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ACTUARIAL POST FOR THE MODERN ACTUARY JUNE 2019

SILENT CYBER RISK

THE GOOD LIFE BECKONS DIVERSIFICATION TRAP REGULATORY PRIORITIES

TAIT’S MODERN PENSIONS

RETIREMENT PUZZLE page 1

PENSION PILLAR


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Actuarial Post Team EDITOR Jennifer Redwood jennifer@actuarialpost.co.uk SUB EDITOR Jennifer Stone article@actuarialpost.co.uk ADVERTISING MANAGER Alan Burns alan@actuarialpost.co.uk

www.actuarialpost.co.uk @actuarialpost @APjobs Head Office 13 Vale Rise Tonbridge Kent, TN9 1TB 01732 359488

EDITOR’S NOTE With the political arena showing no signs of stabilising as Theresa May resigns as Prime Minister, Boris Johnson faces trial for ‘lying and misleading the British public’ over Brexit and we have the prospect of a second referendum. They do say a week is a long time in politics. As the rows rumble on in other news we also learn this month that over twenty seven million people are preparing to work past 65 and that Grandparents can top up their state pension if they look after their own grandchildren. This issue Willis Re examines Silent Cyber Risk and how it is putting insurers on their guard. Spitch follows this by asking can AI-led ‘conversational’ commerce change insurance forever. Continuing on the AI theme Lexis Nexis provide us with an article on Data Scientists: taming artificial intelligence. Our regular columnists have also been busy, including insights into the insurance regulatory priorities for the year ahead from PwC with Intelligent Pensions looks into the Pension Transfer Gold Standard. We wait with bated breath for the next instalment from the soap opera that is Westminster in time for next month’s magazine.

Jennifer Redwood

Legal Notice All rights reserved. No part of this publication may be reproduced or transmitted without the prior permission of the publisher in writing. Whilst every care has been taken to ensure the accuracy, Actuarial Post cannot accept responsibility for loss of business to those referred to in thie magazine as a result of errors.

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ACTUARIAL POST RECRUITER OF THE YEAR 2012 . 2013 . 2014 . 2015 . 2016 . 2017 . 2018

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CONTENTS Regulars

10

6

Movers & Shakers

8

City Dealings

9

Features

17

Silent Cyber Risk

10

AI-Led ‘Conversational’ Commerce

14

Diversification Trap

20

Columns

18

16

News

20

Tait’s Modern Pensions

12

Retirement Puzzle

16

Solvency II & Beyond

17

Inner Workings

18

Lights, Camera, Actuary

22

Pension Pillar

25

Information Exchange

26

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NEWS JUNE Exciting times for actuaries predicted Pensions are supposed to be boring – public sector pensions even more so. Actuaries are only supposed to get excited very occasionally and when they do, it’s often hard to tell that they are excited. 2019 will no doubt go down in history for many reasons – probably mainly for what didn’t happen

rather than what did. It is also of course valuation year in the LGPS in England and Wales, and for lots of reasons the 2019 valuation year has the potential to be one of the most exciting valuation years yet. Graeme Muir FFA, Partner and Head of Public Sector, Barnett Waddingham

State pension top up for looking after your grandchildren New figures revealed to insurer Royal London under the Freedom of Information Act show that more than 10,000 grandparents and other family members received help with their state pension in 2017/18 for looking after grandchildren. This represents a sevenfold increase on two years ago. But Royal London estimates that lack of awareness of this scheme means that many hundreds of thousands more family carers are still missing out on help. READ MORE

So why all the excitement? Asset returns Despite Brexit or lack thereof, US presidents and the like, investment markets around the globe have surged ahead and a typical LGPS Fund may have seen fund values grow READ MORE

The Pensions Regulator publishes their Corporate Plan

are protecting pension savers and the Pension Protection Fund and increasing confidence in pension saving. We are striving to deliver better retirement outcomes.”

Improving the participation, accountability, protection and confidence in occupational pension schemes forms the heart of The Pension Regulator’s (TPR) new corporate plan

READ MORE

Charles Counsell, Chief Executive of TPR, said: “We are publishing this plan at a time of great change in both the pensions landscape and the way TPR works. “By driving up participation in workplace pensions and holding those we regulate to account, we

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The plan for 2019 – 2022 outlines how as part of TPR’s more proactive and targeted approach hundreds more schemes will be contacted in the coming year.


NEWS What would you do if you had twelve months to live Most Brits would spend time with family, go on a once in a lifetime trip and make plans for their funeral if they found out they only had 12 months to live, according to research from SunLife. SunLife asked 2,000 Brits to pick the top five things they would do if they had just 12 months to live. While overall, the thing most people would do is ‘spend more time with family’ followed by ‘go on the trip of a lifetime’ and ‘arrange your funeral’ the priorities changed somewhat with age. Under 50s put ‘go on a cruise’ as number one and ‘make funeral arrangements’ down at number 7, while for over 50s, going on a cruise was number 5 and arranging their funeral was second only to spending more time READ MORE

Actuary named as one of the Top Jobs in report Do you save more or less than the rest of your generation New research from personal loan provider, Hitachi Personal Finance, reveals which age groups are the most financially secure, and where their priorities lie when it comes to spending their income. Despite often being reported as the generation that doesn’t understand the concept of money, millennials actually came out on top as having the highest household income, putting most away into their savings and were also among those feeling the most financially secure. Those aged 65 or over were found to be the most likely to consider themselves financially secure (65%), however, the millennial market followed closely as

the generation feeling most comfortable with its financial position. According to the research, 62% of those aged 25-34-years-old claim to feel financially secure, compared to just 46% of those in the 5564 age bracket. Highlighting a clear divide between millennials and other generations, the research shows that as a nation, our peak income earning age is between 25 and 34, with more than a quarter (26%) of this age range achieving a household income of £75,000 - £100,000 every year. When it comes to financial goals, making home improvements was revealed as the top priority for UK adults by READ MORE

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Data-driven fields, such as Data Scientist, Statistician, Information Security Analyst, Actuary and Mathematician are among the best jobs of the year, according to the 31st edition of the Jobs Rated report released today. On the flip side, the worst jobs, which may have a combination of high stress, poor work environment, negative occupational outlook and low salary, include Taxi Driver, Logging Worker, Disc Jockey, and Newspaper Reporter. “The collection, interpretation and implementation and even protection of data contribute to some of the best jobs of the year,” says Kyle Kensing, Online Content Editor, CareerCast. “Demand for the top job -- Data Scientist -- is high with a 19% growth outlook, READ MORE


MOVERS & SHAKERS The latest moves and appointments from the actuarial marketplace LexisNexis Risk Solutions appoint Steve Kerrigan LexisNexis® Risk Solutions has appointed Steve Kerrigan as senior vertical market manager within the UK Connected Car group.

LCP LifeSight appoint announce the Richard Everitt appointment of as Head of a new CEO

Implementations LifeSight, Willis Towers Watson’s DC master trust, has appointed Richard Everitt as Head of Implementations.

A highly-respected and well-known figure in the insurance sector, Steve Kerrigan brings 12 years of valuable management experience to the growing team at LexisNexis Risk Solutions. Steve has joined the business from a senior role at Co-op Insurance, where he was responsible for the Young Driver telematics product. He will bring his experience to bear in helping insurance providers realise their investment in telematics, whilst focusing on developing the LexisNexis Risk Solutions connected car proposition in the UK. Steve takes up the role at a pivotal point in the growth of telematics insurance in the UK and connected car production.

LCP has updated its management structure with three key new appointments. The changes have been made to position the firm for continued growth, support succession planning, and focus on the key business priority of developing talent.

