Studying the genesis of the actuarial profession will help us to anticipate the issues of the future and remain appealing to actuaries of the future, says Elliot Cox

The current generation of actuaries look at their career in a different way to those entering the profession in the past. This is, in part, due to the rising state pension age, higher university fees and an increased cultural acceptance of those who follow 'non-traditional' paths in careers and society.
Significant investment is required in order to become an actuary: an array of mathematical and communication skills are needed, there are a multitude of exams to sit, even after you have achieved your degree, and working as an actuary may well take up most of your career - it's not something you can easily dip in and out of. This all leads to two questions: will this large commitment pay off through to retirement? And will it remain appealing to those who are thinking of becoming actuaries?
Responding to risk
We need to consider how the profession can remain relevant in the years to come - and what better way to consider the future than by looking back at how we started? Through exploring earlier actuarial innovations, we can better identify what we need to work on in order to meet demand in new markets and ensure we remain appealing as a profession.
Risks have been ever-present since the beginning of civilisation; actuarial skills were borne out of the need for insurance. A death in the family could leave loved ones without the support needed to survive. Loss of assets (such as food stocks or housing) could lead to financial ruin. Even early creditors needed to insure themselves against the risk of default on payments. Enter the actuary. By developing stochastic models, early actuaries were able to price premiums and reserves on policies. This led to the creation of life insurance policies, thanks to the development of life tables and models for longevity.
With the advance of technology, the limitations imposed by manual calculations have been dismantled, and more sophisticated models are being developed at an increasing rate. As financial systems have become more complex, actuaries have borrowed theories from economics, giving rise to actuarial areas of investment. Non-traditional aspects of our profession are coming to the fore, as evidenced by recent changes to the IFoA syllabus; its heavier focus on computer-based exams emphasises the fact that the modern actuary needs to master an array of skills. With complexity increasing, explaining techniques to non-actuarial audiences becomes more challenging, so communication skills are also crucial.
Evolving needs
What could the future of the profession hold? Given that our work is underpinned by risk, we must look at emerging threatsto determine how insurance needs will evolve over time. We are beginning to see cybersecurity become a prominent financial risk, and continued technological progress is likely to bring new risks that insurance companies will want to price policies for. Outside of insurance, there is a greater demand for social and green investment strategies from clients, so the future actuary is likely to see ethics play a much larger role in their work than they currently do.
Continued demand for actuarial consultants in the retirement industry has been brought into question, given that many companies have now moved away from offering defined benefits. However, the recent CDC (collective defined contribution) pension scheme adopted by Royal Mail may soon become the most popular way to share the financial burden of retirement funding between employees and employers. Will this set a precedent for the future of the pensions industry? Only time will tell.
If we look back to where we started, we can see that our industry is led by our customers' needs to mitigate financial risks. By ensuring that we remain concerned with both current and emerging threats to financial safety, we will continue to provide value to clients we work with, and appeal to new job seekers as they begin their journey into the working world.
Elliot Cox is a guest student editor