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The Actuary The magazine of the Institute & Faculty of Actuaries

Making a difference

I welcome the project outlined by Presidents Tom Ross and Jeremy Goford in the article ‘Making a difference’ (August 2003). The duty of the actuarial profession is to be proactive and client-driven. Clients need high real returns. Like it or not, everybody has to live within certain constraints.

There is nothing anybody can do about:

  • worldwide deflation as industries and services are increasingly moved to low-pay countries;
  • improving longevity;
  • stockmarket levels; and
  • the oversupply and overproduction of buildings.

Savings are low. Borrowing is high. Left to itself the operation of the market would produce reasonable real returns. The market is not left to itself. The Bank of England stipulates a base rate of 3.5% and a target inflation rate of 2.5%. Combined with modest expenses of 1.0%, this means that saving is not worth doing.

The actuarial profession needs to campaign against such state interference on behalf of its clients. As Redington said: ‘The actuary who is only an actuary is not an actuary.’