Steve will work closely with Martyn Mathews, senior director of motor insurance, to support UK brokers and insurers to develop their

Aaron Punwani becomes LCP’s Chief Executive Officer and has overall responsibility for defining and delivering the firm’s strategy. Aaron has driven many of the firm’s client-focused innovations over the last decade and advises the trustees or corporate sponsors of some of the UK’s largest pension schemes. In 2016 Aaron received an Institute

READ MORE

READ MORE

Redington announces three new Managing Directors

Redington, the leading independent investment consultant, has announced a number of promotions including three new Managing Directors and two Directors as it continues to add strength across the business.

Richard has joined LifeSight’s Client Relations team, where his focus will be on successfully onboarding new clients into LifeSight; managing the process through appointment; member consultation; scheme set-up and asset transition; and then into business-as-usual activities. Prior to joining LifeSight, Richard was Vice President at Goldman Sachs, where for 11 years he was EMEA pensions manager. There he was responsible for strategic advice on all EMEA pension and life assurance READ MORE

Sebastian Schulze, Nick Samuels and Lee Georgs have all been promoted to Managing Director, joining the firm’s strong incumbent team of MD’s, including Carolyn Schuster-Woldan who recently joined from LCP. The internal

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promotions play a central role in the future growth and development of the business and its mission to help make 100 million people financially secure. Sebastian, who joined the firm in READ MORE


CITY DEALINGS Keeping up to date on acquisitions, mergers and the dealings of companies in the city

Marks and Spencer complete second round of pensioner buy ins Marks & Spencer has taken another important step in reducing the risks in its £10bn UK defined benefit pension scheme. Marks & Spencer has now secured two further buy-in policies with Pension Insurance Corporation (PIC) and Phoenix Life totalling broadly £1.4bn. Hymans Robertson has been working with Marks & Spencer on the longevity de-risking strategy for the pension scheme. Together with the two policies purchased in 2018, approximately two thirds of the Scheme’s pensioner liabilities are now insured. Through a close working relationship with the

Richard Wellard, Partner, Hymans Robertson said:

“This will undoubtedly be one of many large buy-in transactions to complete this year. Setting a strategy and timing transactions in a way that works for both the Company and the Trustee is very important. Shared objectives, a collaborative approach and continual communication are so important in the de-risking of large pension schemes. This a marathon, not a sprint.”

READ MORE

Twenty seven million pounds lost in crypto investment scams

BROADSTONE ACQUIRES 3HR BENEFITS CONSULTANCY

The Financial Conduct Authority (FCA) and Action Fraud (link is external) are warning the public to be wary of investment scams carried out via bogus online trading platforms. This warning comes as cryptoassests (crypto) and forex investment scams reports more than tripled last year to over 1,800. Fraudsters promise high returns from investments in crypto and forex, with victims losing over £27 million in total in 2018/19. How the scams work Fraudsters often use social media to promote their ‘get rich quick’ online READ MORE

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FCA extends Temporary Permission Regime deadline The FCA has confirmed the deadline for notifications for the temporary permissions regime (TPR) will be extended to the end of 30 October 2019. TPR would allow EEA-based firms passporting into the UK to continue new and existing regulated business within the scope of their current permissions in the UK for a limited period, while they seek full FCA authorisation. It will also allow EEA-domiciled investment funds that market in the UK under a passport to continue temporarily marketing in the UK. The deadline for applying to the Trade Repository and Credit Ratings Agencies has also been extended... READ MORE


SILENT CYBER RISK PUTS INSURERS ON GUARD Significant cyber events such as the NotPetya malware attack and the Equifax data breach grabbed international headlines in 2017 and put the spotlight on cybersecurity. Just months before, Willis Re conducted its first insurance industry survey studying the perceived dangers of silent cyber risk or, in other words, coverage under policies not specifically designed to cover cyber. For insurers, the resultant claims and losses in lines as diverse as property, marine, and directors and officers (D&O) liability have left their mark. Significant increases in the level of expected cyberrelated losses were evident in the 2018 Silent Cyber Risk Outlook global survey. Over 60% of respondents said they will likely incur more than one cyber-related loss for every 100 non-cyber covered losses over the next 12 months in all lines of business except workers compensation — compared with less than 50% who envisioned this in any line of the classes of business surveyed in 2017. Figure 1. Silent cyber risk factor by line of business

The shift in perceptions over the past year is most pronounced in the Other Liability line of business. In 2017, only 35% of respondents perceived the silent cyber risk factor as greater than 1.01 , but in 2018 this percentage increased to 62%. Of these, close to 30% assigned a risk factor of 1.10 or greater, a figure matched for the Property line of business (Figure 1). Variations by industry The indiscriminate nature and reach of cyberattacks such as WannaCry have caused respondents to our survey to re-evaluate potential liability in different industries. In 2017, a majority of respondents rated only two of the nine industry groups included in the survey as having a silent cyber risk factor of greater than 1.01 for Property coverage, while none of the industries met this threshold in Other Liability. In 2018, a majority of respondents attached at least that level of risk to all industries in both lines of business. Furthermore, the largest number of respondents now see Other Liability posing the biggest silent cyber risk (greater than 1.10) in two industries: hospitals/medical facilities/life sciences and financial services. Over a third of respondents believe the silent cyber risk factor in medical fields is 1.10 or greater, a sharp increase from 19% in 2017. Meanwhile, the perceived threats associated with critical infrastructure have meant that the information technology (IT)/utilities/telecom sector continues to be seen as the biggest risk for silent cyber under property coverages, with 42% judging the risk factor as 1.10 or higher. Industry-based risk perceptions in two new lines of business added in 2018 — Errors and Omissions (E&O) and D&O — were almost universally high: Over 30% of respondents assigned an overall silent cyber risk factor of over 1.10 for both. Fortyfour percent of respondents viewed the financial services risk factor for D&O as 1.10 or greater. In E&O, perceived exposure was even higher. Financial services led the way with 47%, with commercial and professional services joining IT/utilities/telecom and

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hospital/medical facilities/life sciences at around the 40% mark. A new normal for cyber events Recent experience has clearly left many more insurers on their guard, and most don’t expect any let up in larger incidents that could test their silent cyber readiness. Between 60% and 70% expect events similar to recent headline losses to occur at least every five years or less. According to other research conducted by the Economist Intelligence Unit and sponsored by Willis Towers Watson, a third of the companies surveyed had experienced a serious cyber incident — one that had disrupted operations, impaired financials and damaged reputations — in the past year. And significantly, most placed high odds on another one occurring within a year. Many insurers are wary of the correlation among business lines that can be caused by large cyber events. Indeed, it seems quite possible that because of this correlation, a large cyber event could present a broader threat to insurers than, say, a natural catastrophe, which has a limited impact on liability policies. Insurers expect E&O and D&O to have the most significant correlations. Based on survey responses, there’s the potential for an extreme cyber event to result in a simultaneous increase in claim frequency of up to 40%.

How to manage this new normal The EIU/Willis Towers Watson study found that only 13% of companies rated themselves as good at applying lessons from past security incidents. Linked to this, most of the senior executives questioned also felt they still had a long way to go in filling cyber-talent gaps and in creating a cyber-savvy workforce. As supported by our own analysis, the biggest threat to most companies’ cybersecurity remains their own employees who can fall prey to lapses such as opening phishing emails. What can be done to manage the longer-term threat of silent cyber risks that this new normal brings? First, insureds can buy appropriate cyber insurance and take preventive action to bolster their cyber resilience and minimise the vulnerability to, and impact of, breaches or malicious attacks on their businesses. Another step is to clarify policy language that was often written in the pre-digital era and is ill-suited to address many of today’s cyber-related risks. A third strategy for insurers is to assess the downside risk posed by silent cyber and create transfer facilities to manage the excess risk. As the industry’s experience of the sources and causes of cyber risk further develops, we can expect more action and initiatives from all dimensions.

