Actuarial salaries have declined

Unscrupulous recruitment agencies play their part in that, Viki, exploiting these foreign actuaries who as you say don't appreciate what the "right" salary is. Yes the company pays less, agency gets bigger cut and foreign actuary gets inferior deal as a result.

 

I have a copy of the letter IFoA sent the UK Government in July 2011:
"I am writing on behalf of the Institute and Faculty of Actuaries to confirm that we strongly support the inclusion of actuaries on the shortage occupation list that is currently being reviewed by the Migration Advisory Committee. Allowing UK employers to recruit qualified actuaries from outside the European Economic Area is in the public interest as it would help address the intense resourcing pressures that are currently challenging the implementation of Solvency II, the new solvency regime for all EU insurers and reinsurers (including the insurance operations of banks) that is designed ultimately to provide improved transparency and protection for consumers. "

& later in the letter:
"Sensible
In our view, including actuaries on the shortage occupation list would help address the intense resourcing pressures caused by Solvency II which are currently creating substantial wage inflation in this specialist area which is, in turn, leading to significantly increased implementation costs for insurers. The risk is that, left unchecked, these costs will ultimately have to be passed on to UK consumers in the form of increased prices for financial services products and services."

Ahh, we can't have better salaries and contracting rates for actuaries can we for a couple of years- it's not in the public interest. Can't the same 'public interest' argument be made about the above inflation salary increases of IFoA CEO and staff costs which are paid for by individuals and insurance companies with ever more exams and higher fees hence ultimately the British consumer- but of course there's no public interest issue there only when actuaries get better pay. Earlier in this discussion Net Premium stated actuarial salaries was not CEO or IFOA's responsibility - we see here they were actively lobbying for a policy in order to reduce actuarial remuneration in the UK. Just another betrayal in their catalogue of undemocratic betrayal against members.

They also said:
"The technical demands of the Solvency II work requires a level of expertise that can only come from qualified or near qualified actuarial professionals. Although the flow of new students wishing to study for the profession continues to be strong, the average time taken to qualify is around five years after graduation. This means that the current skills shortage cannot alone be addressed by training and recruiting new candidates to the Profession from within the UK. "

This is false. They could have addressed the supply side if they really wanted to. For example, they could have contacted the huge number of UK members who left without quite finishing the exams to entice them back, maybe on the reduced rate fees they were offering to members in some overseas countries. But no. They preferred allowing companies to ignore UK actuaries and recruit directly from outside the EEA.

 

Not necessarily. Great salaries in bermuda

 

Yes let’s all move there so that we can make up complicated formulas to justify the benefit of domiciling a letter box company on this 20 square mile island

 

The original post was that actuaries don’t get paid well outside the UK. Bermuda is just an example of where they do. Ireland also has good salaries also as does the USA. But you’re right you can’t ALL move there. I didn’t realize the question was how can ALL actuaries get a good salary as if we were unionized NHS nurses with a common wage scale.

I would also add to the discussion the idea that there’s a standard rate for an FIA is a nonsense. Experience, practical worth to a company and your set up as either permanent or contractor are bigger determinants on salary than the qualification which is only a minimum standard and a foot in the door effectively.

 

The price of everything is a function of supply and demand. In insurance IFRS 17 and Brexit will increase demand in the short term while supply will come from foreign Labour and students. But when it comes to the individual it really depends on what expertise are on offer. There’s no generic actuary as we all have specific experience and roles which are described as needing any old life actuary for example do not tend to require the kind of specific skill sets or experience that commands the higher wages. A specialist in something niche can command much higher wages should a demand for that service come about

 

When do you think the market will start picking up for IFRS17 and Brexit driven demand?

 

It's certainly happening in Ireland already. IFRS 17 will drive demand over the next 3 to 4 years at least, perhaps longer if it's delayed further. EIOPA have given insurers 3 years to sort out their balance sheets on legacy business but new business being sold under passporting rights stops immediately once the UK leaves. Any company who wants to continue to sell cross border must set up legal entities in those EU countries and the same goes for EU companies wanting to sell in the UK. That means applications for licenses, etc.. All actuarial job dependent in the short to medium term.

And who knows after that. So long as the world keeps changing the demand keeps coming. And if there's not much change going on in the world then the industry will invent a better way to perform a metric or another big project, Solvency 3 or something. The profession never sits idle.

Supply on the other hand keeps coming also but it's always at the junior end. So for +5Y PQE jobs it will take 5 years before this batch of newly qualified can compete in this bracket

 

Where does 5+ years come from? The IFOA say it only takes 3 years to qualify

 

PQE, post qualified experience. Post was referencing newly qualifieds not new students.

 

Sorry yes you’re right.

 

Yes PQE is post qualified experience. The minimum is 3 years to qualify but I think the average is something like 7 years. Least it was back in my day but that may have changed with the volume of exemptions available today. In general I would say the key is to get qualified with a. Reasonably broad knowledge base but afterwards find a niche that you can become expert at. Having a specific skill or experience that fits exactly what an employer is looking for but is finding difficult to get can do wonders for your bargaining power and commanding a good salary early in your career. Also, smaller operations tend to find it more difficult to do without key people, and people in those circumstances can be thrown salary bumps and fancy titles to entice them to stay. Think of supply and demand factors

 

If I make a mistake, I apologize. It’s that simple. Covering up mistakes is not advisable as then it shows it wasn’t just a mistake but intentional. And that’s when you have to pay for your mistakes

 

Did you know that a British National that is a member of the IFOA must have 10 years post qualification experience to join the Indian Actuarial Institute. 10 years... What a joke. They can join ours as soon as they qualify.I am posting this at 20:00. Lets see how long Acted hold it in quarantine before releasing it.

 

Strangely that 10 post-qual experience must be for general/health. I guess life/pensions actuaries are not eligible.

What's even more strange is that the mutual recognition agreement shared on IFoA website is not between IFoA and IAI as the link states but between the old Institute and ASI. There is no mention of this 10-year requirement in that agreement.
https://www.actuaries.org.uk/membership/mutual-recognition/actuarial-society-india

 

It doesn't look like IFoA publish salaries anymore - why?

 

Good post. Consider this. For almost a decade now at least two well known large pension consultancies have set up shop in Lisbon, Portugal, where they're managing UK pensions. They use Portuguese actuaries who have mostly attended the ISEG University in Lisbon. In turn after a few years a number of these people are transferred within the company to the UK. Also now their competitors in the UK are using recruitment agents to target these actuaries to bring them to the UK. I think you're right, they are seduced by what seem like high UK salaries compared to Lisbon but the loser is the British actuary being undercut.