuarial skillset and to reposition actuaries for emerging roles. Fully 84% of associations have established a code of conduct that sets out their actuarial responsibilities to the public, clients and profession. A majority have also laid out qualification standards, detailing requirements for education and/ or experience as well as standards of practice, which offer a framework for the performance of professional assignments. Examination by an actuarial organization or completion of university coursework are leading methods of qualification. About three-quarters of associations (74%) report that their professionals are required to participate in continuing professional development to maintain their actuarial status.

2 STATE OF THE PROFESSION PHASE ONE SURVEY REPORT Prepared for: The International Actuarial Association s State of the Profession Project Task Force August 2016

3 Objectives To help create a global roadmap for IAA member organizations to see where they stand in relation to peers in terms of: Actuarial employment by industry Tasks performed by actuaries Professional reputation of actuaries Opportunities and challenges facing the profession Education of actuaries 2

4 Methodology Online survey conducted by Society of Actuaries Market Research department Fielding period: April 24 July 1, 2016 Respondent sample: Invitations were sent to 94 full and associate members of the IAA 47 full and associate members, based in 43 countries, from four global regions, completed the survey (50% response rate) 3

5 Geographic and Economic Groupings Number of participating IAA members, by base country s geographic region: Africa 6 Americas 9 Asia and Oceania 9 Europe 23 To reflect economic diversity within geographic regions, countries are also categorized using the World Bank s analytical classification 1 of the world's economies Number of participating IAA members, by base country s income level: High-income economies 31 Middle-income economies World Bank. Country classifications by income level : Each year on July 1, the analytical classification of the world's economies based on estimates of gross national income (GNI) per capita for the previous year is revised. As of 1 July 2016, low-income economies are defined as those with a GNI per capita, calculated using the World Bank Atlas method, of $1,025 or less in 2015; lower middle-income economies are those with a GNI per capita between $1,026 and $4,035; upper middle-income economies are those with a GNI per capita between $4,036 and $12,475; High-income economies are those with a GNI per capita of $12,476 or more. 2 In this report, for simplicity, fourteen upper and lower-middle economies together with two low-income economies are collectively grouped as middle-income. 4

6 Summary 5

7 Summary: Demographics 47 organizations representing over 67,000 * fully qualified actuaries (FQAs) in 2015 From 2010 to 2015, the number of FQAs grew at an annual rate of over 5% on average, across the associations surveyed. IAA members based in Europe and Africa experienced above average member growth during this period. The majority of organizations (70%) report having professionals who reside outside the country they are headquartered. This is seen in associations of varying size in every region. The proportion of expatriates employed within or outside their geographic region is unknown. Professional membership in multiple actuarial organizations is most prevalent in the Americas region and lowest in Europe. 6 * Note: Overlapping memberships reported

8 Summary: Industry Participation Actuaries are widely employed in life, pensions & retirement, general insurance, and in other industries, notably consulting services. A small percentage of actuaries worldwide are employed in investment management and banking. The highest share in a region is seen in Africa. Four-in-ten associations (39%) consider Information Technology and Data Analytics to be an emerging area of employment for actuaries in the country they are based. Organizations report: The success of pioneers in creating value for firms leading to demand for actuarial talent That traditional actuarial skills (e.g. quantitative skills) are transferable to pricing analytics and business intelligence 7

9 Summary: Current and Emerging Actuarial Tasks Product development, pricing and management of actuarial departments are the most widely performed tasks for actuaries, as reported by over 90% of associations Just over two-thirds of associations (68%) report having actuaries in executive management (e.g., CEO, CFO, Chief Risk Officer), outside of the actuarial function In general, associations based in High-income countries report broader involvement of their professionals in a range of tasks, including teaching, financial reporting, underwriting and Information Technology as compared to those in middleincome economies 8

10 Summary: Current and Emerging Actuarial Tasks Consistent with views on developing opportunities in the Information Technology and Data Analytics industry, half of associations (49%) report that Data analytics (e.g., predictive modeling) and business intelligence are emerging areas of responsibility for actuaries About four-in-ten associations (44%) believe that enterprise risk management is a promising area for actuaries. A majority of organizations based in High-income countries (58%) share this view. 9

11 Summary: Employer Perceptions of Actuaries There is near-universal belief among associations that employers would rate actuaries quantitative skills and attention to detail as excellent or good (96%). Fully 91% of associations share this view of actuaries problem solving ability, while 87% rate them highly for their trustworthiness. This suggests a widespread appreciation of these actuarial strengths. However, just over one-quarter of organizations (28%) believe that employers would rate actuaries communication or interpersonal skills as good or better. This too indicates wide acknowledgement of the professions weak spots. A majority of associations (57%) believe that it is important for actuaries to develop communication skills. This is seen as a key step in: Remaining competitive with other professions Securing positions in senior leadership Breaking into new roles 10

12 Summary: Biggest Opportunities / Optimizing Opportunities Data analytics and risk management top the list of the biggest opportunities for actuaries over the next five years. Almost three-quarters of associations based in High-income nations (73%) believe that demand for actuarial talent will grow in the data analytics field. The majority of associations (74%) will use education and training to optimize opportunities over the next five years. Over one-quarter of organizations (28%) will seek to raise awareness of these opportunities with their stakeholders. Others will reach out to industry partners, regulators and other actuarial groups for collaboration. A few mention that they will create strategic plans to help focus their resources on these opportunities. 11

13 Summary: Greatest Challenges & Threats / Managing them 12 Loss of traditional actuarial work, competition from other professions and regulatory changes are seen as key challenges over the next five years, by almost one-third of associations. Organizations warn of the potential disappearance of traditional actuarial jobs due to the decline of defined benefit pensions; advent of disruptive technologies; Perceived narrow actuarial skillset; and Insurance industry consolidation Low awareness of the profession and the need to maintain or improve its reputation in light of competition are noted as challenges by one-in-five associations Associations plan to educate and train their professionals, to help them stay competitive Several associations plan to counter lost/ losing ground by raising awareness of the actuarial skillset to new and existing audiences. Others will work closely with regulators, industry groups and other actuarial bodies to help reposition their professionals.

