With reduced bonuses and the prospect of redundancy, the investment banking world is losing its allure for actuaries. However, opportunities may pick up for them later in the year.

“The lure of working for an investment bank was simply more money,” says Tony Deacon, director of actuarial recruiter the Emerald Group. “Now that bonuses are significantly reduced and people are being made redundant around them, I’m dealing with more and more actuaries looking to move out of that sector.”

One area of hiring activity for actuaries within investment banks that may take off going forward is around the valuation of longevity derivatives – or the risk that people might live longer than expected.

A number of banks including Credit Suisse, Goldman Sachs and JPMorgan have got involved in this, but hiring has yet to really take off. This could change going forward.

Deacon says: “It is the next hot topic. We’ve moved seven actuaries to one particular tier one investment bank which is heavily involved in gearing up that space. However, the vast majority aren’t getting involved at this stage. It’s not like asset liability management were they all jumped in with both feet – organisations are being more cautious.”

Some investment banks may have laid off actuaries, but they’ll be calling them back soon, says Paul Walsh, CEO of actuarial recruiter Acumen Resources.

“Banks will realise the value of employing an actuary in a risk control role,” he says. “Demand will pick up for actuaries from a control, compliance and underwriting point of view to a much greater extent than in the past.”

The Times’ Oliver Kamm suggests they could be used for something else – working out bonuses. The idea, he says, is that the same actuarial calculations used in the performance measurement of actively-managed investment portfolios can be used to work out compensation.

Don’t hold your breath for any new roles in this space, says Deacon: “That wouldn’t appeal to most actuaries,” he says. “And if it did, they wouldn’t be a very good one.”