In this blog, Comfort Ajoku, Trainee Actuary at the Government Actuary's Department (GAD) talks about GAD's role as it celebrates its 100th anniversary.
John Finlaison is generally regarded as the first actuary in government, being active during the early 19th century. This was well before the subsequent formation of the Government Actuary’s Department (GAD), which this year celebrates its 100th anniversary.
The department’s origin dates to June 1919 because of one of the many recommendations in the ‘Haldane Report’ from the Ministry of Reconstruction. The report recognised the benefit of actuarial work being provided by a centre of excellence which would “gain a variety of experience and knowledge that surpasses the grasp of an actuary employed within a single department.”
Since then, GAD has grown from primarily focusing on advising the UK government on pensions and social insurance in the period following World War 1, to supporting government decision-making in much wider areas including actuarial advice on insurance and health related matters, as well as financial and demographic modelling.
Let’s stop for a minute to look back at what has brought us here. You’ll be amazed by the vast variety of different areas where we’ve been able to give actuarial advice:
- 1925: following the ‘Widows, Orphans and Old Age Contributory Pensions Act 1925’ GAD began producing actuarial calculations and reports for the public sector pensions schemes
- 1948: we provided regular costings of pensions for the police, fire service and NHS
- 1954: GAD began a 52-year stint producing the official national population projections, used by government to test affordability and appropriateness of policy options
- 2014: the department extends its actuarial service provisions to include NHS Resolution (the compensation scheme provided for clinical and non-clinical negligence claims)
- 2017: GAD plays an actuarial role in the creation of DFID’s Centre for Disaster Protection to help bridge the gap between data and risk-informed decision making
- 2019: GAD provides key analysis for the Airline Insolvency Review
The Government Actuary has just provided the Lord Chancellor with advice for the first review of the personal injury discount rate (PIDR) under the Damages Act 1996 as amended by the Civil Liability Act 2018. The PIDR, also known as the ‘Ogden’ rate, plays an important part in determining the cost of damages that should be awarded to claimants in personal injury cases. It is used to calculate the lump sum that should be payable such that, allowing for investment returns, it represents the value that the claimant would need to replicate the loses suffered from the life-changing injury.
We continue to improve the analysis and reporting for the National Insurance Fund in relation to the annual uprating and re-rating exercise and the Quinquennial Review of the Fund’s finances. Longer term, we’re developing expertise in new analytical techniques to improve the advice provided to government in areas as diverse as public sector pensions, student loans and the risk protection arrangement for academies.
Why not discover for yourself how GAD has helped its clients over the years? You can view our range of case studies. They reflect the main areas of GAD’s expertise in insurance, investment, modelling, quality assurance, pensions and social security.
Our Annual Report and Accounts 2018-19 shows a record of GAD’s progress in diversifying and modernising the work of actuaries in government. We are highly valued by 90% of our major clients, and this has led to further assignments because of our growing reputation and profile where clients have described GAD as “professional, reliable and trusted”.
We were successfully re-accredited under the Institute and Faculty of Actuaries’ Quality Assurance Scheme, with our annual return being described as ‘exemplary’.
It is fair to say that 100 years on from the Haldane Report, GAD continues to provide a centre of excellence for actuarial advice across government and has extended its collective knowledge far beyond that which would be available to actuaries working within a single department.
Now we ask ourselves, “what have we learned from our first 100 years? And how must we evolve to meet the continually changing needs of government over the next century?”.
This year we’ve been hosting a variety of events to celebrate our centenary. This included a lecture delivered by Paul Johnson, the Director of the Institute for Fiscal Studies, entitled ‘Getting Old, Who Pays?’. Paul highlighted several challenges that are likely to influence government policy over the long-term. He cited the fiscal pressure of increasing health and social care costs related to the ageing population, low rates of interest limiting saver returns and risks from economic shocks. There are significant financial uncertainties associated with each of these and GAD’s actuaries are well-placed to provide analysis and understanding to help support the required policy decision-making. You can read more about this lecture in our recent eNews article.
Our 9th Government Actuary, Martin Clarke says: “The work of actuaries in government has evolved continuously over 100 years. GAD’s centenary is a chance to celebrate our versatility and look forward to more exciting challenges ahead.”
We look forward to continuously helping the government and expanding our versatility.