1. Other Liability includes coverages protecting against legal liability resulting from negligence, carelessness or failure to act that causes property damage or personal injury to others. 2. All respondents were asked to assess the extent to which, over the next 12 months, cyber exposure would increase the likelihood of a covered loss. Using a range of responses of 1% or less (no more than one additional cyber-related loss for every 100 non-cyber-related losses) to 100% (an equal balance), these were converted into a silent cyber risk factor — for example, 1.01 or less in the case of one cyber-related loss or fewer per 100, or 1.5, representing 50% more covered losses.

About the survey The Willis Re 2018 Silent Cyber Risk Outlook global survey included close to 700 participants from over 100 insurance companies and groups around the world as well as a number of Willis Towers Watson employees.The survey focused on five lines of business.Three repeated from 2017: first-party property, other liability (which this year incorporated auto) and workers compensation.Two are new: errors and omissions (E&O) and D&O.

By Mark Synnott Global Cyber Practice Leader at Willis Re page 11


TAIT’S

MODERN

PENSIONS


The Pension Transfer Gold Standard The Personal Finance Society (PFS) has seen more than 600 advice firms sign up to its Pension Transfer Gold Standard (PTGS) since it was announced in April, of which we are one. While this affords great satisfaction to each of the advice firms whose application has been accepted, the important point is what it offers to our clients. The PTGS is not just another set of regulations, albeit industry-led. This would simply have added yet another layer to an already complicated regulatory landscape and would also have required industry-wide monitoring and enforcement. We already have the FCA to do that and we have seen several instances of that in the last year or two.

then help the trustees to outline the service members should expect if they ask for pension transfer advice and encourage them to report any instances where they believe the adviser has fallen short. Above all, if the member is worried that their adviser is not adhering to the standards they should not go ahead with transfer. It is important they find an adviser they are happy with. What should members expect? The PTGS requires adherence to 9 simple principles, which address the issues of consumer understanding, adviser qualifications and the cost of advice. These can be found in the Gold Standard Consumer Guide, or in more detail on the PFS website and most should already be standard practice for quality adviser practices. PTGS advisers must first help clients to understand what the advice process will involve before they agree to go ahead. A key element of this is a definite statement that a transfer will not be recommended unless the adviser believes the member would better off than they are within the scheme.

What the PTGS is looking to achieve is education and reassurance for the clients of financial advisers. The fact that in order to comply, advisers who sign up will be reviewing and making improvements to their business processes, is a very welcome plus. So what does this mean? One of the key issues highlighted by the British Steel Pension’s “right to choose� exercise was that members had great difficulty finding the advice they needed when considering transferring their pension benefits. Local advisers became overwhelmed with enquiries and members simply did not know where to start looking for an alternative. As a result, they became an easy target for the unscrupulous practices adopted by some of the advisers who proactively contacted them. The PTGS would not have prevented those advisers from following advice processes which led to some unsuitable outcomes, but it might have been a source of information to give the British Steel Pension workers a better chance of spotting what a good transfer advice process should look like and allowing them to contrast this with the service they were in fact receiving. This will only work if the standards are widely communicated by the PFS and the advisers who adopt it, and if they are easily understood by the members affected. Trustees can help with the former by including it within information sent to members who request a transfer, or by organising a bespoke service with an advice firm which has already adopted the standard. The PTGS provides trustees with an extra layer of due diligence and provides additional support to the selection of a particular adviser.

The PTGS, unsurprisingly, requires that advisers should be suitably qualified. The qualifications in themselves may not mean much to the member but recognition by a professional body does provide an element of reassurance, much like the standards promoted in other professions. Charges for the advice services are of course also central to the PTGS. It does not try to mandate the level of fees but insists that they are clearly disclosed. This may not sound much different to the existing regulatory requirements, but a key difference is that the client should be asked to specifically indicate that they have understood this element of the service. Advisers are expected to provide a stand-alone summary of their charges and ask the client to sign and date it to signify acceptance. So what? At the end of the day, advisers who adopt the standards are expected to provide evidence to support their adherence to the principles of the PTGS but they will not be proactively policed. It falls therefore to all of us to help employers, trustees and most importantly members to set their expectations and empower them to walk away if they are not met.

Firms who have adopted the standard can page 13

by Fiona Tait Technical Director Intelligent Pensions


AI-LED ‘CONVERSAT TO CHANGE

by Gary Williams, Director of Sales & Consultancy, Spitch If you’re still following the minutiae of Brexit, if you know exactly what the Backstop entails, and if you understand how the UK’s proposed departure from the EU will affect your consumer rights – congratulations! You’re in a pretty small minority. For most of us, finding out how Brexit will affect us will require us to access expert advice from service providers who have taken the time to understand the impact on ordinary citizens. Insurance is one industry that can expect many more calls from consumers who want to know how the UK’s new relationship with Europe will affect their travel insurance or whether Brexit will affect their premiums. This huge rise in Brexit-related calls is inevitable and smart insurers will already be examining how they can improve their call centre operations to ensure that they provide accurate and timely advice to callers’ complex questions. But it’s not just Brexit that should provide the impetus for improving the customer call

experience – it’s vital that insurers are optimising their contact centre operations to eliminate common complaints that can cause frustrations for callers. For many callers to insurance companies, what should be a simple task of ringing to get through to an expert is a tedious and time-consuming process involving an endless array of options, irritating hold music, and poorly-functioning voice menus. By the time a customer finally gets through to a human operative, their opinion of the insurer will have undergone a marked decline. This is where new developments in Artificial Intelligence (AI) and natural language Machine Learning (ML) can bring significant benefits by improving voice-driven customer experience thought pioneering speech recognition technology. AI and natural language processing (NLP) are moving past the hype that have characterised discussions in the last few years and are now delivering real value

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to organisations in a host of industries – including insurance. Industry analysts Gartner predict that by next year half of analytic queries will be generated using searches based on naturallanguage processing. Meanwhile between 20-25% of searches made with the Google Android App in the US are already voice searches, according to Google. One of the traditional complaints about voice-driven customer service is that it performs significantly poorer than speaking to a real-life human call handler. Thankfully, AI has made significant advances in recent years that enable the technology not only to understand voice commands better, but also to identify callers’ intent and sentiment, perform voice biometrics non-intrusively, transcribe calls and flag issues in real time. AI can also ensure that the caller doesn’t lose focus and that they remain interested in what is being communicated to them via a speech-enabled Interactive Voice Response system.


TIONAL’ COMMERCE INSURANCE?

Such voice-driven technology can be deployed in a myriad of ways that don’t just improve the call experience, but also provide rich data and insight that enables insurance firms to improve their operations as a whole. As a result, insurance firms are empowered to better serve their customer and to offer personalised services to their clientele. Take the example of the international insurance company that required its employees to listen to 2.5% of archival contact centre conversations to improve their customer experience. The company deployed an AI-powered omni-channel communication platform that not only enabled it to identify the reasons for poor service calls and make the required changes to business workflows, but also allowed the team to compare the efficiency of different marketing campaigns. The company’s technology platform also enables it to evaluate each agent’s performance against several key criteria and to cluster them into skills groups

according to their grades – while freeing human operatives from the burdensome task of listening to and analysing historic calls. Another car insurer in Switzerland is improving the customer experience by shortening call queues with an AIpowered self-service system. This extracts all the required details before giving the customer the option to have their vehicle fixed by their local garage, a partner garage or a drive-in; in the case of the first two options, the system will automatically issue a ticket to get the work done. If they prefer the drive-in option, they are sent an SMS with a link to an online form to set up an appointment.

callers’ sentiment and intent, their speaking habits, conversational linguistics, dialects, idiosyncrasies, slang, foreign accents, intonation, emphasis, intention and enunciation. There will always be a need for human agents – for example, to resolve complex queries or when the customer feels uncomfortable speaking to technology. Yet by adding these capabilities, insurers can make huge capacity gains that will shorten wait times and ensure that they provide the best possible experience to every caller.

