The growth in demand for bulk annuities means insurers are trying to expand their teams, leading to intense competition for pensions actuaries. What are the effects of this on the traditional pensions actuarial sector?  

  

Labour shortages have been a theme since Brexit and the pandemic, but often we only hear about professions like lorry drivers or care staff. The pensions sector has its own recruitment challenges, however. 
 
Insurers have always employed actuaries, but the growth of the pensions risk transfer market means they are now looking to add pensions specialists within that field – the same people who would normally take a defined benefit scheme through a triennial valuation.   

  

  

Insurers “seem to be getting their cheque books out” to hire pensions actuaries, said Patrick Bloomfield, who chairs the Association of Consulting Actuaries. He has seen colleagues being given attractive offers, he said, as insurers are looking for are actuaries who are trained in valuing pension schemes and understanding complex benefits.  

However, he said some have also returned to actuarial firms after working for insurers for a while, for multiple reasons ranging from the variety of work, culture and work environment to career progression and opportunities.   
 

“Most actuarial consultancies are renowned for having really strong training programmes and career paths. Part of the reason insurers are having to pay over the odds is because they are not investing in training people up” within their firms, he argued.   
 

Bloomfield interpreted the lack of investment in training as a sign that not all insurers might be committed to staying in this market longer term. If insurers see bulk annuities as a market, “they need to look at their graduate recruitment and training plans”, he said.   
 

But while there has been greater staff turnover, particularly among recently or part-qualified actuaries, he saw this as the result of pent-up movements during lockdown, and not out of the ordinary over a two-year period.  
 

Bloomfield predicted a capacity crunch nonetheless in the next five years, “largely driven by regulatory change in a short amount of time”, adding that while the pressure was on for actuaries, things were even worse for administrators because of major projects like schemes readying their data for pensions dashboards.  

  

  

The Institute and Faculty of Actuaries has been “picking up clear signs of increased market demand for traditional core areas for actuaries in pensions and insurance”, as well as in newer areas, said David Thomson, head of policy and research at the IFoA. Actuarial skills and data analytics are key areas where employers had difficulty recruiting, a recent survey found.  

  

“Another trend that we are seeing is the expansion of use of actuaries in newer skill domains, including climate change and sustainability, with requirements and focus on net zero and other work increasingly driving competition for talent,” noted Thomson. The actuarial profession’s recent diversity strategy shows a need to broaden and diversify the pipeline into the profession, as well as progression within it, he added.  
  

There has been “intense competition” for actuaries for some time, said Charlie Finch, a risk transfer partner at consultancy LCP. “One of the challenges for getting larger volumes is having numbers. We're seeing smaller schemes struggling to get engagement," he said.  
  

The demand for actuaries is increasing, agreed Paul Battye, chief executive of recruitment firm Hoffmann Reed. “We have seen a 7% rise in requests from clients since the turn of the year to help clients find actuarial talent. For organisations who are already light on actuarial resources, this is creating a headache as demand is outstripping supply,” he said.   
 

There is also pressure on salaries, with organisations having to pay more for talent than they have previously, Battye said. “As such for the first time in a long time we are seeing a very hot candidate driven market."   
 

How is the pensions actuarial market changing?

Charlie Finch

Sonia Sequeira

Paul Battye