I endorse the view of Peter Crowley in his article An Ethical Question, that actuaries can understand derivatives and the complex analysis required to determine mis-selling and quantify appropriate compensation. I can add to the debate that he asks for in two respects.
Businesses deprived of cash, through selling of derivatives that do not correctly address the risks to which the businesses are subject, can suffer all sorts of detriment including, in some cases, the need to close down, causing losses to creditors and owners. The analysis of such situations is complex and actuaries have the ability to identify the key issues. Obviously, there are other professionals in the area, but an actuary is probably better placed than most to get the big picture and pass that onto others to act on.
Sometimes court action cannot be avoided.
Until 2014, solicitors had a monopoly for conducting litigation, but parliament's wish to expand the choices available to consumers and businesses means that actuarial firms can now run cases in their own area of expertise - financial claims. Actuaries can identify the compliance failures, determine causation and quantify loss and instruct barristers to produce the court documents.
This is an efficient and effective approach.
Roger Grenville-Jones 17 June
