Mid-market pension schemes and insurance firms face a common problem: regulatory deadlines are tightening, but the actuarial talent needed to meet them is scarce and expensive. In response, a growing number of firms are turning to a shared actuary model, pooling risk talent across multiple organisations to achieve compliance without bearing the full cost of in-house teams.
This explainer examines what the shared actuary model involves, why it is gaining traction, who benefits, and what risks it carries. It is based on publicly available industry commentary and regulatory signals, not on proprietary data.
What Is the Shared Actuary Model?
The shared actuary model is a form of fractional or outsourced actuarial service. Instead of hiring a full-time actuary or maintaining a large in-house team, a mid-market pension scheme or insurance firm contracts with an external provider that allocates a portion of an actuary's time to multiple clients. The actuary may be employed by a consultancy, a specialist actuarial firm, or a shared-services platform that aggregates demand from several smaller clients.
The model is not new in principle—consultancies have long provided actuarial advice on a project basis. What is changing is the scale and structure. Some providers now offer dedicated shared-actuary roles, where one actuary serves a portfolio of clients under a single service agreement. Others use technology platforms to standardise data collection, reporting, and risk modelling, making it feasible for one actuary to oversee multiple schemes efficiently.
For mid-market firms, the appeal is clear: access to professional actuarial expertise at a fraction of the cost of a full-time hire. For actuaries, it offers variety and flexibility, though it also demands strong time-management and the ability to switch contexts rapidly.
Why Is It Gaining Traction Now?
Several regulatory and market pressures are converging to make the shared actuary model more attractive.
First, the UK's Pensions Regulator (TPR) has been pushing for stronger governance and clearer funding plans. The 2024 funding code, which applies to defined benefit schemes, requires trustees to set a long-term funding target and a journey plan. This demands more detailed actuarial work than many mid-market schemes have previously commissioned. The deadline for submitting these plans is approaching, and schemes that lack in-house actuarial capacity are scrambling to secure external support.
Second, the insurance sector is facing its own regulatory wave. The Prudential Regulation Authority (PRA) has introduced new rules on operational resilience and has been reviewing model risk management. Insurers must demonstrate that their actuarial functions are robust, which often requires additional validation and documentation. Smaller insurers, in particular, may not have the headcount to produce this work internally.
Third, the talent market is tight. The Institute and Faculty of Actuaries (IFoA) has reported a steady but not explosive growth in membership, while demand for actuarial skills has risen across pensions, insurance, and increasingly in areas like climate risk and cyber risk. This imbalance pushes up salaries and makes full-time hires less affordable for mid-market firms.
Finally, the cost-of-living crisis and post-pandemic shifts in working patterns have made flexible and fractional roles more acceptable to professionals. Many actuaries now prefer portfolio careers, and shared-actuary arrangements can offer that without the administrative burden of running a solo practice.
Who Is Adopting the Model?
The shared actuary model is most relevant to three groups:
- Mid-market defined benefit pension schemes – typically those with assets between £50m and £500m. These schemes often have a trustee board that meets quarterly and needs actuarial input for valuations, funding updates, and covenant assessments. A full-time actuary is rarely justified, but the complexity of the new funding code means they cannot rely on a single annual report.
- Smaller insurance firms – including managing general agents (MGAs) and niche underwriters. These firms must comply with Solvency II or the incoming Solvency UK regime, which requires actuarial input for pricing, reserving, and capital modelling. Many do not have a chief actuary on staff and instead outsource this role.
- Professional trustee firms – which serve multiple pension schemes and may bundle actuarial services as part of their offering. They are not the end client but can act as intermediaries, recommending shared-actuary arrangements to their clients.
How Does the Model Work in Practice?
A typical shared-actuary arrangement involves a service-level agreement (SLA) that specifies the number of days or hours of actuarial support per month, the deliverables (e.g., valuation reports, funding updates, risk dashboards), and the response times for ad-hoc queries. The actuary is usually a named individual, not a pool of anonymous consultants, to ensure continuity and accountability.
Technology plays a key role. Many providers use cloud-based platforms that allow clients to upload data, track progress, and access reports in real time. This reduces the administrative overhead for the actuary and gives clients visibility into the work being done. Some platforms also include standardised templates for common tasks, such as scheme valuations or ORSA (Own Risk and Solvency Assessment) reports, which speeds up delivery.
