Check out this actuarial employer Q&A from LCP to give you more insight into the actuarial profession and the different aspects of working in actuaries.
Continuing the Actuarial Careers series of Employer Q&As in November 2012, LCP answered your questions.
Find out more about LCP.
The questions
As a graduate joining LCP, would most of your work be done from behind a desk, or would you get out and do different things? ➜
What hours do you work in an average week? ➜
How does working in insurance differ to working in pensions? How technical is the work in insurance compared to pensions? ➜
Do LCP offer industrial work placements as part of sandwich courses? If so, are they accepting applications for 2013/14? ➜
How would you describe LCP’s work environment? ➜
What are the most common industrial/commercial challenges that your clients face? How do these challenges influence the ways in which you advise them? ➜
Does actuarial consultancy on investment usually concern risk management rather than fund investment advice? ➜
Is there anything I would be able to do to prepare for the abstract reasoning tests at LCP’s assessment day? What does the group activity include? ➜
Is there any opportunity for interaction with partners and other senior members of the firm as a graduate trainee at LCP? ➜
I understand the LCP offer summer internships, however is it possible to carry out an internship or work placement at any other time of the year to get a feel for the company? ➜
What is your opinion of the outlook for DB pension consulting? ➜
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The Answers
As a graduate joining LCP, would most of your work be done from behind a desk, or would you get out and do different things?
Victoria, University of Newcastle
When you first start your career the majority of your work will be desk-based. However, even in your first year of joining you can expect to have several opportunities to meet clients, either at face-to-face meetings or at corporate events. The level of client-facing work you do will naturally increase as you develop in your career and a typical LCP partner might spend about half of their working week away from their desks at meetings or events.
One of the key benefits of a career as an actuarial consultant is the variety of work. Whichever department you work in you will be doing a variety of jobs each day, whether it is building spreadsheet-based models, carrying out calculations or drafting reports. And, whilst you are taking your exams, about one day a week will be spent studying, either at home or at group tutorials.
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What hours do you work in an average week?
Victoria, University of Newcastle
As a new graduate you can expect to work about 35 hours a week. When you first start at LCP, the key focus will be on ensuring that you are able to dedicate sufficient time to passing your actuarial exams, and your team leader will be on hand to ensure that you achieve a healthy balance of work so that you are able to leave the office on time to go home and study (or rest!).
On the whole, an actuarial career provides an excellent work/life balance. However, as a consultancy firm, our actuaries do need to be flexible in order to meet the needs of our clients. Occasionally this may mean needing to work outside of office hours in order to ensure that client deadlines are met.
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How does working in insurance differ to working in pensions? How technical is the work in insurance compared to pensions?
Stephen, University of Warwick
Working in insurance and pensions both require common skills, such as numerical ability and good communication skills. However, the clients we advise in pensions differ from those in insurance and we adapt the way in which we provide our advice accordingly. For example, one of the key challenges within the pensions department lies in explaining complex actuarial ideas in a way that is easy to understand.
Our clients come from a range of different backgrounds and we need to be able to communicate to them in a way that is suitable for people with varying levels of pensions and financial knowledge. In insurance, many of our clients are other actuaries. Here, it is more common to be asked very specific technical questions that you need to be able to answer giving the appropriate level of detail.
In terms of the day-to-day work, insurance could, in general, be described as the more technical. As a graduate, you may find you are required to use more statistics and there is a greater focus on techniques such as computer programming. These skills are still required in pensions but to a lesser extent, with greater emphasis on communication. Both departments contain a good mixture of one-off, unique projects and there is an opportunity to see a wide range of work and use different mathematical techniques in both.
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Do LCP offer industrial work placements as part of sandwich courses? If so, are they accepting applications for 2013/14?
Sashini, University of East Anglia (UEA)
We do not typically offer work placements. Any such applications would be considered on a case-by-case basis and only offered in exceptional circumstances where the candidate demonstrates a keen interest in an actuarial career.
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How would you describe LCP’s work environment?
Chin Yin Kitt, Queen’s University Belfast
The working environment at LCP is friendly, supportive and sociable. When you start you will be assigned a ‘buddy’ who will be on hand to answer any questions you may have, but you will find everyone in the office to be very approachable. The office is open plan and the partners all have an open door policy.
You will find there is plenty going on socially too. We have a number of sports teams and a social committee dedicated to organising a variety of events throughout the year, as well as more informal after-work drinks. You will never be short of things to do and everyone will go out of their way to help you fit in.
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What are the most common industrial/commercial challenges that your clients face? How do these challenges influence the ways in which you advise them?
Chris, University of Sheffield, Chin Yin Kitt, Queen’s University Belfast
These are difficult economic times. Following the recession, many of our clients are facing cash constraints and are having to operate within increasingly tight budgets. Coupled with this, bond yields have fallen to an all-time low and this has led to a significant increase in pension scheme deficits. Perhaps more than ever, this has led to the need for pragmatic actuarial advice and the ability to develop flexible and creative solutions in order to ensure pension scheme funding for our clients remains at sufficient but affordable levels.