14 Summary: Education The majority of responding associations have established a code of conduct for their professionals Codes of conduct and qualification standards are almost universal among associations based in High-income nations Examination by an actuarial organization or completion of university coursework are leading methods of qualification Almost three-quarters of associations (74%) report that their professionals are required to participate in CPD to maintain their actuarial status 13

15 Industry Participation 14

16 Actuaries are widely employed in life, pensions & retirement, general insurance, and in other industries, notably consulting services Using your best estimate, what percentage of your actuaries are employed in the following industries? 15 ALL (47) Africa (6) Americas Asia & Oceania Europe (23) High-income (31) Middleincome (16) Life 29% 32% 25% 41% 33% 29% 33% Pension & Retirement 21% 18% 21% 14% 23% 21% 15% Property & Casualty or General Insurance 13% 14% 9% 19% 18% 13% 16% Health 13% 10% 19% 1% 5% 13% 9% Investment Management 3% 8% 2% 4% 4% 3% 7% Banking 2% 5% 3% 3% 1% 2% 4% Regulator or Public Sector 2% 1% 2% 2% 1% 1% 2% Information Technology and Data Analytics Natural Resources, Utilities and Energy 1% 1% 1% 2% 1% 1% 1% 0% 1% 0% 1% 0% 0% 1% Private Equity 0% 1% 0% 0% 0% 0% 1% Other Industries, including Consulting 16% 10% 18% 13% 13% 16% 11% Percentages are based on estimates of the number of actuaries employed by industry, in each region and group

17 Four-in-ten associations (39%) consider Information Technology and Data Analytics to be a new or emerging area of employment for actuaries Of the industries listed below, which do you consider to be new or emerging areas of employment for actuaries? Information Technology and Data Analytics 16 Total (36) Africa (5) Americas (7) Asia & Oceania (7) Europe (17) Highincome (26) Middleincome (10) 39% 40% 43% 43% 35% 42% 30% Investment Management 22% 40% 29% 29% 12% 23% 20% Property & Casualty or General Insurance Other Industries, e.g. Risk Management 19% 20% 0% 14% 29% 23% 10% 19% 0% 29% 29% 18% 27% 0% Health Insurance 17% 0% 29% 14% 18% 23% 0% Banking 17% 40% 14% 14% 12% 8% 40% Pensions and Retirement 14% 0% 14% 0% 24% 19% 0% Regulator or Public Sector 11% 0% 14% 29% 6% 8% 20% Life Insurance 8% 0% 0% 29% 6% 0% 30% Private Equity 6% 40% 0% 0% 0% 0% 20% Natural Resources, Utilities and Energy Percentages are based on respondents (i.e., not counting missing responses) 0% 0% 0% 0% 0% 0% 0%

18 How actuaries transitioned into new and emerging industries Information Technology and Data Analytics 17 Personal initiative and ambition Initial pioneers created value for firms and consequently actuarial expertise has been in demand Quantitative skills have been applied to pricing analytics and business intelligence in telecommunications The expansion of available data and tools for analyzing this data has led to a natural integration of these skills into actuarial work Technical skills that actuaries developed in insurance are transferrable and can be applied to data analytics Actuaries received training in this area from their association and/ or employer

19 How actuaries transitioned into new and emerging industries Investment Management 18 Initial pioneers created value for firms and consequently actuarial expertise has been in demand Technical skills that actuaries developed in insurance are transferrable and they are now well established in the asset liability management field University training in investments field has enabled actuaries to transition Mismanagement and investment losses in pension funds and new regulatory requirements triggered demand for actuarial talent Some actuaries working on defined benefit plans, which require asset management, have transitioned into jobs on the asset side

20 How actuaries transitioned into new and emerging industries Property & Casualty or General Insurance 19 Regulation/ legislation mandating actuarial employment University training in both life and non-life areas allows for actuaries who are versatile International experience has helped actuaries transition New solvency rules are spurring demand for actuaries Health Insurance Regulation/ legislation has increased demand for actuaries University training in both life and non-life areas allows for actuaries who are versatile International experience has helped actuaries transition New solvency rules are spurring demand for actuaries

21 Current and Emerging Actuarial Tasks 20

22 Axis Title Just over two-thirds of associations (71%) report having actuaries in executive management, outside of the actuarial function 21 Tasks Performed by Actuaries Product Development Pricing Management of Actuarial Department or Function Regulation Reinsurance Asset Liability Management Reserving Modeling, forecasting, cash flow testing Executive Management (e.g., CEO, CFO, Chief Risk Officer) Enterprise Risk Management Data analytics (e.g., predictive modeling) and business intelligence Planning - Strategic and Financial Risk Capital Management Teaching/ Research Underwriting Financial Reporting Operational Risk Management Investments Auditing Strategy formulation Non-executive directors (i.e., Board Directors not part of the executive Financial advising for corporate structures, mergers & acquisitions Information Technology (e.g., programing, software development) Accounting Marketing Expert Witness Other, please specify: # of orgs indicating task is performed Axis Title

