What does it mean to be a member of a regulated profession? Huw Morris listens in on a roundtable of experts as they discuss the opportunities and challenges facing actuaries in this field
Ask actuaries what they most value about IFoA membership and many will mention the fact that it provides them with status as part of a highly regarded profession, with strong professional standards and an equally strong brand. A recent IFoA expert roundtable interrogates this finding – confirmed in a recent membership survey – and debates what it means to be part of a regulated profession, as well as discussing the pressures confronting today’s professionals. Are actuaries just ‘clever calculators’, as some would have it?
A hallmark of competence
Zamara chief executive Sundeep Raichura starts us off, stating his belief that, internationally, IFoA membership conveys “the standing of having a qualification, a designation and being recognised under law”, because actuaries have to go through “a qualification process that requires immense discipline and grit to complete, and one that instils a rigorous and analytic approach to thinking and exercising judgment.
“Your qualification and the IFoA’s professional code of conduct should be the hallmark that you have the competence and professionalism to provide quality advice and solutions,” he adds.
IAA president Roseanne Harris says it needs to be recognised that “there’s a role for actuaries in certain spaces, without it being an over-regulated profession where that role is very narrowly defined”.
Educational and technical competence, alongside a code of ethics, are crucial to the profession’s status and credibility, she continues. “It shouldn’t be the case that the recognition in regulation is to preserve a role – rather, the regulation should serve to ensure there is a standard or value delivered in the interest of the public. There’s the issue of regulation requiring actuarial involvement, but also, how do we regulate ourselves? Those things are inextricably linked.”
Sunil Sharma, past president of the IAI and chief actuary and CRO at Kotak Life, says it is important for a regulated profession to gain the public’s trust. Actuaries are expected to display high levels of professionalism and technical competency, and to live up to high ethical standards, as set out in the IFoA’s Actuaries’ Code – but what sets them apart from other professionals?
“It is likely that two actuaries may come up with different answers for the same question,” he says. “Most of the time we can justify what we’ve been doing, even if our answer is different from others’ answers. However, some of these practice standards that we have set up really help us in ensuring consistency across methods and in principles.”
For Harris, this gets to the heart of credibility and reliability: “The actuarial involvement means that the focus is not a self-interest or necessarily a commercial interest, but looking out for the public good, and balancing the interests of multiple stakeholders is part of the professional promise we bring.
“The other balance we need to strike is making sure we’re avoiding groupthink,” she continues. “Some reviews of the profession have highlighted the need for governance, oversight and the involvement of other professions or laypeople, as well as professional standards, to make sure we are being challenged and not falling victim to groupthink.”
An intergenerational community
Should there be an element of independence in actuarial regulation, though? First Actuarial founder Hilary Salt believes the Actuaries’ Code gives “a kind of intergenerational solidarity”, linking the actuaries of today to “the giants whose shoulders we stand on, and to those yet to qualify”.
This “intergenerational covenant” is a “real strength” that other professions lack, she adds. “We rewrite it and recreate it for a new generation. I don’t think we’re starting from scratch but taking something that’s been handed down carefully and preciously. One of the reasons we need to maintain standards and have the right hurdles to let people into the profession, with the right disciplinary processes, is so that we can hand this precious thing on to the next generation.”
The challenge of demonstrating professional actuaries’ value is experienced around the world, according to Harris. “As much as there are disciplinary processes that guard it, it’s the community almost tacitly agreeing to abide by it that is more powerful. It does create a challenge if you think of the burgeoning field of data science and the role the actuarial profession plays in that.
“We have to ask ourselves: where do we add the greatest value? Where is the skillset best employed? If we don’t want to be seen as just clever calculators, we mustn’t act as just clever calculators. Perhaps we need to think about how we work in multidisciplinary teams and fulfil that specific role of applying professional judgment alongside others who perhaps are more equipped to provide technical skills.”
Proving our worth
The profession is facing considerable challenges and opportunities, and Aviva actuary Lucy Saye encourages us to consider the tools that actuaries bring. “We should ask ourselves why businesses should employ an actuary over another professional,” she says. “What is it that we bring? Yes, certain regulated roles require actuaries to do them, but many increasingly high-profile roles do not – yet we are capable of doing them. So how do we demonstrate the relevance of our skillsets in a changing world?"
The IFoA’s Quality Assurance Scheme (QAS) plays a crucial role in demonstrating that regulated professionals produce a high standard of work. “We might think that’s the case, but I’m not sure we were necessarily able to prove it,” Salt notes. “QAS does start to prove it.” For Raichura, QAS extends regulation to the actuarial firm. “It’s been a really good way for us to embed firm-wide standards and create a culture of professionalism within the firm. Most importantly, I think it makes it much easier for the IFoA to monitor firm-level compliance with standards.”
“Regulation should serve to ensure there is a standard or value delivered in the interest of the public”
Similarly, continuous professional development is encouraging people to keep their skills up to date and consider what they need to work on. “It creates this virtuous cycle where compliance doesn’t become a chore, but the benefit becomes visible,” says Raichura. “The nudge is that there’s a requirement that gets you started on that journey. That protects the profession as a whole in terms of the quality of the services being delivered.”
However, bugbears do remain. One of the challenges is ensuring that employers continue to support the value of professional qualification and training, notes Saye. “Not all employers pay professional body subscriptions, and some are better than others at making time and funding available to support training and development”, she adds. QAS-accredited employers make a specific commitment in this respect, but we should do more to encourage all employers to support lifelong learning and professionalism.
Salt says her organisation uses QAS to send “a clear message to graduates and interns that we take their development seriously, that we take protecting them very seriously if they’ve got issues around speaking out”. She adds that today’s graduates are values-based: “If you can make a case that we’re putting you in a role where there’s real ethical content, I think they find that quite attractive.”
Another common concern expressed by panel members is that the profession risks becoming “compliance-driven” in the face of intense pressure from statutory regulators. This is a factor internationally as well as in the UK, they believe.
“I almost feel like we are being turned into a compliance-driven profession,” says Raichura. “With all the relentless changes that the world is going through, including the rise of technology, globalisation and knowledge in other areas that impact our work, there is a need for us to emphasise the actuarial value proposition. However, regulation does mean we can show we are bound by a code of conduct and rigorous standards, even as we apply and innovate our skills in a changing world.”
Sharma argues that future regulations are likely to change in response to emerging trends such as digitisation, automation, machine learning and artificial intelligence. Will it also have to address issues such as diversity, equity and inclusion (DEI) and sustainability? “Do we need regulation for that?” he asks. “It varies from market to market. Each market is at a different level of implementation when it comes to DEI and sustainability, and in emerging markets you will probably find that they’re still behind in some of those areas.
“These things may not be pushed through regulations, but perhaps through guidance and awareness sessions – see if that really helps to push diverse views, and equity among genders and people from different backgrounds.”
Louise Pryor IFoA president and roundtable chair
Sundeep Raichura Group CEO of Zamara
Hilary Salt Founder of First Actuarial
Roseanne Harris President of the International Actuarial Association (IAA) and health policy actuary at Discovery Health
Sunil Sharma Past president of the Institute of Actuaries of India (IAI) and chief actuary and CRO at Kotak Life
Lucy Saye Actuary at Aviva and deputy chair of the IFoA Sustainability Board