MAY 2019 theactuary.com
Interview Sir John Curtice When opinion polls miss the mark
The magazine of the Institute and Faculty of Actuaries
Life The future of life insurance securitisation
Environment Developing eective corporate social responsibility
Career development Does polymathy hold the key to success?
Why wearable tech could be about to transform the life insurance industry
MADE TO MEASURE 01 cover_The Actuary May 2019_The Actuary 1
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Contents May 2019
14
Features 14 Interview: Sir John Curtice The political scientist on Brexit, electoral reform, opinion polls and voter behaviour 18 Careers: Diminished returns Olivia Bridge examines how Brexit could impact recruitment within the actuarial profession
Up Front 4 Editorial Francisco Sebastian reflects on the evolving nature of the profession
20 Technology: The examined life Advances such as data collection could boost consumers’ engagement with life insurance, says Mandy Luo
5 President’s comment Jules Constantinou on the IFoA’s exciting array of upcoming engagements in Africa
24 Life: The problem solver Adam Robinson and Luca Tres give an overview of the usefulness of life insurance securitisations
5 CEO’s comment The accomplishments of the past year suggest more success to come, says Derek Cribb
26 Corporate social responsibility: Embedding values Michael Fitzgerald on companies meeting social and economic goals
6 IFoA news The latest news, updates and events from the IFoA
29 Auto-enrolment: Going automatic The pensions revolution is a great base to build on, says Kate Smith
18 At The Back 32 Careers The route to success lies through polymathy, not single-minded focus, argues Waqas Ahmed 34 School of thought Adeetya Tantia on art insurance and the shredding of a Banksy 35 Puzzles 36 People/society news The latest news, updates and events 38 Inside story David Hare reflects on the benefits reaped from 30 years of volunteering
30
12 Members’ quote/unquote 30 Pensions: Deflated expectations Allan Martin asks: are unfunded pension promises a major problem?
COVER: IKONIMAGES
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F E AT U R E S E D I T O R S Sharad Bajla, general insurance Stephen Hyams, pensions Paul Malloy, reinsurance, life insurance Henry Mungalsingh, pensions VS Rajeshwarie, GI Thanuja Krishnaratna, life Contact: features@theactuary.com
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FRANCISCO SEBASTIAN
Revolution and evolution The world is in the midst of another industrial revolution. In recent years, we have heard almost daily about new scientific discoveries and technical innovations coming out of places such as Silicon Valley, London, and Shenzhen, China. However, revolutions and abrupt changes are unusual in the actuarial world, where linear or slightly ‘convex’ changes are ubiquitous. This gives actuaries the invaluable benefit of being able to take a step back and focus on the long term. Brexit may be an exception to this. In this issue, we move away from the controversial debate among politicians to discuss with Sir John Curtice the science underpinning electoral analysis (p14). Olivia Bridge, meanwhile, assesses the effects that migration costs arising from Brexit could have on actuaries (p18). Returning to the evolution of the profession, Michael Fitzgerald provides an overview of how corporate social responsibility has been growing in the corporate world (p26), while Adam Robinson and Luca Tres examine the innovation and opportunity provided by life insurance securitisation – a trend that seems to be returning (p24). And Mandy Luo looks at how technological advances and data collection can help those working in life insurance to engage with the consumer (p20). In the pensions world, where the pace of change is generally slow but steady, Allan Martin discusses a trend that could lead to a revolution: pervasive deficits in pensions, especially in the public sector (p30). On a more positive note, Kate Smith explains how pensions auto-enrolment is helping to pave the way for millions to retire more comfortably (p29). In summary, revolutions may not be the norm in the actuarial field, but the evolution continues. Enjoy the read!
Published by the Institute and Faculty of Actuaries (IFoA) The editor and the IFoA are not responsible for the opinions put forward in The Actuary. No part of this publication may be reproduced, stored or transmitted in any form, or by any means, without prior written permission of the copyright owners. While every effort is made to ensure the accuracy of the content, the publisher and its contributors accept no responsibility for any material contained herein. © Institute and Faculty of Actuaries, May 2019 All rights reserved ISSN 0960-457X
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FRANCISCO SEBASTIAN EDITOR editor@theactuary.com
www.theactuary.com
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J U L E S C O N S TA N T I N O U
DEREK CRIBB
Join the conversation
Reaching milestones
I
e measure progress by looking back at milestones achieved, and ahead to our changing world and how we will navigate it. The past year has seen a number of milestones for the IFoA that are worth noting. For the first time, we had more than a thousand members reach Fellow status in the year, with record numbers in both the UK and our wider global community. A further 90 members reached qualified status by transferring to Associate. Of these, more than one-third were from outside the UK, reflecting the geographic reach that brings strength and diversity to the IFoA. Jules Constantinou’s presidential ‘Stepping out of the shadows’ campaign helped achieve a new level of stakeholder influence for the IFoA, including meetings with ministers and Select Committee appearances. This is important at a time when our future as a self-regulating profession is under review. Our #iamanactuary messages reached record numbers of social media users, as members highlighted their skills and pride in the profession. Change will continue as we seek to better understand and meet members’ needs. In June, the IFoA Council will meet members and employers in Africa: a fast-growing group of economies that are developing actuarial capacity. Your feedback through the member survey is helping DEREK CRIBB us build and deliver the services you is the chief need for the future. In another first, executive of the on 26 June we will be holding our AGM Institute and outside London; I look forward to Faculty of Actuaries seeing many of you in Edinburgh.
n early June, Council will be holding one of its quarterly meetings in Africa – a first for the IFoA. Members of Council will be joining the national society conferences in Kenya, Nigeria and Zimbabwe, before participating in a seminar hosted by the Actuarial Society of South Africa (ASSA), and finishing up with a Council meeting in Cape Town. The actuarial profession in Africa is experiencing unprecedented growth, and Council believes that now is the right time to engage, connect and learn from these rapidly changing societies and markets. As the continent develops, so do the opportunities for actuaries at all levels of practice and qualification. From Kenya to South Africa, Nigeria to Zimbabwe, there’s a conversation taking place about how the profession can support and enable this growth in a way that’s tailored to the needs and identities of the region. We want to be a part of that conversation to understand how we can contribute, and how the profession’s transformation in Africa might point the way to the future. More than that, we’re here to find out about innovation across the continent. From healthcare to fintech, we want to learn how these innovations could work in a global context. Most importantly, we’re here to meet with our students, Associates, Fellows, volunteers and fellow associations all across Africa. As we become an ever more global JULES profession, our commitment to CONSTANTINOU understanding and connecting with our is the president of members is vital to our success as a the Institute and truly 21st-century professional body. Faculty of Actuaries #iamanactuary
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AUTUMN MAY 2019 2017 | THE ACTUARY | 5
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Upfront News D ATA S C I E N C E
Opportunities for actuaries The content covered all practice areas and demonstrated how actuaries can develop their existing knowledge and move into the world of data science. It also offered a platform for members and students to learn more about artificial intelligence, machine learning and other areas of data science. Due to the interest and success of the conference, access to the materials was extended to provide further opportunities for delegates to view and engage with the materials after the live event concluded. During the initial webinar, the panel was inundated with questions. Time did not permit for all of these to be answered, so next month you will be able to read more about the virtual conference in a response on the key themes of the questions raised during the event. If you missed the conference, members will be able to view the resources in the Virtual Learning Environment.
What do we mean by ‘speaking up’ and ‘whistleblowing’? Is there a difference? Do you know when, how, and to whom you are required to speak up? What do we mean by ‘misconduct’ under the IFoA’s Disciplinary and Capacity for Membership Schemes? With the CPD year-end fast approaching (30 June 2019), our professional skills webinars are an excellent opportunity to complete one hour of CPD, which can count towards your Stage 3 Professional Skills Training requirements under the CPD Scheme 2018/19. Join one of our professional skills webinars (which all have the same content) on Thursday 9 May at 08.30 to 09.30 and 16.30 to 17.30 BST. We will use a selection of video and illustrated case studies to bring the discussion to life. You can put questions to our panel of experts and join in the debate, wherever in the world you are located. Book your place on our Professional Skills webinars on the IFoA website today at bit.ly/2G84b85
PICTURES: ISTOCK, VECTEEZY ISTOCK
Tuesday 26 February 2019 was a groundbreaking day for IFoA events. At 8.00 (GMT), president-elect John Taylor and a panel of specialists with a wide range of experience in the data science domain opened the IFoA’s first ever virtual conference. The event’s theme was ‘Data science – Opportunities for actuaries’, and it showcased a huge range of resources, recordings and live webinars. More than 3,000 delegates from 70 countries took part in the conference, which was open to members and non-members and free to attend. Preparation began last July, when a group of volunteers formed a committee to work with the Events and Lifelong Learning teams. The committee created a programme to highlight the impact that actuaries are having, and could have, in data science. The committee included recorded workshops that provided a hands-on training experience for delegates.
Professional skills webinars
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Upfront News
This year’s conference offers four topical plenaries and twelve workshops offering plenty of CPD and networking opportunities covering a variety of trending topics across the risk & investment sector. Topics include:
đƫ Risk and Brexit đƫ Analysing analytics risk đƫ Machine learning and the future
Risk and Investment Conference 20-21 May, Amba Hotel Charing Cross, London
đƫ Risk functions and strategic decisions đƫ ESG and sustainability
2019
Book to attend bit.ly/RIConf2019
MEMBERS’ EVENT
IFoA in Sydney John Taylor, IFoA’s president-elect, and Derek Cribb, chief executive, hosted a members’ event in Sydney on 12 March 2019. The event attracted more than 100 participants and was fully booked within a few days. During the evening cocktail session, Derek and John shared an update on the IFoA’s strategic plans for 2019 and high-level results of the IFoA’s member value proposition survey. They also took the opportunity to award new qualifiers and volunteers for their achievements and contributions.
Myanmar delegation visit The IFoA was delighted to host a government and business delegation visit from Myanmar at its London office on 19 March. This visit was organised by the Department of International Trade at the British Embassy in Myanmar to promote expertise and share knowledge in the areas of capital markets, insurance and fintech. As Myanmar prepares for the liberalisation of its insurance sector this year, the delegation was particularly interested in learning more about the actuarial profession and how such skills can be built in the country. Positive feedback was received on the IFoA’s presentation, and we look forward to working more with these stakeholders in the near future. www.theactuary.com
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Upfront News MEMBER FEEDBACK
IFoA Member Survey We would like to thank all members who took part in our online Member Survey in November 2018. The survey set out to gather data on what members most value about IFoA membership, the challenges and issues members face, and what we could change or improve to deliver more value to members. The survey was sent to all IFoA members, with 12% of our entire membership completing it – a response rate that compares favourably with similar organisations in the membership sector. The findings provide valuable insight into our members’ views of the IFoA and membership, and a solid evidence base for further research. The online survey is a central element of a programme of research the IFoA is undertaking to better understand and address members’ concerns, especially around the value for money of IFoA membership and the perception of a rising regulatory burden. Having listened to your feedback and concerns, and putting our role as an organisation run by and for members at the centre of our strategic planning, IFoA Council set up a Steering Group in May 2018 that was tasked with undertaking research into our members’ wants and needs, and to inform development of an IFoA Member Value Proposition (MVP).
An MVP is a brief, compelling description of the value of membership to members. Understanding what our members value will help us to ensure our strategic planning is aligned to the needs and wants of members. An IFoA MVP will provide a framework against which we can focus and assess new and existing IFoA activities and help to inform our future subscription pricing strategy. We are currently undertaking the next phase of our MVP research. We are using the Member Survey findings as a basis for a programme of qualitative research, which includes focus groups and telephone interviews with members and employers across the world. The qualitative research will provide insight into why our members value elements of their membership and how they view the IFoA. Once we have completed the qualitative research in May 2019, we will begin reporting the results of our member research through IFoA channels, including the IFoA website, e-newsletter and The Actuary magazine. Once the member research report has been delivered in early summer 2019, we will update members on Council’s plans to deliver enhanced member value. If you have any questions about the Member Survey, or would like to take part in future member research, please email membersurvey@actuaries.org.uk
ETHICS
Revised Actuaries’ Code and Guidance comes into force This month the revised Actuaries’ Code comes into force. Since the Code first came into effect in 2008, the actuarial profession has moved into more diverse fields and the number of members working outside the UK has increased. To make sure the Code remains relevant and appropriate for the profession today, we have reviewed and updated it. Why is the Code important? The Actuaries’ Code is the ethical code of conduct for IFoA members. It is designed to support members in adhering to high standards of professional and personal conduct, while protecting the public interest and assuring trust in the profession. The Code sets out six principles that IFoA members must abide by: Integrity Competence and care Impartiality 8 | THE ACTUARY | MAY 2019
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Compliance Speaking up Communication. Each principle has a number of amplifications that give examples of the behaviour expected. You can find further details and guidance at bit.ly/2UMhPaf The Code applies to all members, in their capacity as an actuary and when their behaviour in their personal lives could reflect on the profession. Changes to the Code The revised Code has simplified language. The words ‘must’ and ‘should’ are used to clearly demonstrate the nature of obligations under the Code. ‘Must’ denotes a mandatory requirement. ‘Should’ indicates a requirement that members are expected to follow but in some circumstances non-compliance will be justifiable.
The requirement to speak up has been redrafted as a standalone principle reflecting how important it is for members to voice concerns. It asks that members “speak up if they believe, or have reasonable cause to believe, that a course of action is unethical or is unlawful”. The requirement to speak up is much broader than the traditional concept of whistleblowing. Members are expected to raise issues with clients, peers and colleagues, as well as report serious concerns through the appropriate channels in their workplace or to the relevant regulator or body. Guidance To support members in understanding the obligations and applying the Code in practice, the IFoA has produced Guidance to the Code. It provides more
information on each of the principles and has helpful pointers for members, employers and users of actuarial work. The Guidance draws on several other IFoA Guides such as the Conflicts of Interest Guide, which has also been revised and updated. The Guidance has been published online as a dynamic, interactive tool for members. The IFoA hopes this will make the document easy to access and navigate, and ultimately easier to digest. The Revised Code and Guidance are now available on the IFoA’s website bit.ly/2UMhPaf If members have any questions on the Code or require further support on any other issue, they are welcome to contact the IFoA through the Professional Support Service at bit.ly/2Ff1z5G or by email at regulation@ actuaries.org.uk www.theactuary.com
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Upfront News
2018/2019 CPD year ends 30 June 2019 A reminder to all members in categories 2-6 that the continual professional development (CPD) reporting year will end on 30 June 2019. All CPD activity for 2018/2019 must be completed by this date. CPD is defined by the IFoA as any learning activity that: Is relevant to your work or role and Addresses a personal development need. Although traditional methods, such as attending a conference or contributing to a research group, are most readily identified with gaining CPD, any opportunity to learn something new or consolidate your learning on a topic that is relevant to your work or role can count towards your annual requirements. It is not the content of the activity that is important, but what you gain from it. For example, recording four hours of CPD for a conference which offered you no learning benefit would certainly not be in line with the CPD Scheme’s requirements. The CPD Scheme is not prescriptive: it is for you to determine what your learning requirements are and select activities that will develop your skills and knowledge in that area. If you have any questions about your obligation under the 2018/2019 CPD scheme, please contact the Membership Team at cpd_feedback@actuaries.org.uk
Quality Assurance Scheme Congratulations to our most recently accredited organisations, Little & Company, Lux Actuaries & Consultants and AIA Thailand. “The consultant was engaging, the feedback was constructive and we believe that other smaller firms would find real value in going through the accreditation process.” – Andrew Little, Little & Company. “We are elated and privileged on being accredited to the QAS group. Knowing that we adopt good practices in our actuarial work and care for our clients’ needs is one thing; getting cognisance of effectively doing so by the specialised and professional assessment team of QAS is an incredible feeling on another level. It will go a long way to reinvigorate the zeal of the Lux team and will enhance trust and confidence of our clients.” – Mamata Pandey, Lux Actuaries & Consultants. If your organisation would like more information about applying for the QAS, please get in touch with the QAS team at qas@actuaries.org.uk www.theactuary.com
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EVENTS AND CONFERENCES 14 05 19
18 06 19
CILA
NED Event: Behavioural Finance and Boards
E U S T O N , LO N D O N
bit.ly/ifoacila19 CILA is one of the pre-eminent events in the annual life calendar. Aimed at practising life actuaries from life offices, consulting firms and other employers of actuaries, it will interest those who work in, or advise on, the UK and Europe life assurance market.
S TA P L E I N N H A L L , LO N D O N
04-05 06 19
bit.ly/ifoanedbfb This event will discuss behavioural economics, including product design, marketing, customer service and board decisions, and should be of interest to product design teams, investment committees of insurance companies and pension schemes, and NEDs and boards.
International Mortality and Longevity Symposium 2019
18-19 06 19
ICC BIRMINGHAM
Pensions Conference 2019
bit.ly/IFoAMLS2019 The International Mortality and Longevity Symposium aims to give a better view of the scope of current mortality research in a variety of relevant disciplines, providing a forum to discuss the implications for actuarial practice. This year, the symposium will be joining forces with the Protection, Health and Care Conference below, running back to back at the same venue.
BRISTOL MARRIOT HOTEL CITY CENTRE
05-06 06 19
19 06 19
Protection, Health and Care Conference 2019
Current Issues in General Insurance (CIGI) 2019
ICC, BIRMINGHAM
I N M A R S AT, 9 9 C I T Y R O A D, LO N D O N , EC1Y 1BJ
bit.ly/IFoAphc19 This conference is aimed at all insurance professionals with a passion for harnessing insurance risk. Workshops explore how innovation, tech/medical advances, the political landscape and other market development will impact the protection, health and care markets.
bit.ly/ifoapensions19 Confirmed plenaries include: GMP Equalisation – an opportunity to look at tricky issues from a legal and an actuarial viewpoint; Code of Practice – Pensions Bill – presentations from TPR and DWP; and Consolidation, in addition to 12 workshops covering current topics and trends.
bit.ly/cigi2019 CIGI will provide an excellent and diverse lineup of speakers, each providing insight and knowledge on a range of topics. The programme will be broad in nature, so will be of most value to those with some experience in the industry.