23 Product development, pricing and management of actuarial departments are the most widely performed tasks, as reported by over 90% of organizations In which of the following tasks are your members currently involved? Total (47) Africa (6) Americas Asia & Oceania Europe (23) Highincome (31) Middleincome (16) Management of Actuarial Department or Function 91% 83% 89% 78% 100% 97% 80% Pricing 91% 100% 78% 89% 95% 90% 93% Product Development 91% 100% 67% 100% 95% 90% 93% Regulation 84% 83% 78% 89% 86% 90% 73% Asset Liability Management 80% 50% 100% 89% 76% 93% 53% Reinsurance 80% 50% 67% 78% 95% 87% 67% Modeling, forecasting, cash flow testing 78% 33% 89% 78% 86% 93% 47% Reserving 78% 50% 67% 78% 90% 87% 60% Data analytics (e.g., predictive modeling) and business intelligence 71% 67% 78% 78% 67% 77% 60% Enterprise Risk Management 71% 67% 56% 67% 81% 90% 33% Executive Management (e.g., CEO, CFO, Chief Risk Officer) 71% 50% 56% 78% 81% 83% 47% Planning - Strategic and Financial 69% 67% 56% 78% 71% 80% 40% Risk Capital Management 69% 50% 44% 78% 81% 83% 80% 22 Percentages are based on respondents (i.e., not counting missing responses)

24 In general, associations based in High-income countries report broader involvement of their members in a range of tasks, including teaching, financial reporting, underwriting and IT as compared to those in Middle-income economies In which of the following tasks are your members currently involved? Total (47) Africa (6) Americas Asia & Oceania Europe (23) Highincome (31) Middleincome (16) Teaching/ Research 67% 67% 56% 56% 76% 80% 47% Financial Reporting 64% 33% 44% 67% 81% 80% 40% Underwriting 64% 67% 56% 67% 67% 67% 33% Operational Risk Management 62% 50% 67% 78% 57% 70% 60% Investments 60% 83% 67% 78% 43% 63% 47% Auditing 53% 17% 67% 56% 57% 60% 53% Financial advising for corporate structures, mergers & acquisitions 47% 33% 44% 78% 38% 57% 40% Information Technology (e.g., programing, software development) 47% 17% 33% 56% 57% 60% 20% Non-executive directors (i.e., Board Directors not part of the executive management team) 47% 33% 33% 56% 52% 57% 27% Strategy formulation 47% 50% 44% 56% 43% 57% 27% Accounting 42% 17% 56% 67% 33% 53% 27% Expert Witness 33% 17% 67% 44% 19% 43% 20% Marketing 33% 17% 44% 67% 19% 47% 13% 23 Percentages are based on respondents (i.e., not counting missing responses)

25 Axis Title New and emerging areas of responsibility for actuaries 24 New and emerging tasks performed by Actuaries Data analytics (e.g., predictive modeling) and business intelligence Enterprise Risk Management Risk Capital Management Modeling, forecasting, cash flow testing Operational Risk Management Investments Asset Liability Management Non-executive directors (i.e., Board Directors not part of the executive Information Technology (e.g., programing, software development) Executive Management (e.g., CEO, CFO, Chief Risk Officer) Management of Actuarial Department or Function Teaching/ Research Other, please specify: Strategy formulation Pricing Auditing Reinsurance Regulation Product Development Planning - Strategic and Financial Financial Reporting Financial advising for corporate structures, mergers & acquisitions Axis Title Figures based on responses by organization

26 Half of associations (49%) view data analytics and business intelligence to be an emerging area of responsibility Of the tasks listed below, which do you consider to be new or emerging areas of responsibility for actuaries? Total (39) Africa (6) Americas (8) Asia & Oceania Europe (16) Highincome (26) Middleincome (13) Data analytics (e.g., predictive modeling) and business intelligence 49% 67% 63% 67% 25% 50% 46% Enterprise Risk Management 44% 17% 38% 33% 63% 58% 15% Risk Capital Management 28% 17% 0% 22% 50% 35% 15% Modeling, forecasting, cash flow testing 23% 0% 38% 0% 38% 27% 15% Operational Risk Management 21% 0% 13% 22% 31% 19% 23% Asset Liability Management 18% 0% 13% 11% 31% 15% 23% Investments 18% 17% 13% 22% 19% 15% 23% Executive Management (e.g., CEO, CFO, Chief Risk Officer) 13% 17% 13% 0% 19% 12% 15% Information Technology (e.g., programing, software development) 13% 0% 0% 22% 19% 12% 15% Non-executive directors (i.e., Board Directors not part of the executive management team) 13% 0% 13% 11% 19% 19% 0% Management of Actuarial Department or Function 10% 17% 0% 0% 19% 12% 8% 25 Percentages are based on respondents (i.e., not counting missing responses)

27 Not surprisingly, few associations consider tasks related to pricing, product development or reinsurance to be new and emerging Of the tasks listed below, which do you consider to be new or emerging areas of responsibility for actuaries? Total (39) Africa (6) Americas (8) Asia & Oceania Europe (16) Highincome (26) Teaching/ Research 8% 17% 0% 11% 6% 8% 8% Middleincome (13) Auditing 5% 0% 25% 0% 0% 0% 15% Pricing 5% 17% 0% 0% 6% 4% 8% Strategy formulation 5% 17% 0% 11% 0% 4% 8% Other, please specify: 5% 0% 13% 11% 0% 4% 8% Financial advising for corporate structures, mergers & acquisitions 3% 0% 0% 0% 6% 0% 8% Financial Reporting 3% 0% 0% 0% 6% 4% 0% Planning - Strategic and Financial 3% 0% 0% 0% 6% 4% 0% Product Development 3% 17% 0% 0% 0% 0% 8% Regulation 3% 0% 0% 11% 0% 4% 0% Reinsurance 3% 0% 13% 0% 0% 0% 8% 26 Percentages are based on respondents (i.e., not counting missing responses)

