Across Europe, demand for actuarial services has ballooned as corporations and their pension funds struggle to comply with new regulations and accounting standards. In some areas, there are now signs that the peak is past, but how has the industry coped with the call on its skills?
Malcolm Campbell, vice president at the Swedish Society of Actuaries, says the society has been aware for some time of an increasing demand for actuaries. “As a result we have put quite some effort into the education program at the university in order to encourage students to study actuarial courses,” he says. The intention being, of course, to satisfy the demand with newly qualified graduates.
But initiatives like this naturally take time to translate into results, and Campbell says there has been something of a shortage of actuaries in Sweden. “However recently there has been evidence that it is easier to find actuarial resources, at least at the junior end of the scale,” he says. “Presumably our efforts have been paying off.”
But the society would expect all that to change again as the changes in accounting and solvency rules for the EU take effect, he says.
Campbell says it is difficult to say anything general about the effect the shortage of actuaries has had on the fees charged. Most actuaries in Sweden are employed within insurance companies, he says.
There are some consultants, but most of these work for the big well known consultancy companies, such as Tillinghast or Watson Wyatt, and so the charge out rates are very similar to those of other countries and so follow global rather than local demand.
In Denmark, says Peter Melchior, president of Den danske Actuarforening, says there is no actuarial industry as such. The country does not have a tradition of using consulting actuaries.
“But we do have a shortage of actuaries,” he says. “The insurance industry together with the Danish actuarial society and the University of Copenhagen last year made a campaign to get more actuarial students.” This campaign was a success, he says, and as a result, the number of students starting in the actuarial education at the University increased by 100%.
The dearth of actuaries in Denmark has put a certain amount of pressure on salaries in the profession, says Melchior.
In Germany at the moment, however, there seems to be a balance of supply and demand in the actuarial profession. The German Association of Actuaries says about 1,400 students are currently undergoing the qualification system which will lead them into careers as actuaries.
“During the last five years between 250 and 330 young mathematicians entered our education system each year, while approximately 200 students could be accredited as fully qualified actuaries every year,” says Birgit Kaiser at the association. So it would be wrong to speak of a shortage of actuaries in Germany, she says.
“On the other hand, we don’t have the impression that there is an excess of actuaries either,” she says. “The vast majority of actuaries have little problems in finding an adequate employment; you could say that there is a stable market for qualified actuaries.”

As a result, actuarial charges are at a reasonable level, says Kaiser. The German Association of Actuaries is steadily growing - it now has about 2,400 members - in accordance with the increasing demand for actuarial services. And the association is already looking ahead.
“In order to meet the future needs of the actuarial industry as well we are now revising our education system; not least to focus more on international developments such as IFRS and Solvency II,” says Kaiser. So, she says, the association is optimistic that there will be neither a shortage nor an excess of actuaries in Germany in the near future.
In Ireland, plenty of new people have been entering the actuarial profession recently. “We have quite a substantial proportion of newly qualified actuaries in the last few years,” says Aisling Kennedy, director of professional affairs at the Society of Actuaries in Ireland. “The profession has been growing in the last few years… we’re not aware of any shortage.”
But the workload for actuaries in Ireland has certainly increased, she says, with quite a lot of compliance work.
David Robertson, permanent secretary at the Association of Consulting Actuaries in London, says the intense demand for actuarial services in the UK has probably eased a little over the last year. “I think the effect of the decline in DB (defined benefit) is beginning to be reflected in the policies of some firms,” he says.
Some staff are now being released from defined benefit work at actuarial firms, and this is increasing the supply of actuarial services available. However, in the short-term the increased level of work continues, but there are signs that this is changing.
“Firms are predicting that over the long term they will need fewer actuaries… even though it is still feverish at the moment,” says Robertson.
But despite the fact that firms are looking at the longer-term picture and starting to take action to protect their interests, the heavy activity will still go on for many years, he predicts.
In the UK, the Sir Derek Morris, recently retired Chairman of the Competition Commission, is conducting a review of the actuarial profession. The Morris Review is due to report in the spring. It is charged with considering what the best professional or other regulatory framework would best promote high quality and continuously developing actuarial standards, and it is also looking at transparency in the conduct of actuaries, and the level of openness and competitiveness of the profession.

In the Netherlands, too, demand seems to be increasing. “We experience indeed an increasing demand for our services, including our actuarial services,” says Falco Valkenburg, principal at Towers Perrin in the Netherlands. And this year, given all the legislative changes - accounting, supervision and tax treatment of pensions, for example - the demand for services will remain high, he says.
“We are always looking for new top talent,” says Valkenburg.
The firm has been able to attract new actuaries, and is training econometricians, mathematicians and physicians to become skilled actuaries. Given that the high level of demand for actuarial services is expected to continue, Towers Perrin is being even more aggressive in its recruitment efforts.
”As a global firm we also leverage knowledge and staff between countries and regions,” he says. For example, the firm is currently working with actuaries from Australia and Canada. It also makes use of less busy periods in other countries. “Germany has, for example, a slightly different business cycle and we can use some of the German resources in our extremely busy months in the first half of the year,” he says.
But quality remains key. “So we are making judgements about whether we can take on new projects or not,” he says. “Our prime focus is on our key clients to whom we give priority, and we are clear right from the start by saying ‘no’ if we think we lack the capability and/or resources. Of course we will first see whether we can find a solution using our entire network, which most of the time is possible.”
Despite the squeeze, fees for actuarial services, says Valkenburg are still reasonable. “We have not increased fees last year,” he says. This year, however, the firm has increased most billing rates by 3%, in response to increased costs, he says.