The intention of this paper is to describe, by way of example, how profit testing is carried on in practice and how by making it central to the company's operation the company may be controlled. The mechanism of control is to test the company's results against the results of profit tests built into a model of the company. We shall also describe how the results of these tests of the company's results are fed back into the profit tests to establish the basis for future tests of the company's results. The motivation for this paper arose from the need to communicate to shareholders the links between profit testing and the company's actual results. It is all very well to say to shareholders that the products satisfy a certain profitability standard but how does that show itself and how real is that profitability paticularly for a new or expanding company which displays nothing but statutory losses or, at best, break even? This communication also led to the need to explain variations from the original projections and finally to answer the question: what happens to profitability if these variances continue?

The paper explores the framework for the development of actuarial education in the future. The main aims are to broaden the profession while maintaining standards and to achieve global qualifications by working with other actuarial bodies. The suggested way forward would mean several changes from existing practice.

THINKING AND BEHAVIOUR abstractIn a world of transition for all our disciplines, actuaries can get and keep ahead of the changes by, first, getting our thinking right. Right behaviour and actions will follow. We will think about the needs of our employers and clients and present our findings more in the business context; we will look through their needs to the needs and interests of their employees and customers. We will grasp financial economics and learn banking thinking. The profession will raise issues of public interest and inform the debate. Part I. Objectives1 Transition 1.1 We live in troubled times. I do not intend to dwell on them. We are learning our lessons, as are many of our colleagues in other professions and disciplines. The process of learning will continue, as will accepting new realities and adjusting our thinking to demonstrate how we add value in the new environment. We will also contribute proactively to the development of the new environment. My objective, in my Presidential term, is to lead the profession through the transition. Judging by recent experience, the state of transition may itself be permanent.

The text of the Presidential Address is printed in this part of British Actuarial Journal on pages 1-33.