28 Employer Perceptions of Actuaries 27

29 A strong majority of associations believe that employers would rate the quantitative skills, attention to detail, problem solving and trustworthiness of actuaries as Excellent or Good Axis Title Business Skills rated Excellent or Good Quantitative skills 43 Attention to detail 42 Problem solving skills 41 Trustworthiness 38 Industry knowledge 35 Business acumen 26 Communicating effectively 13 Interpersonal skills 12 Other: Professionalism Top 2 Box Rating Axis Title Figures based on responses by organization

30 There is near-universal belief among associations that employers would rate actuaries quantitative skills as excellent or good (96%) To the best of your knowledge, how would employers rate the performance of actuaries in Quantitative Skills? Total (47) Africa (6) Americas Asia & Oceania Europe (23) Highincome (31) Middleincome (16) Excellent 67% 67% 89% 56% 62% 73% 53% Good 29% 33% 11% 33% 33% 23% 40% Fair 2% 0% 0% 11% 0% 0% 7% Marginal 2% 0% 0% 0% 5% 3% 0% Poor 0% 0% 0% 0% 0% 0% 0% Don't know 0% 0% 0% 0% 0% 0% 0% 29 Percentages are based on respondents (i.e., not counting missing responses)

31 Near-universal belief among associations that employers would perceive actuaries attention to detail as excellent or good (96%) To the best of your knowledge, how would employers rate the performance of actuaries in Attention to detail? Total (47) Africa (6) Americas Asia & Oceania Europe (23) Highincome (31) Middleincome (16) Excellent 64% 33% 88% 56% 67% 76% 40% Good 32% 67% 13% 33% 29% 21% 53% Fair 2% 0% 0% 11% 0% 0% 7% Marginal 2% 0% 0% 0% 5% 3% 0% Poor 0% 0% 0% 0% 0% 0% 0% Don't know 0% 0% 0% 0% 0% 0% 0% 30 Percentages are based on respondents (i.e., not counting missing responses)

32 Fully 91% of associations believe that employers would rate actuaries problem solving skills as excellent or good To the best of your knowledge, how would employers rate the performance of actuaries in Problem solving skills? Total (47) Africa (6) Americas Asia & Oceania Europe (23) Highincome (31) Middleincome (16) Excellent 42% 33% 33% 44% 48% 47% 33% Good 49% 67% 67% 44% 38% 47% 53% Fair 7% 0% 0% 11% 10% 3% 13% Marginal 2% 0% 0% 0% 5% 3% 0% Poor 0% 0% 0% 0% 0% 0% 0% Don't know 0% 0% 0% 0% 0% 0% 0% 31 Percentages are based on respondents (i.e., not counting missing responses)

33 Fully 87% of associations believe that employers would rate actuaries trustworthiness as excellent or good To the best of your knowledge, how would employers rate the performance of actuaries in Trustworthiness? Total (47) Africa (6) Americas Asia & Oceania Europe (23) Highincome (31) Middleincome (16) Excellent 55% 33% 63% 56% 57% 69% 27% Good 32% 50% 25% 33% 29% 28% 40% Fair 9% 0% 13% 11% 10% 0% 27% Marginal 2% 17% 0% 0% 0% 0% 7% Poor 0% 0% 0% 0% 0% 0% 0% Don't know 2% 0% 0% 0% 5% 3% 0% 32 Percentages are based on respondents (i.e., not counting missing responses)

34 Over three-quarters of associations believe that employers would rate actuaries industry knowledge as excellent or good (76%) To the best of your knowledge, how would employers rate the performance of actuaries in Industry knowledge? Total (47) Africa (6) Americas Asia & Oceania Europe (23) Highincome (31) Middleincome (16) Excellent 33% 50% 22% 11% 43% 30% 40% Good 44% 33% 33% 67% 43% 53% 27% Fair 16% 0% 44% 22% 5% 10% 27% Marginal 4% 0% 0% 0% 10% 7% 0% Poor 2% 17% 0% 0% 0% 0% 7% Don't know 0% 0% 0% 0% 0% 0% 0% 33 Percentages are based on respondents (i.e., not counting missing responses)

35 A majority of associations (60%) believe that employers would perceive actuaries business acumen as good or excellent To the best of your knowledge, how would employers rate the performance of actuaries in Business acumen? Total (47) Africa (6) Americas Asia & Oceania Europe (23) Highincome (31) Middleincome (16) Excellent 5% 0% 0% 0% 10% 7% 0% Good 55% 83% 25% 56% 57% 55% 53% Fair 27% 17% 63% 33% 14% 31% 20% Marginal 11% 0% 13% 11% 14% 7% 20% Poor 0% 0% 0% 0% 0% 0% 0% Don't know 2% 0% 0% 0% 5% 0% 7% 34 Percentages are based on respondents (i.e., not counting missing responses)

