How to set up an actuarial function in a new or growing insurer
Start with what your regulator requires the actuary to be and to sign, then hire around that. For most new insurers that means a qualified reserving and valuation lead first, backed by clean data and a finance partner, with pricing depth added once you have experience of your own. Outsourcing can bridge the gap where rules allow.
Should the first hire be an appointed actuary or a chief actuary?
Read the regulation first; in many markets it has already decided for you. The appointed actuary is a statutory role with personal accountability set in law. The chief actuary is a management title, and it means whatever your organisation chart says.
In a small insurer one person often holds both. That works until the same person is also running pricing and the board pack, and the statutory view starts to blur.
India shows how tight the rules can be. The IRDAI (Actuarial, Finance and Investment Functions of Insurers) Regulations 2024, effective 1 April 2024, replaced the 2022 appointed actuary regulations. The appointed actuary must be ordinarily resident in India and a full time employee, must report directly to the CEO, and cannot also be the chief risk officer. The regulations also set a minimum number of other actuaries. GIFT City is different again: insurance offices in the IFSC fall under the IFSCA (Appointed Actuary) Regulations 2022, not the IRDAI rules.
If the law wants a full time resident employee, a consultant who flies in monthly is not a candidate, however good the CV.
Can a small insurer outsource the actuarial function?
Sometimes. It depends entirely on the jurisdiction: some regimes treat a shared actuary as normal, others want the role inside the company.
Jurisdiction | Named actuarial role | Can it be shared or outsourced? | Residency or employment condition |
India (IRDAI) | Appointed actuary | No, it must be a full time employee | Ordinarily resident in India; reports to the CEO; cannot be the chief risk officer |
India, GIFT City (IFSCA) | Appointed actuary under the IFSCA 2022 regulations | Check the IFSCA rules, which are separate from IRDAI | As set by IFSCA |
UAE (CBUAE Rulebook) | Licensed and registered actuary | Yes, within limits: a resident actuary may serve three companies, a non resident two | Fellowship, or Associateship plus two years of supervised experience |
Saudi Arabia (draft law) | Internal actuarial department | The July 2025 draft requires an internal department | Key function appointments need Insurance Authority approval |
The UAE row reflects Insurance Authority Board Decision No. 9 of 2017, now in the CBUAE Rulebook; the Saudi row reflects the Insurance Authority’s draft Insurance Law, released for consultation on 8 July 2025. The Gulf sequence, phase by phase, is in what a newly licensed insurer in the UAE or Saudi Arabia should hire first.
An external actuary will not sit in your pricing meeting on a Tuesday when underwriting wants to cut rates. If you outsource, hire an internal actuarial analyst to own the data and the relationship.
Reserving and valuation first, or pricing first?
For most new insurers, reserving and valuation come first. Statutory numbers are due whether you have written ten policies or ten thousand, and launch pricing leans on reinsurer input and market rates anyway.
Two exceptions. A managing general agent (MGA) moving to a licence already has pricing as its edge, so it keeps that and adds reserving. An established insurer entering a new line may need a pricing actuary for that line, with reserving already covered.
Stage | Role to hire | Why at this point |
Licence application | Head of actuarial or appointed actuary | The regulator assesses the person, not the plan |
Before the first policy | Actuarial analyst; data engineer or MI analyst | Someone has to build the data flows the valuation depends on |
First year of trading | Pricing actuary; second qualified actuary | Your own experience starts to matter, and so does peer review |
Growth or new line | Capital or risk actuary | Capital planning outgrows one person |
What does the first actuary need around them?
Data, finance and risk, in that order. Without a data person, your first actuary becomes an expensive data cleaner.
Reserves flow straight into the accounts, so you need a financial controller who has seen a reserving close. Keep the chief risk officer separate from the statutory actuary: in India that is law, elsewhere it is good sense.
One interview question does a lot of work: when did you last reconcile claims data to the ledger, and what broke? People who have done it answer in detail; others answer in principles. Our actuarial recruitment practice starts from questions like that, and where several functions are being built at once, capability build recruitment sequences the hires so the actuary is not left without a data team.
A new Indian insurer is hiring far beyond actuarial, which is why the first 50 hires at a new Indian insurance company is its own plan. Moving experience studies and model runs offshore raises separate questions when building an actuarial or risk function inside a global capability centre.
Is it a bad idea to be the only actuary in a firm?
It can be, and good candidates will ask. Their worries are no peer review and no exam support, and both are fair: a lone actuary has nobody to challenge an assumption before the auditor does.
Answer both in the offer. Budget for an annual external peer review of the main assumptions. Put study leave and exam fees in writing. Name the month you expect to hire the second qualified actuary.
What does IFRS 17 add to the workload?
IFRS 17 Insurance Contracts took effect for annual periods beginning on or after 1 January 2023, according to the IFRS Foundation. Where it applies, actuarial models sit directly behind reported profit, and auditors test them line by line.
The close gets tighter, actuarial and finance must share one data model, and someone has to explain movements in the contractual service margin to the audit committee in plain words. That rarely fits inside a reserving role. Hire someone who has lived through an IFRS 17 year end.
How to brief the chief actuary search
When a board asks me to find “a chief actuary”, I treat it as a problem statement, not a vacancy. Before anyone is approached I want to know what the regulator requires that person to be, how many qualified actuaries in that market could legally take the role, whether the pay matches what they earn today, and what competitors are offering the same people. I also ask how the role is positioned, because a new insurer has to give a senior actuary a reason to move. Most often the criteria are too narrow. Demanding someone who has already built a function from zero shrinks the pool to almost nobody. A strong reserving lead who has been through a licence application is usually enough.
Frequently asked questions(FAQs)
1. What is the difference between an appointed actuary and a chief actuary?
An appointed actuary is a statutory role defined by the insurance regulator, carrying personal accountability for the opinions the rules require. A chief actuary is a management title set by the insurer. One person can hold both, but the appointed actuary must still meet every residency, employment and independence condition the regulator sets.
2. Can a small insurer share an actuary with other companies?
It depends on the jurisdiction. In the UAE, Insurance Authority Board Decision No. 9 of 2017 lets a licensed resident actuary serve up to three companies and a non resident up to two. In India, IRDAI’s 2024 regulations require the appointed actuary to be an ordinarily resident, full time employee, so sharing is ruled out.
3. Should a new insurer hire a reserving actuary or a pricing actuary first?
Most new insurers should hire reserving and valuation first, because statutory numbers are due from the first reporting date while early pricing leans on reinsurer and market inputs. The main exception is an MGA moving to a licence, where pricing is already the core skill; it keeps that capability and adds reserving.
4. Does IFRS 17 change who an insurer should hire?
Yes, where it applies. IFRS 17 took effect for annual periods beginning on or after 1 January 2023 and puts actuarial models directly behind reported profit. Insurers need actuaries who can work to a finance close, explain movements to auditors and share a data model with finance, which is a different profile from a traditional reserving actuary.
If you are setting up an actuarial function and want a specialist view on the brief before you go to market, Start a conversation.
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