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The Actuary The magazine of the Institute & Faculty of Actuaries

Profession: Making it count

The general public knows very little about the work of the actuarial profession. This is a problem for the UK’s 20 000-plus members as, when their work does come to the public’s attention, it is often for the wrong reasons. Without good public visibility of the ethical standards, the structures that govern and the commitment to act in the public interest, businesses, trustees and policymakers will assume the worst when actuaries are in positions of potential conflict.

The actuarial profession is not alone in this. Like other professions, it has a long history linked to strict professional ethics from the start. In England and Wales, The Institute of Actuaries was founded in 1848 and gained its Royal Charter in 1884; the Scottish Faculty of Actuaries dates from 1856 and received its Royal Charter in 1868. In each case, the granting of a Royal Charter entailed significant public interest duties which have been further bolstered by a wellestablished, but much-debated, system of oversight since the Morris Review.

Actuaries, like other professions, need to speak more confidently about the contribution they make to the professional economy and the standards to which they adhere. Like other professions, they are formally committed to acting in the public interest and promoting and improving knowledge. One of the ways they can do this most effectively is in concert with other professions.

Until Spada was commissioned to produce British Professions: The Impact of the Sector by three professional bodies, there had been no single document bringing together a summary of the British professions’ history and structures, their various roles and their contributions to society.

The professional sector is Britain’s largest employer according to our research — it accounts for 11.5% of total UK employment. Professional services account for the largest single share of UK output (in UK real GDP), contributing 8% of the total. They represent £18 859m of British trade in services — almost half the total of £41 772m. Despite the global financial downturn, professional services continue to expand.

What, though, do we mean when we use the word ‘professional’? Professions are both conceptual as well as being business sectors. Sir Alan Langlands’ working definition from his Gateways to the Professions report is useful. This encapsulates those occupations “where a first degree followed by a period of further study or professional training is the normal entry route and where there is a professional body overseeing standards of entry into the profession”. Lord Benson, in the House of Lords in 1992, said that to be professional is, to a large degree, bound up in the public interest. A critical factor was the degree to which individuals in a profession and their governing body acted ethically.

This sense of public-spirited professionalism has taken a battering in recent years. Public scandals, including financial sector bonuses and MPs expenses all in professional sectors — have roused intense public ire. But the public’s declining esteem for those working in the traditional professions arguably began with Margaret Thatcher. “Thatcher’s governments were devastating for the professions — the first two terms for the public sector professions, for example, medicine and teaching, and the third term for the legal profession in particular,” says Michael Burrage of the London School of Economics.

For Professor Burrage, Thatcher’s crusade against professional self-regulation and her later cuts in funding for public sector professions proved that, despite being Conservative in name, “her political programmes were some of the most radical the country has ever seen”. The attacks were not reversed by New Labour governments.

However, society has moved on. The global financial meltdown has wreaked havoc but it descended at the same time as the increasing recognition of the principles of what those in IT heralded, a few years ago, as the ‘web 2.0 world’. The digital revolution puts a premium on co-operation and consensus, in the belief that the harnessing and dissemination of collective intelligence is good for business.

The sharing of costs, content and platforms may yet reinvigorate the newspaper industry, just as engagement with blogs, wikis and social networking will transform the professions. As the economy begins to show the first tentative signs of recovery, it is incumbent on the professions to lead by example, not just in technical competence, but in the standards of behaviour we embrace and admire.

All of us who would describe ourselves as professionals should take pride in the vital role we play in Britain’s prosperity. But so, too, should we begin to foster a greater sense of professionalism through cross-discipline co-operation. Providing that context is all the more important for the actuarial profession, as the benefits of good advice — the contribution that it has made — may not be known for 30 years after the event, whereas the challenges to the professions’ reputation and role are immediate.

Gavin Ingham Brooke heads Spada, a research and communications consultancy for the professions