36 Over one-quarter of associations believe that employers would rate actuaries communication skills as good or better (28%) To the best of your knowledge, how would employers rate the performance of actuaries in Communicating effectively? Total (47) Africa (6) Americas Asia & Oceania Europe (23) Highincome (31) Middleincome (16) Excellent 4% 0% 0% 0% 10% 3% 7% Good 24% 33% 44% 11% 19% 20% 33% Fair 62% 33% 44% 89% 67% 70% 47% Marginal 7% 33% 11% 0% 0% 3% 13% Poor 2% 0% 0% 0% 5% 3% 0% Don't know 0% 0% 0% 0% 0% 0% 0% 35 Percentages are based on respondents (i.e., not counting missing responses)

37 Just over one-quarter of associations believe that employers would rate actuaries interpersonal skills as good or better (28%) To the best of your knowledge, how would employers rate the performance of actuaries in Interpersonal skills? Total (47) Africa (6) Americas Asia & Oceania Europe (23) Highincome (31) Middleincome (16) Excellent 0% 0% 0% 0% 0% 0% 0% Good 28% 0% 25% 33% 35% 32% 20% Fair 51% 67% 63% 67% 35% 54% 47% Marginal 14% 33% 13% 0% 15% 7% 27% Poor 2% 0% 0% 0% 5% 4% 0% Don't know 5% 0% 0% 0% 10% 4% 7% 36 Percentages are based on respondents (i.e., not counting missing responses)

38 A majority of associations (57%) believe that it is important for actuaries to develop communication skills Axis Title Important attributes for actuaries to develop Communicating effectively 27 Business acumen 10 Interpersonal skills 6 Industry knowledge 6 Trustworthiness 3 Problem solving skills 2 Quantitative skills 2 Other 1 Attention to detail Axis Title 37 Figures based on responses by organization

39 Why developing communication and interpersonal skills is important 38 An essential skill for effective business persons To be considered for positions in senior leadership With increasing complexity and detail in tasks, actuaries need to be effective in communicating results, models, limitations and recommendations To help actuaries to be effective advisors and partners to clients, colleagues and board; and to help convince others of the merits of their ideas This will help improve awareness and recognition of the profession To remain competitive with other professions To help actuaries break into new areas and roles To help support business decisions by clearly explaining technical issues to non-technical audiences

40 Biggest Opportunities 39

41 Data analytics and risk management top the list of the biggest opportunities for actuaries in the short term Axis Title Biggest Opportunities for Actuaries in the Next Five Years Data Analytics & Business Intelligence 22 Risk Management inc. ERM 18 Banking 10 General Insurance Healthcare Regulation/ Reporting Standards Asset Management & Investments Pension & Retirement Other Industries: Natural Resources, Government, Manufacturing, etc. 5 5 Consulting & Auditing Other Tasks: IT, Marketing, Strategy, Board 4 4 Pricing 3 Life Insurance Telecommunications Axis Title 40 Figures based on responses by organization

42 Almost three-quarters of associations based in High-income economies (73%) expect demand for actuaries will grow in the data analytics field In the next five years, which new industries or tasks will offer the biggest opportunities for your members to play a role? Data Analytics & Business Intelligence 41 Total (40) Africa (6) Americas Asia & Oceania (8) Europe (17) Highincome (26) Middleincome (14) 55% 33% 67% 75% 47% 73% 21% Risk Management inc. ERM 45% 50% 44% 50% 41% 46% 43% Banking 25% 33% 22% 25% 24% 23% 29% Asset Management & Investments 15% 17% 11% 13% 18% 15% 14% Regulation/ Reporting Standards 15% 0% 33% 0% 18% 23% 0% Healthcare 15% 17% 22% 0% 18% 15% 14% Property & Casualty / General Insurance Other Industries: Natural Resources, Government, Manufacturing, etc. 15% 17% 22% 13% 12% 12% 21% 13% 50% 0% 13% 6% 8% 21% Pension & Retirement 13% 0% 11% 25% 12% 15% 7% Other Tasks: IT, Marketing, Strategy, Board, etc. 10% 0% 11% 13% 12% 15% 0% Consulting & Auditing 10% 0% 11% 0% 18% 8% 14% Pricing 8% 17% 0% 13% 6% 0% 21% Telecommunications 5% 33% 0% 0% 0% 0% 14% Life Insurance 5% 0% 0% 13% 6% 0% 14% Percentages are based on respondents (i.e., not counting missing responses)

43 Optimizing Opportunities 42

44 The majority of associations will use education and training to optimize opportunities over the next five years Axis Title How Associations Plan to Optimize Opportunities in the Next Five Years Education and Training 29 Increasing Stakeholder Awareness 11 Working with Industry 7 Working with Regulator or Government 5 Partnering with Other Professional Bodies 4 Creating Strategic Plans/ Priorities 4 Working with Universities 2 Creating Special Interest Groups 2 Other: Offer Consulting Services Axis Title Figures based on responses by organization

45 Over one-quarter of organizations (28%) will seek to raise awareness of these opportunities with their stakeholders What are you doing to optimize these opportunities within the next five years? Total (39) Africa (6) Americas Asia & Oceania Europe (15) Highincome (24) Middleincome (15) Education and Training 74% 100% 78% 67% 67% 79% 67% Increasing Stakeholder Awareness 28% 17% 33% 33% 27% 33% 20% Working with industry 18% 33% 11% 11% 20% 13% 27% Working with Regulator or Government 13% 17% 22% 0% 13% 13% 13% Creating Strategic Plans/ Priorities 10% 0% 22% 11% 7% 8% 13% Partnering with Other Professional Bodies 10% 0% 11% 11% 13% 17% 0% Creating Special Interest Groups 5% 17% 0% 11% 0% 4% 7% Working with Universities 5% 0% 11% 0% 7% 8% 0% 44 Percentages are based on respondents (i.e., not counting missing responses)