However, the model is not a simple plug-and-play. Each client has unique circumstances—different scheme rules, different risk appetites, different data quality. The actuary must be able to adapt quickly, and the provider must have robust quality control to ensure that work is consistent and compliant.
Why It Matters
The shared actuary model matters for several reasons.
First, it addresses a real market failure: mid-market firms are too small to justify full-time actuarial hires but too complex to rely on generic advice. Without a viable alternative, they would face regulatory non-compliance or excessive costs. The shared model offers a middle path.
Second, it could improve the quality of risk management across the sector. If more schemes and insurers have access to professional actuarial input, they are less likely to make costly errors in funding assumptions or capital calculations. This benefits policyholders, scheme members, and ultimately the financial system.
Third, it has implications for the actuarial profession. The rise of fractional roles could change career structures, with more actuaries working across multiple clients rather than climbing a single corporate ladder. This may affect training, professional development, and the way the IFoA regulates continuing professional development (CPD).
Commercial Impact
For providers, the shared actuary model represents a scalable revenue stream. By serving multiple clients with a single actuary, they can achieve higher utilisation rates and better margins than traditional project-based consulting. The key is to standardise processes without losing the bespoke element that clients expect.
For clients, the cost savings are significant. A full-time qualified actuary in the UK can command a salary of £80,000 to £120,000, plus benefits and overheads. A shared arrangement might cost £30,000 to £60,000 per year for a similar level of service, depending on the number of days and the complexity of the work. This makes compliance more affordable for mid-market firms.
There is also a potential market for technology platforms that support shared actuarial work. These platforms could offer data standardisation, automated reporting, and even AI-assisted risk modelling, reducing the time actuaries spend on routine tasks. However, the market is still nascent, and it is unclear which providers will emerge as leaders.
Risks and Unknowns
The shared actuary model is not without risks.
Conflict of interest – An actuary serving multiple clients may face conflicts if their clients are in the same industry or have competing interests. Providers must have clear ethical guidelines and disclosure mechanisms.
Quality control – When one actuary is stretched across many clients, there is a risk of errors or missed deadlines. Providers need robust review processes and sufficient backup capacity.
Regulatory acceptance – Regulators may be cautious about the model. They may question whether a shared actuary can give sufficient attention to each client, especially in times of stress. The PRA and TPR have not issued specific guidance on shared actuarial arrangements, so there is regulatory uncertainty.
Data security – Sharing data across multiple clients on a single platform raises cybersecurity concerns. Providers must ensure that client data is properly segregated and protected.
Talent retention – Actuaries may find the portfolio model attractive initially, but burnout could be a problem if workloads are not managed carefully. Providers must invest in support and training to retain talent.
FY Outlook
The shared actuary model is likely to grow, but its trajectory will depend on regulatory signals and the quality of early adopters. If the model proves reliable, we can expect more mid-market firms to adopt it, and possibly larger firms to use it for niche tasks. If problems emerge, regulators may step in with stricter requirements, which could raise costs and reduce the model's appeal.
In the near term, the most significant driver is the 2024 funding code deadline. Schemes that have not yet secured actuarial support will need to act quickly, and shared-actuary providers are well positioned to capture this demand. Over the next two to three years, we expect to see consolidation among providers, with larger firms acquiring smaller ones to gain scale and technology capabilities.
For mid-market firms, the key is to conduct due diligence before entering a shared-actuary arrangement. Check the provider's track record, ask for references, and ensure that the SLA includes clear escalation procedures. The model can work well, but it is not a substitute for strong governance.
Conclusion
The shared actuary model is a pragmatic response to a real problem. It offers mid-market pension and insurance firms a way to meet regulatory deadlines without breaking the bank, and it gives actuaries a flexible career option. However, it is not a panacea. The model's success depends on careful implementation, robust quality control, and regulatory acceptance. Firms that approach it with eyes open will find it a useful tool; those that treat it as a quick fix may be disappointed.
As the regulatory landscape continues to evolve, the shared actuary model is likely to become a permanent feature of the mid-market landscape. The question is not whether it will survive, but how it will mature.
