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The Actuary The magazine of the Institute & Faculty of Actuaries
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Q&A: Trevor Llanwarne

What motivated you to pursue an actuarial career?
An actuarial career involved maths (my expertise), was well paid and in commerce — rather than academia or schools — and looked like it had career potential, unlike operational research — a fad in those days.

What has been your best experience working as an actuary, and worst?
The best has been running Sun Life’s small self-administered scheme, helping to sort out Maxwell and running big mis-selling projects; leading international co-ordination work at Pricewaterhouse Coopers; and working with economists. Latterly it’s been meeting lots of chief executive officers on A-Day work, and now the Government Actuary’s Department (GAD). Naturally, I’ve had one or two things go wrong but client confidentiality prevents me from saying more about the worst.

What knowledge of GAD did you have when you first applied for the role? How has the reality compared with this?
I was headhunted and initially wasn’t at all sure about taking on the role. Only in preparing for my final interview did I think, “I know what’s needed here, I think I can do it and it would be great to be appointed”. I knew it was going to be an interesting challenge and it has certainly proved to be the case. The people are committed and friendly but the Department needed a new direction and that means culture change more than anything else.

How has the credit crunch affected GAD? Are you seeing an increase in the number of graduates applying for jobs?
Positively. More people are interested in coming to work for us. We looked for several graduates last summer, had 100 applications, made eight offers and had eight acceptances. Unheard of.

How does working in the public sector compare to working for a private sector consultancy?
We are ‘the actuarial consultancy — in the public sector — for the public sector’. We have a consultancy mindset and that’s not normal in the public sector. But public sector has advantages — there is a focus on service rather than value, a better work-life balance and there are less ‘sales’ attitudes and pressures.

What excites you most about your current role?
Making the Department a success. I have three missions: to improve the brand of actuaries and GAD in government; to be the ‘government actuary’ not just the ‘government pensions actuary’ as could be the case — this means expanding into other areas; and making GAD a huge success in the public sector.

To whom do you feel you are ultimately responsible: the government, the public or the client?
It does, and always should, depend on the context. For example, in being responsible for the running of GAD, I am responsible to government. In the work I am responsible for on many of the public sector pension schemes, I am enshrined in law to give an expert opinion or determination following legal processes that apply under public law provisions. Where I act as an actuarial adviser under a model more typical in the private sector, I am responsible to the client. Bear in mind, though, that if the client is an ‘agent’ of another entity that is ‘principal’ — for example trustees are ‘agents’ for the beneficiaries, company management is typically the ‘agent’ of the shareholders and so on — then each individual circumstance will dictate the extent to which I also have some responsibility to the principal.

To which other areas do you feel GAD could positively contribute?
Over 50% of what we do relates specifically to public sector pensions. However, we have thriving operations in social security and insurance, and people should not forget our monthly certificate of premium bond randomness!

What I am keen for us to move into now is investment and risk, and do more on demographics, long-term care and equity release. Of these, investment and risk are our top priorities and to that end we have recently recruited Colin Wilson to lead on both. We are already involved in assisting treasury on its proposals to resolve the banking problems and, indeed, making good progress in the other areas.

Do you ever come under political pressure to recommend a solution you don’t agree with?
I have been in this role for a year now and I’m pleased to say that this has not happened. Long may this continue!

What do you see as the biggest challenge for actuaries generally and GAD specifically in the next couple of years?
For actuaries generally, my guess is that the biggest issue will be the recession. However, working in the public sector, I’m somewhat removed so others are probably better placed to answer. For actuaries in GAD, which is growing at present, my guess is that one of our big challenges is the handling of the growth rate, while ensuring we provide a highly valued service that is of real benefit to the taxpayer.

Assuming the credit crunch continues to worsen, what survival skills do you have for living in a post-apocalyptic world?
A mathematical/logical brain, tenacity, flexibility and a modicum of selling skills — actuaries should not underestimate the importance of the last item.

Do you see a future for defined benefit pension schemes?
I believe the challenge for actuaries is to better understand the driving forces that employers face. They are not what actuaries want them to be. One force for many is risk minimisation outside the core business requiring certainty of cost. Collective DC, as is being investigated further at present, delivers. But it’s not the only approach and I do believe actuaries should start thinking outside the box of the DB/DC spectrum on how to deliver better benefits subject to this force.

Do you think there is an upper limit to human life expectancy?
No. See for example the Oeppen & Vaupel article that appeared in Science magazine 2002. This doesn’t prove the case, of course, but it gets people thinking and challenging some pre-conceptions.

If you could go back in time and give your Actuarial Trainee self one bit of advice, what would it be? “Don’t be frightened to grab the new career opportunities in your firm that get offered.” There’s no gain without pain. Also “always do what’s right and don’t compromise on your values – things will always come good in the long run”. Actually that’s what I‘ve done over the years and it’s held me in good stead.

What do you do to relax?
Family is very important to me. Maggie and I celebrate our silver wedding this summer. I have done lots of work in genealogy, I enjoy reading and playing bridge. Some time soon, I’ll get back into sport again.

Are there any pieces of work or technical issues that give you sleepless nights?
I have not, to date, had sleepless nights on anything technical. The issue which has had my biggest attention so far on client work has been ensuring the work we do follows proper governance over the process and that we do proper stakeholder engagement throughout. A lot of the problems for actuaries generally arise, in my view, through inadequate attention to these aspects. Even so, I’ve had no sleepless nights so far. The people here in GAD are a great team.