[Exclusive] Financial Supervisory Service Conducts Actuary Demand Survey for Banks and Securities Firms... Impact of IFRS17

Expansion of Investigation Targets to Pension Operators
Identification of Actuarial Staffing Needs Over 10 Years
Increased Demand Due to IFRS17 and Health Insurance Competition
Possible Increase in Minimum Passing Number for Actuary Exams

Financial authorities have unusually expanded their survey on the demand for actuaries to include banks and securities firms. Previously, the survey on actuary manpower demand was conducted only for insurance companies and actuarial firms, but it has now been extended to all pension service providers. This move is interpreted as a proactive response to changes in the demand for specialized personnel due to the introduction of the new insurance accounting standard (IFRS17) and the growth of the retirement pension market.

According to a comprehensive report by Asia Economy on the 12th, the Financial Supervisory Service's Insurance Supervision Bureau recently surveyed financial companies regarding the required number of actuaries and hiring plans from 2020 to 2029. Previously, the survey was conducted only for insurance companies and actuarial firms, but this year it was expanded to include retirement pension providers such as securities firms, banks, and the Korea Workers' Compensation & Welfare Service. A senior official from the Financial Supervisory Service explained, "Typically, this demand survey is conducted around November each year and is used as basic data to determine the scale of successful candidates for the qualification exam in the following year. This time, the scope was broadened to include pension service providers where there is likely demand for actuaries."

The Financial Supervisory Service plans to complete the survey by the end of this month and use it as a basis to decide the number of successful candidates for next year's actuary exam. The policy aims to prevent unemployment among certificate holders by selecting an appropriate number of candidates considering market demand, while simultaneously meeting the industry's need for specialized personnel.

An official from the Financial Supervisory Service added, "Since obtaining an actuary certificate is not easy, it is important to select an appropriate number of candidates that matches market conditions. If there are too many successful candidates, employment difficulties arise; if too few, the industry's demand is not met." Although the actuary demand survey is not a legal obligation, it is conducted as needed to balance supply and demand.

Financial sector insiders cite the introduction of IFRS17 and the increased demand for insurance product development as reasons for the recent rise in actuary demand. An insurance industry official explained, "There has always been demand, but with IFRS17, the number of actuarial assumptions has increased, leading to greater demand. Especially in life insurance companies, where product development demand is high due to competition in health insurance, the demand is even greater." The mandatory fair value evaluation of insurance liabilities under IFRS17 has heightened the importance of actuarial expertise, and as the retirement pension market grows, the need for actuarial expertise is increasing even outside the insurance sector.

The number of successful actuary candidates steadily increased from 161 in 2020, 163 in 2021, 166 in 2022, to 169 in 2023, but sharply dropped to 126 in 2024. Despite the growing need for actuaries due to the implementation of IFRS17 and intensified health insurance competition, the number of successful candidates has decreased. This expansion of the survey scope is analyzed as a basis for increasing the number of successful candidates next year.

The actuary exam consists of five subjects, with a minimum passing number set at around 150 per subject. Candidates must pass all subjects to be fully certified, but in practice, many companies hire candidates who have passed only 3 to 4 subjects. Candidates are allowed to prepare for the remaining subjects after hiring, so the Financial Supervisory Service explains that supply and demand can be balanced based on the number of passing candidates per subject. However, if the survey confirms a significantly higher demand for actuaries across the entire financial sector, the number of passing candidates per subject for next year may be increased.