Book Protection, now! Health and Care Conference 2019 Register at:
Mortality and Longevity Symposium 2019
bit.ly/IFoAphc19
Register at:
bit.ly/IFoAMLS2019
www.actuaries.org.uk
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Upfront News
Life Research Committee seeks working party volunteers Three new working parties are in the process of being established. These are: Artificial intelligence and automation’s effect on the work of life and health and care actuaries. Long-term product guarantees – do they have a future in the UK? What could make them more affordable and attractive? Impact of regulation on risk management – to what extent does regulation incentivise good long-term risk management, and are there unintended consequences? If you are interested in volunteering, please keep an eye on the current list of vacancies at bit.ly/2GESipf
Health and Care working parties update The Health and Care practice area has a number of active working parties, driven by volunteers with the support of the Health and Care Board and Research SubCommittee. The aim of these working parties is to carry out research that furthers actuarial science and provides members with contemporary knowledge that supports evidence-based decision-making and debate within the health and care industry. Some of the working parties that we have recently set up include: Diabetes – to research the risk factors driving the increasing prevalence of diabetes and how the management of this condition can improve mortality risk for type 1 and type 2. Population Health Management – tackling the challenge of rising healthcare demand where funding is constrained. Actuarial skillsets in demographic, risk modelling and analytical capability are being used in this public interest debate. Other research topics being considered include: Mental health The impact of electronic medical records on insurance The role of the actuary in UK healthcare. Vacancies in new working parties are advertised at bit.ly/2GESipf www.theactuary.com
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60 SECONDS WITH... Grahame Stott GRAHAME IS A FELLOW OF THE IFOA AND NEW CHAIR OF THE IFOA’S MANAGEMENT BOARD
You describe yourself as a ‘businessman who happens to be an actuary’ – why do you think that description fits you best? For the last 17 years, I have been working as a non-executive director of listed companies in a number of different industries, including property development, insurance broking and an investment trust. While a strategic understanding of the business is essential, my actuarial training has helped me to understand the finances of these businesses and the financial risks they are taking. How would you describe your role and that of the IFoA Management Board? Council sets the IFoA strategy. The Management Board oversees the operation and management of the IFoA and holds the executive accountable for their activities. My role is to ensure the Management Board does this effectively. What do you think is the profession’s greatest short-term challenge? The pace of change in business. When I qualified, most actuaries worked in defined benefit pensions or life assurance
– no longer the case. As a profession, we have to change as quickly as the business world, and the ability to understand and embrace such areas as data science, artificial intelligence and the impact of disrupters such as Amazon, Google, Alibaba and WeChat are essential. …and what’s our biggest long-term opportunity? Actuaries have the skills to consider a wide range of financial and business problems. As business models evolve, actuaries can be uniquely placed to apply these skills to an ever-wider business community. What’s the best piece of advice you’ve ever been given? Many years ago, I was offered a three-year contract in Hong Kong at a time when I had never travelled further than Europe. My boss in London told me not to be afraid to try new things. I ended up working in Asia for more than 20 years! What would you say to those considering a career as an actuary? Do it! It’s a great profession and the skills you gain are increasingly relevant.
EVENT
Mortality and Longevity Symposium The IFoA’s Mortality and Longevity Symposium returns on 4-5 June. Recognising the overlap in subject matter and potential delegates, it will be run alongside the 2019 Protection, Health and Care Conference (5 -6 June) in Birmingham. Delegates can choose to book any combination of the two conferences across the three days. “Once again, the Symposium provides a great opportunity for actuaries and other related professions with an interest in mortality, longevity and morbidity to come together and exchange ideas,” said Sacha Dhamani, chair of the IFoA’s Mortality Research Steering Committee. “As well as presentations on mortality modelling, this year’s programme includes topics ranging from drug innovation to the impact of sleep. The combined conference will provide delegates with wider networking opportunities and more options of topics to learn and discuss.” Bookings are now open for both conferences through the IFoA website at bit.ly/2vaJlzG. Readers may also be interested in reading the synopsis publication from the last symposium in 2016 – find it at bit.ly/ifoa2987
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Upfront p Opinion
Quote unquote
How flexible are you? @Tess_invests
Twitter’s reaction to Louise Pryor and Simon Jones’ April Letter of the Month, which discussed the importance of dealing with climate risk
Reading the latest @TheActuaryMag it is interesting how many of the job ads (NOT THAT I LOOK EVER) flag that they are offered with home working, agile working or flexi working. Good to see and shows how important this is to candidates (NOT THAT I LOOK EVER). #Jobs #allrolescanflex
@Tess_invests
@NormaCohen3
@ActuaryByDay
Spot on @LouisePryor. Why on earth would you ignore a risk just because it is complicated? #LoveHer
This is the actuarial profession demonstrating its true value.
Conversations on climate change
@HigherEdActuary Strong stuff on actuaries and climate change. Time to get educated.
@markjrowlinson @Tess_invests @LouisePryor What do you do with it then? I’ve read that guide and don’t remember
seeing anything practical in it. Investment managers perhaps (although even that is business as usual in my mind) but not pensions actuaries. What practical step should be taken that doesn’t just use up paper?
In theory it means “we focus on output and achievements rather than facetime at the office”. In practice it often means “we got rid of half the desks to cut costs so now everyone needs to WFH twice a week”.
@HigherEdActuary I’m a little less cynical. Having moved to a “smart” office with only enough seats for 65% of staff we always have plenty of space. Looking back the old ways of individual offices and filing cabinets was a colossal waste of space and expense.
@21stC_Actuary
@ActuaryByDay
Fantastic to see a review of @KateRaworth doughnut economics in @TheActuaryMag a bookk full of ideas that actuaries will ill find useful and inspiring as we look to solve future problems. ms.
I do agree, and really value my WFH days as I can do the school run. It just needs the right attitude ffrom employer and employee. I might have been eexpecting that wink to do a bit too much work in my earlier tweet. m
@DaddyP If I was an economist I’d be thinking like this. Kate rocks ... in a good way of course. 12 | THE ACTUARY | MAY 2019
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@kennytindall @ I aagree. I’m a big supporter of flexibility and wfh. But it helps to be in the office regularly. I think you B need to see your teams f2f and talk to them as ne individuals. Calls and IM don’t do that anywhere ind near as well. ne www.theactuary.com
26/04/2019 16:08
INSIDE Interview: Sir John Curtice The politics professor and electoral expert talks opinion polls and voting reform
Diminished returns Brexit is likely to have significant consequences for recruitment within the actuarial profession, says Olivia Bridge
The examined life Mandy Luo discusses how smarter technological solutions are changing the life insurance industry
The problem solver Adam Robinson and Luca Tres on the usefulness of life insurance securitisations – and how IFRS17 could shake up the market
Embedding values Companies that are committed to corporate responsibility need a strategic plan and a consistent approach, says Michael Fitzgerald
Going automatic Kate Smith examines how automaticenrolment has revolutionised the UK’s pensions
Deflated expectations Are unfunded pension promises a sustainable way to provide for employees’ retirement? Allan Martin looks at the facts
MAY 2019 | THE ACTUARY | 13
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Features Interview
Sir John Curtice, professor of politics at Strathclyde University, talks with Stephen Hyams and Francisco Sebastian about surveys, election polling, Brexit and electoral reform
14 | THE ACTUARY | MAY 2019
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Features Interview
Avoiding bias A lower response rate potentially increases the risk for bias, as the sample may not be representative of the whole population. This has become an increasing problem. “People are now much less willing to participate in surveys or polls. Whereas a minimum response rate of 70% used to be normal, nowadays you are lucky to get 50%.” Inventiveness can help to overcome the problem of low participation. “I am more likely to get responses to a survey about politics if I embed the questions in a wider survey that includes topics of greater interest, such as parenting or welfare benefits,” Curtice explains. Compensating for bias is achieved by weighting the sample to known population characteristics. For example, weighting up the response of younger people is normally required, as they are harder to be contacted and interviewed. “This can overcome the biases that are apparent, but we always worry about those which are not apparent, or the unknown unknowns,” says Curtice. Bias can also arise from the way that you ask the question, although that is a subjective judgment.
General elections Polling for the 2015 UK general election illustrated the dangers of bias. “The relationship between age and party choice had sharpened considerably, with younger people more likely to vote Labour, presenting a challenge for pollsters because age and turnout are correlated.” While younger people are generally less likely to vote, the sample interviewed are disproportionately more likely to do so. “As a result, the polls overestimated the support for Labour because they anticipated a higher turnout for young people than took place,” Curtice explains. During the 2017 general election, the pollsters got into difficulty by overcompensating. “In trying to deal with the problem in 2015 it led a number of them to get it wrong in 2017. The company that got it right didn’t change its method from 2015.”
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rofessor Sir John Curtice is an expert in using surveys and polls to assess public opinion and predict the outcome of general elections. We begin by asking him: what makes a good survey or poll? “The quality of the questions is crucial, the aspect that I’m personally most interested in, and which I think is an under-appreciated art,” he says. “The answers to a survey depend on the framing of the questions. In order to understand the structure of public opinion, you need to come at it from a number of different angles”. The use of plain English is important. “It’s very easy for those who are specialists in an area to overestimate public understanding. You need to be able to write questions in a way that someone with a reading age of 11 or 12 can understand.” What about sampling methodology? “This will be a compromise between the ideal and the possible, given various constraints,” he says. “Opinion polls in the UK are mostly done over the internet using stratified random sampling. They will ask about demographic background and voting at the last election, as these are attributes with known distributions in the population. The method assumes stratification and weighting can overcome the limitations of the samples, to achieve reasonably accurate results.” Random sampling, on the other hand, is more common in US opinion polls. “There is evidence that this is a better approach, but it’s more expensive.” The quality of the fieldwork also matters. “An internet survey needs to be easy for people to follow, and you must make time to get hold of a reasonably representative sample of people.”
MAY 2019 | THE ACTUARY | 15
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Features Interview
Exit polling on election day in the UK presents unique challenges, because votes from different polling stations are mixed prior to counting, and voting mainly takes place late in the day so there is little time to analyse. “There is a wide geographical spread in the level of support for the political parties, but the variance in change in support between any two elections is much lower,” says Curtice. The methodology used is to estimate the change in support at each of about 130 polling stations where exit polls have been conducted in the past, and to translate this into the probability of each party winning. The probabilities are then combined to give a final exit poll verdict.
Interest in elections and politics Curtice’s interest in general elections dates back to the age of 11, with the 1964 election won narrowly by Harold Wilson. “My parents allowed me to watch the beginning of the evening election programme, and I followed it the next day on the radio.” He was exposed to political discussion within his family, but at a level that could easily have washed off. His mother took him to meetings and his grandfather was involved with the Labour Party. “From an early age I was reading political literature, and as a teenager I knew I wanted to study politics at university.”
Brexit We turn to the Brexit referendum. “The legitimacy of a lawmaking authority requires the people to choose it. You can argue about the timing of the referendum, but our membership of the EU has always been problematic, and arguably at some point the issue was going to get raised.” Curtice explains how preconceived views influenced polling during the referendum. “A lot of people said that, at the last minute, the EU would do a deal. Similar folk wisdom is, if you get a major constitutional referendum, at the end the public will swing in favour of the status quo because of fear of the consequences of change.” Where polls provided conflicting results, “there was a tendency to believe the polling that fitted your expectations. “There was an issue in the Brexit referendum that was a bit more subtle, and which explains why the polls were slightly too pro-Remain. Because a Leave vote had more significant consequences, not least for the financial markets, the polling industry was concerned about predicting a Leave result and being wrong.” Curtice believes the Brexit result was always going to be close, as indicated by the internet polls. “I would say this is a 50-50 shot so, if a Leave vote is business
“With strong views on both sides, there is a tendency to fit the evidence to preconceptions rather than the other way round – resulting in few people changing their minds”
critical, then it is worth spending money to mitigate the risk”. Overall, he estimates there was a 5% swing to Leave over the campaign, but was never sure if it would be enough to win. On the problems found when implementing the Brexit decision, Curtice comments: “With strong views on both sides, there is a tendency to fit the evidence to preconceptions rather than the other way round – resulting in few people changing their minds.” This is a problem when the status quo does not have majority acceptance, and when there is a range of views on what the correct way forward is.
Public opinion
The Brexit referendum reflected a change in the structure of public opinion, raising fresh challenges for the pollsters and requiring them to innovate. “The demography of attitudes was different from general elections; not least this was a battle between young graduates and older, less well-educated people,” explains Curtice. “It was not a classic left versus right or middle versus working class contest, but one between social liberals and social conservatives.” Social liberals tended to vote Remain, social conservatives for Leave – cutting across the usual party lines and raising questions about the future political landscape.
Electoral reform Might there be electoral reform in the UK? “We rely on an electoral system with a tendency to produce majorities, but that is contingent on the electoral geography,” says Curtice. He explains how, in the early 1950s, it was shown that a ratio of votes between Conservative and Labour of a:b resulted in a ratio of seats of a3:b3. Add in the tendency of the system to punish small parties and a majority was likely. There are now far more seats held by smaller parties, and fewer marginal seats that may change hands at an election. That makes a majority outcome less likely and puts the bargaining power in the hands of a small territorial party. Curtice notes this is the consequence of not having a majoritarian electoral system, as Italy and Greece do. What about proportional representation as an alternative? “In many countries, that was introduced as the price extracted by the elite to allow the expansion of the right to vote. The concern was, with a majoritarian system, the working class would dominate the legislature and public policy.” In the UK, electoral reform has been seriously considered on various occasions, but the system has continued to work well for the two main parties, which consequently chose to maintain the status quo. “It’s only possible to guarantee proportional representation if you are willing to have some degree of multimember representation, but many UK members of Parliament are still wedded to the single member constituency,” says Curtice. “Electoral reform will happen in the UK when we get another occasion where a prime minister is dependent on a small party to gain power, and that is the price to be paid.”
16 | THE ACTUARY | MAY 2019
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26/04/2019 10:53
ts s co t n io f fec t a g r to a i m et UK w o re s e x i t h t s a Br a k s p l a n o s to lo on a p e g rati s in d ri ig rie B i a i m mc t u a v i d a Ol an www.theactuary.com
18-19 Diminished returns_The Actuary May 2019_The Actuary 18
26/04/2019 16:11
Features Careers
OLIVIA BRIDGE is the political correspondent for the UK’s Immigration Advice Service
The immigration plan in post-Brexit Britain means that EU actuaries are required to meet high visa requirements and pay for the privilege. They will also have to pay for an English language test, and some may require document translation services, which, of course, come at a price. The proposed replacement of free movement for European actuaries is expensive and restrictive. Visa fees have risen twice in the past year alone, and the Immigration Health Surcharge that migrants require in order to access the NHS has also doubled in price this January, inflicting costs of up to £2,000 to accompany a five-year visa. Couple this with a Tier 2 Visa application, and an applicant will be coughing up thousands. Even emailing the Home Office incurs a charge of £5.48.
A shrinking talent pool
ILLUSTRATION: IKONIMAGES
B
usinesses are now battening down the hatches and putting plans into action, regardless of whether the UK leaves the EU with a deal or not. Concerns are ramping up among those working in the financial, insurance and banking sectors, as Brexit will unequivocally change the landscape either way. The UK has long benefited from free movement. London is a globally recognised hub of talent that has pushed the UK to the forefront of the world stage and international market, coming second only to the US as the world’s largest financial sector (followed by China and Japan). The Single Market permitted businesses and firms to freely trade and sell services across the continent without facing any barriers. However, an emerging problem for the insurance, finance and actuarial industries is not only retaining current levels of staff after Brexit, but also recruiting in the future. The UK’s success was built on cross-collaboration and the continuous exchange of talent from all over the world. EU nationals plug vacancy gaps in the UK, from graduates and junior analysts to CEOs. Migration Observatory statistics from 2017 show the banking and finance sectors ranked among the highest in the UK labour market for recruiting EU and international workers, accounting for 17% and 20% of total employees in the sector respectively. Diluting access to talent pools up and down the country is the arrival of the ‘skills-based’ immigration plan, scheduled to come into effect by 2021.
www.theactuary.com
18-19 Diminished returns_The Actuary May 2019_The Actuary 19
Employers and firms looking to recruit from overseas will need to issue each worker with a certificate of sponsorship – at a cost of £1,199 for every non-UK worker they recruit per year. They will also need to apply for a sponsor licence – which isn’t cheap – in order to legally hire workers from the EU and beyond. There is, at least, a silver lining as actuaries, economists and statisticians are featured on the UK’s Shortage Occupation List. Migrants looking to take one of these positions can benefit from marginal visa discounts – as long as they apply for a job through the list. However, the fact that these roles are listed as a shortage occupation shows that the sector could be in for a shock after Brexit, when access to talent pools have shrunk. As we move towards artificial intelligence, automation and digitisation, big data and cyber security, the demand for specialised skills will increase. In turn, this will hike competition across the continent for programmers, data analysts and machine and cyber security operators. Actuaries, with their specialised skills, may prefer to take up positions elsewhere in the EU, where they can continue to benefit from frictionless mobility. If this proposed immigration plan and the disproportionate costs involved are not revised, the fees could saddle the industry with widened domestic vacancies and skills gaps. The cost and the complexity of seeking a visa and a sponsor will only act as a deterrent to the highly-skilled talent that the UK needs the most. And, although the long-held success of the industry in the market will keep it from collapse, EU workers will continue to find employment where there is stronger job security – painting a bleak picture for the future of the sector in a post-Brexit UK. MAY 2019 | THE ACTUARY | 19
26/04/2019 17:13
Features Technology
Mandy Luo looks at how technological advances and data collection could help actuaries engage with consumers when it comes to life insurance – especially elusive millennials
The examined life www.theactuary.com
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Features Technology
FIGURE 1: Number of Reimagine Life study interviewees, by country Developed market – large, long-established markets Emerging markets – smaller, fast-growing markets
CAN 584
DEU GBR 539 FRA 514 ESP 506 507
USA 1,002 MEX 501
CHN 1,010 IND 1,024 MYS 512
CHL 511
JPN KOR 539 500
ZAF 508
IDN 502 AUS 501
Changing drivers, changing journeys Consumers today use a broad range of channels to research, interact and purchase. While many life insurance purchases are still initiated by some form of human contact – insurance agent, financial adviser, bank staff or telemarketing call – the journey to the ultimate purchase decision is changing. Consumers increasingly want to research their proposed purchase online. Different generations have different engagement preferences, determined and defined in part by the complexity of their protection needs. However, data indicates that all generations show an appetite for online engagement at some point in the pathway to purchase, and will be happy to provide certain personal information in a secure online environment. The rise of digital channels does not correspond to a fall in traditional intermediary channels. Rather, online channels are used to supplement information and services from other sources, particularly early on in the customer journey. At the point of purchase, the continued strength of intermediary channels is www.theactuary.com
20-22 feature_The Actuary May 2019_The Actuary 21
clear – 61% of consumers state that they intend to purchase via advised channels, and 79% claim that their last purchase was via an advised channel. FIGURE 2: How people completed the application Mobile Tablet Laptop Desktop
68% Millenials
68% Generation X
66% Boomers
43% Silent
A seamless online-to-offline channel approach, which allows the consumer to mix and switch their channel without hindrance, is an attractive guiding principle; it points to the potential for hybrid advice models to solve the consumer’s dilemma. Such models – combining online research, auto-advice technologies, and human confirmation and completion (whether face to face, phone, chat, etc) – can deliver advice in a relatively cost-effective and flexible manner, building trust through a more effective customer experience.
