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The Actuary The magazine of the Institute & Faculty of Actuaries
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Research: Exploring new depths

For me, the autumn always brings back memories of the first day of a new academic term. The summer break has given us time to replenish our batteries and start afresh. As a profession, this is the time we also welcome many new members who have moved on from university study to the start of their actuarial careers. It therefore seems an appropriate time to look at how the Profession is moving forward as a learned society. In particular, how it is supporting new research, providing existing research to those who will use and develop it and how members can get involved.

One element of the Profession’s strategy is to encourage research and knowledge exchange that:
• Promotes the monitoring and development of actuarial science, including methods and use of data
• Supports and develops the competence of members throughout their careers
• Helps actuaries speak out publicly with authority in matters relevant to the profession and where actuaries can make a difference.

Funds are available from the Profession to support external research. The research team has already consulted widely to identify areas where the need for research is greatest. The most popular topics that came out of this consultation earlier in 2011 were: long-term care; risk and uncertainty management; longevity/mortality; resource, environment, energy; saving for retirement; discount rates; actuarial techniques in new areas; actuarial roles in defined contribution schemes; risks in adequate data/techniques.

Through external research funding, we can sustain and build on existing communities and create links with other researchers who may be working outside the traditional actuarial spheres. The team will be consulting and updating on the research needs again this autumn to ensure we keep our focus up to date.

An example of one proposal that has now been taken forward is a project on funding for long-term care. Many of the financial drivers for the successful delivery of care in the future are related to the core actuarial skills in managing long-term risks, and the Profession wishes to play its part by collaborating closely with other bodies and disciplines to develop those long-term solutions. A call was made during the summer for an in-depth review of the international literature in this area, and funding offered. It is hoped that further studies might develop from this initial project to look at developing new data capturing analyses.

The Profession has also offered to part-fund some PhD studentships and to help finance academics so they may attend conferences and other events. This funding will make a significant difference to developing centres of excellence at universities and allow the creation of new PhD studentships in actuarial science.

Alongside the funding of university research, the Profession has also approved a fund to boost member-led research. Often such research has been developed through the hard work of volunteers and the beneficence of employers, but in many cases additional funds will significantly assist these projects. For example:
• To fund a researcher or administrative help for a short period
• To fund travel to meetings
• To fund surveys of relevant thought-leaders, members of the public or other organisations.

Any bids for funds should have the support of the relevant Practice Executive Committee or Member Interest Group. It is intended that the funds should make a material difference to the project, which would then aim to provide thought-leadership material or opportunities that fit with the Profession’s strategy, the results of which would, in time, be disseminated among members.

Two interesting proposals for member-led research have recently been approved. The first has been developed by the Microinsurance Member Interest Group, which is looking at the provision of insurance to those who live and work in poverty, particularly agricultural insurance. The proposal is to develop and disseminate an ‘actuarial toolkit’, which would serve as an educational tool for the understanding of microinsurance and would be used by non-actuaries, such as non-governmental organisations, who operate as frontline practitioners of such schemes.

The second comes from the Critical Illness Definitions Working Party, which hopes to obtain and analyse in detail the incidence rates within the UK for the three significant sicknesses of cancer, heart attack and stroke. In particular, the research will consider the impact of socio-economic category and location on the incidence of these three conditions and then look at the impact of future trends and shocks. Funding from the Profession will help the working party access relevant data from the NHS and to fund medical expertise to analyse the findings.

I am looking forward to seeing the results of these fruitful ideas at future events and I am sure that they will prompt much stimulating debate within our profession and other research communities.

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For further information on these projects, or others within and outside the Profession, contact the Profession’s research project manager Pauline Simpson pauline.simpson@actuaries.org.uk