46 Greatest Challenges & Threats 45

47 Loss of traditional actuarial work, competition from other professions and regulatory changes are seen as key challenges for actuaries Axis Title Greatest Challenges and Threats for the Profession in the Next Five Years Loss of Traditional Actuarial work 14 Competition from Non-Actuaries 11 Regulatory Changes 10 Low Awareness/ Recognition/ Bad Publicity 8 Maintaining/ Improving Reputation 7 Technology/ Computerization 5 Other Market changes (e.g. Interest Rates) 4 Rote/ Automated Work/ Over reliance on Models Lack of Students/ Candidates Consolidation in Insurance Industry Axis Title Figures based on responses by organization

48 Low awareness of the profession and the need to maintain or improve its reputation in light of competition is noted by one-in-five associations Within the next five years, what are the greatest challenges or threats to the actuarial profession? Total (37) Africa (5) Americas (8) Asia & Oceania (7) Europe (17) Highincome (24) Middleincome (13) Loss of Traditional actuarial work 38% 20% 50% 43% 35% 46% 23% Competition from Non-Actuaries 30% 60% 25% 14% 29% 33% 23% Regulatory Changes 27% 20% 38% 14% 29% 33% 15% Low Awareness/ Recognition/ Bad Publicity 22% 20% 50% 29% 6% 25% 15% Maintaining/ Improving Reputation 19% 20% 38% 0% 18% 8% 38% Technology/ Computerization 14% 40% 13% 29% 0% 8% 23% Other Market changes (e.g. Interest Rates) Rote/ Automated Work/ Over reliance on Models 11% 20% 13% 14% 6% 13% 8% 8% 0% 0% 0% 18% 13% 0% Lack of Students/ Candidates 8% 20% 0% 0% 12% 8% 8% Consolidation in Insurance Industry 8% 0% 13% 14% 6% 8% 8% 47 Percentages are based on respondents (i.e., not counting missing responses)

49 Managing Challenges & Threats 48

50 Associations plan to educate and train their professionals, to help them stay competitive Axis Title How Associations will Manage Key Challenges and Threats over the Next Five Years Education & Training 16 Raising Awareness/ Promoting & Repositioning Actuaries 12 Working with Regulators/ Government Affairs Activities/ Lobbying 7 Working with Other Actuarial Organizations 5 Working with Industry 5 Creating Strategic Plans 3 Other inc. Funding Research, Environmental Scanning 3 Creating Special Interest Groups/ Discussion Groups 2 Creating Actuarial standards Axis 10 Title Figures based on responses by organization

51 Over the next five years, several associations plan to counter lost/ losing ground by raising awareness of the actuarial skillset and collaborating with stakeholders Within the next five years, what are you doing to manage the challenges you ve listed? Total (31) Africa (4) Americas (8) Asia & Oceania (7) Europe (12) Highincome (20) Middleincome (11) Education & Training 52% 50% 38% 57% 58% 45% 64% Raising Awareness/ Promoting & Repositioning Actuaries Working with Regulators/ Government Affairs Activities/ Lobbying/ Tracking Regulation 39% 75% 13% 29% 50% 30% 55% 23% 25% 50% 0% 17% 20% 27% Working with Industry 16% 50% 0% 0% 25% 15% 18% Working with Other Actuarial Organizations 16% 25% 13% 14% 17% 10% 27% Creating Strategic Plans 10% 0% 13% 14% 8% 15% 0% Creating Actuarial standards 6% 0% 0% 14% 8% 5% 9% Creating Special Interest Groups/ Discussion Groups Other (inc. Funding Research, Environmental Scanning) 6% 0% 13% 14% 0% 5% 9% 6% 0% 13% 0% 8% 10% 0% 50 Percentages are based on respondents (i.e., not counting missing responses)

52 Professional and Qualification Standards 51

53 Axis Title The majority of associations have established a code of conduct for their professionals Professional Standards Established for Actuaries Code of conduct - the ethical responsibilities to the public, clients, employers and profession 36 Qualification standards - the requirements for education and experience 32 Standards of practice - the framework for performing professional assignments 26 Other (e.g. CPD, Technical Guidelines, Discplinary Process) 10 None of the above Axis 20 Title Figures based on responses by organization

54 Codes of conduct and qualification standards are almost universal among associations based in High-income economies Has your organization established any of the following professional standards for actuaries? Total (43) Africa (6) Americas Asia & Oceania Europe (19) Highincome (28) Middleincome (15) Code of conduct - the ethical responsibilities to the public, clients, employers and profession Standards of practice - the framework for performing professional assignments Qualification standards - the requirements for education and experience Other (e.g. CPD, Technical Guidelines, Disciplinary Process etc.) 84% 67% 67% 89% 95% 96% 60% 60% 50% 44% 67% 68% 71% 40% 74% 67% 67% 67% 84% 89% 47% 23% 17% 44% 11% 21% 21% 27% None of the above 9% 33% 0% 11% 5% 0% 27% Multiple responses accepted 53 Percentages are based on respondents (i.e., not counting missing responses)

55 Axis Title Examination by an actuarial organization or completion of university coursework are leading methods of qualification How Actuaries become Qualified Through examination by an actuarial organization 20 Through university coursework 15 Examination by an actuarial organization but with possible exemptions from part of syllabus based on university results 15 Through work experience 13 Through regulatory licensing 12 Other (e.g. Examination by Supervisory Authority, Hybrids) Figures based on responses by organization

