WORK PHOTO: HERIOT-WATT UNIVERSITY


RESEARCH Where theory meets practice


Scotland not only has a strong historical tradition in actuary expertise, but it is also pioneering new approaches to the discipline through research at Edinburgh’s Heriot-Watt University.


Heriot-Watt University’s School of


Mathematical and Computer Sciences, has developed a reputation as a world-leading centre for actuarial and financial mathematics, and was the first in the UK to offer a specialised programme in actuarial mathematics, fully accredited by the UK actuarial profession. This department is also part of the


Maxwell Institute for Mathematical Sciences, which pools research and postgraduate activity with the University of Edinburgh. The School runs its own PhD research into areas such as actuarial mathematics,


pensionmetrics, stochastic asset models and pricing and hedging of derivative securities. Heriot-Watt is also the centre for The


Scottish Financial Risk Academy – a partnership between academia and industry which includes the Maxwell Institute, Scottish Financial Enterprise, the Actuarial Profession, Aberdeen Asset Management, Barrie & Hibbert and Lloyds Banking Group. It was set up in April 2010 as the


first academic-industry partnership in the UK to address quantitative financial risk management. The Risk Academy’s aim is to enhance the quality and understanding of financial risk management across the financial sector, exploiting the knowledge and complementary expertise found in academia and in real industrial practice.


Scotland, the UK and worldwide, and a fitting legacy for the former Faculty of Actuaries in Scotland.” While actuarial consultancies are already dipping their toes into the risk management market, the main sectors for actuarial skills remain in financial services, specifically life insurance, pensions and, to a lesser degree investment management. Scotland has a pedigree in the actuarial


profession with some of the earliest life insurance companies being created here, and this has played a central role in the development of the country’s financial services industry. Actuaries working in life insurance are


tasked with analysing a huge amount of numerical data, such as longevity statistics, to help to create and price policies, and to ensure insurance companies have the financial reserves to cover claims, including meeting the new Solvency II requirements. In the pensions arena, actuaries play


a key role advising on company pension schemes, which range from defined benefit through to defined contribution schemes set up under trust or contract. Actuaries advise pension scheme trustees and sponsoring companies on a wide range of issues


including scheme funding, investment, accounting for pensions, scheme design and managing risk.


Actuaries also play a role with investment


companies. They are involved in research and on the pricing and management of investments, particularly in mitigating the risk of investments, and often using their understanding of insurance or pension liabilities to manage corresponding assets. David believes that Scotland provides


an ideal environment for actuaries to thrive and develop. He said: “Scotland has a long tradition


in developing actuarial skills that goes back over more than 150 years and as a result has a well established actuarial community that has a strong professional standing and wide representation in Scotland’s large financial services sector. “It’s also in a country that is


producing world-leading research into the development of actuarial science and, with the launch of the Scottish Financial Risk Academy, regular ‘Our Changing Future’ breakfast meetings and a programme of evening events, this makes Scotland a vibrant place for continuing professional development and to be at the heart of developments in the industry.”


For more information about the Actuary Profession, visit www.actuaries.org.uk DIG DEEPER...


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