ACTUARIAL POST FOR THE MODERN ACTUARY •
AUTOMATION, AI AND OTHER TECHNOLOGIES
HOW IMPORTANT IS FAIR PRICING? FIGHT AGAINST INSURANCE FRAUD A NEW PARTNER TO HELP PENSION SCHEMES
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 This month we have Willis Towers Watson examining Automation, AI and other technologies and how it is changing the insurance industry as we know it. Following on from that SAS determine how using AI and machine learning is working towards the fight against insurance fraud. We also have two articles examining recent output from The FCA with our own Fiona Tait looking at the FCA Business Plan - Regulatory priorities and their impact, and Nikki Ceko from Huntswood looks at the future of the insurance sector – How important is fair pricing? This month’s issue also covers Privacy, the biggest issue for tech in 2019, from Tom Murray, and intriguingly Dale Critchley says that Dogs in the office don’t compare to pensions. We hope you enjoy the issue and we look forward to welcoming you back next month.
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
BULK ANNUITIES ACTUARY INVESTMENT MANAGER
PENSIONS INVESTMENT
PRICING ACTUARY RISK PRICING MANAGER
HEAD OF ACTUARIAL MODELLING
HEAD OF LONGEVITY HEAD OF INVESTMENT
SENIOR AUDIT MANAGER
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 Antony Buxton FIA MANAGING DIRECTOR
page7766 4 414 560 | antony.buxton@staractuarial.com +44
CONTENTS Regulars
10
12
News
6
Movers & Shakers
8
City Dealings
9
Features Automation & AI
10
Importance of Fair Prcing?
12
Rising Tide
16
New Partner to Help Pensions
23
16 Columns
18
Tait’s Modern Pensions
14
Retirement Puzzle
18
Inner Workings
20
Solvency II & Beyond
22
Pension Pillar
24
Lights, Camera, Actuary
26
Information Exchange
28
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NEWS MAY The top challenges to becoming a better actuarial consultant According to our ‘Navigating Change’ report, which researched the views of 100 senior trustees from large UK pension schemes, consultants face a myriad of challenges. They are having to adapt to the changing pensions landscape and collaborate better with trustees, more than half of whom said
they will change – or are considering changing – their actuarial consultant in the next year. So, how can actuarial consultants become better? Our findings show trustees often want a fresh approach, but can be unsure what that approach is, or where to
The FCA sets out its priorities for the coming year The Financial Conduct Authority (FCA) has today published its Business Plan for 2019/20, which outlines the key priorities for the coming year. As the UK finalises preparations to leave the European Union, the immediate priority will remain supporting an orderly transition post-exit. The FCA will also continue to play a leading role in shaping the global regulatory framework working with other national regulators and international bodies. READ MORE
find it. The majority of trustees appoint and assess consultant performance in terms of the cost savings they can provide. However, this practice poses a challenge for consultants to retain their integrity and deliver the best service possible without compromising quality for cost. READ MORE
The importance of changing trends to actuarial work
uncertainty, pose increased risk to the public interest. These are:
The Joint Forum on Actuarial Regulation (JFAR) has today published its Risk Perspective: 2018 Update setting out its collective view on current risks to high quality actuarial work.
READ MORE
In its report the JFAR - a collaboration between regulators involved in actuarial work - has reconfirmed nine distinctive risk hotspots impacting actuarial work. The hotspots relate to current or emerging risks which, due to their changing nature or level of
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•
political and legislative risk
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regulatory change
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market performance and uncertainty
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climate-related risk
•
financial security
NEWS Fund managers believe schemes can influence climate change XPS Pensions Group (XPS) met with 90 fund managers to discuss the latest thinking in investment markets. Environmental, Social, and Governance (ESG) issues were top of the agenda. Of the various ESG issues discussed, 8 out of 10 fund managers said that pension schemes should seek to positively influence climate change. Sarita Gosrani, Head of ESG Research, XPS Investment said: “We are delighted to see climate change at the top of the agenda for fund managers. We think that as a minimum ESG should be embedded within the risk management and decision making of all fund managers. However, the fund managers surveyed have demonstrated a desire... READ MORE
Government launches Mid Life MOT The Department for Work and Pensions (DWP) has launched a new website for middle aged people offering free, impartial guidance on skills, health and finance. The scheme, dubbed the ‘mid-life MOT’, aims to help those aged around 45-55 to consider their physical health and financial position, now and in the future, and ensure they are prepared for retirement.
Stuart Price, Partner and Actuary at Quantum Advisory, praises the scheme, but says more needs to be done to make people notice. Stuart said: “I think the mid-life MOT is a great concept and I hope it will be successful. Sometimes people do just need a little wake-up call before they realise they need to take action.
“The website provides practical advice for anyone considering The concept was their future and planning launched by Pensions Minister Guy Opperman for their retirement, whether that’s in thirty and links to The years or thirteen Pensions Regulator years. However, I and Money and think it will take more Pensions Service. The than a website to get site explores different people on board, and ways to stay healthy employers need to take and active, the working options available in later some responsibility in life, and pension planning. educating staff on the... READ MORE
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Your colleagues are the biggest drivers of workplace stress Workplace stress is on the rise and the biggest drivers of stress are colleagues, new research from MetLife UK has found. Its study found employees say the major causes of tension at work are ongoing understaffing, with underperforming colleagues adding to the pressure. More than half (52%) of employees questioned said being understaffed is creating stress at their workplace while the same number blame colleagues not doing their jobs properly. Around two out of five (40%) say recruiting inexperienced staff contributes to stress. Personal financial worries are adding to the stress mix with one in three (30%) employees admitting they struggle to stay on READ MORE
MOVERS & SHAKERS The latest moves and appointments from the actuarial marketplace Buck reveal range of hires including Snr Consulting Actuary Buck has announced a range of new appointments across the business. These additions to the team will be a driving force in the delivery of Buck’s services, including more bespoke technology services for clients’ longterm success, increased actuarial support for trustees, and specialist investment advice. Peter Dean joins Buck from Broadstone as a Senior Investment Consultant. With over 25 years’ industry experience, Peter will be offering investment advice to a range of Defined Benefit (DB) and Defined Contribution (DC) pension schemes and providing strategic direction on Buck’s investment propositions to help meet clients’ long-term strategies through technological solutions. Peter is a Chartered Member of both the Securities and Investment Institute and the Chartered Insurance Institute and a Member of the Pensions Management Institute and a Certified Financial Planner. READ MORE
Willis Towers Watson appoint Christophe Meurier
Willis Towers Watson names Tammy Richardson as new Leader
Willis Towers Watson has announced that Tammy Richardson will take on the role of UK and Ireland Leader for Life and P&C in the company’s Insurance Consulting and Technology business. Richardson most recently served as leader of the UK P&C team within the same business. Colin Forrest, Regional Leader for Europe, Middle East and Africa (EMEA) in the company’s Insurance Consulting and Technology business, said: “I am delighted to announce that Tammy will be taking on the role of UK and Ireland Leader, with immediate effect. Insurers today must balance a wide range of competing demands and risks, with swiftly...