A key challenge for our insurance clients has been dealing with the upcoming ‘Solvency II’ regime. This is a fundamental review and subsequent change of the regulatory regime for insurance companies, which is due to come into effect by January 2014.
Our insurance consultants are spending a large amount of their time supporting our clients through this process. The implications of Solvency II are far reaching, and work in this area includes (among other things): helping clients to build or validate their own internal models used to calculate their capital requirements; providing technical advice on the methodologies; improving risk management and governance; and board-level training on the key issues to ensure the key decision makers understand its implications on their business.
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From the website I see that LCP has an investment department. Does actuarial consultancy on investment usually concern risk management rather than fund investment advice? Are the clients looking for securing the principles while maximising return, or do you they come in for advice on how to invest their money?
Chiam, University of Warwick
Our clients are primarily the trustees and sponsoring companies of occupational pension schemes (and are, we should be clear, not individuals). We advise our clients how best to invest their money in order to secure the promised pension benefits, taking account of the amount of risk they want/need to take, and the returns that they need to achieve.
The main focus of our advice is on the appropriate investment strategy (ie the split between different asset classes), which is based on each client’s particular objectives and circumstances. We would then recommend particular funds that we believe are appropriate in order to implement the strategy, based on our research of investment managers and products, and help co-ordinate any asset transfers. On an on-going basis, we monitor performance of our clients’ investments, both in absolute terms and relative to the pension scheme’s liabilities, and we take new ideas to them which we feel might be of interest.
So, there are many aspects of investment consultancy work. All staff in our investment department are trained as generalists rather than specialists, meaning that you can expect to be involved in lots of interesting areas.
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Is there anything I would be able to do to prepare for the abstract reasoning tests at LCP’s assessment day? What does the group activity include?
Laura, University of Bath
The abstract reasoning test has been designed to test your natural problem solving ability and so there is no need for you to do any preparation for the test in advance of the assessment day.
Being able to work as part of a team is one of the key skills required to be a successful consulting actuary. As part of the assessment day, we therefore ask candidates to participate in a group exercise to see how well you are able to interact and work as a team in order to come up with possible solutions to a series of problems. The exercise is usually run in groups of four and lasts about an hour. There is no need for you to do any preparation in advance of this activity.
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Is there any opportunity for interaction with partners and other senior members of the firm as a graduate trainee at LCP?
Becky, University of Edinburgh
Absolutely! One of the benefits of working for a medium-sized firm like LCP is that you will have contact with a variety of colleagues across all levels of the firm. From the moment you join you will be encouraged to be actively involved and to make a real contribution to the work we do for our clients. And, if you are doing a good job, it won’t go unnoticed – you will be given greater responsibility and opportunities to work with more senior staff. It is not uncommon for our graduates to work directly to partners and seniors consultants within their first year of joining.
In addition, LCP partners are strongly encouraged to take our graduates along to client meetings so that you can see first-hand how the work you do is communicated to our clients.
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I am a first year actuarial student and I understand that LCP offer summer internships, however is it possible to carry out an internship or work placement at any other time of the year to get a feel for the company?
John, UCL
LCP’s summer internship programme is primarily aimed at penultimate year students, although we will consider other strong applications.
We don’t typically offer work placements at any other times of the year. As part of the internship we offer a structured training programme (similar to that provided to our graduates) and this makes it difficult to accommodate other start dates.
Any specific requests would be considered on a case-by-case basis and only offered in exceptional circumstances where the candidate demonstrates a keen interest in an actuarial career.
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What is your opinion of the outlook for DB pension consulting?
Stephen, University of Warwick
Over recent years there has been a definite shift away from defined benefit (DB) pension schemes (where the risks primarily lie with the sponsoring company) to defined contribution (DC) schemes (where the risks primarily lie with the individual member).
The future of the pensions landscape is a very topical issue within the industry at the moment. Recently, the government has kick-started the debate by introducing its aspiration for so-called ‘defined ambition’ pension schemes which allow the risks to be shared more evenly between companies and members. It is not yet clear exactly what the future holds, but it is quite possible that the trend will be for many schemes to sit somewhere between traditional DB and DC.
In the meantime, there remains plenty of work to keep pensions actuaries busy. Even closed DB schemes require on-going actuarial advice and these schemes will continue to be in existence for many years to come. The desire to reduce the level of risk run by pension schemes is also leading to more opportunities for work in the area of pension scheme de-risking. For example, a much greater proportion of our time is now spent advising on pension scheme buyouts (where a pension scheme pays a premium to an insurance company in return for them taking on responsibility for paying the pensions). This has led to a lot of particularly interesting, challenging and high-profile work.
