As the global business landscape rapidly evolves, demand for actuaries has grown significantly across diverse regions. This article examines the supply-demand dynamics for actuaries in North America, Europe, and Asia, highlighting key factors driving these trends.
Global Context
Despite actuaries’ crucial role in financial stability and risk management, their numbers remain limited compared to other financial professions. Globally, there are approximately 1.8 million chartered accountants and 190,000 Certified Financial Analysts (CFAs), but only around 76,510[1] actuaries.
A striking 75% of actuaries are concentrated in North America and Europe, regions accounting for merely 17% of the world’s population. Conversely, only 25% of actuaries serve the remaining 83% of the global population, mostly located in emerging markets. Moreover, 77% of actuaries globally reside within just ten countries, highlighting a notable imbalance.
Actuaries in North America
In North America, actuaries’ supply and demand are influenced by industry expansion, regulatory shifts, and educational factors.
Demand Factors:
- Insurance Sector Growth: Continued expansion drives demand for actuaries skilled in managing life, health, property, and casualty risks.
- Financial Sector Needs: Increased complexity in financial instruments heightens the necessity for precise actuarial risk assessments in investment and pension planning.
- Regulatory Changes: Ongoing regulatory updates, such as the Affordable Care Act (ACA) and US GAAP amendments, elevate actuaries’ roles in ensuring compliance.
Supply Factors:
- Educational Infrastructure: North America hosts numerous top-tier actuarial science programs in the U.S. and Canada.
- Rigorous Certification: Professional bodies, including the Society of Actuaries (SOA), Casualty Actuarial Society (CAS), and Canadian Institute of Actuaries (CIA), enforce stringent qualification standards.
- Talent Shortage: Despite robust education programs, demand outpaces the influx of new actuaries, intensifying competition among employers.
- Technological Integration: Actuaries must continuously adapt to emerging technologies, such as data analytics and artificial intelligence, creating challenges and opportunities.
- Diversity Initiatives: Efforts to foster inclusion and attract talent from diverse backgrounds are critical to addressing shortages and enhancing innovation.
Actuaries in Europe
In Europe, actuarial demand varies significantly due to regulatory diversity and differing market maturity.
Demand Factors:
- Established Markets: Countries like the UK, Germany, and France maintain strong insurance sectors driving actuarial demand, especially following Solvency II and IFRS17 implementations.
- Emerging Eastern European Markets: Rapid financial sector growth gradually increases actuaries’ importance in risk management and strategic planning.
Supply Factors:
- Educational Excellence: Europe boasts high-quality actuarial education, notably in the UK and Germany, supported by professional bodies such as the Institute and Faculty of Actuaries (IFoA) and Deutsche Aktuarvereinigung (DAV).
- Demographic Challenges: An aging actuarial workforce poses risks to future supply, highlighting the need to attract younger talent.
- Regional Imbalances: Addressing disparities across European regions is essential to ensure a balanced and responsive actuarial workforce capable of meeting future demands.
Collaboration between educational institutions, industry stakeholders, and professional bodies remains vital in navigating demographic shifts, technology integration, and regional disparities.
Actuaries in Asia
Asia is witnessing robust growth in actuarial demand, primarily driven by rapid insurance and financial market expansion.
Demand Factors:
- Insurance Industry Growth: China’s booming insurance sector has notably increased actuarial demand for expertise in risk assessment and product pricing.
- Demographic Shifts: Aging populations, particularly in Japan, intensify demand for actuaries specialized in pension and retirement planning.
- Regulatory Developments: Frameworks such as China’s C-ROSS and widespread adoption of IFRS17 across major economies necessitate actuarial expertise, though some smaller Asian countries have yet to adopt IFRS.
- Insurance Penetration: With global insurance penetration around 6.7% (11.6% in the USA and less than 4% in many Asian countries), increasing awareness of insurance protection is expected to drive industry growth by approximately 2.3% annually.
Supply Factors:
- Talent Shortage: High-population countries like China, India, Indonesia, and Pakistan currently face significant actuarial shortages relative to their market potential. For example, India alone anticipates needing 25,000 actuaries by 2030, compared to roughly 758[2] currently available.
- Educational Development: Comprehensive education and training initiatives remain essential in nascent actuarial markets, requiring collaboration among governments, academic institutions, and industry stakeholders to bridge supply gaps.
Conclusion
The supply-demand landscape for actuaries across North America, Europe, and Asia is shaped by complex interactions of industry growth, evolving regulations, educational opportunities, and technological advancements. As global markets continue facing uncertainty, actuaries’ roles in risk management become increasingly vital. Strategic efforts to attract, train, and retain actuarial talent are critical for maintaining balanced industry growth and ensuring robust risk management solutions globally.
References:
- [1]Report by DD Consulting “Global data of actuaries and the looming talent shortfall”. This report considered 80 countries as a sample and relied upon the database of the International Actuarial Association and Actuarial Society of respective countries as the primary source of information.
- [2]https://actuariesindia.org/membership-statistic?field_as_on_target_id=1337
Syed Raza, FSA, MAAA, is the founder of ActuaryList, the leading global job platform for actuaries. With over 15 years of actuarial experience spanning the U.S. and Dubai, he brings deep industry insight to helping actuarial professionals connect with meaningful career opportunities worldwide.