Stuart Faloon, principal at Mercer in Belfast, provides an insight into the little-known but fast-growing world of actuaries
To many people, saying that you are an actuary can be a conversation stopper. For those who understand what an actuary does, the actuarial profession is generally seen as a niche industry comprising highly educated, well-paid individuals working for insurance companies or major financial institutions — most of them based in London or Dublin.
So, what does an actuary do? Put simply, actuaries apply financial and statistical theories to solve real business problems. Primarily, actuaries work within the pensions and life assurance industry where they use mathematical and statistical techniques to create models of how long people are expected to live. From these models, they determine how much money companies or individuals need to set aside to fund the cost of making payments following certain events — such as life assurance benefits on the death of a policy holder, or for a pension in retirement.
It may come as a surprise that there are actuaries living and working in Northern Ireland, and that the actuarial community here has grown from zero to well over 100 people over the past 30 years. Much of this growth has happened within the past five years.
In the early 1980s, Ulster Pension Trustees Limited (now part of Mercer) was the first company to employ an actuary in its Belfast office, advising local companies on the financial management of their pension schemes.
Today, the number of fellows of the Institute and Faculty of Actuaries working in Northern Ireland has grown to around 20 people. (Many other Northern Ireland-born actuaries are working in Dublin and overseas.)
Whereas Northern Ireland-based actuaries initially practised to serve the needs of local industry, their enthusiasm and entrepreneurship has transformed Northern Ireland into a base for the delivery of actuarial services to both the national and international markets.
Mercer continues to be the largest employer of actuaries in Northern Ireland, with local actuaries championing the development of Belfast as a centre for delivering cost-effective actuarial services through a highly educated workforce.
It has now built a specialist technical support team of more than 100 actuarial technicians in Belfast, all of them university graduates with mathematics based degrees, providing actuarial advice to clients across the world.
Whereas in the past the opportunity to pursue a career in financial services in Northern Ireland was largely limited to banking or accountancy, developments within the local market are creating exciting new opportunities. There are now several pension consulting firms in Belfast, all of which are recruiting.
Allstate Insurance recently started expanding its actuarial team in its Belfast office so as to provide technical support to its American offices.
As Invest Northern Ireland continues to attract inward investment, it is undoubtedly the case that there will be opportunities for actuaries as other financial services firms look to establish operations in Northern Ireland.
The increasing demand for risk-management advice is also expected to create new opportunities for actuaries.
Contrary to the stereotype of actuaries being back-room technicians, actuaries are in fact skilled risk-management consultants. Historically, these skills have largely been put to use in financial risk management; however, the actuarial profession is evolving its training to enable students to model, assess and advise on wider risk management and mitigation.
With an increasing focus on risk management following the banking crisis of a couple of years ago, it is expected that actuaries will emerge as key individuals within the risk-management departments of banks and other financial services companies.
With the growth of the actuarial services industry in Northern Ireland, Queen’s University has recently developed an undergraduate actuarial degree programme, its first-class graduated in 2011.
A local actuarial society is also being established to provide a forum for networking and continuing professional development for both qualified and trainee actuaries in Northern Ireland.
The actuarial profession is a small, but important and highly respected one. In Northern Ireland, it has operated successfully, though largely unheralded over the past three decades. However, from an acorn sown 30 years ago, it has matured to a healthy and vibrant community built on strong foundations. As financial services businesses continue to be attracted to the province, the actuarial industry is well placed to grow with the successful development of the local economy.