How to convert the unconvinced? The relationship between consumers and sharing data is complex. At one extreme, there is the ever-present mobile device, wholehearted engagement on social media and widespread adoption of applications that facilitate service, save time and ease interactions. At the other is ongoing doubt and suspicion about the security and privacy of data sharing and use – and a lack of trust in corporate intentions in that regard. That said, most consumers are willing to answer some health questions. And the majority, across all generations, now feel comfortable completing health questions online – albeit with a striking bias in self-perceptions of health status. FIGURE 3: How healthy do you perceive yourself to be in comparison to the average person of your age?
42%
Healthier than average
49%
9%
Average
Less healthy
ILLUSTRATION: ISTOCK
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he past five years have seen the life insurance sector transformed. Pathways to purchase have been automated, customer journeys modelled, mapped and personalised, and payment gateways perfected as the industry automates processes in line with contemporary consumer culture. Reimagine Life, ReMark’s fifth annual study of consumer trends in the global life insurance industry, suggests that, with the innovative use of consumer data and delivery of clear benefits in return, we can change the customer relationship for the better – and even entice the millennial generation to engage.
Insurers need to have realistic expectations of the data they are likely to obtain. Even from a willing consumer, there is limited MAY 2019 | THE ACTUARY | 21
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Features Technology
likelihood of rich activity and diet data. However, as new approaches to underwriting – such as SCOR’s Biological Age Model (bit.ly/2TUTEXs) – demonstrate, the combination of ongoing wearable data and incentives offers possibilities in terms of identifying consumer health at application and ongoing engagement. The application of regular repricing based on wearables data – the ‘reward’ part of the data sharing equation – suggests that both the renewal process and lapse rate experience may well be improved.
Dynamic lives demand smarter solutions Novel applications of consumer technologies also lie at the heart of the response to the Millennial challenge. Compared to their parents, Millennials are not particularly disposed to buying life insurance, nor are they receptive to many of the traditional propositions and messages of insurers. Especially in developed markets, Millennials are more motivated by happiness, health, wellness and related goals than by fears. Wellness and loyalty programmes, powered by wearable technology that enables the sharing of data and rewards, are a key gateway to all segments, but especially to Millennials.
% agreement among consumers who perceive themselves to be: healthier than average of average health 49 less healthy than average 45
56 48
management. Insurers benefit through continuous risk assessment from a simple dataset, for dynamic underwriting that minimises risk, facilitates competitive pricing, speeds the purchase cycle and enhances the customer experience. Personal fitness is just one side of the wearable device equation. Next-generation medical monitoring devices and medicine-tracking apps could reframe the protection proposition entirely, making possible dynamic partnerships of prevention and protection in the personal health management sector.
A positive narrative
FIGURE 4: Which of the following would you be happy to allow your insurer to see, in order to answer fewer questions about your health? 66
“Advances in technology mean consumers can be incentivised to make positive behavioural changes”
Technology transforms expectations and experiences; advances mean consumers can be incentivised to make positive behavioural changes through dynamic underwriting, automation and more frequent customer engagement. FIGURE 5: What is a reasonable time for an insurer to decide on a claim and then to pay out once the decision has been made? Reasonable time to decide
Reasonable time to pay
43
40 34
36
27% 25% 24 19 14
Doctor’s reports
Prescription info
Blood tests
App data
16 11
10
None
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22%
12%
13%
13% 11%
7%
24 hours
Wearable devices – whether a next-gen fashion accessory or a simple tracking band – feed into the interests of both insurers and consumers. Wearables have been adopted by keep-fit enthusiasts and extreme athletes alike, and users are a significant cohort of engaged customers; interest is rising in the trade of data for rewards such as regular repricing. Wellness programmes make tangible the promise of protection through ‘prevention first’ strategies, and the associated willingness to share data opens new avenues to engagement. Dynamic underwriting presents new ways to assess risk and manage conditions. Enabling services, rather than death benefits, become the driving factor, as insurers help consumers to pursue healthier life choices. Loyalty and wellness programmes are opportunities to engage consumers in a positive way and connect them with relevant products and services. Such a strategy has appeal beyond the Millennial cohort. There is broad support across all demographics for insurers to do more to support quality of life and extend their proposition beyond death benefits. Data-driven approaches such as the Biological Age Model offer incentives to consumer and insurer alike. Consumers benefit from personal health intelligence and learn how even the simplest exercise (daily steps) can have a significant effect on mortality risk; they are rewarded for taking responsibility for their personal health
26%
16%
48 hours
1 week
2weeks
3weeks
8%
6%
4+weeks
8%
6%
Don’t know
Engagement is the key to re-imagining the insurance value proposition in line with contemporary attitudes and interests. The challenge is to sustain that engagement and secure the data stream on which such dynamic propositions depend. For dynamic underwriting to flourish, engagement strategies and messaging must chime with the desire for lifestyle-based protection – acknowledging, rewarding and encouraging positive behavioural change. That means joining customers on their journey. It is about tapping into interests and serving those interests to become a valued part of consumers’ efforts to get fit and stay fit. The benefits cut both ways. Ultimately, the relationship between consumers and technology is simple. MANDY LUO, FSA Consumers love their devices and want is ReMark’s chief reasons to use them. Mobile engagement actuary and head of defies boundaries; few activities are data analytics undertaken without it and fewer still are impervious to it. The complexity is ours to own. The machine age is here. Speed matters. Ease of use matters. But the consumer wants – and the insurer needs – the best of what humans and technology can offer them. www.theactuary.com
26/04/2019 16:31
The magazine of the Institute and Faculty of Actuaries
FEATURES LIST 2019 PLEASE NOTE THE THEMES FOR EACH ISSUE ARE NOT EXCLUSIVE.
The schedule is subject to occasional revisions. Please check with the features team prior to contributor deadlines for further details. Contact: features@theactuary.com
ISSUE
July 2019 August 2019 September 2019 October 2019
FURTHER INFORMATION For further information and advice please contact features@theactuary.com
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23 ad_The Actuary May 2019_The Actuary 23
DEADLINES
Published: 11 July 2019 Contributor deadline: 20 May 2019 Ad booking deadline: 21 June 2019 Published: 08 August 2019 Contributor deadline: 17 June 2019 Ad booking deadline: 19 July 2019 Published: 05 September 2019 Contributor deadline: 15 July 2019 Ad booking deadline: 15 August 2019 Published: 10 October 2019 Contributor deadline: 12 August 2019 Ad booking deadline: 20 September 2019 WRITING FOR THE ACTUARY See terms and conditions at www.theactuary.com/contribute/
SUBJECT THEMES ■ GLOBAL VISION ■ Careers/Professional development ■ Longevity/Mortality ■ Health and care ■ Life insurance ■ GI/Reinsurance ■ Environment ■ Modelling ■ Life Insurance ■ Mortality/Longevity ■ Health and care
MORE CONTENT ONLINE Additional content can be found at www.theactuary.com
MAY 2019 | THE ACTUARY | 23
26/04/2019 16:12
Features Life
THE PROBLEM
SOLVER Adam Robinson and Luca Tres explain the past, present and future of life insurance securitisations
L
ife insurance linked securitisation (life ILS) is the packaging of life insurance risks and passing them to the capital markets. However, beyond this simple definition, what exactly is it? Unlike the developed yet standardised role that non-life ILS has played in non-life insurers’ peak risk transfer (such as catastrophe bonds), life ILS has long resisted being shoehorned into an easy-to-define yet single-purpose offering. This lack of standardisation is actually life ILS’ greatest strength when considering it as a tool for risk, liquidity and capital management purposes. Whenever insurers have faced new problems caused by regulatory, reporting or demographic changes, life ILS funds have had the capacity to provide solutions.
Past Pre-financial crisis, life ILS was used by (re)insurers to solve a relatively small set of problems. The first one was to place peak mortality risks – a similar problem to the peak catastrophe risks that non-life CAT bonds were designed for. An example would be Swiss Re’s first Vita mortality bond in 2003. Another use was the AXXX excess reserve financing ADAM ROBINSON securitisations (named after the US adoption of Regulation is investment Triple-X) and embedded value securitisations across the analyst at Securis US, UK and Europe. These types of transactions – while Investment Partners different in their objectives – had similar effects, placing life actuarial risks, notably mortality and lapse, into the capital markets. It should be noted, however, that issuance was facilitated by monoline insurers providing ‘credit wraps’ on bonds; the guarantee from monoline insurers enhanced the bond’s credit rating (linking it to the insurer’s). This made these types of transactions more accessible to conventional capital market investors, as opposed to specialist investors LUCA TRES such as life ILS funds, as some of the most complex risks is head of life at would be effectively transferred to the guarantor funds. Securis Investment The run-up to Solvency II saw some more innovative Partnerss transactions. An example of this was Aegon’s longevity risk transfer programme, whereby Aegon transferred its longevity risk to Deutsche Bank, which in turn placed it with capital markets investors. This was a novel out-of-the money longevity swap, with attachment and detachment points based on Dutch population indices. This type of transaction was in many ways a precursor to Solvency 24 | THE ACTUARY | MAY 2019
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II-optimised transactions, as it could likely result in solvency capital requirement (SCR) and risk margin relief. The transaction itself was also highly specialised, requiring investors to take a long-term view on Dutch mortality improvements to price and understand the risk. Life ILS funds were a key element in this transaction, as they had the requisite capital markets and actuarial skillset to understand and price the deal.
Present Solvency II was meant to boost de-risking and capital relief transactions. These are designed to explicitly transfer key actuarial risks from a (re)insurer’s balance sheet and, subsequently, reduce SCR for the risk-ceding (re)insurer. Transactions of this type can cover any of the core life actuarial risks; lapse has been www.theactuary.com
26/04/2019 16:13
Features Life
recognise the LAC DT on its balance sheet is to demonstrate that should a loss occur, it will still be able to meet its capital requirements and make profits in the future. (Profits are clearly required, as otherwise no future tax to offset against the tax credit would arise.) By providing full risk transfer solutions, life ILS funds have been integral in structuring transactions that allow insurers to benefit from their LAC DT. Beyond explicit risk transfer and Solvency II-motivated transactions, Life ILS funds often help insurers by providing capital to support business growth. For example, commission payments to brokers create cashflow strain upon the inception of new business sourced through this channel. Traditionally, banks could help insurers with this strain by providing liquidity facilities. However, since the financial crisis, banks have moved away from this business. Life ILS funds have stepped in to fill the gap and offer solutions to this problem, structuring transactions linked to the experience of specific policies, on which life ILS funds take direct lapse and mortality risks. This means that insurers benefit from not only reduced day-one cashflow strain, but also from a risk reduction and, possibly, from lower SCR.
ILLUSTRATION: IKONIMAGES
Future
a key one, especially mass lapse, but increasingly also lapse down, longevity and, to a lesser degree, mortality. To date, however, the volume of public ILS transactions has been limited. This is partly due to investment banks’ subdued capacity and appetite for structuring these transactions, as well as for the ample availability of cheap capital; medium and large insurers have benefited from thin spreads in the hybrid bond market, enabling issuance of different forms of capital, such as restricted tier 1, tier 2 and tier 3. Private ILS transactions have been more abundant, notably among mid-sized insurers. Privately negotiated risk-transfer transactions have remained a key focus for life ILS funds in a post-Solvency II world. These funds have stretched beyond traditional lapse, longevity and mortality de-risking transactions, sometimes even helping insurers on the loss absorbing capacity of deferred taxes (LAC DT). This is a Solvency II balance sheet item that allows insurers, under certain circumstances, to reduce the insurer’s SCR as a consequence of a loss, getting credit for the lower tax due in the future. This future loss-contingent benefit can be recognised on the balance sheet today, reducing SCR risk capital. A key requirement for an insurer to www.theactuary.com
24-25 LISRobinsonTres_The Actuary May 2019_The Actuary 25
IFRS17, the new accounting standard for insurance contracts that comes into effect on 1 January 2022, will affect the timing of profit recognition for insurance companies. This could shake up the industry and, subsequently, the life ILS market. Life ILS funds will not be affected directly, as they report under different accounting standards. This will permit transactions that leverage accounting differences between insurers reporting under IFRS17 and life ILS funds under a simpler fair value basis. Some life ILS funds are already working on transactions that can impact profit recognition under current accounting rules (IFRS4) and upcoming ones. When credit spreads begin to widen, issuing new hybrid bonds may become less attractive, encouraging some of the larger insurers to explore alternative solutions to reduce Solvency II capital requirements. This may lead to issuance of large-scale public de-risking transactions (mass lapse and longevity structures are an obvious target), in which most life ILS funds will participate. Life ILS has evolved over time and changes will continue in the future. The role of life ILS funds has also morphed, from risk-taker to provider of holistic solutions. As insurers become more comfortable with their Solvency II balance sheet and IFRS17 implementation becomes imminent, we expect them to seek further innovative solutions to some of their problems, with which ILS funds can help. MAY 2019 | THE ACTUARY | 25
26/04/2019 16:13
Features Corporate social responsibility
Michael Fitzgerald looks at how organisations regard their social responsibilities and how these have evolved to become integral today
Embedding VALUES
T
he aims of corporations have changed significantly during the past half century. Much of the renewed focus on corporate social responsibility has come via the identification of the need for ‘sustainable development’. The UN-sponsored report Our Common Future, also known as the Brundtland Report, defines sustainable development as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”. Sir Adrian Cadbury, speaking at the World Bank’s Global Corporate Governance Forum in 2000, defined corporate governance as being “concerned with holding the balance between economic and social goals and between individual and communal goals. The corporate governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship of those resources.” Nearly 20 years on from Sir Adrian Cadbury’s remark, the prestigious Harvard Business Review in its February 2018 edition nailed its colours firmly to the mast: “We are witnessing a big, transitional moment – akin to the transition from
26 | THE ACTUARY | MAY 2019
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www.theactuary.com
26/04/2019 16:14
Features Corporate social responsibility
analogue to digital, or the realisation that globalisation is a really big deal. Companies are beginning to realise that paying attention to the longer term, to the perception of their company, and to the social consequences of their products is good business.” The phrase ‘corporate social responsibility’ (CSR) can be interpreted in many ways. The main approaches may be summarised as: Any business entity has a single reason to exist and that is as a means of wealth creation for its shareholders. The economist Milton Friedman would have been the most easily identified champion of this view in the latter half of the 20th century. Others see society and business as inextricably linked and driven by ethical considerations. There would seem to be very little overlap between this approach and the previous one, and yet both models have produced profitable businesses and wealthy shareholders. A variant of the above involves company owners identifying that the company has the power to influence society. The company may take the opportunity to operate in the social sphere to exercise this power. A fourth approach sees the need to integrate social needs into business methodology, in recognition of the fact that the company would not exist without the needs of broader society.
The modern approach According to Michael Hopkins, editor of and contributor to CSR and Sustainability – From the Margins to the Mainstream: “CSR is steadily moving from the margins to the mainstream across the spectrum of private companies, NGOs and the public sector. It has grown from being a concept embraced by a small number of companies such as The Body Shop in the 1980s, to a widespread global movement. At its weakest level, it is represented by a few philanthropic gestures by organisations but, when applied in its most complete form, it can steer the organisation or sector to deliver a fully-fledged, system-wide, multi-stakeholder operation, accompanied by multiple types of certification.” FIGURE 1: Once a company embraces sustainability, it is no longer accountable only to its shareholders but to all its stakeholders
Investors
Media, public, NGO’s
ILLUSTRATIONS: ICONIMAGES / FREEPIK
SUSTAINABILITY
Suppliers
Government / regulators
Customers
Communities
“Companies are beginning to realise that paying attention to the perception of their company is good business” The key difference between the approaches is in defining who the stakeholders are for any business. For example, Tata Sustainability Group’s mapping of stakeholders (Figure 1) for any business looking at CSR and sustainability goes well beyond Milton Friedman’s narrow shareholder focus. Shankar Venkateswaran, Tata Sustainability Group CEO, elaborates on the concept of sustainability and its relationship with corporate social responsibility: “This automatically implies that a company must a) map its stakeholders b) understand what its stakeholders expect of it in terms of environmental, social and financial performance, and consequently c) build a business model that incorporates these expectations. The governance processes have a key role to play in enabling and ensuring this.”
