Actuarial Economics

A major change in the training of actuaries in the period since the 1990s has been the introduction of the concepts underlying financial economics into the mainstream of actuarial coursework. Yet in this same period, three parallel developments have taken place - changes in the traditional role of the actuary, the advance of computer technology, and new insights from economic analysis, which suggest further change. In this paper we argue that key insights in economics, particularly labour economics and public and macroeconomics, have made these branches of economics at least as valuable to a practising actuary as financial economics, and should be included in the actuarial curriculum. The 2005 syllabus of the Institute and Faculty of Actuaries is recognition that the development of computer technology and actuarial systems has reached a point where detailed mathematical practice currently emphasised in actuarial training might be replaced with greater exposure to conceptual issues. We believe the economic analysis outlined here is a crucial part of preparing actuaries to handle broad issues relating to long-run planning and risk