Interview by Andrea Thompson

Growing up, I always knew my dad was an actuary—but I couldn’t have told you what that actually meant. I’d proudly tell people what he did, only to blank completely when they asked, “So… what’s an actuary?”

Now, after building my own career in financial services, I’ve come to appreciate just how deep and dynamic his profession really is. My dad, Derek Thompson, spent decades as an actuary working at the intersection of math, risk, and business strategy. He witnessed—and shaped—some of the most significant changes in the industry, from the era of sky-high interest rates and universal life insurance to the rise of AI and the decline of segregated funds.

In this interview, I sat down with him not just as a professional, but as his daughter—to capture the stories, lessons, and reflections from a lifetime in a field that’s as complex as it is crucial.

Andrea: Let’s start simple—what exactly does an actuary do?

Derek: That’s a tougher question than it sounds! An actuary is someone who evaluates and manages risk, mostly in the context of insurance, pensions, and financial products. It’s a profession that requires a lot of training and certification—we go through ten rigorous exams to become Fellows of the Society of Actuaries in Chicago and the Canadian Institute of Actuaries. The real heart of the work is making sure companies price their products fairly and remain solvent so they can deliver on the promises they make to policyholders.

Andrea: When I was a kid and told people you were an actuary, I had no idea how to explain it beyond, “something with math.”

Derek: [Laughs] That’s fair—it’s not an easy job to sum up in a sentence. But at its core, it’s about being the analytical engine behind the scenes of the financial system.

Andrea: What got you interested in actuarial science to begin with?

Derek: I always loved math. I was analytical, logical, and I liked solving problems. But I didn’t know what career that pointed to until I started collecting these career pamphlets from the Toronto Star. They used to let you send in for descriptions of different professions, and I built up this big file over the years. When I came across the one for "actuary," something clicked—it was all the things I was good at, with a long-term planning component. I even reached out to a friend’s uncle who worked at Manulife to hear firsthand what it was like, and that sealed the deal for me.

Andrea: You studied actuarial science at Western. What was that like?

Derek: Intense. We started with about 40 students and only two of us made it through to graduation. It’s a program that really weeds people out. On top of your regular coursework, you start taking the actuarial exams, which are incredibly demanding. I managed to pass two exams during university and the remaining eight while working full-time. Most people take about seven years after graduating to finish them—I did it in four, but it meant my life was work and study, and not much else.

Andrea: What was your first job after university?

Derek: I had summer jobs with both London Life and Canada Life, and after graduating I accepted a full-time offer from Canada Life. Like most actuarial students, I rotated through different departments—valuation, pensions, group insurance, individual life. The idea was to get a broad base of experience while continuing your exams.

Andrea: But eventually, you ended up in a more strategic role, right?

Derek: Yes. I realized early on that I didn’t want to be confined to just one specialty. A lot of actuaries stay in one lane—pensions, group benefits, etc.—but I wanted variety and to understand how the whole business worked. After a brief and unsatisfying stint in consulting, I got a call from a headhunter about a role at Transamerica Life to build their actuarial department in Canada. I jumped at it. It gave me the chance to lead pricing, reserving, research, and strategy all in one. I was on the executive committee, flying to LA for meetings, and involved in broader business decisions, not just the math behind them.

Andrea: What were some of the biggest changes you saw over the years?

Derek: So many. For starters, when I began, most insurance companies were mutuals. They were owned by the policyholders, not shareholders, so the focus was all about long-term sustainability and delivering value to the client. But in the 1980s, we saw a big wave of demutualization. Companies wanted to grow and needed capital flexibility, so they converted to stock companies. That unlocked equity, allowed acquisitions, and changed the structure of the whole industry.

Then there were interest rates—in the early ’80s, they were sky-high. That made life insurance products highly profitable because you could invest premiums into bonds with great returns. But as rates started to fall, it became a lot harder to generate those returns, and the whole pricing landscape changed.

That shift helped fuel the rise of universal life (UL) insurance. UL policies unbundled the traditional whole life model—splitting it into a transparent cost-of-insurance and investment component. Consumers liked the flexibility, and in high-interest environments, they worked really well. But as rates dropped, and people wanted more growth, we saw demand shift toward market-linked products.