Measuring CSR A sure sign of the change in approach is the increasing number of organisations that now exist in order to rate corporations on CSR and sustainability. This is a seachange; something is only measured if it is deemed to be of value, and CSR and sustainability are now valuable currencies. But how real is the commitment? Questions to ask when considering whether a business is truly committed to CSR include: Are CSR and sustainability built into the business model? Is it evident at executive level? Does someone have oversight and responsibility for these issues at board level? Does meeting or failing to meet CSR and sustainability targets impact on remuneration? Are targets set, communicated, assessed and reviewed? Although the CSR key performance indicators (KPIs) will differ depending on the organisation, they are, in all instances, quantifiable financial and nonfinancial measures. They should be included in the organisation’s strategic plans. MAY 2019 | THE ACTUARY | 27
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Features Corporate social responsibility
Inconsistencies in the application of CSR and sustainability have undermined much of the progress made. A billionaire business leader may be donating to charities supporting the homeless under the guise of CSR, while the business model giving rise to these super-profits is founded on minimal labour rights and zero-hours contracts. That same business may be contributing to lobbying firms which campaign against earmarked levies to fight homelessness. While the donation may hit the first mark of CSR, the approach here fails to meet the broader definition of business sustainability, as well as having negative social impact.
Practical and scaleable Sadly, the cost of a senior staff member taking time out to appear in a promotional picture presenting a giant cheque to a community organisation is often higher than the sum raised for the charity. It may be cost-effective advertising for the company, but it is not genuine CSR. I remember meeting excited colleagues who, with no carpentry experience between them, had earlier in the day helped repair damaged park furniture. They were buzzing and enjoyed a sense of bonding in the pub that night. The reality was that the council dismantled their work the next day as it was a danger to the public. If one’s finance team was preparing statutory returns and a member of the sales team turned up to help to raise money under the guise of ‘team-building’, they would be sent packing. Similarly, if the valuation actuary decided they would like to undertake a ‘sponsored Movember IT migration’, they would be told, in no uncertain terms, that they should stick to the area where their skills apply.
“A billionaire business leader may be donating to homeless charities while their business model is founded on minimal labour rights” 28 | THE ACTUARY | MAY 2019
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If companies are serious about engaging with community organisations on an ongoing basis, then it would seem axiomatic that the company recruit and employ individuals who understand the requirements and complement the skillset to make the community organisation more effective. If the company is serious about CSR and sustainability, it should then treat these issues as a core part of the business and apply the same professionalism it applies to revenue generation and compliance. CSR is not a hobby. We are a small consultancy with four employees. Three of the team are assigned to revenue generation and administration. The fourth employee’s only role is to partner with and mentor small community organisations that are already making an immediate positive impact to vulnerable people. This part of the business, community support resources, is a cost to net income and generates worth in a different currency than revenue – but it is a core part of our business model. Information on progress is shared on a monthly basis, and the addition of future staff will hinge, in part, on their buy-in to this principle. Progress is reviewed with the same diligence as any other projects. In the past year, we have succeeded in helping two organisations: one providing creative classes to adults with mental health difficulties and the other providing opportunities for integration for female asylum seekers in Ireland’s Direct Provision system (asylum seeker accommodation). This has indirectly led to the city’s Library Services linking to the children of asylum-seeking people living in the Direct Provision centres. The day these MICHAEL children delighted in the discovery of the library services FITZGERALD was the proudest in my 30-something years as an actuary. is director at There is nothing in our small-scale model that is not Fitzgerald Actuarial scaleable if companies make genuine CSR a business priority, allocate resources accordingly and employ people with the necessary skillset to make a real impact. In fact, I would suggest that making CSR an integral part of the definition of ‘business as usual’ should be the aim, rather than merely a photo opportunity or a marketing exercise. www.theactuary.com
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Features Auto-enrolment
Ka Smith explores the impact of pension Kate au automatic-enrolment in the UK and the les lessons that might be applied elsewhere
Going automatic
I
n 2012, the UK embarked on one of the greatest pension experiments – automatic-enrolment (AE). Seven years on and it is making a difference, with 10 million people now saving into their workplace pension plan and benefiting from their employer’s pension contributions. Equally positive, the Department for Work and Pensions (DWP) highlights that only 1% of employers have reduced their total pension contributions across the whole workforce as a strategy to absorb the cost of meeting AE requirements – a far lower percentage than expected. There is strong evidence that employees are getting used to the idea that each job comes with a pension, and this means paying pension contributions. This is demonstrated by lower opt-out rates for new recruits compared to when AE commenced. Overall, businesses have responded well. In 2018, the DWP reported that around two-thirds of employers found their ongoing AE duties less onerous than expected, while in February 2019, the Pensions Regulator revealed that over 1.4m employers confirmed they have met their AE duties.
ILLUSTRATION: ISTOCK
Impact on behaviours and attitudes The success of AE is down to eligible employees not having to take any action. As soon as they fulfil the eligibility criteria (age 22 or above, earn over £10,000 a year and work in the UK), their employer auto-enrols them into a workplace pension scheme. They can opt out, but fewer than 10% have chosen to do this. Rather than a big bang approach, employers were staged into their AE duties between October 2012 and April 2017. Each employer was given a staging date, determined by the size of their largest pay-as-you-earn scheme in April 2012. New employers began to stage from May 2017. The Pension Regulator worked closely with employers to ensure they were aware of their responsibilities, and made it clear that if employers didn’t comply they faced heavy penalties. The minimum total contribution under AE is 8% of a band of earnings, but a phased approach was adopted, as shown in Figure 1, to allow employers and employees to become familiar with AE. The first increase in April 2018 was from 2% to 5%, and then to 8% in April 2019.
FIGURE 1
EMPLOYER
EMPLOYEE
TAX RELIEF
TOTAL
OCTOBER 2012
1%
0.8%
0.2%
2%
APRIL 2018
2%
2.4%
0.6%
5%
APRIL 2019
3%
4%
1%
8%
There has been some debate about whether we are approaching ‘saturation point’ in pension contribution levels, which could result in mass opt-outs following the most recent increase. However, recent research by NEST, the AE pension provider set up by the government, indicates the April 2019 contribution increase isn’t expected to lead to people ceasing contributions or cause a higher rate of opt-out among new joiners. The positive impact of inertia on pension saving cannot be underestimated, and it is expected many people won’t notice the extra contributions or the fall in their takehome pay. In fact, 28% of employees have considered increasing contributions further.
Moving from inertia to engagement The reality is many people are still not engaged with saving for their retirement. Even with minimum contribution levels rising, an 8% contribution isn’t going to be enough to provide an adequate income in retirement for most, even combined with the state pension. The focus needs to move from inertia to engagement, to help people understand how much they need to save, and help them to make this happen. There are certain demographics who are less engaged and we’re beginning to see trends emerging. Women tend to have higher participation rates than men and, while pension participation remains highest for older employees, it’s good to see the largest increase has been among the youngest, those aged 22-29. More people are saving for retirement, but AE doesn’t cover all workers and so many people are still losing out. Paying into a pension should be the social norm for every UK employee, and the DWP is seeking to change AE policy to allow more people to benefit. A reduction in minimum age for AE from 22 to 18 is planned, bringing in a raft of young pension savers. Also, to align to modern working patterns, any concept of an upper age for AE is expected to be removed. There is also work to be done to address the gap in self-employed pension savings as this expanding group of workers risks being left behind. The £10,000 annual earnings trigger is also to remain in place excluding low earners, mainly women, from AE. However, they can opt in and benefit from an employer contribution. There is no plan to further increase the rate of AE contributions. These are based on a band of annual earnings KATE SMITH between £6,136 and £50,000, so the first £6,136 a year is is head of pensions non-pensionable. The DWP is seeking to remove the offset from at Aegon the mid-2020s, so contributions are calculated from the first pound, leading to higher pension contributions for employers and employees. AE has been successful, but contribution rates need to rise. Inertia will only take people so far. Employees must take ownership of their workplace pension and make active decisions. We need to build on AE and take it to the next stage. MAY 2019 | THE ACTUARY | 29
29 Autoenrolment Smith_The Actuary May 2019_The Actuary 29
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Features Pensions
Deflated expectations Allan Martin discusses whether unfunded pension promises can all be kept
Pe
ensions can either be funded for in advance, or be unfunded and dependent on taxes, revenues or other resources from future generations to pay the promised benefits. At the end of 2017, OECD countries had funded pensions of almost US$29trn; very important to world stock markets and for equity and bond finance, and include both defined benefit (DB) and defined contribution (DC) arrangements. In comparison, unfunded DB pension promises in OECD countries in 2016 were a staggering $78trn, nearly twice conventional national debt. The unfunded promises are growing rapidly, but are a lot less visible and quantifiable than funded arrangements in terms of the value of accrued liabilities and of the liabilities built up each year in the future. As an example, the UK is estimated to have the following DB pension liabilities:
£2.9trn in private and public sector funded schemes £1.7trn of unfunded public sector employee commitments The more familiar state ‘old age pension’ perhaps involves another £1trn for current pensions in payment. In addition, the UK has about £1trn in personal and workplace DC arrangements. The sustainability or adequacy of pension promises is much clearer with funded arrangements. Regular statutory actuarial valuations (for example, every three years) reveal surpluses or deficits and appropriate action can be taken. Complete sponsor failure is rare, but corporate insolvencies such as Kodak, Nortel and BHS illustrate the scale and significance of private sector pension debts. Public sector insolvencies are less common but have occurred in several US cities.
5 FIGURE 1: GDP ggrowth G 1 UK G h versus u SCAPE A discount i n ratee
3 2
Some unfunded pension arrangements, mainly state pension arrangements, are assessed via future cash flows, contributions paid in and benefits paid out over rolling five or 10 year periods. Unsurprisingly, the age profile of contributors and beneficiaries dominate the assessment. When not assessed on a cashflow projection basis, unfunded schemes are evaluated in a similar manner to funded schemes, by calculating the value of accrued liabilities and the cost of each year’s future build-up of liabilities, using a discount rate to convert future cash flows into present values. As for funded schemes, the higher the discount rate, the lower the value placed on the liabilities. The cost may seem notional because there is no physical fund, but the discount rate affects the derived cost of benefit provision, which can influence whether the benefits are deemed to be affordable. This is an important issue, since benefit expectations build up and politically are very hard to change, whether in respect of commencement age, eligibility or amount. Actual benefit reduction or changing expectations are as difficult as raising additional tax.
1
UK challenges
£17bn
0
03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 -1 -2 -3 -4 -5
30 | THE ACTUARY | MAY 2019
30-31 Pensions AMartin_The Actuary May 2019_The Actuary 30
Actual GDP growth Forecast GDP growth RPI + 3.5% p.a. CPI + 3.0% p.a. CPI + 2.8% p.a. CPI + 2.4% p.a.
As an example, unfunded UK public service benefit liabilities are calculated using the SCAPE discount rate, which is set as the assumed growth in gross domestic product (GDP). With pension liabilities growing broadly in line with the UK economy, affordability is thereby assumed in the long term, although the incidence of
ILLUSTRATION: ISTOCK
Percentage change on a year earlier
4
Unfunded pension promises
www.theactuary.com
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INSIDE contributions and benefit payments is also dependent on demographic trends. Over the last 15 years, the current SCAPE discount rate has been gradually reduced from Retail Prices Index (RPI) + 3.5% per year to the current assumption of Consumer Prices Index (CPI) + 2.4% per year (Figure 1). It can be seen that GDP growth has been consistently less than the SCAPE discount rate and is forecast to continue to be so; the projected shortfall is many times the size of the £17bn square shown on the graph. With £1.7trn of unfunded public sector pension promises, a shortfall in GDP growth of 1% in a year compared with the SCAPE discount rate equates to £17bn. This implies a massive additional burden on future generations, while continuing generous future service benefits only increase the problem of these ‘other national debts’. Public interest or awareness in a country’s unfunded pension promises might be increased by comparison with the annual issuance of government debt. The promise to repay an index-linked UK government bond currently yielding RPI less 1.5% per year can be legitimately compared to the annual build up of future service unfunded pension liabilities (deferred pay for 5 million voters) ALLAN MARTIN yielding CPI + 2.4% is director of ACMCA per year. Such promises in 2018-19 were of the order of £22bn and £37bn respectively. I believe such issues need wider debate. www.theactuary.com
30-31 Pensions AMartin_The Actuary May 2019_The Actuary 31
Careers Waqas Ahmed discusses why having a broad array of interests can help with the day job
Puzzles Brain teasers for your coffee break
People and society news A round-up of actuarial and social news
On the record David Hare on volunteering for the profession
Student Adeetya Tantia runs an actuarial eye over the unexpected shredding of a Banksy artwork
MAY 2019 | THE ACTUARY | 31
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At the back Careers
I
t is too often assumed that when geniuses get into the ‘zone’, they become tunnel-visioned, blocking out all peripheral distraction to focus on a specific task. The truth is that this ‘zone’ is actually a ‘flow state’, the point at which the genius finds absolute unity and harmony in every aspect – central or peripheral – even remotely connected to the task at hand, whether it be a pitcher in a baseball game, a musician on their violin or an actuary in the midst of an evaluation. Last month’s feature article in The Actuary by Nico Aspinall outlined the importance of environmental, social and governance, which essentially refers to taking a holistic approach to actuarial science – ‘seeing the big picture’. Indeed, actuarial science – like most 21st century fields or professions – is inherently interdisciplinary. A successful actuary will not only understand mathematics, business, behavioural science, politics, monetary economics, demography and much more, but will also know how to synthesise this seemingly disparate knowledge to construct accurate and insightful evaluations. The actuary ultimately finds unity in the complex diversity they are confronted with. At least, that’s how it’s supposed to be. Unfortunately, we are generally not encouraged to approach life, learning and work in this way. We treat anything seemingly unrelated to the task at hand as a kind of ‘otherness’ – a distraction to be avoided rather than assimilated. This is because by the turn of the 20th century, academia, government and business had each adopted a stringent ‘division of labour’ structure, establishing a culture of segregated hyper-specialisation in every sphere of life. This trend has become the norm.
The myth of the ‘specialist’ Such division of labour had profound sociopsychological implications. We automatically assume that the great achievers in the world are lifelong specialists in their field. We presume that they’ve been completely immersed in their work, not allowing anything to distract them from their primary subject or activity. We pre-suppose that the great Nobel laureates, scientists, writers
and artists, athletes, businessmen and statesmen are great because of their exclusive commitment to their work; that this complete, long-term immersion allows for their creative breakthroughs. This is a flawed aw wed e aassumption. ssum ss sum umpt umpt ptio ion. ion. n. Edwin Hubble was boxer in Hu H ubble bb ble l eexcelled xcel xc elle led ed in n aathletics, th hle leti tics ti cs, wa w as an n aamateur maate teu teur urr b oxxerr aand nd n d angler, served sseerv rveed d as as a soldier sso old ldie ier during duriingg the du the h First Fiirrst World Wor orld ld War, War ar,, qualifi qu q ual a ifi ifieed ed as a a lawyer, coached cco oaaccheed basketball baask sket ket etbaalll and and d taught tau augh ht Spanish Span Sp anis an ish h before befo be fo oree becoming beeccom omin ing the thee th Nobel Pr Prize-winning Priz rizzee-w wiin nn nin i g astronomer astr as tron ono om meerr whose who ose se name naam me was w s given wa give gi ven to to the Hubble Telescope. Nicolaus Copernicus was clergyman, bble bb le T eleessco el ope p .N Ni ico olaau uss C operrni op nicu cuss w cu wa as a cl lergy erggyyma er man n,, economist, painter, mis ist, t, p aaiint n eerr, polyglot, poly po lyggllo ly ott, diplomat, dipl di plom maatt, physician phyysssic ph iccia icia ian n and and an lawyer in in addition ad ddi diti tion ti n to to becoming beeco beco omi ming ngg the father her er of of modern mode mo dern rn astronomy, ast s ro on no omy omy my, y, whose whos wh ose heliocentric nttrric theory th heeor ory revolutionised r vvo re olu l ttiion onis ised d the the he way way a astronomers omeerrs viewed om vviiew view ewed ewed ed the the h universe. uni niveers rse. see.. According study rd diin ng to ng to tthe he Si he SSigma igm igm gma X Xii SSurvey, urrve u veeyy, a st tud udy by b American an n psychologist pssyych c ol olog ogist og isst Bernice B rn Be rnic ice Eiduson Eiidu E id du usso on based base base ba sed ed on testimonials im mo oniiaalls b byy numerous numer um mer erou ou ous us Nobel No No obe b l laureates, be laaur urea e te ea tes, es, s, great scientists cieen nttis tiisssts ttss often offtten n have hav ave ve multiple multip mu ltip lt ple le avocational avoca vo ocaati tion onal on al interests ts (prior (priiorr careers (p caarree e rs rs or or hobbies). ho ob bb bie bie ies) es) s). In-depth In n-d dep epth th analysis anaaly lysi sis si of Nobel Literature between el llaureates el aure au reat re reat ates es iin nL Li ite t rraature tu ure re b etwe et ween e 1901-2002 en 1990 011 20 2002 02 found that writers hatt ggreat reeatt aartists reat rttis i ttss aand nd w nd rite ri ters rss often oft ften en have en haavve multiple lee aavocational vo ocati caati t on naall iinterests. nteres nter nt ereesssts er ts. Eiduson ts. ts Eiidu E duso so son on found foun foun fo und nd that that th laureates were es we w eree highly higgh hlly accomplished accco acco omp mpli lish shed sh hed d outside ou utttsi side their si the h irr work: mo more half had artistic m oree tthan haan h h ha alff h aad d aatt le lleast eas ast one on o ne ar arti tist ti stic st ic ic avocation, on,, aand nd aalmost nd lmo lm lmos osst al aall ll ha had an had n eenduring nd n durrin ing hobby, hobb ho bbyy,, from chess insect One-quarter hess hess he ss tto o in inse nseectt ccollecting. ollleeccttin o ng. g. O ne-q ne -q qu uaart rter er were wer ere musicians, practised an ns, s, aand nd d 118% 88% %p ract ra c ised issed vvisual isua is isua ual ar aarts rtts ts ssuch ucch uc h as a drawingg or painting. They or p aint ai nttin ng. gT hey are he are 25 ar 25 times tiim mess as as likely lliike kely ly as as the th he averagee scientist scie scie sc ientis nttis ist st to sing, sin i g, g, dance, dan nce ce, or ce, or act; actt; 17 17 times tim mes as as likely l keely li ly to to be a visual more write poetry ual ar ua aartist; rti tist s ; 12 12 ttimes im mess m o e li or llikely ike kelyy tto o wr w rit ite po oet etryy aand nd d literature; do woodworking ure re;; eight eigh ei ght times gh time ti imes mees more mo m ore re llikely ikkel ikel ellyy to d o wo w ood odwo w rrkkin ng o orr ssome om o me other craft; raf a t; t; four fou our times tiim mees as as likely likkely eelly to to be be a musician; mu m usiici cian an; and an an; and an twice ass llikely bee a ph photographer. ikkel ellyy to to b p ottog ot ogra og ogra raph raph pheerr.