Aegon Asset Management appoint a new Global Head of ESG Aegon Asset Management has made two new hires to strengthen its now 14-strong global responsible investment team. Brunno Maradei joins Aegon Asset Management as Global Head of ESG based in The Hague, the Netherlands and Julius Huttunen joins the company as Responsible Investment Manager, based in Chicago, U.S. Both will report into Roelie van Wijk-Russchen, Global Head of Responsible Business & Public Affairs. Maradei joins AAM on the 1st of May from the European Investment Bank in Luxembourg where he was a Senior Investment Officer leading execution teams for project finance deals outside the European Union... READ MORE
READ MORE Willis Towers Watson announced that Christophe Meurier will assume the role as Global Head of Financial Solutions, with effect from 1st July 2019, succeeding Paul Davidson in that capacity. Paul will continue as the Chairman of Financial Solutions.
Christophe joins Willis Towers Watson’s after 25 years with BNP PARIBAS where he held senior roles as the Head of Insurance Solutions within Corporate and Institutional Banking as well as Chief Executive Officer of the BNP PARIBAS political and
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credit risk insurance company, GreenStars. He holds an MBA in Financial Studies from the University of Nottingham and a degree in Business Management specialised in Finance from the Paris Business School EDC. READ MORE
CITY DEALINGS Keeping up to date on acquisitions, mergers and the dealings of companies in the city
Peugeot Pension in bulk annuity deal with Scottish Widows The Trustee of the Peugeot Advanced Pension Plan has secured a c. £140m buy-in with Scottish Widows, covering all members of the Plan. The ultimate parent company of the Plan is Groupe PSA, who worked closely with the Trustee to ensure the successful completion of this transaction. The agreement secures the benefits of all Plan members and the premium structure agreed with Scottish Widows minimised the overall funding required to the Plan whilst still providing full coverage of benefits – a key requirement both for the Trustee and the Company. Good quality data and extensive due
Geoff Benney, one of the Trustee Directors of the Peugeot Advanced Pension Plan, said:
“This full buy-in is the culmination of many years’ work by the Trustee to de-risk the Plan. Scottish Widows presented an attractive deal which provides comfort to the Trustee in regard to the security of members’ benefits and certainty of overall cost.”
READ MORE
Broadstone Group acquires Thomson Dickson Consulting
LEGAL AND GENERAL ANNOUNCE FIRST CANADIAN RISK TRANSFER READ MORE
Broadstone has acquired Glasgowbased Thomson Dickson Consulting (TDC) to support its growth across consulting and actuarial. The business is owned and managed by actuaries Ann Marie Dickson and Andy Thomson who, along with all of the company’s employees, will remain with the business in its Glasgow offices. TDC is one of Scotland’s leading, independent actuarial consultancies and provides actuarial consultancy, scheme administration, and governance services to trustees and sponsoring employers of... READ MORE
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XPS Pensions Group acquires RL Corporate Pension Services XPS Pensions Group plc (“XPS”), the UK specialist in pensions, investment and administration services, is pleased to announce their acquisition of RL Corporate Pension Services Limited (RLCPS) from The Royal London Mutual Insurance Society Limited. RLCPS provides pensions actuarial, consulting and administration services to 150 smaller defined benefit (“DB”) pensions schemes, covering 8,000 scheme members. The acquisition will strengthen XPS’s presence in the market for provision of full services to smaller DB pension schemes. READ MORE
AUTOMATION, AI AND O CHANGING THE INSURANCE
by Alice Underwood Global Leader of Insurance Consulting & Technology, Willis Towers Watson How will automation, AI and big data impact the insurance industry? A good place to start is the overuse or broad use of the term AI, which isn’t just about well-trained computers, but encompasses a huge breadth of technology from deep predictive models to cognitive learning. A lot of investment has been in predictive modelling and that will increase as cognitive computing capabilities expand. As for big data, our view has long since been that it starts at home, so having a good grip on your underlying data assets so you can bring in the capabilities from AI predictive models and deploy them against those assets will be transformative. And there’s a really good opportunity to think about how this technology could play out differently in personal lines – where products are simple and the pricing is sophisticated – versus commercial lines, where products and exposure are very complicated, but the rating is less sophisticated, and there’s less data to work with. How is technology helping insurers increase growth and profitability? There’s a tension between growth and profitability. It’s easy to grow quickly if you’re willing to lose money… and it’s easy to set well defined parameters around how profitable you want to be, but it may be difficult to grow under those circumstances. Technology can help you balance those competing priorities and explore options to find the right place on the risk/reward curve. It can also help you expand your range of products and provide them to customers quickly, whether that’s
through apps on a mobile device or through an online portal, both of which can help you grow and access your customers more efficiently and cost effectively. Insurers are already using data from predictive models and other types of AI to build mobile apps that drive the right product (coverage, limits and deductibles/excesses) to the right customer. Predictive models are no longer just about pricing and underwriting rules, but are being deployed in sales and operational effectiveness too. We’re also seeing the emergence of electronic trading hubs and personalised aggregators that allow customers to compare policies and rates, a trend that will continue to expand into less complex commercial risks. Some really interesting interactions are likely to begin when brokers and intermediaries start using technology to make decisions about which insurers they use and which deals they send to their customers. How will technology address the range of regulatory environments in insurance? Technology has to be sensitive to regulations. We work in environments that move from a complete tariff, to those where rules and prices are disclosed to regulators, to fairly deregulated markets such as those in the U.K., where it’s more principles-driven than framework driven. So, technology needs to support all of those markets. In less regulated markets, technology can help you understand your segments in a much more granular way so you can be much more focused on what you charge. In the U.K., an example might be the
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OTHER TECHNOLOGIES: E INDUSTRY AS WE KNOW IT
