Actuarial practitioners have traditionally utilised conventional economic theory to identify the approach to adopt in economic and financial issues. For example, using the Black-Scholes formula to value options held by their client companies, or relying upon the Efficient Markets Hypothesis to explain and validate the valuation of shareholdings.
The experience of the 2008 economic and financial crisis challenged conventional economic tools, with other schools of economic thought brought into sharp focus. This has opened up a number of questions that the IFoA would like to explore through a research programme focused on economic modelling.
Dr Iain Clacher of Leeds University Business School was engaged in June 2017 to undertake the first phase of the research; a survey of the economic theories used, both explicitly and implicitly, by firms which employ actuaries in the UK. Dr Clacher undertook a series of detailed interviews with a range of experts, both internal and external to the Profession, looking at economic theories in common use in actuarial practice. Dr Clacher's initial findings were discussed at a recent Actuarial Research Centre (ARC) event with senior actuaries and experts, looking at how the Profession could improve economic understanding in areas that inform actuarial work. Following these thought-provoking discussions, ARC and IFoA actuarial volunteers will be progressing further research and stakeholder discussion to ensure the profession is contributing to, and learning from, this important debate. Dr Clacher's report - summarising his research findings - has been published. Download the report.
Face to face interviews with relevant individuals working in firms including, but not limited to, insurance companies, consultancies, banks and pension funds. The research will be carried out in two phases to allow for a round table event at which preliminary results can be used to guide the second phase of research.
The initial output of this research is a report summarising Dr Clacher's findings as well as presentations at relevant IFoA events.
Dr Clacher's initial report, June 2019: The report provides a picture of the current opinions of a range of actuaries and economic experts on the subject of economic thought, how the traditional concept of economic thought is changing and the likely impact this change could make on approaches towards long-term investment and risk.
ARC Launch Event, May 2018: The ARC hosted a round table launch event on 29 May 2018 at Staple Inn Hall, to share thinking so far, following a series of confidential interviews of leading actuarial thinkers in a wide range of roles. An introduction to the ARC's Economic Modelling programme was given by Professor Mark Cross, chair of the IFoA's Research and Thought Leadership Board (RTLB), 2015-18. Dr Iain Clacher and Professor Steve Keen also presented at this event. View Dr Iain Clacher's presentation. View Professor Steve Keen's presentation.
IFoA Life Conference, November 2017: Dr Iain Clacher (Leeds University Business School) delivered a workshop on "Economic Theory and Actuarial Practice". Following this, the economic modelling programme will host a round table event to share thinking and look at how the Profession could improve economic thought in actuarial practice. View Dr Iain Clacher's presentation
In the News
Diversity of economic thoughts - why it matters. An article in The Actuary highlights key areas for consideration by the actuarial profession, following Dr Iain Clacher's report on 'Economic Thinking and Actuarial Practice'. Erik Vynckier's response to the report is also included in the article. Erik is the chair of RTLB, 2018 - present.
'Animal spirits' vs the efficient market hypothesis. Alex Waite asks whether actuaries are evolving to remain relevant in their economic predictions. Read the full article in The Actuary.
In a letter to The Actuary Mr W John Bishop, FIA responds to the article.
If you want more information about our research programmes please contact the IFoA Actuarial Research Centre:
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Presenter Matt Modisett
In collaboration with the Institute and Faculty of Actuaries, the Principles of Responsible Investment is delighted to host this webinar discussing the response to the TCFD’s recommendations two years on from their publication. The webinar will feature new analysis of the 591 investors representing $45 trillion who responded to PRI’s 2019 climate indicators, insights from the past Chair of the IFoA’s Resource and Environment Board as well as an investor case study of implementation in practice from Aviva.
An introductory session to help you get ahead with climate change.
- Science, terminology and initiatives: handy facts to keep in your back pocket
- Getting your point across: how to influence people and avoid common traps and pitfalls
- Taking action: what are actuaries expected to do...and what are we actually doing?
This KSS talk, presented by the FCA Head of Department in Scotland, will focus on the following 3 main areas:
- FCA business plan priorities
- The future of regulation
- FCA Engagement in Scotland
Friday, 6 September, Beijing Local Time (CST) 14.00-16.30; British Summer Time (BST) 07.00-9.30
The IFoA Beijing Office and China Life are pleased to be co-hosting a Professional Skills Training (PST) session in Beijing, Shanghai and Shenzhen on Friday, 6 September. Wen Li (FIA), the IFoA Lead Representative in China and East Asia, will lead the PST presentation and discussion on ‘Getting it right!’.
