Actuaries who have recently lost their jobs due to the ongoing delays to Solvency II implementation now have new hope of re-employment.
Full implementation of the rules requiring higher capital ratios for insurers are likely to be delayed from 2014 to 2016, said Paul Clarke, leader of the Solvency II practice at PwC. Actuaries who were once able to land lucrative contract roles in insurance firms earning up to £2,000 a day have been losing their jobs in the last six months. Now, it’s more likely that firms will have to take them on again.
“Some insurance firms had a solution that was pretty much a quick fix to hit the 2014 deadline, but now they’re more likely to work on developing something sustainable in the longer term,” said Paul Clarke, leader of the Solvency II practice at PwC. “More elegant technology requirements will be needed to meet data reporting standards, models will be refined and all of this is likely to generate a need to recruit both actuaries and technologists.”
Advisory firm Grant Thorton this week released an overwhelmingly negative survey of insurance firms’ attitudes toward Solvency II. Some 83% of respondents said that the regulation is “too complicated” in its current form and another 27% described it merely as a “necessary evil”.
The last Grant Thorton survey on the topic was in 2009, when most insurance firms supported the regulation. During the past three years the “demands for increased granularity and frustrating delays” have produced a more negative sentiment, said Simon Sheaf, general insurance practice leader at Grant Thornton.
“Hiring the right resources for Solvency II projects has been challenging because of the limited amount of expertise on the market and therefore it’s also been very costly for those bringing in employees, usually on a contract basis,” he said. “The larger firms have been successful, recruiting large teams, while the medium and small insurers have struggled to compete. They still have a lot of work to do and the will create a renewed need to hire the people to do it.”
With a potential delay in rule implementation, demand has slumped for actuaries working on Solvency II contracts. Paul Walsh, chief executive of actuarial recruiters Acumen Resources, said opportunities have declined by 90% in the last six months and day rates have also shrunk. A role that would have paid £1,000 a day is now offering an average of £750, he said.
“Some people are applying for full-time positions, others looking for stop gap like maternity cover or less demanding actuarial roles, but most people we speak to are happy to take some time off,” he said.
Insurers will still need to eventually implement Solvency II rules. “Just because the implementation date is delayed, doesn’t mean the regulator is going to allow these Solvency II projects to be switched off,” Clarke said. “Insurers will need to provide the data on a dry-run basis and demonstrate their preparedness for the regulation.
“Therefore, the work still needs to be done as quickly as possible.”