Financial Economics and Pension Actuaries: The U.K. Experience

There has been strong resistance within the U.K. actuarial profession against taking on board the lessons of financial economics. Nevertheless, the majority of the largest U.K. actuarial firms have significantly modified their standard approaches to actuarial valuations to take account of criticisms based on financial economics. In the meantime, the failure to come to terms with basic lessons from financial economics has caused the U.K. actuarial profession to lose credibility with key players in the United Kingdom. The U.K. actuarial profession has still not come to a single view on financial economics, and the major divisions that remain continue to hamstring its policy development.