The main venue will be in Beijing. Members in Shanghai and Shenzhen can join the interaction with Beijing via video conference at China Life’s regional venues. (see full details below)
This event is now fully booked. Please click here to register for the wait list.
The actuarial profession has much to offer the world of banking. In this second webinar on opportunities for actuaries in banking we have two actuaries sharing their experience
GIRO is attended annually by over 800 delegates and speakers who are keen to discuss key topics such as Pricing, Reserving, Modelling and the future of the insurance industry. GIRO 2018 was a huge success and we have opened bookings early for what we hope will be another brilliant conference at the EICC in Edinburgh this year.
Presenter Jon Spain
This workshop, now in its sixth year, is aimed at senior actuaries working in life insurance - predominantly Chief Actuaries, but also Reviewing Actuaries and others working in risk and financial reporting. It will provide seven hours of relevant CPD.
Three actuaries – and CEOs – discuss their views on how the business world is changing and what that might mean for actuaries in the future.
Have you ever thought about working in wider fields? Would you like to play a role in the fight against climate change to make the planet better?
It can be difficult to do this - but seeing an example you can follow can make it more realistic. In this ‘green’ case study a template is outlined to show how actuaries can apply their skills more broadly - and in doing so, to make a difference.
The Institute and Faculty of Actuaries and the Royal Statistical Society have worked together to develop joint ethics guidance on data science. This is the culmination of an 18 month programme of practitioner led work.
Join us for the launch of this new guidance, with a high-level panel discussion which will explore the role of data science practitioners and professional bodies in data ethics.
The Institute and Faculty of Actuaries is running a sessional meeting on autonomous vehicles on 28th October. The session will showcase the work of the IFoA “Autonomous Vehicles” working party alongside a number of expert external presenters.
ARC Event: Beyond Proportional Hazards: Statistical methods for assessment of the impact of medical advances and health interventions on longevity and population projections.
This workshop is being delivered by the Actuarial Research Centre’s (ARC) ‘Big Health and Actuarial Data’ Research Programme.
This evening will feature two new cases studies that highlight the implications for insurers of issues impacting on health and mortality for life, pensions, and health and care products; Impactability modelling: a worked example in Type II diabetes presented by Josephine Robertson, and Seasonal Mortality in England and Wales 1993-2016 presented by Mary Hall, Dublin City University.
Join us for this brand new seminar that brings together our Current Issues in Pensions, Pensions and the Law, and Investment for Pension Actuaries events. The seminar builds on the IFoA’s Annual Pension Conference with sessions covering CDC, TPR’s code of practice, investments, legal updates and Professional Skills Training with a focus on interactive discussion throughout.
The National Records of Scotland (NRS) collects, preserves and produces information about Scotland's people and history to inform current and future generations - work that underpins the fabric of Scottish society and tells the story of our nation. This KSS talk will explore the following and other areas impacting Scotland’s changing population, and assess the potential implications of the changes:
- population statistics
- life expectancy
- changes in age structure
- birth and death rates, including causes of death statistics.
The Life Conference is the premier event for professionals interested in life insurance. Offering a wide range of workshops and plenary sessions it’s the perfect opportunity to discover what’s hot and current in life insurance ensuring you get up to date on the latest thinking and innovation whilst meeting and exchanging ideas with a broad range of professionals.
The IFoA is pleased to announce that this year’s Autumn Lecture will feature the Rt Hon Nicky Morgan MP as its guest speaker. Nicky has previously served as Financial Secretary to the Treasury and Minister for Women. She now chairs the Treasury Select Committee whose remit is to examine the expenditure, administration and policy of HM Treasury, along with all of its agencies and associated bodies.
Watch the live stream of this year's Autumn Lecture with guest speaker Rt Hon Nicky Morgan MP.
We are delighted to announce the launch of the findings from our ARC funded Behavioural Finance research with a special evening event at Staple Inn on Tuesday14th January 2020. Entitled Behavioural Aspects of Institutional Investment Decision-Making, this research programme is being delivered by City, University of London, Leeds University Business School and Ipsos.
This sessional meeting will be of direct interest to actuaries and others working in the in the Health and Care, Life or Pensions sectors or indeed an actuaries with an interest in morbidity or mortality.