by Dave Ovenden, Global Pricing and Underwriting Leader, , Willis Towers Watson young driver market where telematics are very heavily used, so the way for a young driver to enter the driving population is often through a telematics product. That’s a really good example of regulation allowing the market to respond to a population that represents something like 5% of the community and 30% of the losses. Given the range of regulatory frameworks, there are also a number of different strategies insurers can deploy. Where the rate environment is flexible, insurers may want to focus technological development around pricing, whereas those in regulatory environments where pricing is relatively constrained may want to focus technological development on underwriting or claims. In terms of managing claims, you could automate claims processes to be more efficient and cost effective. You could also use artificial intelligence in the claims process to bring the claims that need attention to the right handler and process the claims that don’t need close attention in a no-touch way. How is technology affecting the average insurance buyer? It will be different for each segment of the market. In personal lines, we’re already seeing greater transparency in products and pricing, particularly in the U.K. We will most likely start to see products emerge that link people’s ability to work with business interruption, so there’s a more holistic product for small businesses. As a result, personal and commercial communities will see more tailored products. Products for individuals and small businesses are
also becoming more customised and there’s a much wider range of options, but that can make choosing the right coverage bewildering – which is why many customers are using automated advisors to aid their decision making. How do you see insurance changing over the next decade? The issue of privacy will run in parallel as people and regulators begin to think more carefully about it. We could see an environment where personal data isn’t given freely, which insurers might have to cope with and adapt to. We’re already thinking about who owns the data, and that’s especially relevant as we’re sending and receiving more data between parties trying to get insurance for a customer. We could also see shared data assets, particularly around commercial exposure data: one agreed asset register rather than re-keying the same data many times across the insurance value chain. We have data aggregators, data collectors and people making money along the data value chain – except for those at the beginning, the original data owners. That mindset is unlikely to persist into the next decade. We should also continue to see increased connectivity in the market. Companies will form alliances and partnerships with those previously regarded as competitors, and with players they just hadn’t considered before. It’s no longer about vertical integration. It’s more about being able connect to different providers of information and technology, and integrating that technology with legacy systems.
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THE FUTURE OF THE HOW IMPORTANT
by Nikki Ceko, GI Sector Lead, Huntwood Insurance companies make a significant contribution to the UK economy. According to the Financial Conduct Authority (FCA), the general insurance sector generates £78 billion in premiums and provides 82% of adults with general insurance (GI) products.
surprise to the marketplace). The regulator’s work on value measures and pricing also features very highly on the 2019/20 agenda. Ensuring pricing strategies are fair Fairness in pricing is not as much of an objective reality as one might think from the outside. There are a number of factors that influence firms’ pricing strategies.
Identifying general insurance as a core focus area in its 2019/20 Business Plan, the City regulator is becoming increasingly aware of issues within the market, specifically those around fairness in pricing. The Citizens Advice Bureau (CAB) has also recently slammed home insurance companies, in particular, for making significant proportions of their profits from so called ‘loyalty penalties’, finding that insurers make over £1 billion a year from loyal consumers who have held the same policies for six years or more. The ‘super complaint’ submitted in September last year by the CAB also found that a large number of customers are on uncompetitive deals, paying far more for a service than a new customer would. To add to this, the FCA carried out its own diagnostic review on the home insurance market and confirmed that firms, on average, charge higher renewal prices to existing customers as compared to prices offered to new customers (which will come as little
Fair pricing practices offer consumers protection – while also limiting discrimination through demographic factors – by ensuring that pricing is based on risk factors that are widely accepted as being reasonable to use. With an emphasis on the outcome for customers, providers that take fair pricing seriously will be those routinely evaluating their pricing strategy and using these reviews as opportunities to identify potential red flags. These might include low claims frequencies and acceptance, or be more obvious in the form of high volumes of pricing-related complaints. It is generally accepted that pricing strategies within the marketplace have often impacted disproportionately on customers in vulnerable circumstances and so this is a key concern for the regulator. Firms should be taking actions to minimise the risk to those who may be less able
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E INSRANCE SECTOR T IS FAIR PRICING?
to engage in the marketplace.
decisions will impact on customer outcomes. Ensuring that they address the FCA’s concerns early on will mean they are more likely to avoid the heavy penalties that come with noncompliance.
Value measures reporting The FCA’s latest Business Plan also highlighted the importance of value measure reporting, required to address poor product value and quality, as well as to reduce the risk of selling unsuitable GI products.
As well as the financial repercussions, insurers face reputational risk and likely regulatory intervention if they are found to be causing consumer harm. This can have long lasting effects for both the business and its customers.
The intention is for reporting to become compulsory by 2021, enabling comprehensive monitoring and governance of insurance products. The FCA believes that making this data public will improve market transparency and competition, while also encouraging firms to make improvements to their products on an ongoing basis (through improved product governance processes, for example). For firms looking to get ahead, value measure reporting should act as an incentive to compete, not just in terms of price, but also on broader elements of product value. The consequences of unfair pricing practices With tighter scrutiny, businesses operating within the insurance sector will be expected to have the right strategy, governance and controls in place, as well as understand how pricing
Firms should be aiming to re-evaluate their strategies throughout the year and consider whether the impact of their pricing may have changed since their last review. This view should be informed by regulatory scrutiny and an understanding that the regulator is focusing on ‘outcomes’. Changing customer expectations should also play a large part in this thinking. By having a robust product governance process and pricing strategy, firms can start to minimise the risks associated with potentially unfair pricing practices within the marketplace. Huntswood’s latest White Paper ‘Paying a fair price for loyalty within the general insurance marketplace’ delves much deeper into these issues, and is a good starting point for businesses looking to review their pricing practices.
