Derek Cribb says that joining together to promote actuarial science is the best way to ensure a strong pipeline of future actuaries
What makes an IFoA-qualified professional? I spend a fair amount of my time promoting careers in actuarial science to bright-eyed university students, and the benefits of IFoA members to employers and regulators who demand the highest professional standards. But the greatest advocates for actuarial careers and the IFoA are those that are already our members. Joining together to promote actuarial science will be the best way to ensure a strong pipeline of future actuaries. So how can we do this?
For students, an actuarial qualification offers training in valuable business and financial skills, a qualification that remains in strong demand even in mature markets, and membership of a leading profession. The work is interesting, the pay is good, and the career is commonly rated as one of the most satisfying available by numerous surveys. Wow - how could you not sign up?
For employers and regulators, an actuary brings a skillset that can either address specific regulatory needs or be broadly applied within an organisation.
Most businesses are looking to focus on the longer term - having team members to hand that can look at long-term risks and opportunities and model them into a present value business case can only be good for creating sustained value. The fact that these professionals are subject to ethical and technical standards, including continuous learning and potential disciplinary action for any misconduct, only adds to their credibility.
The student is sold; they now want to be an actuary. But how will they decide what qualification is best for them? There is no monopoly for the IFoA, even in the UK, so what is the IFoA's compelling proposition? The people best placed to answer this question are the employers of actuaries, so let me reflect back some of the views I hear.
First, and not uniquely, an IFoA Associate or Fellow holds a global passport: the qualification is recognised as surpassing the required standards anywhere in the world. That's great if you want to work for global employers, but within a local environment you may find a local qualifying body gives you all you need. If that's the case then the IFoA may not be the right choice. But why the IFoA rather than another major global qualifying body? Why persevere with what are perceived as tougher exams when you might qualify more quickly elsewhere?
Every actuarial qualifying body takes a different approach. Within the IFoA the focus has always been on building up a broad technical base, either via the Core Technical (CT) series or a strong performance in an accredited university course, before moving on to the higher order exams of your choice.
Even within the CT series, however, you start to see the second tenet of the IFoA focus come into play: our actuarial qualification is a business qualification.
This starts with Business Awareness at CT9 and flows through the later exams. The exams are undoubtedly academically challenging, but knowing the text book is not enough.
You need to understand how to apply and communicate that knowledge, and the rigorous testing of communication skills is, in the words of a senior non-IFoA actuary, a valuable differentiator core to the IFoA offering.
Given the nature of our exams, it is perhaps no surprise that in markets where there are multiple providers of actuarial qualifications we are rarely dominant by number, but are usually disproportionately represented within senior roles. This was backed up a couple of years ago by an independent survey of salaries in China and South-East Asia that showed our qualified actuaries earning 10%-15% more at all stages of their careers compared with other actuaries - that equates to over $1,000,000 dollars in today's money over the course of a lifetime.
This all sounds great, but we mustn't be complacent. We can attract the best and brightest students out of university around the world, but that's just half the story.
Our approach of engaging and accrediting universities works to our mutual benefit, but if our education and testing is not seen as fair and relevant we lose the talent of the future, not just from the IFoA, but potentially from the profession as a whole. Even where other societies have a strict policy of not offering exemptions to universities, often they are willing to accept candidates with exemptions from the IFoA. To see such talent leaving the IFoA is painful so, without making exams easier, under our refreshed strategy we are making our exams fairer to those who may not have English as their first language.
If we get this right we know we create a virtuous circle of attracting the best students, educating and qualifying them fairly, watching them rise as exemplar professionals to senior positions where their profile and contribution to the profession will attract more of the best students to actuarial careers with the IFoA.
Derek Cribb is the chief executive of the Institute and Faculty of Actuaries