The End of the CAA Qualification – What does the future hold?
Unfortunately the IFoA and the SOA have taken the decision – link here – to wind down their joint venture that is CAA Global, and the associated CAA qualification. Existing students will continue to be supported over a maximum of five further exam sittings over the next two years but the qualification will close to new entrants as early as this October. As a UK actuarial employer that has been one of the biggest proponents of the qualification, the news was a significant blow to us. In this article, we summarise the great benefits the qualification has provided to APR (and in turn, the ten or so of our clients that have made use of our CAA resources), the opportunities it has provided to individuals recruited via this scheme and our initial thoughts on what might replace it.
Why is it being discontinued?
Some of the key reasons for the changes appear to be:
- A lack of traction in America where the Society of Actuaries (SOA) has struggled to get virtually any employers or candidates signed up to the CAA qualification.
- Within the UK, it seems clear that the IFoA has been better at actively marketing the qualification and working with employers to encourage take-up. However numbers have still not been at the levels envisaged and based on the number of UK employers actively advertising CAA roles, our sense is there’s an industry view that it doesn’t quite fit what companies were looking for in terms of a widely recognised baseline actuarial certification.
- We also suspect that low take-up in key offshoring territories such as India has been another factor especially given there is no automatic (part) credit for CAA exams granted within the FIA pathway. There have been various, conflicting messages over recent years on how the CAA and FIA pathways sit relative to one another, and we feel that the current position where no credit (eg part-exemptions) is granted has not helped the situation.
- Competition from growing fields such as data science has no doubt also impacted on the numbers of students wanting to commit to the CAA qualification.
The benefits of the CAA programme
We believe the success stories of the CAA qualification to employers are very clear – indeed we and some of our clients partnered with CAA Global in the following webinar to extol the virtues that having CAA analysts as part of the workforce has conferred. The main benefits include:
- Bringing a younger, diverse group of talent – commonly post A-level leavers – into the industry and profession. The skills that many such individuals hold through educational and cultural shifts in recent years, most obviously strong coding skills and tech-savviness, are natural fits for some of the key skills shortages within the profession.
- The context of high University tuition fees and the difficulty for many students and their families to support such costs meant that our experience was there are some very high-quality individuals looking for alternative routes into skilled employment rather than the traditional route of university education. The likes of the CAA qualification and apprenticeship frameworks provided an excellent alternative.
- Developing our or any employer’s total actuarial capacity in a cost-effective manner.
- The existence of the CAA qualification encouraged both the IFoA and CAA-friendly employers like ourselves to attend careers fairs aimed at A-level students – these included national events. This undoubtedly raised the profile of the actuarial profession to many interested students at a younger age than they traditionally first hear about a career as an actuary.
- Entry to the FIA pathway. A number of such individuals we took on quickly passed the six modules to become a qualified CAA and are now actively being supported by APR through the FIA exams. It is clear to us therefore that without the CAA qualification, there would have been no obvious pathway for such individuals to join the profession. To be clear, we do not propose that all those completing the CAA exams should see it as automatic to join the FIA pathway – Fellowship is not needed for many successful actuarial careers and as such is not always a sensible investment of time or resources. For example, we believe the CAA credential plus a data science qualification could prove an even more effective combination for some.
As is evident from the above points, the real loss from discontinuing the qualification – if a suitable alternative isn’t quickly found – should be measured in wider terms than just the crude metric of the number of current CAA students or qualified CAAs.
The future is presently unclear. The IFoA’s current position is couched in uncertain terms: “The IFoA and the SOA are exploring how each organisation can best enable students to progress in their studies on a pathway to actuarial associateship”.
We are disappointed that the IFoA doesn’t appear to be considering retaining the CAA qualification in its current form without collaboration from the SOA.
Within APR, our short-term strategy is clear: we will continue to support and wholeheartedly recommend to our current CAA students (and those joining us as new recruits next month) that they complete the CAA qualification. We feel that both internally and within our client base, the qualification will continue to hold value for the foreseeable future. All of our students have indicated their wish to continue to study for the exams.
The longer term is less clear; while our firm intention is to still hire early career students, we believe we will need some form of recognised qualification to ensure this offers sufficient development opportunities and is a suitably attractive option compared to university education or other competing industries. We are actively considering what can be offered and we are looking into apprenticeship programmes, part-time degrees, data science qualifications and wider business skills for alternatives that may be suitable.
In summary, our fear is that without a widely recognised qualification pathway available to school leavers the profession risks disregarding a valuable talent pool. The IFoA has reached out to us and indicated they will actively engage with employers like APR who were significantly invested in the CAA programme to come up with a successful alternative to the scheme. We await an update on whether they will embark on a formal industry consultation but in the meantime if you or your team is impacted by the changes, we’d be interested in hearing from you.