Solvency II boom

How is everybody experiencing working in a booming market due to Solvency II, which causes shortage of actuarial resources and extremely high contract rates?

 

sII boom

And will there be a crash after the boom?

 

I guess there will be, after SII changes and restructuring are completed....lots of people will have to look for new assignments/ roles.

 

maybe - or maybe SII will just keep evolving to keep alot of these people busy, and there will be more and more companies moving towards internal model approval, which might also help make it a softer landing

certainly alot of people will be hoping the deadline is put back to 2014 so the boom continues for a bit longer

 

I doubt there will be a crash: SII work isn't going to magically disappear the day it comes into force. I do think there will be a hiring standstill for a couple of years, and probably concomitant falls in salary for lower level roles.

If I was doing SII contracting right now, I'd be thinking very carefully about my long term plans.

 

There will always be contracting demand. It just shifts on a bit....We had pensions review, endowment review. Now its SII. So I don't reckon its always the same people earning the mega wonga.

But yes, I wouldn't want to be in it to the end as not everyone will be able to transfer into BAU.

 

You can always get into new areas...some people change from valuation to pracing roles or into reporting....Why not switch from SII into the above?

I only wonder what is the perception of the UK market on the contractors? If someone changes into being a contractor, is it easy to then change back to permanent role?

 

Don't see why not, but I guess at the interview they would be grilled on why the change as permanent ees will hopefully stick around and want a 'long term relationship' with a company.

Guess it may be easier if whilst contracting, a permanent role appears and you apply.

May also be easier if the reason you first went contracting was say post redundancy, rather than leaving a permanent role on financial grounds.

 

Don't you feel tempted to leave your permanent role for contracting based on the financial upside to it, especially now?

 

- A lot of these contractors are of dubious quality. If you're good and have real skills I think it will be okay.

- A lot are non-EU and on work permits and will move globally.

- There is still a tremendous amount of systems work to be done when the industry fully consolidates. What is the long term equilibrium number of insurers? I would suggest there are way to many small to medium operations in existence.

 

well....if you are not a good conractor, you get kicked out very quickly I assume...only the good ones have a chance to say for longer....

have you heard of contractors being signed up for a contract and forced to leave early from the project/role?

 

(Seaking generally) The recruitment process is generally pretty robust, so termination for underperformance is not that common, though it does happen. In my limited experience, it was more normal for contracts to be terminated for business reasons (ie the CEO has seen the costings for the project and killed it!)

 

1. I am curious where you get both of those ideas from, it's not what I'm hearing on the ground. For many contractors, even in S2, contract rates are less than in the past, many contractors happy to accept a pay cut to keep their job.

2. Are you aware that actuary has recently been listed as a shortage profession in the UK, with S2 being the main reason cited? This means employers can bring in people from outside the EU to the UK to work as actuaries, whereas previously there were restrictions. Now pause and consider supply/demand theory and what that means for your job security and future earnings in the UK when the supply will be increased with people from all over the world who are willing to work for much less to do the same job as you?

3. Don't actuaries pride themselves on good planning ahead and making good assumptions going forward, long term views etc? Then ask yourself why there would be a shortage at all in this profession? Who takes responsibility for this? S2 is not exactly something that's come up unexpectedly this year, it's been on the way for a long time.

4. Conflict of interest issues. S2 is a short term workload but won't recruiters and companies take full advantage and bring in as many non-EU actuaries as possible permanently at cheaper rates than training up their own UK actuaries, to do non-S2 work also? Expect loads of new CVs of people abroad to be posted to companies all over the UK by zealous recruiters very soon. Conflict of interest?

5. How can it be fair on the countries overseas outside the EU that the UK will be importing actuaries from those countries to work here on S2 when there may be more genuine actuary needs in those countries? As I thought the profession's rationale to offer cheaper training materials in those countries were because it wants to develop the profession abroad in poorer countries. Then frankly we shouldn't be taking their actuaries from them, to be consistent.

6. We keep hearing how good our education system is yet we can't come up with enough our own actuaries? But thousands of graduates each year have their applications for actuary trainee jobs rejected.

7. Is it fair to ask whether the profession has contributed to a shortage in part when it charges higher amounts to train actuaries in the UK compared to overseas? Why must UK companies spend e.g. for CA2 or CA3 a fee of £740 then travel and accomodation to the UK's most expensive cities for 2 days for their employees, when members overseas can do the test online for £300 from the comfort of their own home? How is this fair on the UK consumer? Does this really comply with the Equality Act 2010 Law?