In case of problems, the caller can choose to be routed to a human at any point simply by saying the word “agent”, ensuring the smoothest customer experience possible.

As Brexit casts its shadow over the insurance industry, AI- and NLP-based technologies promise the ability to cope with unprecedented call volumes, while ensuring that as many interactions reach a satisfactory conclusion.

These examples just scratch the surface of AI’s capabilities. In many cases, technology can even understand customers better than human agents, understanding

In the battle for customer satisfaction, investing in modern omni-channel communications could be the best call an insurer ever makes.

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RETIREMENT PUZZLE CHINESE EQUITY by Alex White Head of ALM Research Redington China has only relatively recently opened up its equity markets, but global investors can now access onshore Chinese equities (A-Shares). The question is whether they should. As a default, I would argue that in general, equity investors should be investing in China, for several reasons. Top down, China is a large market on a different economic cycle from the US. It may well offer less diversification going forwards than it would have done so far, but it is still a large part of the overall market, and the second largest economy in the world, so as a starting point it makes sense to have a meaningful allocation. Added to this, it is likely to become an increasing part of the relevant indices. China A shares are now included as a small part of the MSCI EM- at full weight though, they would account for around 15% of the index. Understandably, MSCI do not want to make huge changes to their indices overnight, which makes it likely that we’ll see the holdings in the index increase steadily. This means demand from investors benchmarked against the MSCI EM is likely to increase. There is also a strong bottom-up case that alpha may be easier here than in other markets. In particular, trading volume is roughly 85% retail, as opposed to 85% institutional in developed markets. This is likely to mean behavioural biases are exacerbated, and professional investors should have more scope to earn alpha. Corroborating this, over the last 5 years the dispersion of returns between index constituents has been roughly double that of the S&P 500 or FTSE 100 (with a standard deviation of around 12% compared to 6%)

So why wouldn’t you? Well there are legitimate concerns. Firstly, the index is more volatile. A lot more. Depending on your metric, the China A shares index can be 1.5 to 2 times as volatile as the MSCI World, significantly more than even the MSCI EM. This is a legitimate concern, but it is mitigated by diversification. A 10% allocation, for example, is likely to be broadly neutral or even risk reducing. It can be argued that the diversification benefit will be smaller going forwards as China becomes a more homogeneous part of the global equity market, but this would likely affect volatilities too. Nonetheless, there is reason to be cautious of over-allocating to such a volatile index, which may encourage smaller sizing. Similarly, there are risks around governance (albeit developed markets like the UK can be hardly be claimed to be immune from this risk, especially now). Moreover, accessing the index well is not that easy.You would need a top-tier manager to mitigate this risk and to exploit the opportunities, and finding one might require too much governance. This is especially true for investors with small allocations, or those aiming to de-risk from equities more generally. There is no investment appropriate for all investors. Overall though, China opening up changes the investible landscape. To get a diversified global portfolio, it should be included- and having an allocation of zero should be a deliberate choice. There are good reasons why it may not be appropriate for any specific investor. However, for a large equity investor with few constraints, it makes more sense to think of allocating to China as the default, and only keep a zero allocation if there are reasons specific to their circumstances.

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SOLVENCY II & BEYOND INSURANCE SECTOR REGULATORY PRIORITIES FOR THE YEAR AHEAD by Kareline Daguer, Director, PwC Recently, the Prudential Regulation Authority has focused on a number of key industry issues that have remained on its radar for a long time. Looking forward, there will be some specific activity insurers will need to engage with. These include new consultations on key issues, stress test runs and evaluation of SM&CR effectiveness to name a few. So what’s on the cards? First there are some important cross-sector themes worth noting. Operational resilience is a shared priority across both the PRA and the Financial Conduct Authority, with a joint consultation paper due later this year. The PRA has reinforced its longer term pledge to get operational resilience on the same supervisory footing as financial resilience. From the FCA, firms can expect to see a bigger focus on change management and third party risks which were both significant causes of IT failures highlighted in their recent Cyber insights paper. Brexit continues to be one of the most significant changes facing the industry and therefore remains a key priority for both regulators. Firms’ culture and governance remains a priority as weak governance or poor culture has been shown to increase the likelihood that harm will occur. I continue to see use of section 166 reports around governance from both regulators and in this particular area insurers are clearly expected to significantly improve their behaviours. Finally, and looking further ahead the FCA and PRA will both have key roles in looking at the future of regulation and the financial services sector overall. A post-Brexit world brings with it questions on equivalence and how to future-proof existing principles and rules, as well as the role of technology in improving the efficiency and effectiveness of how firms engage with the regulatory agenda. Firms should consider engaging with the regulators to help shape the future of insurance regulation in the UK. More specific areas of focus for both life and general include: • the evaluation of effectiveness of SM&CR and remuneration policies, review of governance arrangements on remuneration practices, diversity and corporate governance at board level. This is particularly relevant for insurers following recent focus on the London Market around diversity and inclusion. • Publication of final policy on enhancing the approach to managing climate related financial risks following last year’s consultation.

• Continuing focus on guarding against the risk of model drift for internal model reporters. • Running a stress test in the second half of 2019 covering the vast majority of the life and GI sectors (95% and 85% respectively) to monitor resilience to a number of scenarios. • Consultation on a new supervisory statement on the implementation of the Prudent Person Principle. • Issuing a final supervisory statement on good practices for insurers to identify, monitor and manage liquidity risk following consultation earlier in 2019. • Consultation in the first half of 2019 on further refinements to the Insurance Linked Securities (ILS) regime to help increase the issuance of ILSs from UK based vehicles. The key areas of focus in the GI sector perhaps unsurprisingly centre around firms’ business model plan optimism and their reserving and underwriting oversight for specialist business models. The PRA plans to extend its review of exposure management practices to include claims functions and consider the effectiveness of reinsurance arrangements. In the life sector the focus continues to be on balance sheet risks arising from complex products and asset exposures. The PRA plans to issue a new consultation on outstanding issues from last year’s ERM consultation such as ongoing assessment of the Effective Value Test and how to address excessive interest rate sensitivity. The regulator will continue to review firms’ internal governance on illiquids including internal ratings. Where concerns are identified, the PRA plans to issue s166 reviews to obtain external assurance over those ratings. There are also plans afoot to consult on further simplification to the calculation and application of the Transitional Measures on Technical Provisions (TMTP). This is a busy agenda and insurers will need to consider how to engage in relevant areas of the debate to ensure their voices are heard and appropriately considered. The regulatory landscape is no less benign or easier to navigate than a few years back. Careful consideration of the next set of insurance regulatory challenges and finessing your own preparations accordingly continues to be worth the time.

