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The Actuary The magazine of the Institute & Faculty of Actuaries

Strategic actuaries wanted

Standard & Poor’s said last month that good management is the key to easing negative ratings pressure on UK life assurers during one of the worst years for downgrades in the sector.

In a report, the ratings agency said the role of management in establishing business models that would deliver sustainable, long-term profitability was more important than ever in maintaining financial strength. ‘The influence of management on ratings has always been important, but Standard & Poor’s now considers that strategic decisions made today will be the most significant driver of financial strength in the future,’ said credit analyst Hans Wright.

He identified strategic decisions about product mix and distribution, implementation of cost control, relationship management with distributors, and financial and actuarial competence as the key areas of focus. Standard & Poor’s said last year that trends in life assurance were then at a five-year low, but things have only got worse in 2003.