8. Having been interviewed in the past many times for contract opportunities in S2, was often rejected for not having previous S2 experience. Having worked in S2 by now eventually, I must say that I find some employers being unreasonable about this requirement and a reluctance to take people on and give experience. It's not that hard. Probably it's an excuse anyway and they're trying to get the cheapest labour they can. And now that I've got S2 experience I get no calls about S2 contracts. Isn't that odd? As I've just seen the profession I'm in described as in shortage because of all this S2 work yet I get no calls about S2 contracts despite having experience etc !!! Plus how can non-EU people have experience in S2 as it does not apply there. So companies have rejected UK people for not having S2 experience but are all for recruting from outside EU for S2 resourcing. That seems odd.

9. If more actuaries are going to be brought into the UK from outside EU to work for S2, what happens when S2 workload falls away? Won't this lead to redundancies and unemployment? Doesn't it make more sense to meet a short term workload with short term contract work?

10. If you are as concerned as I am about all this and don't feel your interests are protected then I urge you to complain to the profession about these matters. No use crying in 10 years time when actuary pays less than something far less taxing after all that hard work to qualify, or if your job has been exported or done by people from abroad willing to work for much less than you. It's happened in other industries and lines of work, don't think it will never happen to you!

 

How odd that one would have to justify in a free market why one has ditched a perm job where you worked like a slave for less money sometimes for free overtime, to a contract job where you get more reasonable workloads paid much more and treated like an adult and pay less tax etc.

I suspect many of these interviewers are just jealous of contractors and wished they got the hell out of their underwhelming perm job years ago.

 

Not unreasonable at all, really. If those were your reasons last time you had a permanent job, why have things changed?

Did you predict the implementation effort that was required? I think very few people understood how demanding it was going to be in terms of manpower.

Not being directly involved in SII, my impression is that the need is for experienced staff who can work at a high level, not junior staff who have passed a few generic exams anywhere in the world.

OK, I'll bite. Thousands of graduates who have done no research and know nothing about the profession are rejected each year. On the other hand, I don't know a single person from my course who took their applications seriously who doesn't now have a job [offer]. It may not be the easiest profession to gain entry to but it's still a lot easier than getting a pupillage in chambers.

If there are any companies out there who are struggling to pay for their student's exams, there's something wrong. Though I agree the disparity in examination approach is not right.

The workload is not going to vanish, it's just going to level off. And new issues always appear - anybody got some handy experience in managing business mix issues around gender-neutral pricing?

Anyone who thinks that in this day and age they can rely on things being the same in the future as they are now needs their heads examined. Compare the actuary's job in 2011 to that of 1971 - you are going to see at least as great a change again in the next forty years. The profession is not there to guarantee you a closed shop and a job for life.

 

Seems to be a confusion displayed here. If it's not a job for life, if there are serious risks to your future security and your interests are not protected then why work for less in a perm job?

I find it strange that people can be frowned upon for wanting to earn more and pay less tax by employees of companies who have the same aims. Free market works both ways, but clearly some would rather take on people who'll put up and shut up.

 

Not very good is it when you consider what it is actuaries are trained in and paid to do.

 

As for you thinking thousands of students are rejected each year because their app forms aren't showing enough understanding of what actuary is, what utter tosh! Firms take on however much their budgets allow, not dictated by how fancy the app forms are.

 

Because contract rates don't include things like holiday, pension, other benefits (by the time you cost them all, the difference is a lot less), and the security of not having your job cancelled tomorrow because the CFO needs the quarterly figures to come in on budget.

I don't see why expertise in managing uncertain cashflows translates to being able to predict capricious regulatory demands (which are still changing). And remember, a lot of the SII effort is voluntary, in that firms are going well beyond the minimum required.

Of course individual firms take on what they require, but as a whole the industry is taking on the entire output of the actuarial science programs and more. I find it very hard to believe there are (competent!) graduates out there who have put the spadework in and can't find a job.

 

Resource cost = cashflow

Also why do you think they are volunteering to go beyond the minimum given how much the dislike the cost of contractors and want to recruit from outside the EU?

 

I guess you are not asking me all these questions...I feel that you are repeating some of your questions....