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TAIT’S
MODERN
PENSIONS
FCA Business Plan - Regulatory priorities and their impact It is worth remembering that the modern pension market is not just bound by legislation and tax relief. Last week the FCA published its 2019/20 business plan which introduces some fundamental changes to the way in which financial services firms will be run. Priorities The regulator’s priorities are laid out in the context of addressing the biggest risks to consumers and split into the big picture issues that affect the industry as a whole, and those which affect specific sectors such as retirement planning. Top of the list is managing the EU withdrawal. There is so much uncertainty in this area that the FCA has the laudable aim of minimising disruption while at the same time retaining their influence over global regulation. A cultural revolution Reading the cross-sector priorities it becomes clear that the FCA is looking to achieve a wholesale change to the culture of financial services. This goes much further than just the delivery of advice but encompasses the way in which businesses are managed and includes a huge increase in personal accountability for the directors and senior managers of individual firms. The FCA have made noises about self-regulation in the industry before, however this time there are concrete proposals with the Senior Managers & Certification Requirement regime (SM&CR). These rules were first implemented in the banking sector to prevent influential individuals avoiding penalty by hiding behind a corporate screen and will now be expanded to apply to all of their regulated firms. SM&CR hinges on a combination of Conduct Rules and “Senior Management Functions” (SMFs), with a revised certification regime for anyone carrying out prescribed functions which could impact consumer outcomes. The Conduct Rules include the requirement to act with integrity, use due care and diligence and treat customers fairly, and the senior managers are responsible for their application by the people within their business. This means that where the required standards are not met sanctions or penalty could be applied to the individual manager and not just the firm.
checks during recruitment, identify knowledge or skills gaps and oversee appropriate personal development. The regulator will of course expect to see evidence of this and it will force firms to be more prescriptive about who does what in their organisation, what the management structure looks like and how staff are recruited and trained. There is an upside to this. For some firms it might be the first time such things have been officially decided and the result should be better managed businesses and improved “operational resilience” when things go wrong. Along the way it should also deliver more motivated staff who know what their role in the business is and have a clear view of how they can develop and progress. It will however also make it possible for the regulator to intervene not just in the advice process but also in the running of the business. Business as usual Things are much more business as usual in the retirement sector, where the regulator’s focus is unsurprisingly still on defined benefits transfers and high-risk investments. The FCA promises more “intensified work” to improve consumer outcomes in these areas and further action against firms who fail to meet their standards. This focus is required, and it is in everyone’s interests if the standard of advice improves, however the intense scrutiny has already impacted the availability of advice in this area as a result of the increased cost of professional indemnity insurance. The FCA also want to progress their proposed remedies to the problems identified in the Retirement Outcomes Review (ROR). Since 2015 more and more scheme members are opting to use income drawdown without taking financial advice, which might help them to make more informed decisions. The ROR has already resulted in instructions to providers to improve pre- and post-retirement communications and proposes the introduction of default retirement pathways. The pathways have attracted mixed feedback. Any default is by definition not going to cater to individual member needs, but is surely better than no help at all. In this respect the pathways clearly reflect the overall function of the FCA – to provide a balance between ensuring scheme members are protected against making bad decisions while at the same time supporting the availability of trustworthy professional support when required.
The senior managers must also certify, on an ongoing basis, that their staff are competent to carry out certain activities, effectively transferring this function from the FCA to the firm itself. It is the firm who must carry out regulatory reference
by Fiona Tait Technical Director Intelligent Pensions page 15
THE RISING TIDE: GO FIGHT AGAINST IN
by Georgios Kapetanvasileiou, Analytics Consultant, SAS UK & Ireland The insurance industry is undergoing an exciting metamorphosis. Facing heightened competition from digital disrupters and payments providers, insurers are digitising rapidly. They are adopting new technologies, channels and services in the name of transforming the customer experience. Yet, the parasite grows alongside the host. Recent figures from KPMG show a 78 per cent increase in the volume of fraud brought to UK courts last year. The value of insurance fraud in 2018 alone eclipsed the entire period from 2014 to 2017 combined. Insurance fraud is not a victimless crime. In the UK, for example, many of the over 1,500 whiplash claims made a year are fraudulent. They cost insurers £2 billion a year and add £90 to the price of the average customer’s motor insurance premium. The digitisation efforts of insurers are focused on improving certain processes; for example, the provision of policy decisions, the correcting of pricing policies, integration with aggregators and the reduction of customer friction during first notice of loss and claims. To achieve
this, a significant adoption of new technologies is underway; encouraged by multiple factors such as the rise of Insurtechs and the wider availability of artificial intelligence (AI) and machine learning (ML) techniques.
checks, it has become easier than ever for a fraudster to falsify their identity, exploit systems and target victims online.
Yet, while customer interactions and technologies are advancing and becoming more efficient, fraud detection techniques are falling behind. It’s crucial that our methods of detection keep pace with both customer expectations and everevolving fraud techniques.
Technological innovation shouldn’t have to coincide with a weakened security posture.Yet one of the major challenges holding insurers back is outdated detection methods and data infrastructures that are no longer fit for purpose.
