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The Actuary The magazine of the Institute & Faculty of Actuaries

Making the switch

The traditional mix of small, home-grown actuarial teams and external consultancies cannot satisfy current demand by general insurers for capital modelling work. Nor do many insurers want to rely on underwriters whose mathematical capacity may not be a match for increasingly complex pricing exercises. Bringing actuarial processes in-house makes them more controllable, more secure and less expensive.

High profile
Actuaries in general insurance are highly business-focused; their decisions influence strategy and, ultimately, profitability. They enjoy a high profile, often working alongside senior company management. And because they usually work in smaller teams, they have more variety in their work, and considerable responsibility. Actuaries are often in the front line for their employer, for example, presenting capital modelling plans to the Financial Services Authority for approval. In return, they’re rewarded handsomely.
There’s a chance to become involved in cutting edge work such as alternative risk transfer, where you can use your actuarial skills with techniques that have traditionally been the preserve of capital markets. This opens up a wealth of future career options.
However, general insurers have exacting recruitment criteria and with good reason. Taking a strong exam record for granted, employers will want something more to compensate for your lack of sector-specific experience.
For starters, confidence in your own commercial acumen is essential. You’ll often be expected to make decisions or project outcomes based on incomplete or even missing information. You’ll also need to be able to see the bigger picture, recognising how your work fits within the context of the objectives of the whole business.

Stepping stones
As part of the transition, you might decide to make a ‘stepping stone’ move, perhaps to the regional office of a large general insurer and later to join a niche player in the London market. Clearly this wouldn’t suit everyone, but it’s something to consider if you want to increase your options for the long term. Your recruitment consultant will help you to assess the factors affecting your situation when exploring unknown territory, it’s important to make the most of the experience and knowledge offered by people who deal with situations like this on a daily basis.

Transferable skills
Actuaries who attend general insurance interviews agree that employers are looking for potential as much as existing technical skills. Employers want to gauge how steep your learning curve will be. Therefore, you should establish what competencies are required to undertake the job for which you’re being interviewed and identify past situations where you’ve demonstrated those skills, albeit in a different market sector. Successfully selling transferable skills can secure offers.
However, looking forward is also critical. Your prospective boss wants to understand your motivation. It’s no good simply wanting to desert your current sector with only a vague notion of what you’ll achieve from working in the geeral insurance market. Employers don’t want to feel like a refuge. Work out what benefits you can gain as a general insurance actuary and why those fit your long-term career goals. There’s certainly no shortage of benefits; the key is identifying and explaining which of them are right for you.
If you can do that, 2006 may be the year the general insurance market presents you with a wealth of opportunity.