The polymath As one studies stu tudi dies es the es the he lives liv i es es of of renowned renown re nown no wned ed ‘specialists’, lis ists ts’,, it it appears appe ap peaarrs that pe that th a they the hey often ofte of ftteen have have ha ve
The actuarial profession is too focused on specialisation, argues Waqas Ahmed – the secret to success lies in polymathy 32 | THE ACTUARY | MAY 2019
32-33 Polymath_The Actuary May 2019_The Actuary 32
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At the back Careers
Multiple Mu ultiple dimensions Itt h has as llong as ong be on been been n aaccepted cccep ccep epte epte ted d that th hatt actuarial act ctua u ri riaall sscience scie sc cie ience ncce is n is interdisciplinary int nteerrrdi disc di sccip ipli lina nary ry by by nature, naatu na ture tu re, e, and not diffi cult imagine how an nd so o iitt is is n ott d iffi fficcu ult lt tto o imag im maggin inee h ho ow ow iitt ccould ou uld d sserve errvee as erve as a platform plat pl atfo form fo rm m for for or a polymath. Khattak, who has poly po lyma math t . Javed JJaaave ved Kh ve hat attaak, kw ho h ho as as worked worrkkeed wo work d as as an n actuary acttua uary ry for ry for more mo orre than than th an eight an eig ight h years, yea ears rs,, certainly ceertai rtai rt ainl ainl nly ly thinks Hee st started out tth hin hin nkkss sso. o. H o. star taarrte rteed o ou u utt in in profession 2007, getting tthee pr th p ro offes esssiiion on n iin n 20 007, 07, ge 07 gett ttttin ing his Associateship h hi is As A so ociiaattes eshi h p in hi in 2012 201 0 2 and and an Fellowship Feell lo ow wship sh hip p in in 2016. 201166. From 20 From Fr om his h s experience, hi expe ex peri rien ien ence ce, e, the th he actuary actu ac uar ay does doess initially do ini niti ttiiaallly ly receive reecceive eiive v a multifaceted mu m ullttiffac a eetted ed training, traain nin ingg,, but bu b ut this tth h hiis is ethos eth hos os is is not not no encouraged enco en cour our u aggeed d later lat ater ter er on on in in the the he career. car aree reeeer. r “The “T Th he actuarial actu ac ctu tuarria iall exams exxaam ms appear ms appe ap pear pea ar to o train traain in yyoung oung ou oung ng aactuaries ctua ct uarriiess in n multiple mul ulti tipl ple disciplines disc di scip ipli line nees so, sso o, in in theory, theo heory, he ory, or y actuaries accttu uaarriies es should bee we well-placed ssh ho ou uld ld b w ell l -p ll pla lacceed tto lace o use u e wider us wiide wi deer knowledge,” kkn now wle ledg dge, e,” he this he says. say ays. s. “But “B Bu ut th hiiss ttends een n nds ds ds not not to no to happen.” haap ppe pen n..” It doesn’t help It d oeesn sn’tt h elp th el tthat h hat aatt actuarial actu ac tuarria tuar ial departments depa de part rrttm meen ntts often ofte of ten have haave h ve little liitttl ttl tlee interaction inteera in inte ract ctio ct ion with with wi h other oth t er departments. deepa d ep paartme rtm rt meent ntss.. “In “IIn mo mostt llarge most arge ar ge companies, compan co comp mp paan nie ies, s actuarial actuar ac tu uaria aria ar ial al
departments tend to be segregated significantly from other departments,” he says. Indeed, the cult of specialisation seems to have infected the profession. “The prevailing mentality of actuaries, within and externally, is that of a ‘specialist’, which w th wi hin in the the profession p focuses fo ocu use seess almost alm al m exclusively on the mathematical and statistical aspects aspe as peect ctss off the th job.” An n actuary’s act ctua uaar role, he insists, is much more than that. He gives the uar example exxam mpl ple off an a actuary evaluating and being part of the negotiations to cash contributions to a pension fund (as a to agree aggrree ee a company’s co sponsoring sp pon nso sori ori ring ngg employer). According to Khattak, there’s a difference between betw be wee een the een tth he ‘ideal number’ and the ‘ideal solution’, irrespective of whether the company side or the trustee side. The former w eetthe wh her advising her ad dv can ccaan bee arrived arr rrivv at through conventional actuarial calculations. The latter latt latt la tterr requires requi equi eq u r a consideration of all stakeholders, including the pension pen pe nssio ion on fund, fun the sponsoring employer and their specific business fu position, posi po siti tion ion on, the th h members of the fund, the government and the regulatory rreegu gulaatory to oryy body. b “In order “IIn o or rde derr to truly understand the client’s situation (which is by nature and to excel in management and leadership n ture na tu ure r multifaceted) mul ult positions, posi po s ttiion nss,, a less narrow approach is needed,” he says. “This is why the are actually those who do not confine themselves the best b stt actuaries be accttu to o technical tec e hn hnic niccal a or mathematical knowledge alone.”
Emancipating the actuary Emancip Khattak Kh K hat atta tak ha h has as since moved on, as he felt that there were other ways to as satisfy his ssa attiissffy h hi is ze zzest to explore other domains. He is currently co-founder CEO aand an nd CE C O of o Zisk Properties and is involved in a variety of initiatives businesses aand an nd bu b busi ussiine nes relating to blockchain, finance, technology and real estate. He admits that there is potential for the actuarial profession to reform. “Actuaries need to start capitalising on their wide-ranging training to become WAQAS WAQA Q S AH AHMED better actuaries, as actuarial work is not iss aauthor uttho utho or o off The Polymath: Unlocking only reliant on technical knowledge.” Po P olyyma math th: U Power thhe Po the P owe weerr of of Human His suggestion is simple: “Perhaps rotation programmes into other departments, Versatility. He is Ve V errssatil attililit ittyy.. H together with wide-ranging training artistic director ar rti tist tist sticc d irec ir ec ec throughout their careers, can enhance The Khalili att T h K he halili ha hali success for the actuary.” He also believes Collections C Co Coll ollec llllec ecti tion ti ons and that actuaries’ eclectic training makes them iiss ccompleting omp om pllet leettin n well-placed to try new things, even outside his postgraduate h hi is p po ost stggrrad d of the profession. studies st tud udie ies iin ies ie n Abraham Maslow said that ‘what a man neuroscience n ne eur uros rosci ossci o cien ieen nc can be, he must be’ and that one only attains Kings College, at K at iin ngss C oll o a state of self-actualisation when ‘one London. LLo ondon ndon nd on.. becomes everything that one is capable of becoming.’ Knowing that the most effective, creative, highest performing individuals are polymathic in their approach to ‘specialism’, perhaps employers and employees in the actuarial profession ought to re-evaluate the best route to ‘self-actuarisation’.
ILLUSTRATION: IKONIMAGES
a number of avocational pursuits that in some way influenced – or facilitated – their main endeavour. In many cases, they themselves admit to this. It is worth questioning whether those wee cconsider onssi on side der ‘specialists’ spe peci cial alis ists t are are actually ar aacctu actu ual allyy specialists sp peeci cial alists al ists is ts at at all. all.l. al Those Th T hos ose se of of eexceptional xcep xc ptiion on nal all cross-domain cross ro oss s -d dom omai a n versatility vveers rsat a il at illit ity who it who think wh thin th nk holistically way polymaths. Polymaths usually holi ho lliist list stic icaallly ly iin n th tthis h his i w is ay aare ay ree ccalled alle al lle led p po oly oly lyma m th thss.. P o yym ol mat aths ths hs aare r u re ssu ual ally ly understood u un nde derrsstto der oo od d as as people p op pe ople le of of ‘great ‘ggre reat att and an nd d varied var arie rie ied d learning’, lear le a niin ar ngg’, but but ut going goi o ng deeper, dee eepe perr,, pe they th heyy are are re essentially ess ssen ssen entiiallllyy people peo eopl op plle with with multidimensional wi mul ulti ttiidiim meens nsio iona io nal minds, na mind mi n s,, who who ho pursue optimal performance p pu r ue o rs pttim mall p eerrfo orrm maan man nce ce and and n self-actualisation sel elff--acctu tual alis al isaattio is on in i its its ts most mos o t complete, rounded co om mp pleete te,, roun ro ounde un nded ded sens de ssense. se enssee.. Having Havvin ing such ssu ucch h a mindset, min inds dset set, ett, they they th ey reject rej ejeecct lifelong lliife felo elo long ong ng micro-specialisation more broadly, often m mi crocr o--sp o pec e iaali lisati saattiion ion on aand nd d iinstead nssteeaad n d ssee e tthings ee hin hi hing nggs mo m oree b road ro oadly ad dly ly, y, of ften ten te excelling multiple, eex xxce cell ce llin ll in ng in m u ti ul tipl plle, e, sseemingly eeemi eemi minggly ly unrelated un nrrel elat lat a ed d fields eld lds – simultaneously sim si mu ultan lttaneo an neo e u ussly ly minds orr iin n su ssuccession. ucc cces essi es sion on o n. Th The in The iinimitable nim mit i aab bllee ccomplexity om o ompl mpl p exxit ityy of of ttheir heeirr m h iin nds ds aand nd n d llives iivvves es es what makes aare ar re wh w at m at akes ak kess tthem hem uniquely he uniq un queely ly human. hu um man an. Sometimes, Som So meeti times, mes, me s, they the h y use usse their th heeiir ir knowledge kn now wlleedg dge of of multiple mu ullttiipl ple fi fiel elds el elds ds tto o en eenhance nha hanc nce their nce theiir knowledge th kn kno now owle ledg dge performance eld’. How many off aand o nd n dp erfo er rfo orm rman man an nce ce in ce in their th heeiir ‘core ‘ccore orre field’ el ld’ d . Ho H ow m ma any ny such polymaths do have currently su uch ch p ollym o ymat ymat aths hss d h ow wee h ave cu av curr urrrren ntlly in n the th hee profession? aactuarial ac ctu uaarriaal pr rof ofesssi sion ion? on n?
MAY 2019 | THE ACTUARY | 33
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At the back School of thought
Student Appetite for destruction Adeetya Tantia examines the Girl with Balloon shredding incident from an insurance perspective
ILLUSTRATION: SIMON SCARSBROOK
O
n 5 October 2018 the world witnessed a spectacular event – the transformation of an artwork during its own auction. Just after Banksy’s Girl with Balloon was sold for £1.042m, it (partially)shredded itself to become Love is in the Bin – an entirely new artwork, probably twice the value of the original. Through this destruction of an expensive piece of art, in a room full of people who had just fought over it, Banksy – an anonymous political activist and graffiti artist – started a discussion on whether art was only for investment. However, in doing so, he unwittingly made the piece one of the best investments in art. One of the most important things contributing to the value of an artwork is its provenance – its story. One need look no further than the painting White Center (Yellow, Pink and Lavender on Rose), commonly referred to as the Rockefeller Rothko, which was, at the time, the most expensive post-war work of art when it was sold at auction for £72.84m in 2007 – thanks in part to its association with billionaire art collector and banker David Rockefeller. Banksy’s Love is in the Bin will need no 34 | THE ACTUARY | MAY 2019
34 student_The Actuary May 2019_The Actuary 34
introduction for decades to come. The work is a moment frozen in time; it tells a story in a single frame, and was both created and destroyed by Banksy himself. The anonymous buyer most probably had a specialist fine art insurance policy covering ‘automatic acquisitions’, that is, the insurance policy covered the work as soon as the Sotheby’s gavel bang confirmed that the painting had changed hands. Usually, following damage to an artwork, one would expect its value to depreciate, allowing one to file a claim. In this case the value has increased, so no such claim has arisen. This is obviously contingent on the fact that the damage was caused by an external agent’s deliberate actions, without prior knowledge of the owner. Had the damage been more extensive – if the painting had been turned into confetti, for example – a claim for the painting would have probably been paid out. Banksy’s video about the incident ends with the artist stating that “in rehearsals, it worked every time” and shows a practice painting being completely destroyed. Had the shredder worked properly and the entire painting been destroyed, would the world
have accepted the resulting strips of paper as a new artwork? What would have been its value? One could argue that if the painting had been completely shredded, the owner could have simply put the resulting strips in the same frame to create a vertically fractured work. Its value would have been higher than before – but perhaps not as high as it is now. If you were to try to pinpoint the reason for the work’s value doubling, it would probably come down to the publicity surrounding the incident. The video went viral and was seen by millions of people, many of whom would be willing to pay to own this iconic piece of art history. What would have happened if the shredder suffered a mechanical fault causing it to activate at a later time and date, without cameras present? The work’s value would have been in serious question. There would be no video, no publicity and probably no appreciation in value. If the owner were to have filed a claim under these circumstances, would it have been excluded under mechanical fault, or would the insurer have paid? The very fact that the shredder worked when it was supposed to and suffered a fault midway that led to the painting still hanging from the frame, and that the whole incident was caught on tape, surely allowed the insurers to breathe easy. What about the insurance of other Banksy works, though? How will this incident affect their premiums and value? As the painting’s value has increased, so has Banksy’s; his works are probably more valuable than they were before the incident, even though they haven’t been shredded. In the future, insurers may decide to X-ray such works for hidden contraptions before insuring them, and new works could definitely face higher premiums given the risks of Banksy-style creative destruction.
ADEETYA TANTIA is student editor www.theactuary.com
26/04/2019 16:16
At the back Puzzles
iQ
www.mensa.org.uk
Answers . 750: 9.4444 751: 500. Alternate between adding and multiplying to get the next number. 752: The top row minus the middle row gives the bottom row.
Need for speed Mensa puzzle 750 Two cars set off from the same point to travel the same journey. The first car sets off four minutes before the second car. If the first car travels at 40 mph and the second car travels at 65 mph, how many miles from the starting point will the two cars draw level?
Sticky sequence Mensa puzzle 751
Gridlocked Mensa puzzle 752
What number should replace the question mark in this sequence?
What number should replace the question mark in the grid?
1 4 5 20 25 525
8 2 5 6 9 5 8 7 1 4 2 3 5 5
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35 puzzles_The Actuary May 2019_The Actuary 35
MAY 2019 | THE ACTUARY | 35
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At the back Studentnews Society SIAS
Poker faces BY KISHAN PATEL
CHARITY RUN
Marathon in memory Regular charity runner Charles Cowling recently completed one of the world’s six marathon majors, Tokyo, with son and actuarial student Tom. Charles is running three marathons to raise funds for the Brathay Trust in memory of good friends Martin and Matt Campbell. Matt tragically collapsed and died 3.7 miles from the finish of the 2018 London marathon; he was running for The Brathay Trust and in memory of his father, Martin, who had died in the summer of 2016. “Tokyo is home to the greatest marathon lovers on the planet, but because of the time difference I would be running on jet-lagged legs, effectively in the middle of the night,” said Charles. “This was my first visit to Japan and I was taken aback by how kind and courteous everyone was. “But that kindness did not extend to the weather. It was cold and wet. With over an hour of standing around at the start-line, body temperatures dropped and the countdown to the start got slower and slower. At last we were underway. The relief as cold muscles were shaken into action was palpable. “Tokyo is a fascinating city, so exotic, so different – but also so
familiar, with a Starbucks seemingly on every corner. Crowds lined the route with bands, musicians and dancers providing wonderful examples of Japanese culture, past and present. We wanted to stop and watch and listen, but that was not an option. Mile after mile through wind and rain was all that was on our minds. “The Tokyo marathon has a number of out-and-back loops. I’d never before seen the leaders of a marathon out in front – an uplifting sight; a reminder of the privilege that we were ‘competing’ in the same race as these elite runners. “The finish, in the gardens by the Imperial Palace, was special. Even with tired legs screaming in pain it was a magnificent feeling. I had climbed that mountain once again in four hours and six minutes, this time in a city that really appreciates what it takes to get to that finish line. Although Tom was way ahead of me in two hours and 50 minutes, I was able to take some comfort from the fact that the next morning his legs were suffering even more than mine. “So one down – Boston and London next. Matt and Martin, I salute and remember you every step of the way.”
This year’s Annual Staple Inn Actuarial Society Poker tournament, held on 7 March, saw 60 people take part. It was fantastic to see some of our regulars, as well as new faces. Plenty of food (and drink) was provided to facilitate rational thinking. After many ‘calls’, ‘raises’ and ‘all ins’, the tournament drew to a close just before midnight, allowing those remaining to get carriages home before they turned into pumpkins. The top 10 players all received cash prizes ranging from £35 to £370. The top three were: first, Jamie Harding; second, David Adeniji; and third, Mark Wallace. Congratulations to all the winners! SIAS would like to thank everyone for attending the event and continuing to support our socials.
