Risk & Actuarial Consultancy

Risk and actuarial consultancy exists because financial institutions are required to measure and report their risks, and they do not always have the people to do it. Regulators set rules on how much capital a bank must hold and how an insurer must value its commitments. Firms hire consultants to build the models behind these numbers, or to check that existing models are correct.

The work splits into two main areas. Risk consultants work mostly with banks on credit, market, and liquidity risk. Actuarial consultants work with insurers and pension funds on pricing, reserving, and long-term liabilities. A large client with its own team often hires consultants for independent validation, where an outside party checks a model. A smaller client may hire them to build the model itself.

The main tools are Python, R, and SQL, used to build and test models on large datasets. The work also requires knowledge of the rules that apply, such as Basel for banks and Solvency II for insurers. Because the results feed into regulatory reports, the work must be documented carefully and explained clearly.

In the Netherlands, this work sits close to De Nederlandsche Bank and the rules it enforces, with most firms based around Amsterdam and Utrecht. Clients come mainly from Banking and the Actuarial Sector. These firms employ roles such as Risk Manager and Actuary. The same roles exist inside financial institutions; the difference is that consultants move between clients and focus on specific projects, rather than managing one organisation's risk over time.