www.the-actuary.org.ukThe death of the with-pro64257 ts actuary?role is necessarily still recognised as being of the utmost importance. In 2006, the average number of years8217 post-quali64257 cation experience as a fellow among WPAs was 20. Interestingly, the corresponding 64257 gures among appointed actuaries during the 64257 nal years of that regime were almost exactly the same.In some companies, it is not always evident that the functionary gave up all directorships they may previously have held with the company. There appears to be some confusion as to whether the WPA of a company may continue to be a director of another company within the group, although it is clear they cannot be a director of any parent company. Ample remuneration?Perhaps one of the most interesting questions is whether the loss of directors8217 rights, and hence status, has been re64258 ected in WPAs8217 remuneration packages? It would certainly seem so. Only 35% of WPAs surveyed had declared a salary over 163150k. With the level of responsibility involved, this is surprising.It may be that the statutory role is being taken by a more junior employee reporting to, and overseen by, an AFH who is on the board. It is dif64257 cult to see how such an individual can 64257 nd the con64258 icts of interest easy to resolve. In these situations, one wonders whether the new regime has ful64257 lled its purpose.A lot of the larger companies have rigid salary bands, which makes it easy for consultancies to headhunt skills and sell them back at a premium. Could companies save money in the long term by increasing pay for WPAs and any necessary backup, thereby retaining these skills in-house?It might well be that the newly quali64257 ed fellow will in future see two possible distinct career paths more clearly than before:9632 For those more interested in the actuarial function itself, there will be the opportunity of working for one of the consulting 64257 rms that are increasingly being appointed to undertake the role of WPA and sometimes an even broader range of actuarial functions (even for some of the larger life companies)9632 On the other hand, for those more interested in pursuing a managerial role, perhaps with an ambition ultimately to become a director, the traditional life of64257 ces might offer a more clearly de64257 ned career path.The implications for those entering the Profession could be profound. It would certainly be in no-one8217s interest for the actuarial function to be marginalised and increasingly perceived as little more than a highly technical 8216backroom8217 skill. The change of regime from appointed actuary to WPA may have been necessary in terms of the Profession being seen to 8216put its own house in order8217 but it may also ultimately have been a complex response to a problem that was more a matter of perception than reality. Eventually, it might even lead to some fundamental underlying changes in the employment patterns of actuaries, with a clearer distinction between actuaries and managers. 187 Only 35 of the 108 fellows acting as appointed actuaries at the end of 2004 appear on the Financial Services Authority8217s list of with-pro64257 ts actuaries at the end of 2006 171With-pro64257 ts actuariesLife2008 March 41With the increased outsourcing of the WPA, the loophole has been used by almost half of the companies surveyed. In one case, where the consultant refused to provide the information that was not publicly available, he declined to participate on the grounds that 8216it would give a biased slant8217. Our research found that 42% of WPAs are now consulting actuaries, many of whom have acted in that capacity for more than one company. Outsourcing on the riseThe implication is clearly that an increasing number of life insurance companies, including some of the very largest, 64257 nd it expedient to contract out this regulatory role rather than employ someone in-house.One reason for this drive to outsourcing might well be the terms of reference governing the responsibilities and conduct of a WPA, which are increasingly complex and burdensome. Another reason might be that the governing body, whose duty it is to oversee the work of the WPA, either directly or through a with-pro64257 ts committee, takes comfort from the regulatory support and internal peer reviewing that forms part of a contract with a consulting 64257 rm. A third reason might be that, with many with-pro64257 ts funds or sub-funds closed to new business, with-pro64257 ts management is not seen as a core function and, therefore, is one suitable for outsourcing. Little surprise, then, that an increasing number of companies contract out this function to consulting actuaries.The view is increasingly that corporate regulatory actuarial compliance has become too complex an issue to be dealt with in-house. It has become a highly specialised business in its own right, and is best left to the experts. Companies risk losing vital skills by outsourcing the function of the with-pro64257 ts actuary but, as funds close, many companies feel they cannot afford to maintain the requisite expertise in-house.It is our belief, however, that it is not just the cost of having an appropriate backup in case your WPA falls ill or needs a holiday that is driving this trend. Since they are not allowed to be directors, there might be some reluctance among in-house actuaries to undertake the function of WPA. That said, the 040_041_Actuary_Kaye_0308.indd 4119/2/08 12:41:42
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