Winner Jamie Harding
Call for your news… We would be delighted to hear from you if you have any newsworthy items for these pages. Please contact Yvonne Wan at: social@theactuary.com
AUTUMN 36 | THE ACTUARY | MAY 2019 2017
36-37 people news_The Actuary May 2019_The Actuary 36
The top 10 players (with dealer)
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At the back Society Student news D E AT H S It is with great regret that we announce the death of the following members. We offer our condolences to their families and colleagues. Ms Ronalyn Pritchard. Based in the UK, gained Fellowship in 1993. Died aged 53. Mr A V Kesavan. Based in India, became an Associate in 1958. Died aged 94. Mr George Bannerman. Based in the UK, gained Fellowship in 1959. Died aged 87. Mr John F Buchanan. Based in Scotland, gained Fellowship in 1975. Died aged 69.
WCA WCA
Panting for pancakes On Tuesday 5 March, with good-humoured competitive banter and the smell of pancakes in the air, hundreds of Liverymen and members of various Livery Companies, dressed in full regalia, congregated at the Guildhall as curious tourists and office workers looked on. It could only mean one thing: the Inter-Livery Pancake Race. The weather was sunny and beautiful – very different from the wet day we had last year. This fun event, organised by the Poulters (egg suppliers) employed the skills of a variety of Liveries – the Clockmakers timed it, the Gunmakers fired the starting pistol, the Glovers provided the white gloves worn by racers, the Fruiterers provided lemons and the Cutlers provided the forks.
The Worshipful Company of Actuaries team was there to defend its title. We started well in the Master race, where Nick Salter performed exceptionally in his heat, earning him a place in the finals. Cian Creedon was next in the Liverymen race and showed great sportsmanship. Next up was Kartina Tahir Thomson, who won her heat in the Ladies race. Finally, Marian Elliott was glorious in her groovy 70s fancy dress, marking the establishment of the Worshipful Company of Actuaries in 1979. It was a fantastic day enjoyed by many, and while the team didn’t win this year, the Actuaries ‘won’ for the greatest show of support and the loudest cheer in Guildhall Yard.
£500 boost? The Worshipful Company of Actuaries makes an annual award, the Phiatus award, to an actuary who has made significant charitable efforts during the previous 12 months (or longer). Alongside this award, traditionally presented at the July livery dinner, is a donation of £500 to the winner’s selected charity. If you or someone you know is closely involved with a charity that would welcome such a donation, please email details to the chair of the Company of Actuaries Charitable Trust at alan.smith @firstactuarial.co.uk by 31 May 2019.
WCA
Raise a glass (or several) BY LYNDON JONES
Gin is very much in fashion, so on 19 March, the Worshipful Company of Actuaries met at the Merchant House, just off Cheapside (like the proverbial iceberg, small and unprepossessing above ground, but cavernous beneath) for a tasting masterclass! Gin originated in the Netherlands, and the first two we
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36-37 people news_The Actuary May 2019_The Actuary 37
tasted were along the lines of the original – tan in colour and tasting like a weak brandy. London then became the gin capital, with the drink soon known as ‘mother’s ruin’. The clear London gins, flavoured with juniper berries, were a challenge to drink neat. We then tasted the Navy gin, which brought tears to our eyes. We were all crying out for tonic!
For those who think ‘gin is gin’, the Merchant House is worth a visit, boasting 300 gins, 400 brandies and 500 whiskies. So it would take a few visits for anyone completing the set!
We learned a great deal about gin from an excellent tutor and then enjoyed a good ‘London gin and tonic’. Supper afterwards at the Ye Olde Wattling House pub rounded off a great evening.
AUTUMN MAY 2017 2019 | THE ACTUARY | 37
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At the back Volunteer
Inside story Edinburgh.
Various non-exec roles, mainly in life assurance and workplace pensions. David was president of the IFoA in 2013/2014
What have you/do you hope to achieve in your volunteer role? For the Asia conference to be a really worthwhile event for those who attend, and to enhance the role of the IFoA in the region.
What volunteer role(s) do you do for the IFoA? Currently joint chair of the organising committee for the 2019 IFoA Asia conference. Also IFoA Membre Suppléant at the Actuarial Association of Europe.
How long have you been volunteering? Since soon after I qualified in 1988. My first volunteer role was as the actuarial career adviser at Glasgow University – I didn’t realise that I was helping to recruit a future president when I met with a PhD student called John Taylor!
What’s involved in your role(s)? Current role is to make the most of the skills and experience of the volunteer actuaries and events team members on the organising committee so that the conference in May is another successful IFoA event.
What motivates you to volunteer for the IFoA? It’s fun and worthwhile. A small profession like ours needs its members to volunteer if it is to continue to punch above its weight. 38 | THE ACTUARY | MAY 2019
38 volunteer_The Actuary May 2019_The Actuary 38
What new skills or knowledge do you think you have developed? I’ve learned a huge amount in my 30 years of volunteering – not just about actuarial matters, but also governance skills and strategic thinking.
Has this assisted your lifelong learning? Hearing others’ views has really helped my understanding of actuarial issues.
Do you think volunteering has helped you in your day job? Very much so.
Have there been any memorable moments? Lots, particularly during my time on the presidential team.
How do you balance your day job and your volunteer role? Now that I’m semi-retired, it’s not an issue. In the past, I didn’t balance things well – and didn’t get enough sleep as a result!
How do you relax away from the office? Spending time with my family, playing the piano, reading books and walking the dog – we have what we think is the cutest cocker spaniel in the world!
What would you say to others considering a volunteer role? Just do it. It will be time well spent.
Who is your role model – in life or in business? My late businessman-friend, Don Davidson – the most encouraging person I have had the privilege to know.
What was your earliest dream job? Being a concert pianist.
What word best describes you? Thoughtful.
Do you prefer a staycation or holiday abroad? Abroad – Scotland is beautiful, but we all need vitamin D!
If you were locked in a famous building for one night...which would it be and why? The Rijksmuseum – to get an unhurried chance to enjoy the Vermeer paintings.
What would you consider to be the most brilliant moment of your career to date? Presenting a President’s Award to my wife, Caroline, and son, Iain, to thank them for putting up with all my volunteering!
To share your volunteer involvement or find out about volunteering for the IFoA, contact: debbie.atkins@actuaries.org.uk
IMAGES ISTOCK
Where are you based?
DAVID HARE
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26/04/2019 16:17
At the back Appointments
Jobs
To advertise your vacancies in the magazine and online please contact: Shamil Bhoyroo +44 (0) 20 7880 6234 or shamil.bhoyroo@redactive.co.uk
Actuarial Vacancies HFG’s consultants specialise in matching you to the right role at the right Ǥ Ƥ what opportunities are available. Please see a snapshot of our actuarial vacancies below. www.hfg.co.uk
hfginsurancerec
HFG Insurance Recruitment
Capital Actuary
Reserving Actuary
A leading Lloyd’s syndicate is looking for a capital contractor for 6 months to work with their Head of Capital. With a new capital software about to come on board this is a great chance to learn new skills whilst working in a lean team. Previous capital experience is desired.
A leading personal lines insurer is looking for a Reserving Actuary for 6-12 months to provide maternity cover. This individual must be comfortable with hands on reserving. The position would suit Ƥ Ǥ get in touch for further information.
£750 - £900 per day, London
£800 - £1100 per day, London
William Gallimore
William Gallimore
MGA Lead Development Actuary
In-House Actuary
Our client is seeking an in house actuary to work closely with the MGA partners to streamline the underwriting. You will be ƪ and logical decision making. Tasks will include loss ratio pricing, solvency calculations and new deals. This role would suit a Ƥ Ƥ Ǥ
We are currently partnered exclusively with a private equity fund Ƥ Ƥ Ǧ Ǥ will be mostly involved in pricing new / existing business but will have a strong understanding of solvency II and capital modelling Ȁ Ǥ ơ exposure and judgement to a dynamic international business.
£80k - £120k, London
£85k - £110k, West London
Paul Fox
This is a fantastic opportunity for a part-qualified actuary looking to take on a more commercial position with a leading Lloyd’s business. The role provides great exposure across the business dealing with various stakeholders whilst working closely with the capital model. This will suit someone who doesn’t wish to continue exams or wants to transition from reserving or pricing to a capital position.
£50k + study support, London
Angus Mackie
Non-Life ERM Actuary A global insurer is seeking a Non-Life ERM Actuary to lead risk analytics and model validation within the risk function with strategic input to risk committees and the CRO. The role is charged with supporting the execution of the group’s strategy through detailed analytics with a focus on quantitative risk including, reinsurance, underwriting strategy, third party capital, exposure management and strategic programmes.
£70k - £85k, London
+44 (0) 207 337 8800
Angus Mackie
Paul Fox GI Actuarial & Risk Lead +44 (0) 207 220 1103 paul.fox@hfg.co.uk
Jake Morton Jake Morton GI Actuarial +44 (0) 207 337 1202 jake.morton@hfg.co.uk
Featured Vacancy
Risk Capital Analyst
William Gallimore UK Managing Director +44 (0) 207 337 8826 william@hfg.co.uk
Subject Matter Expert
Cognitive / AI, Robotics & ML £100k + bonus (£250k OTE) - London In this exciting, newly created role you will work with business leaders across commercial specialty and personal SME insurance sectors to devise a future roadmap for the implementation of the latest technologies to help guide and steer decision-making.
Angus Mackie Risk +44 (0) 207 337 8808 angus.mackie@hfg.co.uk
You will have hands-on experience with Robotics and Machine Learning, including data warehousing principles gained within a consultative, data-driven environment. Ƥ Ǥ ahad.shadab@hfg.co.uk
0207 220 1203
Ahad Shadab Data Analytics & technology +44 (0) 207 220 1203 ahad.shadab@hfg.co.uk
Making moves in insurance recruitment
MAY 2019 | THE ACTUARY | 39
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At the back Appointments
Jessie Lim Life Actuarial EA Reg: R1769438 +65 6631 2805 jessie.lim@hfg.com.sg
Abby Tempest Actuarial - Hong Kong EA Reg: R1546112 +852 3750 7627 abby@hfgasia.hk
Tong Yu Life Actuarial EA Reg: R176687 +65 6631 7166 tong@hfg.com.sg
APAC Actuarial Assignments Actuarial Pricing Manager
Actuarial Reporting Manager
This client is seeking an Actuarial Pricing Manager for their team in Singapore. Reporting to the Head of Actuarial Pricing, the role will involve leading a small team of pricing actuaries to support pricing for the life business. They are seeking an individual with 6 to 10 years of relevant experience with good exam progress. Please get in touch for further information.
This position will report to the Head of Actuarial Reporting and will lead a small team of valuation reporting actuaries to support valuation reporting for the life business. The client are also looking for individuals with 6 to 10 years of relevant experience with good exam progress. Please get in touch for further information.
$Competitive package, Singapore
$Competitive package, Singapore
Jessie Lim
Jessie Lim
Regional Pricing Actuary - Life & Health
Technical Actuarial Advisory Opportunity - Non-Traditional
An MNC is looking for an experienced Life & Health Pricing Actuary with hands on product pricing skill sets. You will be working with a small but very experienced regional pricing team to drive the implementation of the business’s global pricing methodology as well as to be involved in various regional / global projects. Mandarin speaking is highly preferred.
This is a perfect opportunity for an experienced life actuary to enter the consulting environment without worrying too much about sales KPIs. You will lead a dynamic team (members from Actuarial, Data, Quant and Accounting backgrounds) and provide technical advice to internal and external stakeholders. Prophet modelling knowledge is highly preferred and frequent travel is required.
$700k - $1m RMB + bonus, Beijing
$Competitive package, Singapore
Tong Yu
Tong Yu
Director of Corporate Actuarial
Capital Market Assumptions Manager
This role is the perfect opportunity for individuals looking to become Chief Actuaries in the not too distant future. Working for a global life insurer you will sit as a Director in the Reporting function, working very closely with the local Ǥ Ƥ ǡ project management and stakeholder management exposure.
This is a very interesting role sitting in the ALM function of a global life insurer and requires an individual with a passion for economics. Responsibilities include economic and market assumptions for EEV, strategic asset allocation studies, policy illustrations and local business unit statutory reporting. All rely on a global framework of long-run equilibrium economic and market assumptions.
Up to $2 million HKD, Hong Kong
$840k - $960k HKD, Hong Kong
Abby Tempest
Abby Tempest
www.hfg.com.sg | +65 6829 7153
EA Licence Number: 14C7034
Actuarial Associate Part-qualified (1-2 years’ experience) Potential for exposure to Life and Non-life projects London or Edinburgh Top-quartile salary plus bonus and profit share
Looking for a fresh start to your actuarial career? •
Are you an actuarial student with one to two years’ experience and strong progress through the exams?
•
Has your actuarial career so far not quite given you the challenge you were expecting?
•
Are you looking for more variety in your role, exposure to different sectors or a stronger focus on developing technical skills likely to be key to actuarial work of the future?
•
Do you want to take on more responsibility and do you have the technical ability, communication skills and confidence to deliver exceptional value on client projects?
If the answer to these questions is Yes, then an Actuarial Associate role at APR could be just what you need to re-launch your actuarial career. As an APR associate you will provide project and consultancy support to a wide range of clients in the Life / Non-life sectors and beyond. Our industry-leading internal training programme and technical material, coupled with the close support of our select, high-quality actuarial team, will give you the tools and the confidence to show your potential quickly in delivering outstanding solutions to our clients. And as part of a small but growing and dynamic company you will also have the opportunity to hone your business skills across a range of wider responsibilities: including recruitment, training and management of actuarial staff, technical and business development involvement. All of which we’re confident will reinvigorate your actuarial career and give you the variety and challenge your talents deserve.
For a full role profile contact Tim Nash at tim.nash@aprllp.com
Application by CV and covering letter to recruitment@aprllp.com
www.aprllp.com
40 | THE ACTUARY | MAY 2019
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www.ipsgroup.co.uk At the back Appointments 020 7481 8111 GENERAL INSURANCE – UK Catastrophe Risk Analyst
Actuary
Up to £60,000 Base Salary + Bonus & Benefits
– City of London
Up to £90,000 Base Salary + Bonus & Benefits
– City of London
Leading Global Insurer are looking to a hire an ambitious individual to lead their Property Portfolio. This role reports directly into the Head of Cat and you will be a key link between the Underwriters and the Offshore Analysts, making this role vital in helping the book to grow. They are ideally looking for a candidate who has 3 years of Cat Modelling experience and their preference would be to have had experience of working within Property.
One of the Lloyd’s Markets largest Syndicates seeks an experienced Actuary to help develop the newly established department of Actuarial, Catastrophe Modelling and Risk. They are open to the background of the candidate but you will need to have exposure of working within the Lloyd’s/ London Market. This is a fantastic opportunity for any candidates who feel that they are unable to grow within their current company, as you will have the chance to grow a team from scratch.
Contact: Gary.Ahern@ipsgroup.co.uk Tel: +44 207 481 8111
Contact: Gary.Ahern@ipsgroup.co.uk Tel: +44 207 481 8111
Reserving Actuarial Analyst
Senior Pricing Analyst
Up to £60,000 Base Salary + Bonus & Benefits – City of London Our client is a major blue chip commercial insurer and are looking for an Actuarial analyst to join their European Reserving function, where you will be working closely with senior stakeholders. You will have responsibility for Reserving across all lines of business and you will also have the opportunity to work across Pricing and Capital Modelling. This position is a fantastic opportunity for an individual who is looking to take the next big step in their career. Contact: Gary.Ahern@ipsgroup.co.uk Tel: +44 207 481 8111
Up to £50,000 Base Salary + Bonus & Study Support – City of London A leading Retail Insurer seeks an experienced Pricing Analyst who has had at least 2 years’ experience of working in a personal lines pricing role. This position will be reporting directly into the Head of Pricing, and you will be aligned with the motor underwriting team as well as getting involved in the management of some of the junior resource within the team. Strong communication skills are a necessity and must have experience of using Emblem, Radar, SAS or SQL. Contact: Gary.Ahern@ipsgroup.co.uk Tel: +44 207 481 8111
Pricing Actuary
Portfolio Analyst
Up to £100,000 Base Salary + Bonus & Benefits – City of London A prestigious Lloyd’s Syndicate are offering the opportunity for an experienced Pricing Actuary to be the sole Class Actuary for a specific book of business. This role sits within the Underwriting Analytics Division and you will have daily interaction with Senior Underwriters within the business. You will be involved in developing brand new pricing models, where they will be relying you to use your expertise and bring new and innovative ideas to the table. Contact: Gary.Ahern@ipsgroup.co.uk Tel: +44 207 481 8111
Up to £55,000 Base Salary + Bonus – City of London Established London Market Insurer require a experienced Analyst to join the companies highest performing team providing insight to senior management. This position has come around due to continued growth and internal promotion within the team. This role will suit a candidate who enjoys both an analytical and front facing role.
Contact: Gary.Ahern@ipsgroup.co.uk Tel: +44 207 481 8111
HONG KONG Reinsurance Pricing VP/ AVP
Team Leader, Economic Capital
HKD 1-1.2M p.a. Base Salary, with Bonus & LTIP - Hong Kong & Taiwan Headquartered in Europe, a leading reinsurer’s Life and Health division is looking for a seasoned Fellow with 4-5 years post qualified experience to lead the pricing and modelling of new business with the authority to sign off on quotes and understanding customer needs.
HKD1.2M+ p.a. Base salary, + Bonus & Very Good Benefits – Hong Kong A world-class financial institution’s insurance division is seeking an Economic Capital Senior Manager with 10 years of experience to monitor the risk profile & financial condition of the company through Economic Capital and market consistent metrics.