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INNER WORKINGS THE GOOD LIFE BECKONS

by Tom Murray Head of Product Strategy LifePlus Solution, Majesco A popular 1970s BBC sitcom, the Good Life, was based on the idea of self-sufficiency, where a suburban couple, the eponymous Tom and Barbara Good, decided to become completely independent by turning their garden into an allotment and living off whatever they could produce on it. The concept was slightly fantastical, as one would expect in a good sitcom, but self-sufficiency is back in a big way – promoted by governments who are facing ever increasing bills for stepping into the breach for individuals and are looking for ways to make their citizens less dependent upon the ever-shrinking taxpayer base. Over the centuries, people depended upon the largesse of the landed gentry to look after them in their old-age, and as only a few ever fell into this category, this wasn’t an excessive burden. Post the industrial revolution, the larger employers stepped in, providing generous defined benefit pension schemes that promised to secure the future of those who worked for them. In partnership, the state took responsibility for public servants and those who fell outside the net of the larger employers. However, dramatic changes in longevity, meant that companies started to shut down their DB schemes as the liabilities associated with them weighed excessively on their balance sheets. This meant that future projections showed a huge increase in the responsibility of government for supporting those in

old age and an unsustainable concomitant increase in the costs. Combine this with a declining population and the corresponding decline in tax revenues and the warning lights were flashing a very bright red. Enter stage left, a strong push by governments to establish a sense of personal responsibility in the population for their own financial well-being. Selfsufficiency in the financial arena has become the watchword for the powers that be and to that end, behavioural psychology has been drafted in to ensure that there was a large increase in the number of people that were saving for their own postretirement future. Based on that, auto-enrolment policy was launched to nudge (push) people into saving. To date, it has been a huge success in terms of engagement, with millions of extra people now saving for their retirement. Where it hasn’t been so successful is that the amount being saved is not sufficient to make a major difference in retirement, and that some of the government’s other policies such as pension freedom are not working in tandem with it. If this was our heroic Good family, it would mean that they were about to starve in the final half of the year, as the allotment just isn’t yielding enough to support them. So, encouraging people to save much more is necessary in order to ensure the effectiveness of the

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policy. But while the road to be taken is clear, is the vehicle being provided the right one? Are we correct to focus on security in old age as a stand-alone rather than think of whole-of-life savings as being the goal?

has general ill-health or loses his or her job, then that person could be in the slightly bizarre position of having substantial pension savings yet being unable to access them to remain in their current home or to get the level of medical treatment they require.

One of the key difficulties in getting the general population to save is that there has always been a difficulty in making people focus on their old age. Most people do tend to believe that they will never grow old, and therefore the problems that will surface in their 80s don’t seem real.

Maybe if we want to breed self-sufficiency postretirement, we need to start looking at selfsufficiency pre-retirement. The incentives that are aimed at pension savings should be aimed at life-long savings. We should be auto-enrolling into tax-incentivised, life-long, which can be drawn down for major life events such as the purchasing of a first property, or unexpected events like a loss of income through unemployment or ill-health as well as for pension purposes.

Therefore, people did not have to be nudged to save in Individual Savings Accounts (ISAs). The tax effectiveness of the ISA approach is obvious, and the benefits can be availed of soon enough to make their value seem real to the saver. Similarly, the benefits associated with the latest addition to the stable, the Lifetime ISA, with its ability to be accessed to pay for the deposit on a property, is the kind of goal that young people in their twenties can focus on. Yet the auto-enrolment process is driving people to put whatever money they have into their pension savings. And the problem with pension savings is that they don’t help with any of the issues that might arise in the course of one’s working life. If someone

It is far easier to incentivise people for visible possibilities like these, rather than the over-thehorizon event of retirement, and that would make it easier to drive much higher levels of savings through the auto-enrolment approach. The benefits to the state are obvious – the higher the level of selfsufficiency, the more-affordable the Government will find it to support those whose circumstance mean that they have no option other than to rely on themselves. And that could mean we would all end up living the good life.

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THE DIVERSIFICATION TRAP, AND HOW TO AVOID IT

by Alan Greenlees, Senior Consultant, XPS Pensions Group

Pension schemes often focus on maximising diversification within a scheme’s governance constraints. However, if this pursuit of diversification goes too far this can lead to risk levels being significantly greater than planned. It is important that schemes correctly gauge the extent to which each of the assets and exposures in the portfolio contributes to overall risk. There are numerous types of risks that can impact schemes but grouping them into rewarded and unrewarded risks is a simplistic yet appropriate approach, as it helps frame possible action:

is assuming, increasing the cost of paying pensions. In this case longevity might be considered a rewarded risk, and therefore beneficial to retain in part. Additional risk factors such as Environment, Social and Governance (ESG) and operational and counterparty risks can be difficult to quantify. However, direct management and mitigation of these risks at a granular level is often required, rather than simply hoping they’ll be ‘diversified away’ in the wash. Risk measurement – keeping a clear line of sight

• Rewarded risks are a fundamental means to generate investment returns such as equity risk or credit risk. They are risks associated with the expectation that over time they will lead to profit to the investor. Diversification is a key tool in the effective use of rewarded risks as it allows the reward to be retained whilst reducing risk.

It can be useful to estimate risk, such as looking at the commonly used 1-in-20 year downside risk. However, this ‘Value at Risk’ assessment is not a panacea for risk management. The reality is that risk is not black and white – how many things in life can be summed up in one number?

• Unrewarded risks might lead to a profit or a loss but are not expected to deliver a profit on average, such as interest rate risk. It is important to seek to remove the unrewarded risk as far as possible from the portfolio but in this instance, diversification is not the right answer because ultimately the exposure will still contribute some risk to the portfolio but for no expected reward. There are nuances though – some risks sit somewhere in between the two definitions above. These can be risks that are inherent within running a pension scheme, but are expensive to remove or hedge. An example of this is longevity risk – the risk that your membership lives longer than the Actuary

Pension scheme portfolio construction has evolved considerably over the last 20 years. Across the industry an initial focus on manager diversification alone has progressed to a more robust focus on asset class diversification. But still some elements of the recipe are misunderstood. For instance, asset class diversification in itself is not necessarily beneficial in all circumstances. As an example, holding a combination of equities and bonds issued by the same company does not diversify this source of risk – it just changes the return you’ll earn in good and bad scenarios for that company. True diversification comes from gaining access to other drivers of return – in this case introducing exposure to more companies

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Diversification – know your limits The belief that you can make a portfolio better by continually adding assets that are less than fully correlated to the portfolio is overly simplistic. If this was true you could always add something to improve a portfolio – which you can’t. This is partly because diversification usually involves cost but also because correlation between assets means there are limits to diversification. In fact, correlation between assets is a significant factor in the limit of diversification. Increasing the number of holdings does not necessarily lead to a meaningful reduction in risk.

The Credit Crunch in 2008 was a living memory example of where underlying correlation between systemic risks was overlooked by many investors. Within equities, correlations rose above 50% relative to average historic levels of around 25%. This can significantly compromise diversification benefit – almost doubling the modelled risk. Risk has many dimensions. Therefore, the most reliable way to measure and manage it is to assess it from as many different angles as possible. Ultimately, schemes should look to avoid any concentrations of risk within any particular dimension. It is only on closer inspection that we are able to identify the red flags and assess how the strategy can be improved. Conclusion A truly diversified strategy, across multiple levels, should be a goal for all schemes, large and small. Identifying the potential pitfalls within a strategy enables Trustees to make informed decisions regarding the level and type of risks that the scheme is exposed to. Trustees should have a clear understanding of how their scheme looks from a multi-dimensional perspective which should help to provide confidence in the portfolio’s resilience to any particular risk driver.

