French actuaries told to prepare to become CROs

The challenges that will be created by the transposition of the European directive into French law was one of the main subjects discussed during the latest annual conference of Institut des Actuaires, France's actuary association, which took place in Paris last week. The event also marked the 120th anniversary of the association and included debates on the role played by insurers, banks and financial intermediaries in the global financial crisis. One of the main issues currently being tackled by French actuaries is the perception that they will take higher levels of responsibility in the financial industry, as the definition of the duties of the profession are updated by the Solvency II directive and other evolving rules, such as the Basel II international banking framework.hideThe association said that actuaries will find themselves increasingly called on by management boards to express their opinions on financial risk matters and that this development will have an important effect on their work. "One of the main challenges for the profession now is to clearly define the role actuaries will play and how they will play it inside the companies," said Fabrice Sauvignon, Vice-President of Institut des Actuaires, which has over 2,500 members. "Actuaries now have a personal and a collective responsibility. We are on the verge of discussions with the French insurance industry association to decide how to ensure that actuaries have enough autonomy to express, with some degree of independence, their opinion on risk management and the adequacy of reserves." According to French insurance market experts, such a change would represent a marked difference from the current situation because French actuaries say that this level of autonomy simply does not exist. Mr. Sauvignon said that the association has been urging its members to prepare for the new regulatory scenario by boosting their qualifications via further training. One skill that needs to be developed by actuaries is the art of Enterprise Risk Management, he said. ERM is therefore becoming a central subject of the more than 50 events organised annually by the association around the country, Mr. Sauvignon told Commercial Risk Europe. The final goal for actuaries must be to prepare themselves so that they can become CROs in their companies, said Mr. Sauvignon. The Chairman of the Institut des Actuaires, Thomas Béhart, has stressed in recent public comments that the CRO is set to become more of a feature within insurance and other financial companies in France, and that actuaries should position themselves to take on the role. "The association has created a special qualification for Enterprise Risk Management, and France has been one of the first countries to sign an agreement with other countries for mutual recognition for chartered risk analysts,” Mr. Sauvignon pointed out. The multilateral treaty was signed by France in November 2009 with other member countries of the International Actuarial Association (IAA). It will enable professionals who follow the training programmes devised by the association to be on a par with their peers in other parts of the world. French actuaries with over five years of experience can do one to three years of training to qualify as a Chartered Enterprise Risk Analyst. The Institut des Actuaires has also adopted the Continued Professional Development requirements established by their British counterparts, and from 2012 all professionals in the country will have to comply with the CPD programme. A special course on management and communication has also been created to help actuaries better perform duties at the highest echelons of their companies. In order to meet its goals, the association is also striving to tap into the risk management experience of other industries in France where the profession is in a more advanced stage of development than the insurance sector. "Having a comprehensive, structured and organised approach to risk management is nothing new in France, but it is quite recent within the insurance industry, surprisingly," noted Mr. Sauvignon. "It is certain that in the next five years French actuaries will have to get increasingly involved with the field of risk management. So, in our ERM and Communication for Actuaries and CRA trainings, we have asked top risk managers of industrial companies to share their experiences with our members." Another matter raised by French actuaries is that, when Solvency II is transposed into French law, the authorities should be careful not to reduce the ability of the country to compete for the business of insurance companies. The Institut des Actuaires has stressed that European firms will be able to choose the location of their headquarters while setting up subsidiaries elsewhere. Countries with tighter regulatory requirements, as France is likely to be, could find themselves at a disadvantage.

French actuaries told to prepare to become CROs

Want to read this article?

Read Next

Global data breaches double in 2023 driven by extortion and third-party software attacks

Social inflation set to continue driving US liability rates: AM Best

Marsh McLennan achieves ‘Autism Confidence’ status

New management liability policy from digital MGA Aurora

Anra elects Fraire as new president

Global data breaches double in 2023 driven by extortion and third-party software attacks

Social inflation set to continue driving US liability rates: AM Best

Marsh McLennan achieves ‘Autism Confidence’ status

New management liability policy from digital MGA Aurora

Anra elects Fraire as new president

Want to read this article?

Read Next

Global data breaches double in 2023 driven by extortion and third-party software attacks

Social inflation set to continue driving US liability rates: AM Best

Marsh McLennan achieves ‘Autism Confidence’ status

New management liability policy from digital MGA Aurora

Anra elects Fraire as new president

Related Articles