Contact: Mable.Kwong@ipsgroupasia.com Tel: +852 9739 4405
Contact: Mable.Kwong@ipsgroupasia.com Tel: +852 9739 4405
MAY 2019 | THE ACTUARY | 41
LONDON ACT recr May19.indd 41
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The best from The Actuary Jobs To view all of these vacancies and many more please go to www.theactuaryjobs.com
Actuary - Global Actuarial Solutions London Competitive Salary
Longevity Risk Actuary London Competitive Salary
MGA lead development actuary London £80,000 - £120,000 per annum
Capital and Reserving Actuary London Excellent package
Pricing Analyst London Up to £40,000 per annum
Actuarial Contractor Opportunities UK-wide Day rates to suit experience
Solvency II Manager London Competitive Salary
Senior Reporting Actuary London £90,000 - £100,000 per annum + wider benefits
42 | THE ACTUARY | MAY 2019
ACT recr May19.indd 42
26/04/2019 10:54
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/E^/',d&h> /E&KZD />/' Ed Η t ƵŶĚĞƌƐƚĂŶĚƐ ƚŚĞ ĂĐƚƵĂƌŝĂů ŵĂƌŬĞƚ ƉůĂĐĞ ƌĞĂůůLJ ǁĞůů͕ ĂŶĚ ŚĂĚ ŐƌĞĂƚ ŝŶƐŝŐŚƚ ŝŶƚŽ ƚŚĞ ĐƵƌƌĞŶƚ ƉŽƐŝƚŝŽŶ ŽĨ ĂĐƚƵĂƌŝĂů ĨŝƌŵƐ ĂŶĚ ƚŚĞŝƌ ƐƚƌĂƚĞŐŝĐ ĚŝƌĞĐƚŝŽŶ͘ / ĨĞůƚ ƚŚĞLJ ůŝƐƚĞŶĞĚ ƚŽ ŵĞ͕ ĂŶĚ ĂƐ Ă ƌĞƐƵůƚ ǁĞƌĞ ĂďůĞ ƚŽ ĐŽŶĨŝƌŵ͕ Žƌ ĐŚĂůůĞŶŐĞ͕ ŵLJ ƚŚŝŶŬŝŶŐ ĂƐ ƚŽ ǁŚŝĐŚ ĨŝƌŵƐ / ƐŚŽƵůĚ ĐŽŶƐŝĚĞƌ ĂƉƉƌŽĂĐŚŝŶŐ͘ / ĚŝĚ ŶŽƚ ĨĞĞů ƚŚĞLJ ƚƌŝĞĚ ƚŽ ƉƵƐŚ ŵĞ ŝŶƚŽ ŽƉƚŝŽŶƐ ƚŚĂƚ ǁŽƵůĚ ŶŽƚ ŚĂǀĞ ďĞĞŶ ƌŝŐŚƚ͕ ƚŚƵƐ ĂǀŽŝĚŝŶŐ ǁĂƐƚĞĚ ƚŝŵĞ ĂŶĚ ĞĨĨŽƌƚ͟ W ZdE Z Ͳ KE^h>d E z TO DISCUSS YOUR REQUIREMENTS WITH ONE OF OUR EXPERTS CALL 0113 274 3000 OR EMAIL INFO@BWD-SEARCH.CO.UK
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MAY 2019 | THE ACTUARY | 43
ACT recr May19.indd 43
26/04/2019 12:35
NON-LIFE
At the back Appointments PRICING ACTUARY - LONDON MARKET
SENIOR RESERVING ACTUARY
London, up to £100k + benefits + bonus An exciting opportunity to join a global Re(insurer) within their London market pricing function. The role will focus on supporting their complex US casualty lines of business, and will be responsible for model development, large account pricing and portfolio management. The role will require a high level of interaction with the underwriters based both in London and US. Candidates will be nearly/newly qualified and have London market experience - ideally covering pricing, however reserving backgrounds may also be considered. You must have an excellent academic record.
London, £100k + benefits + bonus A leading London Market insurer is looking to bring on a Senior Qualified Actuary to join their Reserving team. This is reporting directly into the Chief Actuary and will cover all Lloyd’s lines of business. You will also play an active role in SII Technical Provisions and Business Planning. The ideal candidate will be qualified having made demonstrable progress through the actuarial exams. Previous Reserving experience is essential to the role with a preference towards either Lloyd’s or Commercial Lines of business. Contact: curtis.browning@eamesconsulting.com | 0207 092 3242
Contact: james.rydon@eamesconsulting.com | 0207 092 3239
SENIOR ACTUARIAL ANALYST
CONSULTING ACTUARY x2
London, up to £65k + benefits + bonus A leading London Market insurer is looking to bring on a part/nearly qualified Actuary to join their Capital team. This will report into the Group Head of Capital and include a wide-range of duties focused on supporting the internal model. The ideal candidate will be part or nearly qualified having made demonstrable progress through the actuarial exams. Previous Capital Modelling experience is essential to the role with a preference towards either Lloyd’s or Commercial Lines of business. Experience with any of the following platforms would also be a distinct advantage: Igloo, Remetrica, Tyche. Candidates with Standard Formula experience are also encouraged to apply.
London, up to £120k +bonus + benefits One of the most exciting names in the non-life consulting market is on the lookout for 2 senior actuaries to join their growing practice. This will focus on a range of projects for various general insurers and will involve leading projects and managing more junior actuaries. Projects will predominantly involve reserving, capital modelling, pricing and risk work. One of these roles will be more focused on capital modelling, with the other being more generalist. The ideal candidate will be a qualified actuary with demonstrable experience in general insurance. Candidates with mixed exposure are preferred, however technical specialists in one area are strongly encouraged to apply.
Contact: curtis.browning@eamesconsulting.com | 0207 092 3242
Contact: curtis.browning@eamesconsulting.com | 0207 092 3242
RESERVING ACTUARY
PROJECT ACTUARY - PERSONAL LINES
London, £70-85k + bonus + benefits A leading London Market insurer is looking to hire a nearly/newly qualified actuary to join their Reserving function and report into the Head of Reserving. This will work across all lines of business on a rotational basis, and include SII Technical Provisions and Business Planning. The ideal candidate will be nearly/newly qualified and have made demonstrable progress through the actuarial exams. Reserving experience is essential to the role, ideally within a London Market or Commercial Lines insurer. Candidates with personal lines and/or consultancy experience are also encouraged to apply.
South West, £90k + bonus + benefits One of the UK's leading insurers is currently looking to add a qualified Actuary to their GI Reserving Team, this role can be based from London or the South West. Reporting directly to the Head of Reserving, the position will offer broad exposure including IFRS17, SII TP's as well as involvement in the development of effective BAU reserving processes across the business. The role will be key to building the Reserving Team's capability to deliver accurate, effective and timely analysis of reserves and will involve a great deal of transformation project work in collaboration with various other teams within the business.
Contact: curtis.browning@eamesconsulting.com | 0207 092 3242
Contact: anthony.sanderson@eamesconsulting.com | 0207 092 3230
OPTIMISATION PRICING MANAGER
PRICING LEAD - PERSONAL LINES
Surrey, up to £80k + benefits + bonus One of the UK's leading insurers is currently seeking to add an experienced Pricing Manager to their Optimisation Team. This will be a diverse position, working across the business' full range of products and leading a team of up to 4 Analysts. This position would be ideal for somebody looking to gain exposure to some highly innovative and non-standard pricing work and also to take on board some more strategic responsibilities through deputising for the Head of Pricing in some respects.
London, up to £80k + benefits + bonus A highly successful and ambitious London based company are looking to identify an experienced Pricing Analyst or Actuary to take a leading role within their team. The successful candidate will have considerable pricing experience (ideally within personal lines) and demonstrate expert GLM modelling knowledge, particularly in regards to Emblem. Whilst there will be no line management involved in this role, you should be confident in leading projects, mentoring/guiding others and dealing with stakeholders at all levels.
Contact: anthony.sanderson@eamesconsulting.com | 0207 092 3230
Contact: anthony.sanderson@eamesconsulting.com | 0207 092 3230
JAMES RYDON
CURTIS BROWNING
RUPA PITHIYA
ANTHONY SANDERSON
ANTONY WILLIAMS
SAMI ALKARIM
PARTNER GI, Life & Risk
PRINCIPAL CONSULTANT Lloyd’s/London Market +44(0)207 092 3242
PRINCIPAL CONSULTANT Contract & Interim
SENIOR CONSULTANT Personal Lines
MANAGER Insurance Risk
MANAGING CONSULTANT Life & Pensions
+44(0)207 092 3249
+44(0)207 092 3230
+44(0)207 092 3258
+44(0)207 092 3295
+44(0)207 092 3229
VASILIKI GRIGOROPOULOU SENIOR CONSULTANT Catastrophe Modelling +44(0)207 092 3243
44 | THE ACTUARY | MAY 2019
ACT recr May19.indd 44
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At the back Appointments
LIFE, PENSIONS & INVESTMENTS SENIOR ACTUARIAL ANALYST
HEAD OF PRICING
London, up to £70k + bonus + benefits
London, up to £130k + benefits + bonus
Our client, based in the City of London has an exciting opportunity to join their Actuarial Systems team as a Senior Actuarial Analyst on a permanent basis. You will support the delivery of work designed to improve the robustness and efficiency of the Actuarial Department through process improvements, system enhancements and implement an adequate control framework. Ideally, you will be a part qualified Actuary with actuarial modelling software development experience who has been involved in developing Actuarial models within Excel, VBA and VB.Net an advantage. A background in Reporting, Pricing or Capital would also be advantageous.
An exciting, senior opportunity has arisen at one of the leading life insurers, who are looking to hire a Head of Pricing to lead and advise a team of 5 based out of their London office. You will supply subject matter expertise on all pricing related issues for both the manufactured and non-manufactured business with a heavy focus on providing pricing support on all new and extant products, in order to drive and deliver the Insurance UK annual operation plan. The ideal candidate will be a qualified actuary (FIA or equivalent) with in-depth knowledge of pricing and product development, familiarity with Solvency II, IFRS17 and economic capital and risk frameworks.
Contact: sami.alkarim@eamesconsulting.com | 0207 092 3295
Contact: sami.alkarim@eamesconsulting.com | 0207 092 3295
ACTUARIAL PENSIONS CONSULTANTS
PENSIONS ACTUARY
London, Bristol, Birmingham, Manchester, Leeds & Glasgow
London, up to £90k + bonus + benefits
A leading pensions team in the UK are seeking ambitious qualified actuaries with strong inter-personal skills to join them as Corporate Pensions Consultants to be based in various locations throughout the UK. You will be tasked with advising clients on strategic corporate pensions issues, including benefit design, risk management projects, funding negotiations, as well as pension accounting disclosures. Strong inter-personal skills will be needed when managing relationships with certain clients, with accountability for developing those relationships throughout the year. Previous experience will ideally be a qualified actuary with some post-qualification experience and experience in advising corporates on strategic pension issues.
We are working with one of the largest consultancy firms in the World who are looking to hire a number of Pension Actuaries to be based in their London office. You will be working as part of a team to develop and deliver customised advice and solutions to clients (trustee and corporates) with a primary focus on DB pension schemes. The team is structured so that you are given opportunities to deliver advice and consult with a range of clients and you will be supported through situations to continue to expand both your actuarial and consulting skills. Previous experience will be awareness of current pension issues and how these impact clients, including key considerations and ability to talk about these and tailor your response to specific circumstances.
Contact: sami.alkarim@eamesconsulting.com | 0207 092 3295
Contact: sami.alkarim@eamesconsulting.com | 0207 092 3295
SENIOR ACTUARIAL MANAGER
LIFE ACTUARIAL CONSULTANT - IFRS17
Edinburgh, up to £90k + bonus + benefits
London, up to £90k + bonus + benefits
Our client is seeking a Senior Actuarial Manager to join their team in Edinburgh. You will be leading a team focus on the management of the policyholder balance sheet, financial reporting, ongoing solvency monitoring and provide actuarial expertise to design technical solutions. The ideal candidate will be Qualified Actuary who has strong knowledge of IFRS and SII principles and balance sheet. Excellent technical actuarial knowledge and strong commercial and collaboration skills is essential.
A global leading consultancy is looking for a Life Actuarial Manager - IFRS17 within their Actuarial and Insurance Risk team. The role will mainly focus on technical input across a number of client engagements on IFRS17, Economic Capital, M&A and Finance Transformation. The ideal candidate will have a background in Life Insurance or Consulting for a management role with strong project and people management skills.
Contact: sharon.wong@eamesconsulting.com | 0207 092 3286
Contact: sharon.wong@eamesconsulting.com | 0207 092 3286
Our team work on both permanent and contract opportunities across life and non-life insurance and the pensions and investment markets. If you are looking for your next career move or to discuss other opportunities we may have, get in touch with a member of our team today for a confidential discussion. Alternatively, please visit our website for more information on the opportunities our consultants are working on.
MAY 2019 | THE ACTUARY | 45
ACT recr May19.indd 45
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At the back Appointments
Harrison Callen Life Actuarial + 44 (0) 207 220 1101 harrison.callen@hfg.co.uk
Mark Dainty Head of Actuarial +44 (0) 207 337 8816 mark@hfg.co.uk
Katherine Farr Life Actuarial +44 (0) 207 337 8829 katherine.farr@hfg.co.uk
Nanika Ahluwalia Life Actuarial +44 (0) 207 337 1200 nanika. ahluwalia@hfg.co.uk
Reinsurance Opportunities - Bermuda Š‹• …Ž‹‡Â?– ‘ƥ‡”• ƒ „”‡ƒ†–Š ‘ˆ ‘’’‘”–—Â?‹–‹‡• –‘ …ƒÂ?†‹†ƒ–‡• ™‹–Š †”‹˜‡ ƒÂ?† ƒÂ?„‹–‹‘Â? –‘ „‡ ’ƒ”– ‘ˆ ƒÂ? ‡š…‹–‹Â?‰ ’‡”‹‘† ‘ˆ ‰”‘™–Š ƒÂ?† •—……‡••Ǥ ˆ–‡” ƒÂ? ‡š…‹–‹Â?‰ •–ƒ”– —’ ’Šƒ•‡ –Š‡› ƒ”‡ Â?‘™ ƒÂ? ‡•–ƒ„Ž‹•Š‡† ‰Ž‘„ƒŽ ”‡‹Â?•—”‡” …‘˜‡”‹Â?‰ …Ž‹‡Â?–• ƒ…”‘•• –Š‡ ‰Ž‘„‡Ǥ Š‹Ž‡ –‡…ŠÂ?‹…ƒŽ ‡š’‡”–‹•‡ ‹• ƒ …‘”‡ ”‡“—‹”‡Â?‡Â?– ˆ‘” ƒÂ?› ”‘Ž‡ǥ –Š‡ Â?ƒ‹Â? ˆ‘…—• ‘ˆ –Š‡‹” ”‡…”—‹–Â?‡Â?– ‹• ’‡‘’Ž‡ –Šƒ– ™ƒÂ?– –‘ „‡ ’ƒ”– ‘ˆ –Š‡ Œ‘—”Â?‡› ĥ –Š‡ „—•‹Â?॥ …‘Â?–‹Â?—‡• –‘ ‰”‘™Ǥ
Investment Actuary
PRT Transactions Director
͙͆͘͘Â? ÇŚ ͙͆Í?͘Â? „ƒ•‡ ÎŽ „‘Â?—• Č‹ÍšÍ?ÎŹ ÇŚ Í?Í˜ÎŹČŒ + housing & relocation
͙͆Í?͘Â? ÇŚ Í†Í™ÍĄÍ˜Â? „ƒ•‡ ÎŽ „‘Â?—• Č‹Í›Í˜ÎŹ ÇŚ ÍžÍ˜ÎŹČŒ + housing & relocation
Š‹• ‹• ƒ Â?‡™ ”‘Ž‡ •—’’‘”–‹Â?‰ –Š‡ ‹Â? ƒŽŽ ‡Ž‡Â?‡Â?–• ‘ˆ Â?˜‡•–Â?‡Â?– Č€ ••‡– ˆ‘…—• –‘ •—’’‘”– –Š‡ •—……‡•• ƒÂ?† ‰”‘™–Š ‘ˆ –Š‡ „—•‹Â?‡••Ǥ
Â? ĆŹ •–›Ž‡ ”‘Ž‡ …‘Â?„‹Â?‹Â?‰ ‡Ž‡Â?‡Â?–• ‘ˆ „—•‹Â?॥ †‡˜‡Ž‘’Â?‡Â?– ƒÂ?† †‡ƒŽ Â?ƒÂ?ƒ‰‡Â?‡Â?–Ǥ ‘…—•‡† ‘Â? Ž‡ƒ†‹Â?‰ǥ ™‹Â?Â?‹Â?‰ ƒÂ?† †‡Ž‹˜‡”‹Â?‰ ”‡‹Â?•—”ƒÂ?…‡ •‘Ž—–‹‘Â?• ƒ…”‘•• –Š‡ ‰Ž‘„‡Ǥ
Responsibilities: Čˆ ‡˜‡Ž‘’ ƒÂ?† Â?ƒ‹Â?–ƒ‹Â? Â?˜‡•–Â?‡Â?– •–”ƒ–‡‰› ƒÂ?† •—’’‘”–‹Â?‰ models • ALM • Strategic Asset Allocation Čˆ ‘”–ˆ‘Ž‹‘ ’–‹Â?‹•ƒ–‹‘Â? mark@hfg.co.uk
0207 337 8816
Making moves in insurance recruitment
Responsibilities: Čˆ ‡ƒ† –Š‡ ’ŽƒÂ?Â?‹Â?‰ǥ Â?‡‰‘–‹ƒ–‹‘Â? ƒÂ?† ‡š‡…—–‹‘Â? ‘ˆ †‡ƒŽ• Čˆ ”‡’ƒ”‡ ƒÂ?† ”‡˜‹‡™ ’”‘’‘•ƒŽ †‘…—Â?‡Â?–ƒ–‹‘Â? Čˆ ‡…‘Â?Â?‡Â?† ’”‹…‹Â?‰ ƒÂ?† „‹† •–”ƒ–‡‰› ˆ‘” –”ƒÂ?•ƒ…–‹‘Â?•
0207 337 8816
mark@hfg.co.uk
www.hfg.co.uk | +44 (0) 207 337 8800
The magazine of the Institute and Faculty of Actuaries
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FINGERTIPS
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MAY 2019 theactuary.com
Interview Sir John Curtice When opinion polls miss the mark
The magazine of the Institute and Faculty of Actuaries
Life The future of life insurance securitisation
Environment Developing eective corporate social responsibility
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MADE TO MEASURE
46 | THE ACTUARY | MAY 2019
ACT recr May19.indd 46
26/04/2019 12:35
At the back Appointments
The magazine of the Institute and Faculty of Actuaries
theactuaryjobs.com is the official job board for the Institute and Faculty of Actuaries. To register for our Jobs by email service simply go to theactuaryjobs.com MAY 2019 | THE ACTUARY | 47
ACT recr May19.indd 47
29/04/2019 11:27
At the back Appointments
NON-LIFE EE I VI V UUSS CCLL EEXX
STRATEGIC TECHNICAL PRICING Part-Qualified / Qualified
Niche Insurer
NON-LIFE LONDON / SOUTH EAST
STAR5397
Star Actuarial is working with a niche retail insurance business looking to hire a high-quality technical pricing actuary into a strategic role that traverses international borders. This is a real opportunity to make your mark on pricing within a unique business. Working closely with key stakeholders, you will be a major contributor to technical pricing strategy, implementing your in-depth experience and knowledge from the retail general insurance market to enhance the performance of the business. You will have a track record of delivering on pricing-related initiatives, a good understanding of pricing and analytics techniques and software, experience in a project environment, and the ability to influence, challenge, and develop structured solutions. Contact Lance Randles (+44 7889 007 861, lance.randles@staractuarial.com) now for more details on this superb role.