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LIGHTS, CAMERA, ACTUARY... Bolton Associates’ focus is specifically in the non-life actuarial space; the largest dedicated GI actuarial specialist in the market, working across the whole insurance market. The consultants at Bolton Associates offer an exceptional service, managing the process with the utmost tact and respect for all parties. We are passionate about our market, taking great interest in the insurance world as a whole; keeping up with trends and changes, and maintaining our ever-expanding network. We are good at what we do, because we enjoy what we do.

search & selection


The next focus for Bolton Associates’ Spotlight page, is an interview with a leading actuary within one of the Lloyd’s Broking houses. With the broking firms now offering important analytical, actuarial and deal-assisting advice, for the next few months Zoe Bolton will be talking to the senior actuaries in these firms, getting a brief insight into their career paths and visions for the future. This month Zoe talks to Larry Lee of Willis Re Specialty Analytics.

What is your current role, and how did you end up in it? I look after Actuarial Analytics and D&FA (Data and Financial Analysis) for Willis Re Specialty. I moved to Willis Re at the start of 2017 having worked at a number of Lloyd’s syndicates for the preceding 11 years. Most recently I was the Syndicate Chief Actuary at Navigators Syndicate 1221, but I’ve also worked at Amlin and Torus (now Starstone). I started my career at an actuarial consultancy called Tillinghast – which, through a series of mergers is now Willis Towers Watson, where I currently work. So in a way, I’m back to where I started, although I am on the broking side now, rather than actuarial consultancy.

process with Lloyd’s at the time. The amount I learned in terms of being on the Syndicate Board of Directors, running various committees and exposure to regulators put me on a whole new career trajectory. In your opinion, what prepared you best to take on your current role?

What is the defining moment of your career to date? Passing the stochastic modelling exam (103) back in 2001! It was a new exam and only the second time they had set it – the exam seemed to bear no resemblance whatsoever to anything I’d studied in the notes. My despair was peaking in the exam room…but then at the 30 minute mark, the point where you are first allowed to leave the exam, at least half the candidates in the room stood up and walked out. I thought “Hang on, I might have a chance here!” I stayed for the full 3 hours, scrabbling around for marks anywhere I thought I could be awarded one. I don’t think I could have scored more than about 20% for that exam, but when the pass lists were published – there was my name! But on a more serious note, holding the Syndicate Chief Actuary role for the first time was definitely a key time in my career. This was for Syndicate 1301 and was coupled with a Managing Agency application

Working within Lloyd’s syndicates for 11 years has helped me to be more effective on the reinsurance broking side. I know what it’s like to be on the other side of the table, the challenges around getting reinsurance proposals approved by the Board and various committees, for example. Now that I’m on the reinsurance broking side, I certainly wish I’d gone a bit easier on my reinsurance brokers when I was a client! What is the biggest challenge you face in your role within this market? There is so much going on right now in the insurance market, one of the biggest challenges is knowing how best to prioritise the team’s efforts. As reinsurance brokers, we have to be at the forefront of the latest developments in: InsurTech (including AI and digitisation), capital markets, M&A activity, supply appetites of the reinsurance and retro markets, demand appetites of our clients – to name a few. How does your actuarial training and background assist in your day-to-day role now? It’s a crucial part of what I do and I wouldn’t be able to look after a team of actuaries or engage with technical clients and markets without the training I’ve had. In terms of the most technical parts of actuarial work, I tend to leave that to our hotshot actuarial students who are not just incredibly savvy

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at the maths, but are increasingly expert at coding in R, Python and various other programming languages. When did you first join the Institute & Faculty of Actuaries, and what advice would you give to those students looking to emulate your career path? My ARN number is only 5 digits long, so it was a few years back now! In terms of advice, I’d suggest trying to get as broad a knowledge around our industry as possible – whether that’s reading articles, attending conferences, or simply having discussions with colleagues in the industry who are working in a slightly different area (insurers, reinsurers, consultancies and broking firms, for example). Also, if you have the opportunity to work in, or gain exposure to a few different areas of the business

early on in your career, you should definitely take it. If you had your time again, what would you do, career-wise? I nearly went down the route of becoming a doctor, so I’ve always wondered how that would have turned out. But having said that, I’m really happy with the way my career is going right now, so I probably wouldn’t do too much different! Please share your favourite piece of trivia with our readers! Apparently it’s possible to store all the information contained in every single book in the world within a piece of human brain the size of a pea! So why do I find it so hard to remember what I did at the last night of GIRO every year?

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PENSION PILLAR BUNDLED VS UNBUNDLED DOING THE SUMS In a bundled proposition, administration charges are included in the member’s Annual Management Charge, rather than as an additional fee for the employer to pay.

by Dale Critchley Policy Manager Aviva

However, a move to a bundled proposition shouldn’t be based on savings for the employer - unless those costs put employer contributions under pressure. So, there are sums to be done! The gap between unbundled and bundled member charges has been closing. Efficiency savings and a competitive market have driven down charges for bundled schemes. The differential is smaller than it has ever been.

There’s a lot of technical jargon when it comes to pensions. Which is why the use of ‘bundled’ and ‘unbundled’ always amuses me slightly. Amongst harsh sounding terminology like ‘uncrystallised funds pension lump sum’ and ‘trivial commutation’, ‘bundled’ and ‘unbundled’ sound kind of fluffy. An unbundled pension scheme is one in which investments are handled on a dedicated investment platform and administration is carried out by a third-party administrator, paid for by the employer. A bundled pension scheme is where admin and investments are managed by a single provider usually paid for by deduction from member benefits. For a long time, the received wisdom was that once a defined contribution pension scheme had sufficient assets, the way to ensure the best member outcomes was to switch to an unbundled model. Times have changed however - bundled propositions have improved and traffic is no longer one way. Cost is often an initial driver for considering a bundled scheme. Administration charges in unbundled schemes are commonly paid on a ‘per member’ basis, and with the abolition of short service refunds, (members of occupational pension schemes with less than two years qualifying service could get a refund on contributions), some employers have seen administration costs escalate far quicker than before.

Member charges in an unbundled scheme will almost always be lower, but the benefit to members is regressive. A flat-rate, ‘per member fee’, paid by the employer, provides the greatest benefit to those with the largest funds.Younger employees with small funds could be better off if the admin fee were simply paid as an increased employer contribution. Trustees, or those with governance responsibility over an unbundled scheme, should also consider the lifetime charge on members’ pension pots - especially if drawdown isn’t an option within their scheme. The FCA found that charges for drawdown in retail products varied from 0.4% to 1.6% per annum*. As a member could be invested in a drawdown product for 25 years or more in retirement, they can easily undo the hard work of trustees who helped to minimise charges during accumulation. In contrast, most Master Trusts offer drawdown within the scheme and often drawdown charges are the same or very similar to accumulation charges. Investment performance and the ability to engage members are also reasons why bundled pension schemes are on the rise – as long as the sums add up.