A new breed of fraud In some respects, insurers have gotten better at protecting against fraud. Closer collaboration and information sharing internally and with organisations such as the Insurance Fraud Bureau, have been instrumental in fighting certain kinds. However, the fraud landscape is like a seesaw; pressure on one side leads to the rise of the other. Fraudsters regularly change their methods of attack and are becoming more advanced and coordinated. The appearance of new digital channels allows fresh forms of fraud to emerge. With a multitude of new digital channels but few regular
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Past their best
Most insurance companies depend on specialised anti-fraud personnel and business rules-based software to protect themselves. While both are important components in any fraud strategy, they can no longer do it all alone. When an experienced staff member leaves the company, there often follows an immediate drop in effectiveness. They take their expertise with them, and the antifraud systems they helped build and design can become inscrutable to those left behind. While it’s possible to replicate their knowledge as business rules, rules are easily broken. Ultimately, they represent a threshold that, once crossed, triggers an alert. So long as a fraudster can find strategies to avoid
ING HYBRID IN THE SURANCE FRAUD
breaching that threshold, they can remain undetected indefinitely. Fraud teams aren’t helped when the data environments they work with are often disorganised, siloed. And unstructured data sources make it very difficult to assemble the data needed to create a complete customer view or identify a fraudster profile. Poor data quality and integration diminish accuracy and slow down the detection process, nevermind the fact that third-party data must also be compiled and integrated. Prevention over protection As in business, the most agile party usually prospers. So long as fraudsters can advance and evolve faster than their victims, insurers can’t win. While companies rely on outdated detection techniques and legacy infrastructures, they will remain vulnerable. Fortunately, future technologies like AI and ML provide a way to even the score. New AI-driven techniques allow insurers to leverage massive quantities of data, and in real-time, not just to detect fraud but to prevent it from ever happening.
The challenge then becomes which option to choose. These should be driven by the unique needs and vulnerabilities of the business. Once an algorithm has been trained with data to recognise fraud, it can recognise patterns or features faster than any human. As an example, predictive modelling is adept at spotting the familiar warning signs before any fraud has actually taken place. These allow teams to step in before any damage is done. On the other end of the scale, unsupervised learning is designed to hunt down fraud that has no precedent or historical data reference points. Using machine learning, the system decides for itself what is suspicious and warrants extra investigation. This capability alone makes it a gamechanger, and essential for companies that want protection from the unexpected. Finally, social network analysis rounds out these capabilities. While other solutions are effective at smoking out opportunistic fraud, social network analysis unearths organised fraud. By bringing together multiple disconnected data sources, and establishing the links between them, the technology saves time and reveals
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connections no one would have expected. One large UK insurer used social network analysis to compare IP addresses, mobile phone numbers and email addresses to identify an organised fraud ring, saving £7 million a year as a result. Next steps If there was a tried-and-tested method for the application of insurance detection techniques then it wouldn’t be the problem it is. Unfortunately, no one size fits all, and the fraud landscape is rarely static. It’s startling to see how AI and ML techniques are being used by fraudsters to maximise their profits. The best strategy is to keep all your bases covered, with a hybrid approach to detection, and infrastructure that’s flexible to change. By using a hybrid approach and strong data governance policies, Allianz Insurance was able to investigate 26 per cent more cases and save CZK 110 million a year in fraudulent claims detected. What matters isn’t the capabilities you have, but how they work together.
RETIREMENT PUZZLE CARRY ON MY WAYWARD TERM PREMIUM by Alex White Head of ALM Research Redington Over the last two decades or so, UK interest rates have continued to lower, and bond investors have enjoyed spectacular returns. Gilts, by their nature, offer predictable cashflows- if held to maturity, investors know exactly how much they’ll make. Interest rates can go lower, so it makes sense to use gilts as a hedge (for various purposes); but where gilt rates are, does it make sense to hold gilts as a source of returns? Well, it might. Because, while gilt yields are lower than they have been, they’re also upward sloping. This means you can earn potentially significant returns from rolling down the curve, even if nothing else happens. It also means a constant duration holding in gilts with yields around 1.5% could return around 2.5%. But how? Essentially, if you hold a 10-year bond for a year, you end up with a 9-year bond one year later. You can deconstruct the price move in different orders, but essentially your returns will come from both the change in rates over the year
and from your 10-year bond rolling down into a 9-year bond. If you roll the bonds, you are effectively earning the 9-10 year forward rate, rather than simply the 10 year zero rate. Even if we work in excess return space (which will strip out the effect of generally higher yields in the past, and allow a fair comparison with the expected change just from changes in rates), this can be a meaningful pickup. We look at this in two ways. Firstly, we look at history. Taking year-end values from 1996, we construct a hypothetical portfolio that rolls 10 year zero-coupon gilts. While this is not investible, it highlights the key point with much simpler calculations. We then consider the total excess returns, the excess returns we’d expect to have been realised simply from changes in rates, and the returns that can be explained by rolling down the curve. What we see is a meaningful pickup over the simple change in rates, which all comes from the period when the longer forward rates were noticeably higher than short-end rates.
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Alternatively, we can take a forward-looking view. What would happen if rates stayed at the spot curve, and you bought gilts? If you bought an n-year zero-coupon gilt and held it, you’d earn the zero-coupon rate. However, if you bought an n-year bond and rolled it every year, so that your portfolio kept a constant maturity, you would also earn (or lose) this rolldown effect. Which means you might get different returns.
