20 July 2017
The Institute and Faculty of Actuaries (IFoA) has appointed Dr Iain Clacher (Leeds University Business School) to carry out a survey of current practice in the use of economic theory, both explicitly and implicitly, by firms which employ actuaries in the UK. A report summarising the findings will be published by the IFoA, under the sponsorship of the Research and Thought Leadership Committee, and disseminated online and at relevant events.
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 survey is the first phase of a research programme focused on economic modelling and will lead to the identification of gaps requiring future research.
Outputs from the research will be published on the IFoA website.