*https://www.fca.org.uk/publication/market-studies/ms16-1-3.pdf

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INFORMATION EXCHANGE

DATA SCIENTISTS: TAMING ARTIFICIAL INTELLIGENCE

By Alan O’Loughlin Statistical Modelling and Analytics Lead for Europe, Insurance, Lexis Nexis Risk Solutions Outside of tech and data driven companies the concept of Artificial Intelligence (AI) divides people. On the one hand you have companies like AvatarMind creating robots for children’s education and Elder care, which are fantastic concepts and who wouldn’t want to get behind that? On the other hand, you have overly-dramatic sci-fi films continue to portray AI as a potential catalyst for mankind’s annihilation only to be averted by last-minute superhero-intervention. However, the less glamourous Hollywood truth is that, for decades actuaries and Statisticians have been working with the advanced algorithms on which “artificial intelligence” is based. And so far, no actuary’s computer has ever attempted to destroy or rule mankind – which we know of! Advanced analytics for insurance has changed almost beyond recognition since their first

application and continues to change in profound ways to meet the latest and future market needs. Test cycles are speeding up and new models and data are regularly being deployed to improve the accuracy of predicting an outcome. AI is already becoming a key area of competition, having a direct impact on the speed of deployment, efficiency, improved customer experience, targeted pricing and customisation. However, it is not a panacea for all our data problems. Data Scientists to the rescue For insurance providers, machine learning cannot effectively manage, cleanse, analyse and deploy data without input from a highly experienced Data Scientist. Algorithms are incredibly helpful and intelligent and are utilised in many ways: for example, learning our shopping habits to suggest add-on purchases, using traffic data to suggest alternative map routes, delivering relevant online advertising,

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or that tell Siri or Alexa to “to shut up” when they creepily start speaking to you means mute. However, without manual intervention by a Data Scientist, algorithms are not able to accurately structure data or use them for the correct business acumen, especially within Insurance while keeping in mind the relevant regulatory requirements as they model to a loss curve. The most important step is undoubtedly the preparation. As much as 80% of a Data Scientist’s time is spent in connecting the data, cleansing it, normalising and preparing it for different use cases, reviewing code that doesn’t work as it should, across multiple programing and modelling platforms and subsequently questioning their career choice. The remaining 20% is building something new and exciting. Gartner now defines AI as “applying advanced analysis and logic-based techniques, including machine learning, to interpret events, support and automate decisions, and take action”. True AI should solve problems you don’t know exist, but until that is the case you can use AI to identify problems better and faster and then separate to the issues solve them faster, but you need Data Scientist to tie the issue and the solution together. Building successful Analytics Projects Once the cleansing and preparation is complete, the next step is to work out which data mining technique will deliver the best value. What data do you need to accurately predict claims or underwriting? How do you clean and pipeline the data into the right structure and database? Based on years of experience in data modelling, my data analytics team at LexisNexis Risk Solutions would advocate applying the following principles: 1. Start small, but not trivial. The first proof on a concept project should be relatively small, with a timescale of less than six to eight weeks. However, it must still tackle an issue important enough to encourage buy-in from stakeholders as well as end-users if the hypothesis is proven true. They must be able to see the potential benefits. Diving straight in and taking on the firm’s biggest issue without fundamental

understanding of all the links in the chain is too great a risk and investment. 2. Get the requirements right. It is essential to take enough time to fully understand the project requirements. The analyst needs wide engagement to understand the business problem and how best to tackle it. 3. Understand the limitations. It is not necessarily helpful to assume that data science and machine learning is going to solve every problem. Remember, 80% of the job is cleansing and normalising the data and while machine learning can help with some of this, getting it right will require human intervention. 4. Focus on processes. It can be expensive to implement robust procedures for coding and development standards, managing access keys, testing routines, Q&A documentation and review, but getting it wrong can be far costlier. 5. Maintain perspective. It is common to come up against dead ends, but any possible error or failure provides invaluable opportunities for learning. Intelligence gained in these situations should be shared across the team, helping to improve widespread productivity. FAIL FAST if you can. With human involvement playing such a fundamental role in data and analytics for insurance, ‘Applied Intelligence’ or ‘Machine Augmented Intelligence’ are better descriptions rather than full Artificial Intelligence – no rogue robots plotting to take down the human race, here. Augmented intelligence describes the application of automation within the insurance workflow, alongside the essential human intelligence and business acumen, rather than a fully machine run operational process. LexisNexis Risk Solutions has been undertaking data science in this way for more than four decades. While today AI is increasingly helping with data structuring, cleansing and preparing, some of the biggest successes are with applications of simple machine learning, utilised by a team of expert data scientists.

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RECRUITMENT


• • FE BS Y TS E • FE BS Y TS E • FE

search & selection Junior Developer

Data / Actuarial Analyst

General Insurance Up to £45,000 Per Annum City of London

General Insurance Up to £65,000 Per Annum London

Lloyds Syndicate require a junior resource for a project orientated role, understanding business requirements, data processing and analysis work on the pricing of incoming risks, monitoring and managing exposures, and developing and maintaining systems and pricing models using statistical methods. You will need solid coding ability in C# and SQL and familiar with . .Net, and good communication skills.

Global Lloyd’s insurer has an opening for a Data/Actuarial Analyst. You will be responsible for integrating the company’s data systems from International and US business by building and managing a new database. You will also work on their Bermudian reserves. Candidates must have a general insurance background with exceptional data analysis skills and experience with Access, VBA and SQL.

. REF: ZB 0001171 CC

Ref: ZB 00001172 HT

Reserving Analyst

Consulting Actuaries

General Insurance £Market Rates London

General Insurance £40,000 Upwards London

Global speciality insurer within the Lloyd’s market has an opening for a part-qualified reserving Actuary. Working closely with underwriters and so, alongside strong technical skills, communication and stakeholder management skills are essential. You must be ambitious/ hardworking and are likely to come from a consultancy or London market business. .

Keen to speak to Actuaries at all levels from Pricing, Reserving and Capital backgrounds for a variety of diverse opportunities with top Consulting practices in London. You should be technically strong as well as having excellent academics. Exceptional presentation and communication skills and the ability to build and develop relationships is required.

Ref: ZB 0001118 MM

Ref: ZB 0001157 SC

Reserving Actuary

Pricing Actuary, Start-Up

General Insurance £130,000 + Bonus + Benefits London

General Insurance To £120,000 Per Annum London

Global re/insurance business has an opening for a qualified actuary to join their growing business. You will be leading on the reserves reporting into group and managing a junior analyst. You will be an excellent communicator, with exceptional stakeholder management skills. Excellent problem-solving skills with experience of SQL and VBA preferred. .

Fantastic opportunity for an experienced Pricing Actuary to join a new start-up as the first, dedicated, in-house Pricing resource and, effectively, number 2 to the Chief Actuary. You must be a qualified, non-life actuary with significant pricing experience gained from the London/ Lloyd’s Market. Any exposure to reserving and/or capital work could also be beneficial.

Ref: ZB 0001149 CS

Ref: ZB 0001152 PW

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NON-LIFE EE I VI V UUSS CCLL EEXX

CAPITAL - HOME OR AWAY Part-Qualified / Qualified

Global Specialty Insurer

NON-LIFE RISK WORK FROM HOME, LONDON OR EUROPE

STAR5658 / STAR5657

Our client is seeking part-qualified and qualified non-life actuaries to support its Validation team in ensuring that work meets relevant regulatory requirements and actuarial standards.

MULTIPLE PRICING VACANCIES Part-Qualified / Qualified

Major Insurer

NON-LIFE SOUTH WEST

STAR5644 / STAR5643

Exciting opportunities for candidates with strong quantitative skills to analyse pricing structures and past performance to improve our client’s risk management. SAS (or similar) experience is required.

In these roles, you will support the Risk team in providing challenge to quantitative and qualitative aspects of the Internal Model (and other areas of the validation framework), including: model design, methodology, parameterisation, governance and documentation.

CAPITAL AND RESERVING

You will also provide support for stress and scenario testing and the ORSA.

NON-LIFE LONDON

Flexible working available. You could work from Europe, hot desk in London and / or work from home. You must have non-life capital modelling experience.

Use and build upon your existing Solvency II and reserving experience within a leading team. You will perform a wide range of crucial tasks as you provide actuarial support for a variety of niche business lines.

Contact Lance Randles (+44 7889 007 861, lance.randles@staractuarial.com) now for more details.

Part-Qualified

Established Firm STAR5628

MOVE TO NON-LIFE CAPITAL MODELLING

RESERVING SUPERSTARS

Part-Qualified

Lloyd’s Syndicate

NON-LIFE LONDON Qualified

London Market

STAR5607

Take one of these challenging and highly-visible roles for reserving actuaries with a detailed understanding of the non-life market.

