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The Actuary The magazine of the Institute & Faculty of Actuaries

The times they are a-changin’

Summer is a time of change in the UK actuarial profession. The Faculty and the Institute have had their OGM and AGM respectively, with the change that implies for the composition of the two Councils. New Council members are welcomed and retiring ones are thanked for their hard work and contribution to the leadership of the profession.
Perhaps a little less obviously, Nick Dumbreck and I are swapping jobs. Before you jump to the (false) conclusion that I am now Institute president, I should hastily point out that I am talking about the chairmanships of Faculty and Institute Management Committee (FIMC) and the Strategy Implementation Programme Board! FIMC is really the executive board of the profession. Under the strategic guidance of Joint Councils, it is responsible for making things happen.
The Strategy Implementation Programme Board is a temporary body responsible for co-ordinating the activities of the work streams to implement the new post-Morris strategy. Nick moves from chairing FIMC to chairing the Programme Board, and vice versa for me. Actually, the work of the two bodies is now converging, particularly as we start to implement the new structures of the professional body which were agreed by Joint Councils in June.
There will be a transition period from now until March 2008, the start of our new financial year, by which time the new bodies will be in place. There is a separate article in this issue (p26) on the output from the work streams and more detail on the structural and other changes will follow in future issues.

The main purpose of the changes is to provide you, the members, with support throughout your careers so that you have the skills, attributes, and knowledge appropriate for the evolving needs of the UK financial sector, primarily as quantitative risk professionals. A new Member Support Executive Committee will encourage the executive committees that support each of our core practice areas to develop and disseminate knowledge and provide opportunities (both face-to-face and web-based) for practitioners to meet and share their experience and expertise. Members will be encouraged to participate in the communities of their choice.
We shall focus on providing a range of opportunities for the continuing professional development (CPD) of all members. As presidents, Nick and I are able to attend a number of conferences and events arranged by the profession, which are always impressive. It should not be difficult for members to meet the requirements of our CPD scheme. Can I remind those of you who have been slow at declaring your CPD category and recording your activity that checks are now starting, so take corrective action immediately.

Meanwhile, the Faculty Task Force has been looking at the possibility of a merger between the Faculty and the Institute. It will report to Faculty Council in the autumn. It is too early to say how Faculty Council will decide to proceed, but it is perhaps worth restating a couple of points. Any draft proposal for merger coming from the Faculty would go in the first instance to the Institute Council it takes two to tango. Also, any such change, if recommended by the Councils, would be subject to votes by the membership of both the Faculty and the Institute. Only if both memberships agree could a merger happen.

Another of the big events of the summer has been the publication of the Continuous Mortality Investigation (CMI) consultation paper on a projections library (see article on p29). I am very impressed with the quality of the work the CMI is doing here. While emphasising the uncertainty in future mortality experience it is equipping us with a variety of tools which we can use for projections. However, even when this library is completed it will not remove the need for actuarial judgement. As ever, we will have to think carefully not only about the base assumption but also about which projection is appropriate in a given circumstance. What is hard to ignore, though, is the research presented at the Institute sessional meeting in February and the Faculty sessional meeting in March. There is little, if any, evidence of a slowing down in the rate of longevity improvement of UK pensioners. Against that background is it best estimate let alone prudent to use a projection which assumes a rapid falling-off in longevity improvement?

On 27 April, the Board for Actuarial Standards (BAS) published a preliminary consultation paper, ‘Towards a Conceptual Framework’. The profession has put in a response, and you can find it on our website. This does not of course preclude individual actuaries or firms participating in BAS consultations, and indeed, I encourage you to do so. It cannot be stressed too frequently that we are all in this together.
This does not mean that we in the profession will always agree with BAS about everything, but it does mean that we should work with the BAS in a spirit of constructive engagement. The common interest, which binds the BAS, the Professional Oversight Board (POB), and ourselves, is the goal of the highest possible standards of actuarial practice in the UK.

Last month I spoke at a professionalism course for new actuaries in Edinburgh. It was a pleasure to mix with them. They are the future of the profession, and they give me great confidence that it will be in safe hands. For as long as I can remember there have been concerns about the future employment prospects for actuaries. Yet every year we seem to grow and prosper. As long as we can attract the cream of graduates and train them properly, my belief is that they will do whatever it takes to make the profession succeed. In the last analysis change is driven by people, not seasons of the year.