Now, it’s almost certain that interest rates won’t stay at the spot curve. Moreover if rates rise, the rolling portfolio maintains its duration, so it is exposed to more risk (through time). This is demonstrably not free money. What it does mean though is that, without anything dramatic happening to rates, gilts could still return significantly more than their current yields.. page 19
INNER WORKINGS PRIVACY - THE BIGGEST ISSUE FOR TECH IN 2019
by Tom Murray Head of Product Strategy Majesco
Over the last few months, many of the largest tech platforms have been wrestling with the problems of safe storage and ethical usage of the vast amounts of personal data they hold. Amid rising public concern about the sheer scale of the information these platforms have gathered about us, the tech giants have struggled to prove that they are worthy custodians of such levels of information about us as individuals – how we live our lives, our preferences and goals, and what we think about the big issues of the day. In particular, the social media giants have been put on the hot-spot by regulators responding to uneasiness in society about how much information they hold. Even those who do not subscribe to these platforms are finding that information about them is available to the large data giants. This is because those members, who do post often, post about other people who were with them and are thereby accidentally posting enough information for the views or preferences of the non-user to be revealed. Much of the media focus has been on the security
side, with the spotlight being focused on a seemingly endless series of data breaches, with passwords and usernames being harvested, along with credit card and bank details in the most egregious cases. But the dangers of the misuse of information by the company themselves is much higher and could ultimately cause them far more in terms of compensation or reputational damage if they get it wrong. For the life and pensions industry, this has got to be the hottest topic of the moment. Sure, technology will allow us to dramatically improve overheads and provide insurance services in a far more customer focused way than heretofore. But the very nature of our business and the type of information we hold means that data privacy and security have got to remain our number one priority as we embrace our digital future. Our customers have to give us a lot of personal information, ranging from their health details and family history to their current financial position and future goals. This is the kind of information that is clearly dangerous to lose and could cause huge
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problems for the organisation that loses it. It is a difficult balancing act; providing the online real-time services that the customer wants whilst at the same time ensuring the confidentiality that the customer demands is a big ask. There are plenty of technical security solutions and, while none of them is perfect, there are at least standard approaches to ensuring the protection of data from external sources. However, internally, it is also important that we are focused on the privacy of data. Data supplied for a legitimate purpose cannot be generically used across the organisation. It may be very tempting to use such data to offer services and products to people based on the information the company has stored in the organisation, but without the specific consent of the customer, it is not permissible to do so. Hence, probably the biggest risk to companies, in terms of the customer data, is their own people. Employees, either through carelessness with the security of the data they have available to them or through the temptation to use it in ways for
which no consent has been obtained, are constantly at risk of mis-using personal data. And the fines from regulators, not to mention the possibility of collective action lawsuits, should be enough to keep board members awake at night. Amid the excitement of new technology and the creativity of the employees, new ways of doing business and keeping customer satisfaction high are being developed. These are exciting breakthroughs for an industry that was notoriously a laggard in adopting customer-friendly processes. But those putting the brakes on in the name of data security aren’t holding the firm back, they are keeping the customer at the forefront of their mind. Customers who feel that their data is being used too freely will be very resistant to the new products and services that are aimed at them. Processes and procedures might seem to inhibit innovation. But the risks involved in too lax an approach are very high. Getting the right balance for this is difficult. The companies that know how to walk this thin line will be the real victors of the 21st century.
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SOLVENCY II & BEYOND FALLING THROUGH THE CRACKS? by Kareline Daguer, Director, PwC Over the last few years the FCA has carried out a lot of work touching on some problematic products and practices. In its latest report titled “General insurance distribution chain” (TR 19/2) the regulator expresses disappointment at the failure of many GI insurers and distributors to get their act together and do what is right for their customers. The report, Dear CEO letter and proposed guidance published early in April exuded an air of impatience and frustration. But are the current rules and the remedies the FCA proposes ever going to be effective? The FCA groups two key areas of risk of harm to consumers: a. Low value / quality products - over-priced and / or meaningless product with no or very limited intrinsic value-, b. Sales and services - products that do not meet the customer needs or firms not servicing the product appropriately (claims/ complaints). Their most recent piece of work covers 3 products (Guaranteed Asset Protection, Travel and Tradesman insurance) and specific work on delegated authorities in a number of distribution chains. The findings in both areas were similar and in the regulator’s’ words “disappointing” which means that they found many examples where customers were sold over-priced, low value products. The FCA concludes there are two main root causes for this state of affairs:
The second root cause is lack of good governance and issues with compliance, risk management systems, processes and controls. This means that many firms still lack strong processes and controls to decide what activities to undertake or delegate, who to partner with and what products to sell or distribute. We see once again that delegating authority without appropriate due diligence is still a problem across the market. In the past few years GI insurers have found themselves in an extremely competitive market. In addition, insurance is increasingly transacted through a greater variety of business models. Some of these include market participants in the chain such as MGAs, ARs, distributors who manufacture, and even reinsurers who manufacture personal lines products. Insurers are the most heavily regulated of the participants in this long and complex chain and as such they are a lightning rod for regulatory focus. The latest report on value in distribution chains demonstrates this fact. However, when looking at the whole market picture it is possible that there are some areas where the regulator could focus its efforts besides the activity we have seen in recent years: • Regulatory perimeter: market power of non-regulated firms such as powerful ARs
• Culture -purpose and values of firms- compounded by business model and strategy, and
• Sufficiency of IDD rules and regulations to enforce obligations through the chain: for example, price comparison websites complying with demands and needs
• Poor governance and oversight over the end to end product life cycle
• Consideration of tools and best practice examples for assessing risk of customer harm.
Many of the firms under review did lack focus on customer outcomes and the regulators found that customers were not at the heart of their business models. This malaise translated into firms not considering the risk of customer harm when designing and developing products and distribution strategies. I have seen this many times first hand, where the definition of a target market is so vague as to be meaningless. The other symptom comes in the guise of pricing. Insurers are sometimes ready to price on a net basis, allowing distributors complete discretion as to the end price including adding fees and charges. This practice can undo the best product design efforts but in certain areas is quite common such as legal expenses, GAP and white goods and furniture warranties.
Firms need to comply with the best interest of customer principle and demonstrate they consider risk of customer harm in their decision making. But what does it mean in practice? The issues highlighted in the TR will persist for some time but the regulator is announcing its willingness to take a more interventionist approach in the months ahead. However, it is doubtful whether the new guidance will be enough to move the dial and get the insurance market to finally place consumers at the heart of what they do. Whilst rules are vague, there is significant first mover disadvantage and some of the most powerful players are not regulated.