Take up this exciting career development opportunity within a growing team. You will support the development and maintenance of the capital models, and their use in business planning and reinsurance purchase.

You will apply strong technical and influencing skills in the management of a number of work areas, and encourage knowledge sharing for the benefit of the wider business.

CASUALTY PRICING ANALYST

With a focus on creating and adapting solutions for the long-term, you will provide thought leadership and act as mentor to the team, whilst keeping abreast of market changes and innovations.

NON-LIFE LONDON

NON-LIFE LONDON

STAR5395

Contact Lance Randles (+44 7889 007 861, lance.randles@staractuarial.com) now to find out more information.

RESERVING CONSULTANT Part-Qualified

IFRS 17 Market Leader

NON-LIFE SOUTH EAST

STAR5671

Fantastic role offering a candidate with strong personal lines experience the opportunity to use their imagination and creativity as well as their ability to analyse data, draw conclusions and present model results.

Part-Qualified / Qualified NON-LIFE LONDON

London Market STAR5623

Leading reinsurer seeks talented part-qualified or qualified actuary with strong communication skills, proven project management experience and exposure to IFRS 17, to take up a new reserving role.

Part-Qualified

Leading Global Reinsurer STAR5548

Working with the Casualty Pricing team and underwriters, the successful candidate will develop pricing tools and price individual deals to enable the organisation to make informed commercial decisions.

Is your next role one of the

107

NON-LIFE & HEALTHCARE

VACANCIES on our website?

Lance Randles MBA

Paul Cook

Satpal Johri

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ASSOCIATE DIRECTOR +44 7740 285 139 paul.cook@staractuarial.com

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Clare Roberts

James Harrison

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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

P LE A S E CONTACT US AT ANY TI M E TO D IS C USS YOUR RECRUI TM ENT NEEDS

page 30

+44 20 7868 1900

staractuarial.com


ACTUARIAL POST RECRUITER OF THE YEAR 2012 . 2013 . 2014 . 2015 . 2016 . 2017 . 2018

LIFE ACTUARIAL DIRECTOR - LIFE REINSURANCE Qualified

Major Global Reinsurer

LIFE LONDON

STAR5668

A great chance to play a leading role in the co-ordination and consolidation of regulatory and economic capital reporting, and work on process improvements within a market-leading team.

LIFE ACTUARIES - MULTIPLE CONTRACTS Part-Qualified / Qualified

Life Insurer

LIFE VARIOUS LOCATIONS

STAR5634

We currently have multiple contract vacancies for life actuaries across Solvency II, IFRS 17, reporting and project management. Please contact us now for further information.

CAPITAL ACTUARY - LIFE REINSURANCE Qualified

Global Reinsurer

LIFE LONDON

STAR5674

Our client is seeking a qualified life actuary to provide direct input on capital optimisation initiatives and support pricing on complex structures. In this key role, you will provide insight into the implications of Solvency II and other capital regimes for business planning and stress testing/scenario analyses. You will investigate ALM and capital methodologies, providing technical analyses concerning the approaches being applied or proposed, and make pragmatic recommendations for optimisation and process improvement. Knowledge of Economic Capital, Solvency II and US GAAP essential. Contact Jan Sparks (+44 7477 757 151, jan.sparks@staractuarial.com) now for more information regarding this excellent career opportunity.

HEAD OF FINANCIAL AND INSURANCE RISK Qualified

Leading Client

LIFE SCOTLAND

STAR5626

In this leadership role, you will manage a busy risk function and report to the CRO, focusing on assessing capital, including ALM, and conducting stress and scenario testing from a risk perspective.

RISK AND COMPLIANCE DIRECTOR Qualified

Specialist Insurer

STAR5662

LIFE RISK SOUTH EAST

Our client is seeking a talented individual to lead its Risk Management and Compliance functions. You will ensure that appropriate systems, controls, policies and procedures are in place to manage risk according to risk appetite.

RISK MANAGEMENT LEADER Qualified

Major Firm

LIFE RISK LONDON

STAR5602

In this exciting role, you will lead the independent assessment of our client’s M&A activity, performing due diligence on large deals and assessing the reasonableness and robustness of transaction prices.

VACANCIES on our website?

ENTERPRISING LIFE ACTUARY

Qualified

Major Insurer

LIFE LONDON

STAR5484

A fantastic opportunity to use your first-rate understanding of reporting metrics (IFRS, Solvency II) to lead on the development and implementation of a major insurer’s IFRS 17 reporting capability.

Qualified

Forward-Thinking Business

LIFE LONDON

E

LIFE

IFRS 17 LEAD

IV

105

Please contact Satpal Johri (+44 7808 507 600, satpal.johri@staractuarial.com) for a confidential discussion.

US CL EX

Is your next role one of the

With knowledge, experience and understanding of the UK regulatory environment applicable to insurance companies, including Solvency II, the successful candidate will also be a strategic thinker, with excellent communication and leadership skills.

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.

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

SENIOR CONSULTANT +44 7841 025 393 sarah.obrien@staractuarial.com

Irene Paterson FFA

page 31

Experts in Actuarial Recruitment


ACTUARIAL POST RECRUITER OF THE YEAR 2012 . 2013 . 2014 . 2015 . 2016 . 2017 . 2018

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. CORPORATE PENSIONS - IN-HOUSE Qualified

Leading Insurer

PENSIONS LONDON

STAR5673

A fantastic opportunity for a Pensions Actuary to work in-house. This corporate role offers visibility and responsibility to a candidate who can both take the lead in negotiations and get their hands dirty with model development.

Leading-Edge Firm

PENSIONS INVESTMENT LONDON

STAR5565

Exciting opportunity for an actuary to join an in-house team to monitor pension risk and develop new risk management approaches.

Financial Services Provider STAR5666

Another excellent in-house corporate role, focussing on strategic pension projects. Consultancy experience in valuations, benefit design or investment strategy is desirable.

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.

CL

Seeking a pensions specialist to support both Trustee & Corporate assignments, contributing to varied and interesting projects including integrated risk management and asset/liability modelling.

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.

INVESTMENT ACTUARY Qualified

PENSIONS LEADERSHIP

E

STAR5655

IV

Leading Consultancy

PENSIONS EDINBURGH

US

Part-Qualified / Qualified

EX

PENSIONS CONSULTANT

Large Reinsurer

INVESTMENT LIFE LONDON

STAR5651

An exciting opportunity to use your knowledge of regulatory requirements (SII, IFRS) to support our client’s Asset Management team in monitoring the ALM position to ensure that the assets and liabilities remain appropriately

Is your next role one of the

117

PENSIONS & INVESTMENT

VACANCIES on our website?

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 ASSET MANAGEMENT Leading Consultancy

PENSIONS LONDON

STAR5633

Take this chance to lead technical analysis for a variety of corporate clients, acting as a key point of contact. You will work on strategy, liability management, transactions, de-risking and other special projects.

Part-Qualified / Qualified

Asset Manager

INVESTMENT NORTH

STAR5642

Take up this fantastic opportunity within a growing Asset Manager. You will gain client exposure, work closely with the leadership team and develop specialist product knowledge.

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

Irene Paterson FFA

P LE A S E CONTACT US AT ANY TI M E TO D IS C USS YOUR RECRUI TM ENT NEEDS

+44 20 7868 1900

staractuarial.com

Star Actuarial Futures Ltd is an employment agency and employment business

Part-Qualified / Qualified

Part-Qualified / Qualified

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.

FTC: IN-HOUSE PENSIONS RISK PENSIONS SOUTH WEST

IN-HOUSE PENSION RISK MANAGER

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