56 The ways in which actuaries become qualified vary within region and income group How do actuaries become qualified? Total (43) Africa (6) Americas Asia & Oceania (8) Europe (20) Highincome (29) Middleincome (14) Through examination by an actuarial organization Examination by an actuarial organization but with possible exemptions from part of syllabus based on university results 47% 67% 44% 63% 35% 45% 50% 35% 17% 33% 50% 35% 45% 14% Through university coursework 35% 0% 44% 0% 55% 45% 14% Through work experience 30% 0% 33% 13% 45% 38% 14% Through regulatory licensing 28% 0% 22% 25% 40% 28% 29% Other (e.g. Examination by Supervisory Authority, Hybridprocess) 14% 17% 22% 13% 10% 10% 21% Multiple responses accepted 55 Percentages are based on respondents (i.e., not counting missing responses)

57 Almost three-quarters of associations (74%) report that their professionals are required to participate in CPD to maintain their actuarial status Are actuaries required to participate in continuing professional development (CPD) in order to maintain their actuarial status? Total (43) Africa (6) Americas Asia & Oceania (8) Europe (20) Highincome (29) Middleincome (14) Yes 74% 50% 67% 63% 90% 83% 57% No 26% 50% 33% 38% 10% 17% 43% Multiple responses accepted 56 Percentages are based on respondents (i.e., not counting missing responses)

58 Appendix 57

59 List of Participants 58

60 Participating Associations Instituto Actuarial Argentino (Argentina) Actuarial Society of Armenia (Armenia) Institute of Actuaries of Australia (Australia) Aktuarvereinigung Österreichs (Austria) Actuarial Association of Azerbaijan (Azerbaijan) Actuarial Society of Bangladesh (Bangladesh) Instituto Brasileiro de Atuaria (Brazil) Canadian Institute of Actuaries (Canada) Instituto de Actuarios Matemáticos de Chile (Chile) Croatian Actuarial Association (Croatia) Cyprus Actuarial Association (Cyprus) Estonian Actuarial Association (Estonia) Actuarial Society of Finland (Finland) Institut des actuaires (France) Association of Actuaries and Financial Analysts (Georgia) Deutsche Aktuarvereinigung -DAV (Germany) Actuarial Society of Ghana (Ghana) 59 Hellenic Actuarial Association (Greece) Actuarial Society of Hong Kong - ASHK (Hong Kong) Hungarian Actuarial Society (Hungary) Félag íslenskra tryggingastærðfræðinga -FÍT (Iceland) The Institute of Actuaries of Japan (Japan) The Japanese Society of Certified Pension Actuaries -JSCPA (Japan) The Actuarial Society of Kenya (Kenya) Latvijas Aktuaru Asociacija (Latvia) Macedonian Actuarial Association (Macedonia) The Society of Actuaries of Mongolia (Mongolia) Koninklijk Actuarieel Genootschap (Netherlands) New Zealand Society of Actuaries Inc. (New Zealand) Den Norske Aktuarforening (Norway) Asociación Panameña de Actuarios (Panama) Instituto dos Actuarios Portugueses (Portugal) Russian Guild of Actuaries (Russian Federation) Serbian Actuarial Association (Serbia) Slovensko aktuarsko društvo (Slovenia) Actuarial Society of South Africa (South Africa) Instituto de Actuarios Españoles (Spain) Actuarial Institute of Chinese Taipei (Taiwan) Actuarial Society of Tanzania (Tanzania) The Society of Actuaries of Thailand (Thailand) The Actuarial Association of Uganda (Uganda) Institute and Faculty of Actuaries (United Kingdom) ASPPA College of Pension Actuaries - ACOPA (United States of America) Casualty Actuarial Society (United States of America) Conference of Consulting Actuaries (United States of America) Society of Actuaries (United States of America) Actuarial Society of Zambia (Zambia)

61 Demographics 60

62 Organizations based in Europe and Africa have seen the highest growth in fully qualified actuaries (FQAs) over the time period ALL (47) Africa (6) Americas Asia & Oceania Europe (23) Highincome (31) Middleincome (16) Number of FQAs in ,430 1,141 37,853 5,866 22,570 65,188 2,242 Number of FQAs in , ,719 4,830 15,470 50,094 1,732 Average annual growth rates of FQAs, % 7.2% 4.3% 4.0% 7.9% 5.4% 5.3% 61

63 Professional membership in multiple actuarial organizations is most prevalent in the Americas region and lowest in Europe ALL (46) Africa (6) Americas Asia & Oceania Europe (22) Number of FQAs in ,430 1,141 37,853 5,866 22,570 Number of FQAs residing in country where HQ is based 52,893 * 26,792 5,391 19,529 Number of FQAs registered with another actuarial organization 28, ,068 1,565 2,402 Number of organizations with members residing outside the country they are based * Figure under review 62

64 Actuaries and the Marketplace 63

65 Actuaries enjoy a strong reputation with regulators, according to 94% of associations How would you rate the overall professional reputation of actuaries with Regulators Total (44) Africa (6) Americas Asia & Oceania Europe (20) Highincome (29) Middleincome (15) Excellent 48% 50% 67% 22% 50% 52% 40% Good 46% 33% 33% 67% 45% 45% 47% Fair 7% 17% 0% 11% 5% 3% 13% Marginal 0% 0% 0% 0% 0% 0% 0% Poor 0% 0% 0% 0% 0% 0% 0% Don't know 0% 0% 0% 0% 0% 0% 0% 64 Percentages are based on respondents (i.e., not counting missing responses)