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CMI 2018: A NEW PARTNER TO HELP PENSION SCHEMES by Natasha Hill, Senior Consultant, XPS Pensions Group The Continuous Mortality Investigation (CMI) released the 2018 version of their model for projecting future improvements in longevity in March 2019. As well as allowing for actual deaths up to the end of 2018, the core model puts more weight on the recent lower trends in life expectancy seen in the general population, which together mean CMI 2018 projects lower future improvements in longevity than CMI 2017. The CMI first released a mortality projection model in its current form in 2009 based on data from the Office for National Statistics (ONS) for the population of England and Wales (E&W), which is updated each year to include the latest mortality data. It is used widely in the UK pensions industry, with the Pensions Regulator’s (TPR’s) 2018 Scheme Funding Statistics survey showing that 96% of defined benefit (DB) schemes in deficit, which had valuations over the year to September 2016, were using the CMI model. Recent trends in improvements in longevity Population data Since 2013, the CMI model, which is based on the general population data for E&W, has indicated average improvements in longevity of around 0.5% per annum. This is significantly lower than they were in the period from 2000 to 2011, when improvements were around 2% per annum or higher. SAPS tables Research by the CMI on the population underlying the self-administered pension scheme (SAPS) tables, which are based on individuals who have a DB pension, suggests that improvements in longevity have averaged around 1% per annum higher for the SAPS population than the E&W population in recent years. Experience of different socio-economic groups Recent improvements in longevity have been compared by the CMI between three different socio-economic groups (SEGs) of the E&W population. The analysis shows that people living in deprived areas have had lower improvements in longevity than those in less deprived areas. This suggests that mortality rates between the lowest and highest SEGs have been diverging in recent years. In turn, this suggests that improvements in longevity are likely to vary between pension schemes depending on the membership of the scheme. This is important to consider, as members whose benefits form the largest part of a pension scheme’s liability may also be those who are likely to live the longest.
What parameters could be changed in the CMI model? Because the CMI model is based on the general population data of E&W, users should consider whether the longevity trends seen and expected in this population are representative of the members of their scheme. As has always been the case, the user needs to choose the long-term rate of improvement (LTR) appropriate to the circumstances of their scheme’s members. There are two further parameters that can be easily adjusted to reflect your beliefs on future improvements in longevity: • Smoothing parameter The smoothing parameter can be used to alter the model’s level of responsiveness to new data, thus smoothing between subsequent versions of the model. For example, if you wish to place more weight on recent data, you can achieve this by reducing the smoothing parameter. This will reduce life expectancy. In December 2018, the CMI reduced the default value for the smoothing parameter, as the recent experience of lower improvements in longevity now appears more likely to be a trend than a blip. • Initial addition to mortality improvements A new parameter has been added by the CMI to this year’s release of the model, the initial addition to mortality improvements (IAMI). This can be used to adjust the model to reflect the view of the user on appropriate improvements for specific populations. The IAMI works by adding a fixed percentage each year to historic rates of improvements up to 2018. Going forwards, improvements start from the higher initial rate and then tend towards the LTR as per usual. The default value is 0%. The CMI urges users to ensure that they use initial improvements that are appropriate for their specific populations, making adjustments if necessary. What are the next steps to help your pension scheme? • Consider bespoke training on longevity assumptions and risk • Get advice on what parameters to use in the CMI model so that the assumptions for improvements in longevity reflect the circumstances of your scheme and have an appropriate margin for prudence for the purpose required • Get advice on how to adjust the CMI model to better reflect the socio-economic characteristics of your scheme membership
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PENSION PILLAR DOGS IN THE OFFICE DON’T COMPARE TO PENSIONS
by Dale Critchley Policy Manager Aviva There’s been some pretty big changes to the office environment in recent years. The arrival of the big tech companies and reports of employees sitting on bean bags and playing table football has changed the physical working landscape. We used to have ‘dress down Friday’, now, turning up in a tie any day of the week is met with comments questioning whether I have a job interview or a court appearance! Wellbeing benefits such as flexible working and access to exercise classes are becoming much more mainstream. But while these trendier benefits sound great and make a good headline, the question always remains about whether they offer what employees and employers actually want, and whether there’s still a place for “old fashioned” benefits like a workplace pension and life cover. Aviva recently carried out some research* into this and found that the most desirable workplace benefits are the most traditional. News that will be welcomed by actuaries I’m sure. Employees were asked which benefits they valued and which they weren’t interested in. While the clear priority was pay, of the other benefits available 44% included annual leave among the benefits they valued, closely followed by provision for what will be their longest holiday, retirement. The top five benefits that people value, and those they are least interested in are shown below. Table 1: Which workplace benefits are employees most and least interested in? Rank 1
Which workplace benefits are employees most interested in? 22-35 days annual paid leave (44%)
Which workplace benefits are employees least interested in? Being allowed to take your dog into the office (43%)
2
Pension scheme (41%)
3 4
Flexible working (39%) Paid sick leave and/or critical illness cover (38%)
Entertainment at work - films, video games, table football (35%) Subsidised and/or on-site childcare (31%) Social events – parties, away days (26%)
5
Bonuses and/or profit share /share schemes (25%)
Free/subsidised gym membership (26%)
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When employers are looking at which workplace benefits to offer, they will often want to measure their return on investment (ROI). This can sometimes be difficult, benefit spend doesn’t always generate robust, factual data on which to base an ROI measure. A workplace benefits package is designed to attract and retain the best people. It can do that by providing employees with a sense of security, a share in success and belonging, which engenders loyalty between employer and employees. But that halo effect isn’t always tangible. If you look at the benefits employees said they were least interested in, they’re largely low-cost. It shouldn’t cost much to allow dogs into the office, and you only buy a table football set once. The low cost and potential to appear ‘up with the times’ might make these benefits attractive to employers keen to look like the cool kids in the tech firms, but Aviva’s survey shows they aren’t widely valued. Annual leave, pensions and sick pay have ongoing costs for employers. However, as our survey showed, employees tend to value those traditional benefits. Unlike some other benefits, it’s money invested, not just spent. The learnings are pretty clear. Employers looking to retain and attract talented people should concentrate on their core workplace benefits first. Employees are much more likely to look at holiday, pension and sick pay before Christmas parties, table football and whether they can bring Fido into the office. *2,011 UK employees and 502 managers and above with recruitment responsibilities surveyed by Censuswide in March 2019 on behalf of Aviva
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LIGHTS, CAMERA, ACTUARY... Bolton Associates focuses specifically in the non-life actuarial space; now a team of six, we are the largest dedicated GI actuarial specialist in the market, whilst not sitting within one of the larger more generic insurance recruitment firms. We work throughout the Lloyd’s market, often placing the Chief Actuary or CRO and building the teams underneath these individuals. During the relationship, we often assist the client with the structure of their teams, be it product focused or skillset focused. The key for all the consultants at Bolton Associates is to offer an exceptional service to every client, whilst managing the process with the utmost tact and respect for all parties. We are all passionate about our market, and take great interest in the insurance world as a whole, keeping up with trends and changes, and maintaining our ever-expanding network. Whilst it may sound trite, it is true that we are good at what we do, because we enjoy what we do.
