Spotlight on Scotland
Dermot Grenham, Chair of the Scottish Board, gives an overview of the IFoA’s latest policy and public affairs activity in Scotland.
Earlier this year the IFoA responded to the Scottish Government Advisory Group’s call for views on the economic recovery – chaired by prominent Scottish actuary Benny Higgins. The IFoA response highlighted the important role that financial services plays in the Scottish economy, both as an employer but also in the provision of services critical to the economy. It also suggested greater consideration should be given to questions of intergenerational fairness when developing economic recovery policies, as the long-term consequences of COVID-19 could span decades and highlighted the role of sustainability in finance in order to “Build Back Better” and help meet the Scottish Government’s target of being net zero by 2045.
As a result of our response, the IFoA met with Fiona Hyslop MSP, the Cabinet Secretary for Economy, Fair Work and Culture in November. At the meeting, a number of issues were discussed, demonstrating the importance and impact of the Scottish Board’s public affairs engagement in Scotland.
The main goal of the meeting was to highlight the important role that actuaries’ expertise can offer when the Scottish Government looks to implement its economic recovery plan. We also flagged the breadth of our policy work, including on infrastructure and sustainability, as well as that of our ICAT volunteers in response to the pandemic.
Our meeting was timely, coming soon after the launch of the Scottish National Investment Bank, which has net zero as a key area of its investment strategy. The Bank – which is the UK’s first mission-led development bank – aims to provide £2 billion capital for businesses and projects in Scotland in a bid to catalyse further private sector investment. Investment in infrastructure is a key pillar in the IFoA’s sustainability work and well-designed infrastructure projects have long-term economic and environmental benefits, contributing to economic growth and productivity. During the meeting, the IFoA outlined how actuaries are well placed to help investors make effective long-term investment decisions which will be key to the Bank’s success in meeting its net zero aims.
The minister was also interested in the IFoA’s campaign on the Great Risk Transfer. Since the start of 2020, the IFoA has been exploring the transfer of risk from institutions to individuals. Evidence of this shift exists in a number of areas of public policy and actuarial work, and amounts to a profound change in the way that individuals organise their life and finances. Examples include the trend from defined benefit to defined contribution pensions, and the decline of investment guarantees in life insurance products.
Ms Hyslop was keen to understand the breadth of this campaign and had a particular interest in the rise of insecure employment given the overlap with her ministerial portfolio. Although not a traditional area of work for actuaries, respondents to the IFoA’s call for evidence noted that in many modern arrangements, organisations are passing on the risk of their lack of business demand to people who would traditionally be considered employees, but have been shifted to other statuses.
Many of these risks have been exacerbated as result of COVID-19 and, as the IFoA looks to launch its final report in early 2021, we will be considering a range of recommendations to put in front of policymakers and regulators.
We also took the opportunity to flag some of the outreach work the IFoA does specifically in Scotland, including the wide range of maths prizes that we award each year, and also the “Count me in” campaign. The campaign aims to address the issue of social mobility within the profession and seeks to ensure a diverse and inclusive intake of young people into the profession, now and in the future. In Scotland, the IFoA works with a number of maths and local and national skills organisations, especially those who focus on social mobility and diverse audiences.