RESERVING SUPERSTAR Qualified
London Market
NON-LIFE LONDON
STAR5395
Use your technical knowledge and your strong influencing skills in this highly-visible role, creating and responsively adapting solutions for the long-term, and providing thought leadership and mentorship across the team.
HEAD OF RESERVING Qualified
Managing Agent
NON-LIFE FLEXIBLE WITH TRAVEL
STAR5547
Use your reserving experience to review the underwriting performance of several business lines, helping to develop the actuarial function. You will be able to challenge and review work in a precise, pragmatic and professional manner.
MOVE TO BERMUDA
CAPITAL AND RESERVING ACTUARY
Part-Qualified
Global Consultancy
NON-LIFE BERMUDA Part-Qualified
Established Firm
STAR5470
Take this excellent opportunity to join a leading team, providing capital and reserving support for a variety of niche business lines.
Join a highly-collaborative P&C department to play a key role in loss reserving analysis across all lines of business. You will also support other workstreams, such as rate setting, capital, forecasting, M&A and product development.
You will use your existing Solvency II or reserving expertise (including governance systems and controls, risk framework and ORSA and internal models) to perform a wide range of crucial tasks.
INTERNATIONAL PRICING ACTUARY
NON-LIFE LONDON
STAR5628
You will maintain, validate and run internal models to calculate the economic capital benchmark, and will run the quarterly reserving exercises. You will also be involved in reviewing changes to the reinsurance arrangements, and supporting the claims and underwriting team where required. Please contact Satpal Johri (+44 7808 507 600, satpal.johri@staractuarial.com) for more information about this exciting role.
NON-LIFE PRICING EXCELLENCE
RISK PRICING MANAGERS
Part-Qualified
Part-Qualified
International Business
NON-LIFE LONDON / SOUTH EAST
STAR5567
Join a cutting-edge, pricing-focused project team, bringing your sophisticated knowledge of pricing, analytics and programming, and your passion for new approaches utilising machine learning and data science.
Leading Insurer
NON-LIFE SOUTH COAST
STAR5554
Play a key role in the performance and profitable development of products through control of technical pricing in response to claims trends, market conditions and regulatory impact. Talented exam-stoppers will be considered.
Qualified
Multi-National Insurer
NON-LIFE SOUTHERN EUROPE
STAR5522
Seeking an analytical pricing actuary to deliver our client’s pricing strategy. You will develop complex optimisation models, investigate price elasticity, and review and test the existing infrastructure.
Is your next role one of the
93
NON-LIFE & HEALTHCARE
VACANCIES on our website?
Lance Randles MBA
Paul Cook
Satpal Johri
PARTNER +44 7889 007 861 lance.randles@staractuarial.com
A ASSOCIATE DIRECTOR + +44 7740 285 139 ppaul.cook@staractuarial.com
ASSOCIATE DIRECTOR +44 7808 507 600 satpal.johri@staractuarial.com
Clare Roberts
James Harrison
Diane Lockley
ASSOCIATE DIRECTOR +44 7714 490 922 clare.roberts@staractuarial.com
ASSOCIATE DIRECTOR +44 7591 206 881 james.harrison@staractuarial.com
SENIOR CONSULTANT +44 7492 060 219 diane.lockley@staractuarial.com
Antony Buxton FIA
Louis Manson
Joanne O’Connor
MANAGING DIRECTOR +44 7766 414 560 antony.buxton@staractuarial.com
MANAGING DIRECTOR +44 7595 023 983 louis.manson@staractuarial.com
OPERATIONS DIRECTOR +44 7739 345 946 joanne.oconnor@staractuarial.com
| THECONTACT ACTUARY | MAY PL48 EASE US 2019 AT ANY TI M E TO DISCUSS Y OUR RECRUI TM ENT NEEDS
ACT recr May19.indd 48
+44 20 7868 1900
staractuarial.com 26/04/2019 10:54
ACTUARIAL POST RECRUITER OF THE YEAR 2012 . 2013 . 2014 . 2015 . 2016 . 2017 . 2018At the back
Appointments
LIFE HEAD OF PRICING Qualified
Leading Insurer
LIFE SOUTH COAST
HEAD OF FINANCIAL & INSURANCE RISK
STAR5562 Qualified
Fantastic opportunity for an actuary with strong project management skills to lead on all pricing and product development tasks for a variety of business lines, conducting market research, model development and experience analysis.
Leading Client
LIFE SCOTLAND
STAR5626
Take this excellent leadership role, managing a busy risk function and reporting to the CRO. You will be the second line of oversight of financial and insurance risk management, focusing on assessing capital, including ALM, and conducting stress and scenario testing from a risk perspective.
ALM CONSULTANT
You will manage ORSA reporting and risk advisory support and oversight of the business change programmes and will also support the development of the enterprise risk management framework, including risk appetite, risk policies, quantification methodologies and risk reporting.
Part-Qualified / Qualified Leading Global Consultancy LIFE LONDON
STAR5525
The successful candidate will have experience of Solvency II, financial and insurance risk management, and key mitigation techniques.
In this exciting, client-facing role, you will take an active role in supporting the strategic management and running of the ALM team, working on a number of diverse workstreams, and helping to develop a core product area.
Contact Irene Paterson (+44 7545 424 206, irene.paterson@staractuarial.com) for more details.
MODEL DEVELOPMENT Part-Qualified / Qualified
Global Reinsurer
LIFE MIDLANDS
GROUP RISK MANAGER
STAR5518 Qualified
Use your IFRS17 knowledge to build, test, and maintain internal models, whilst also being responsible for the maintenance and development of the stochastic model used for With-Profits reporting.
CL E
IV
US
Part-Qualified
Market Leader
LIFE LONDON
STAR5500
Take your career to the next level in this exciting role, assisting in the provision of expert balance sheet structuring and consulting solutions for life insurers across international markets.
The successful candidate will provide second line support across the prudential risk areas, help with the business planning activities of the group, monitor, manage and improve the risk management frameworks, and assist in the running of the various risk committees. You will be a proactive character, with a good knowledge of market, credit and insurance risks, excellent time management and communication skills, along with superior problem-solving abilities. Please contact Jo Frankham (+44 7950 419 115, jo.frankham@staractuarial.com) for a confidential discussion.
91
LIFE BERMUDA
VACANCIES on our website?
ENTERPRISING LIFE ACTUARY
Part-Qualified / Qualified
International Consultancy STAR5469
Seeking a talented and innovative consultant or manager to support a range of client-facing workstreams, including financial reporting, risk, financial modelling, M&A, capital optimisation and IFRS 17.
Qualified
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ISLAND LIFE
I US CL EX
Is your next role one of the
LIFE
STAR5595
This fantastic role offers a diverse range of opportunities to support and develop risk management across a major financial services group.
EX
CAPITAL SOLUTIONS
Leading Financial Services Provider
LIFE LONDON
Forward-Thinking Business
LIFE LONDON
STAR5584
A non-traditional role, perfect for an independent multi-tasker, offering involvement in a broad range of work, which could include product development, pricing, reserving and cashflow modelling.
Irene Paterson FFA
Lance Randles MBA
Peter Baker
Jan Sparks FIA
PARTNER +44 7545 424 206 irene.paterson@staractuarial.com
PARTNER +44 7889 007 861 lance.randles@staractuarial.com
PARTNER +44 7860 602 586 peter.baker@staractuarial.com
PARTNER +44 7477 757 151 jan.sparks@staractuarial.com
Jo Frankham
Adam Goodwin
Clare Roberts
James Harrison
ASSOCIATE DIRECTOR +44 7950 419 115 jo.frankham@staractuarial.com
ASSOCIATE DIRECTOR +44 7584 357 590 adam.goodwin@staractuarial.com
ASSOCIATE DIRECTOR +44 7714 490 922 clare.roberts@staractuarial.com
ASSOCIATE DIRECTOR +44 7591 206 881 james.harrison@staractuarial.com
Antony Buxton FIA
Louis Manson
Joanne O’Connor
Sarah O’Brien
MANAGING DIRECTOR +44 7766 414 560 antony.buxton@staractuarial.com
MANAGING DIRECTOR +44 7595 023 983 louis.manson@staractuarial.com
OPERATIONS DIRECTOR +44 7739 345 946 joanne.oconnor@staractuarial.com m
SENIOR CONSULTANT +44 7841 025 393 sarah.obrien@staractuarial.com
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ACTUARIAL POST RECRUITER OF THE YEAR 2012 . 2013 . 2014 . 2015 . 2016 . 2017 . 2018 At the back
Appointments
PENSIONS
INVESTMENT
The pensions market is currently extremely buoyant, with exciting opportunities across the UK at all levels. Now is a great time to contact us regarding the next move in your pensions career. ACTUARIAL QUANT Part-Qualified / Qualified
Hedge Fund
INVESTMENT LONDON
STAR5542
A unique opportunity for an exceptionally talented and intellectually curious candidate, with a quantitative background and database experience, to join a small team developing innovative ways to extract value from data.
Part-Qualified / Qualified
Leading-Edge Firm
PENSIONS INVESTMENT RISK LONDON
STAR5565
Fantastic opportunity for an actuary to join an in-house team to monitor pension risk and develop new risk management approaches. In this highly visible role, you will develop alternative funding and investment approaches, whilst co-ordinating input from advisers and other Group functions to develop the overall pension strategy.
SCHEME ACTUARY Growing Consultancy
PENSIONS SOUTH WEST
STAR5537
An excellent opportunity for a Scheme Actuary to take up a senior position within a business which is growing successfully whilst also creating an environment for efficient delivery and a good work-life balance.
With a strong technical background, the successful candidate will enjoy analysing data and developing new modelling solutions. You will also be a confident communicator, and able to explain complex concepts clearly to non-specialists. Candidates from an investment background are welcome. Contact Adam Goodwin (+44 7584 357 590, adam.goodwin@staractuarial.com) for more information.
EX E
STAR4158
Develop and run models to identify and implement suitable investment strategies. Conduct investment manager research and selection exercises. Monitor and report on investment performance.
CORPORATE PENSIONS - AGILE WORKING Part Qualified / Qualified
PENSIONS LEADERSHIP
IV
Major Consultancy
INVESTMENT SOUTH EAST
US
Part-Qualified
CL
INVESTMENT CONSULTANT
Growing Consultancy
PENSIONS YORKSHIRE / NORTH EAST
STAR5418
This is a unique role for a part-qualified or qualified pensions actuary based in Yorkshire or the North East to take their career to the next level with a growing consultancy. Part-time working arrangements will be considered.
Is your next role one of the
109
PENSIONS & INVESTMENT
VACANCIES on our website?
Qualified
Specialist Consultancy
PENSIONS MIDLANDS, WITH THE POTENTIAL TO WORK FROM HOME
STAR5318
A fabulous opportunity for a qualified pensions actuary to take up a significant, leading role within a growing team providing corporate pensions advice. You will have proven business development experience, entrepreneurial flair and a strong pensions network in the Midlands. You will enjoy building long-term client relationships, from initial contact, through feasibility studies and project planning, to successful completion. Contact Antony Buxton (+44 7766 414 560, antony.buxton@staractuarial.com) for more information regarding this opportunity to make a real difference.
CORPORATE PENSIONS Qualified
MOVE TO INSURANCE Leading Consultancy
PENSIONS LONDON
STAR5633
Take this chance to lead technical analysis for a variety of corporate clients, acting as the main point of contact. You will work on transactions, de-risking and other special projects.
Part-Qualified
Large Financial Services Group
LIFE PENSIONS LONDON
STAR5632
Use your defined benefit pensions knowledge and experience in a project-based team, supporting the performance analysis of our client’s risk transfer business, and the integration of new insurance arrangements.
Irene Paterson FFA
Peter Baker
Adam Goodwin
PARTNER +44 7545 424 206 irene.paterson@staractuarial.com
PARTNER +44 7860 602 586 peter.baker@staractuarial.com
ASSOCIATE DIRECTOR +44 7584 357 590 adam.goodwin@staractuarial.com
Antony Buxton FIA
Louis Manson
Joanne O’Connor
MANAGING DIRECTOR +44 7766 414 560 antony.buxton@staractuarial.com
MANAGING DIRECTOR +44 7595 023 983 louis.manson@staractuarial.com
OPERATIONS DIRECTOR +44 7739 345 946 joanne.oconnor@staractuarial.com
50 | THECONTAC ACTUARY T| MAY PLEASE US 2019 AT ANY TI M E TO DISCUSS YOUR RECRUI TM ENT NEEDS
ACT recr May19.indd 50
+44 20 7868 1900
Star Actuarial Futures Ltd is an employment agency and employment business
Qualified
IN-HOUSE PENSION RISK MANAGER
staractuarial.com 26/04/2019 10:54
At the back Appointments
Broaden your horizons Discover your potential with Oliver James Associates For years, expert industry knowledge and an extensive network of clients has enabled our Pensions Actuarial team to consistently deliver across traditional consultancy roles - from corporate pensions specialists to traditional scheme actuary appointments. This year we’re seeing a shift in hiring activity, as more pensions consultants move into specialist areas such as insurance transactions and risk transfer. So, it’s good news if you’re a pensions actuary. As well as insurers, consultancies are looking to grow their specialist risk transfer, longevity and de-risking teams – which creates more opportunities for pensions actuaries to develop outside of the traditional DB landscape.
There’s a growing demand for consultants [V HWWS` [OLPY ZRPSSZL[Z [V KPɈLYLU[ KPZJPWSPULZ and it’s creating a lot excitement and healthy competition in the industry. >HU[ [V ÄUK V\[ TVYL& *VU[HJ[ H TLTILY VM our team today.
+44 (0) 203 861 9200
ojassociates.com/the-actuary
299
FEATURED ROLES:
LIVE UK JOBS
648
LIVE GLOBAL JOBS
Longevity Risk Analyst London £40,000 - £50,000
Pension Risk Manager (In-House) London £55,000 - £65,000
Actuarial Manager London £60,000 - £75,000
<UPX\L VWWVY[\UP[` MVY H WHY[ X\HSPÄLK pensions actuary with 18 months to 3 years’ experience to join a leading longevity risk team in the heart of the city. The position will entail provision of mortality assumptions to optimise all pricing, economic capital and valuation assumptions for the business.
Exceptional opportunity for a nearly/newly X\HSPÄLK WLUZPVUZ HJ[\HY` [V QVPU H -;:, business. The successful candidate will take responsibility for developing alternative funding and investment approaches, for monitoring internal pension risk, and for developing new risk management approaches.
8\HSPÄLK HUK [LJOUPJHSS` HZ[\[L WLUZPVUZ actuary sought by a reputable life insurance business. The successful incumbent will have extensive UK DB pensions knowledge and take responsibility for analysis of reinsurance, longevity and collateral arrangements, and engaging with external clients to ensure smooth post sale delivery.
+44 (0) 203 861 9200 ojassociates.com/the-actuary MAY 2019 | THE ACTUARY | 51
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ACTUARIAL POST RECRUITER OF THE YEAR 2012 . 2013 . 2014 . 2015 . 2016 . 2017 . 2018 At the back
Appointments
BULK ANNUITIES ACTUARY INVESTMENT MANAGER
PENSIONS INVESTMENT
PRICING ACTUARY RISK PRICING MANAGER
HEAD OF ACTUARIAL MODELLING SENIOR AUDIT MANAGER
HEAD OF LONGEVITY HEAD OF INVESTMENT
IN-HOUSE ROLE LEAD CONSULTANT
PRINCIPAL HEALTHCARE ACTUARY
MANAGEMENT CONSULTANT HEAD OF EXPOSURE MANAGEMENT ACTUARIAL PRACTICE LEADER ACTUARIAL TECHNICAL LEAD
PENSION RISK MANAGER HEAD OF MODELLING FINANCIAL MARKETS RISK MANAGER WITH PROFITS ACTUARY PENSIONS & INSURANCE MANAGER ACTUARIAL PRICING CONSULTANT INVESTMENT ACTUARY - FIDUCIARY MANAGEMENT
HEAD OF CAPITAL STRATEGIC RISK CONSULTANT CFO DIRECTOR OF GI MARKET LEADER SENIOR MANAGER - INSURANCE INVESTMENT
ACTUARIAL ANALYTICS MANAGER
LIFE DIRECTOR
HEAD OF ACTUARIAL CHANGE RISK ACTUARIAL LEAD
MANAGING DIRECTOR HEAD OF RISK PRICING
CONTACT STAR TODAY TO DISCUSS THIS ROLE 52 | THE ACTUARY | MAY 2019 Antony Buxton FIA MANAGING DIRECTOR
ACT recr May19.indd 52
+44 7766 414 560 | antony.buxton@staractuarial.com 26/04/2019 10:54