66 Almost four-in-five associations believe that actuaries have a good or excellent reputation with employers (78%) How would you rate the overall professional reputation of actuaries with Employers Total (44) Africa (6) Americas Asia & Oceania Europe (20) Highincome (29) Middleincome (15) Excellent 26% 33% 44% 0% 27% 32% 13% Good 52% 50% 56% 78% 41% 52% 53% Fair 20% 0% 0% 22% 32% 16% 27% Marginal 2% 17% 0% 0% 0% 0% 7% Poor 0% 0% 0% 0% 0% 0% 0% Don't know 0% 0% 0% 0% 0% 0% 0% 65 Percentages are based on respondents (i.e., not counting missing responses)

67 A majority of associations report that the profession s reputation with the public is excellent or good (54%). However, one-in-five organizations lack information in this area. How would you rate the overall professional reputation of actuaries with The Public Total (44) Africa (6) Americas Asia & Oceania Europe (20) Highincome (29) Middleincome (15) Excellent 15% 17% 22% 11% 14% 13% 20% Good 39% 50% 67% 33% 27% 42% 33% Fair 13% 17% 0% 22% 14% 13% 13% Marginal 11% 0% 11% 0% 18% 10% 13% Poor 2% 0% 0% 0% 5% 0% 7% Don't know 20% 17% 0% 33% 23% 23% 13% 66 Percentages are based on respondents (i.e., not counting missing responses)

68 In all regions, changes in the regulatory environment are thought to have had a favorable impact on the demand for actuaries To what extent do you agree with the following statements about actuaries Changes in the regulatory environment have increased the demand for actuaries in the job market Total (44) Africa (6) Americas Asia & Oceania Europe (20) Highincome (29) Middleincome (15) Strongly Agree 45% 50% 56% 33% 45% 45% 47% Agree 39% 33% 33% 56% 35% 41% 33% Disagree 7% 0% 11% 0% 10% 7% 7% Strongly Disagree 7% 0% 0% 11% 10% 7% 7% Don't know 0% 0% 0% 0% 0% 0% 0% Not applicable 2% 17% 0% 0% 0% 0% 7% 67 Percentages are based on respondents (i.e., not counting missing responses)

69 There is general agreement that economic growth has contributed to increased demand for actuaries in every region, with the exception Europe To what extent do you agree with the following statements about actuaries Economic growth has increased the demand for actuaries in the job market Total (44) Africa (6) Americas Asia & Oceania Europe (20) Highincome (29) Middleincome (15) Strongly Agree 14% 17% 22% 11% 10% 7% 27% Agree 43% 67% 56% 67% 20% 45% 40% Disagree 20% 0% 22% 0% 35% 31% 0% Strongly Disagree 5% 0% 0% 0% 10% 0% 13% Don't know 0% 0% 0% 0% 0% 0% 0% Not applicable 18% 17% 0% 22% 25% 17% 20% 68 Percentages are based on respondents (i.e., not counting missing responses)

70 In all regions, the general public s familiarity with the actuarial profession is low To what extent do you agree with the following statements about actuaries The general public's familiarity with the actuarial profession is low Total (44) Africa (6) Americas Asia & Oceania Europe (20) Highincome (29) Middleincome (15) Strongly Agree 43% 50% 67% 22% 40% 38% 53% Agree 50% 50% 33% 67% 50% 55% 40% Disagree 7% 0% 0% 11% 10% 7% 7% Strongly Disagree 0% 0% 0% 0% 0% 0% 0% Don't know 0% 0% 0% 0% 0% 0% 0% Not applicable 0% 0% 0% 0% 0% 0% 0% 69 Percentages are based on respondents (i.e., not counting missing responses)

71 In Africa and the Americas, actuaries are under increased pressure from other professions To what extent do you agree with the following statements about actuaries Actuaries face increased competition from other professions for jobs Total (44) Africa (6) Americas Asia & Oceania Europe (20) Highincome (29) Middleincome (15) Strongly Agree 20% 33% 33% 11% 15% 21% 20% Agree 36% 50% 56% 33% 25% 41% 27% Disagree 27% 17% 0% 33% 40% 31% 20% Strongly Disagree 5% 0% 11% 11% 0% 0% 13% Don't know 5% 0% 0% 0% 10% 7% 0% Not applicable 7% 0% 0% 11% 10% 0% 20% 70 Percentages are based on respondents (i.e., not counting missing responses)

72 Competition for Jobs Non-Actuaries 71

73 Statisticians, Accountants, Economists and Data Scientists compete with actuaries for jobs Axis Title The Groups that Compete with Actuaries for Jobs Statisticians 17 Accountants 16 Economists 15 Data scientists 14 Other (e.g. Financial Engineers, Risk Managers etc.) Axis 10 Title Figures based on responses by organization

74 Statisticians lead the list of professions that compete with actuaries for jobs. Data scientists are noted rivals in High-income countries. Which of the following groups compete with actuaries for jobs Total (24) Africa (5) Americas (7) Asia & Oceania (4) Europe (8) Highincome (17) Middleincome (7) Statisticians 71% 80% 86% 75% 50% 71% 71% Accountants 67% 100% 71% 75% 38% 53% 100% Economists 63% 80% 57% 75% 50% 53% 86% Data scientists 58% 20% 71% 100% 50% 71% 29% Other (e.g., Financial Engineers, Risk Managers etc.) 29% 40% 43% 0% 25% 24% 43% Sample: Associations that indicated that they Strongly Agree or Agree that actuaries face increased competition from other professions for jobs 73 Percentages are based on respondents (i.e., not counting missing responses)