That’s where segregated funds came in. They offered market exposure with some capital protection, appealing to consumers who wanted upside without the full risk. For a while, they were very popular. But over time, with the rise of ETFs and online brokers, people became more fee-aware and confident in managing their own investments. Seg funds became harder to justify.

Another major change was when we started pricing differently for smokers and non-smokers. The data became irrefutable: smoking significantly increased mortality risk. So it didn’t make sense to price everyone the same. That shift dramatically changed underwriting and brought better fairness to policyholders.

Andrea: What other changes did you see in the insurance industry over time?

Derek: Early on, if you had an RRSP, your only retirement option was to buy an annuity. It gave you a fixed income for life, backed by the insurance company. But when interest rates fell, annuity payouts became much less attractive. Meanwhile, equity markets were booming. That’s when the government introduced RIFs (Registered Income Funds)—a more flexible option that allowed retirees to draw income while continuing to invest.

It gave people more control and helped mitigate inflation. But it also created complexity. Insurance companies had to adapt quickly—introducing inflation-adjusted annuities, or matching investments with liabilities more carefully. Designing investment portfolios to support these long-term obligations became a much more sophisticated process.

Andrea: Segregated funds seemed like a big deal when they first came out. Why did they lose steam?

Derek: At the time, they were very innovative—offering guarantees you couldn’t get from mutual funds. But back then, investors didn’t have access to much data. There was no internet, no quick access to company reports or market research. You depended on your advisor for information.

Today, that’s flipped. People are more educated, tools are widely available, and fee structures are more transparent. If you can build a diversified portfolio yourself or through a low-cost platform, it’s hard to justify the higher MERs of seg funds—unless the guarantees are truly essential for your situation.

Andrea: Let’s talk longevity. People are living longer—how did that affect things?

Derek: It changed everything. For example, when Old Age Security was introduced in the 1950s, life expectancy was 69. It kicked in at 65, so the government expected to pay benefits for four years. Now life expectancy is 81 or 82, meaning they’re paying out for almost two decades.

That same shift affects insurers. If a policy was priced expecting someone to pass at 70 and they live to 85, that changes the math significantly. Combine that with low interest rates, and insurers have to work much harder to ensure products are still viable, competitive, and profitable.

Andrea: How has technology impacted the actuarial field?

Derek: We’ve always had strong modeling tools. But AI introduces a new dimension. It has the potential to enhance what we do, not replace it. The key is oversight. AI can crunch numbers, but it takes professional judgment to ensure the assumptions are valid and the outcomes make sense. If companies rely too heavily on automation without human interpretation, they risk missing critical nuances. So I see it as a tool in the toolbox—not a replacement for expertise.

Andrea: What would you say to someone thinking about becoming an actuary today?

Derek: It’s a rigorous but rewarding path. The exams are tough, but they prepare you incredibly well for thinking critically and strategically. The profession is full of smart, ethical people, and the skills you gain can be applied across a wide range of careers. It’s also a career that evolves with you—there’s room to specialize or pivot.

Andrea: And looking back—any regrets?

Derek: None. There were moments, especially during exam season, when I wondered if I should’ve become a gym teacher. But the career has been good to me and to our family. I’ve had variety, impact, and the satisfaction of knowing I contributed to something that mattered.

Andrea: I feel incredibly lucky to have learned from you—not just as a daughter, but as someone in the same field. You’ve shaped how I think about planning, strategy, and integrity.

Derek: And I’ve loved watching you grow in your own career. You were reading mutual fund tickers on my lap before you could read a book! It’s been a full-circle journey.

Derek Thompson, FSA, FCIA is a veteran actuary and former insurance executive with over five decades of experience in the financial services industry. He held senior roles at companies such as Canada Life and Transamerica Life, where he led actuarial teams and played a key role in shaping product design, pricing strategy, and business development. Derek has deep expertise in life insurance, annuities, and retirement income planning, and was directly involved in the evolution of universal life and segregated fund products in the Canadian market. Known for his ability to bridge technical analysis with business strategy, Derek offers a unique perspective on risk, regulation, and the forces that have reshaped the industry over the past 40 years.