Spotlight on the actuaries driving the general insurance market forward
As a new focus for the coming months in the Spotlight column, Zoe Bolton, founder of Bolton Associates will be speaking to the actuaries who have been appointed Partners at the actuarial and broader consulting firms; these senior actuaries are respected industry-wide, and are networked into the insurance market at the highest level. We hope to get a brief insight into their career paths and visions for the future. This month Zoe talks to Simon Sheaf, Partner at Grant Thornton. What is your current role, and how did you end up in it?
What is the biggest challenge you face in your role within this market?
I am a Partner at Grant Thornton and I lead the general insurance Actuarial and Risk practice.
The biggest challenge is always selling the next piece of work!
I started my career within the non-life practice of Tillinghast which is, of course, now part of Willis Towers Watson. I stayed there for 11 years, qualifying and learning a huge amount but then decided that I wanted to experience working in industry. As a result, I joined The St Paul International Insurance Company Limited (which subsequently became Travelers Insurance Company Limited following a merger) as the UK chief actuary. I spent five years there during which time my role expanded to also be the chief actuary for the Irish operation.
How does your actuarial training and background assist in your day-to-day role now?
I was then approached about a role growing the non-life actuarial practice at Grant Thornton. I was attracted by the prospect of joining a newly established actuarial practice and being responsible for developing it and, to a substantial extent, that is still what excites me, so a dozen years later, I am still here! What is the defining moment of your career to date? I’m not sure that there is one single defining moment. Qualifying was obviously a huge deal but then so was getting a chief actuary role in industry through which I learned a huge amount about how insurance companies operate that I had not realised that I didn’t know. And being made a Partner at Grant Thornton was also a big moment as validation of everything my team and I had achieved. In your opinion, what prepared you best to take on your current role? I think it was the combination of the consulting experience that I had obtained at Tillinghast, with the knowledge of how insurance companies actually work that I gained through my role at Travelers. Plus, the network within the GI sector that I have developed over the years.
It is absolutely fundamental and is the foundation for everything I do. Firstly, without the technical actuarial knowledge, none of my clients would trust me to deliver on an actuarial assignment. But, arguably, even more important is the professional and ethical ethos that underpins the profession and that drives how I conduct myself. 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? It feels like it was back in the middle ages but was actually in 1990! My first piece of advice would be to be committed since, if you are not, you will struggle to get through the exams. However, I would also suggest looking to learn as much as possible and to meet as many people as you can since that will open up your career options going forwards. If you had your time again, what would you do, career-wise? Since my chances of being a Premier League footballer or highly paid male model would probably still be quite slim(!), I suspect that I would, in all likelihood, end up following a similar path. Joking apart, I have really enjoyed my career to date and would want to change very little. Please share your favourite piece of trivia with our readers! There are ten types of people in the world – those who understand binary and those who don’t!!
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INFORMATION EXCHANGE
SHIFTING GEARS IN MOTOR INSURANCE
Graham Gordon Director, Global Telematics LexisNexis Risk Solutions
There’s been a change over the past six months or so in the way telematics insurance is talked about in the media. Currently a niche proposition for the younger driver market, there is growing evidence of its efficacy in reducing road risk. As such, awareness is increasing of the benefits for other groups of motorists, including older drivers. Our own analysis identified a 35% reduction in road casualties over the past seven years amongst 17-19-year olds as telematics adoption amongst young drivers increased . This factor alone might be reason enough to encourage wider adoption of usage-based insurance. However, what we have learnt and will continue to learn about risk reduction and pricing based on data direct from the vehicle, will help shape the future of mobility. That’s a big statement, but it’s one the insurance sector needs to keep front of mind in the race towards full vehicle automation.
Telematics insurance has helped address a problem in the young driver market – these high-risk drivers faced steep insurance costs commensurate with their risk. Telematics provides access to insurance priced on actual - rather than presumed - road behaviour. Claims loss ratios have reduced for insurers and premiums have come down. For insurance providers, the cost of investing in telematics for this niche part of their book was justified based on the average premium. We are now close to a decade down the line from when telematics insurance was first introduced into the UK. Since then, through the advances in technology, the cost of data acquisition has fallen by around half. At the same time, improvements in data scoring accuracy gave both insurer and consumer more confidence in the product. Linked to this, there is now wider consumer appetite for UBI - based on our research of over 3000 motorists - 60%
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of consumers want telematics insurance.
in developing mobility services.
Despite this, only 5% (largely young drivers) are offered these types of policies and as a consumer, if you wish to use your driving score to shop around for insurance, your options are limited to a small number of brokers.
Scale is the key here. Car manufacturers are looking for partnerships to help them leverage connected car data. This involves creating links with the insurance sector to help better serve their common customer. It’s already happening in the US, where major car manufacturers have joined the LexisNexis® Telematics Exchange.
Telematics insurance is the first step on the road to the connected and ultimately the driverless car. So moving telematics into a mass market proposition is imperative as connected car adoption grows. There are an estimated 20 million cars in the US with connectivity capability, 11 million between UK, Germany, France, Italy and Spain and this volume is set to grow with 100% of new cars expected to have connectivity by 2025 . How are consumers going to access UBI and shop around for insurance based on connected car data, if the insurance sector has not readied itself to accept and use vehicle data in pricing on a wide scale? Telematics is the start, but we are also now actively sourcing and looking to deliver vehicle build data including ADAS features at the point of quote to also help improve pricing accuracy. These are all valuable learning opportunities for both insurance providers and car manufacturers
More and more data from many different devices and vehicles will demand data normalisation delivered by a neutral server taking data from both sectors. This will help ensure consistent scoring and enable data portability, all with the consumers’ interests front and centre. This is very much in line with the UK’s Government’s Future of Mobility Urban Strategy . This states in summary that, going forward where appropriate, sharing data from new mobility services will improve the choice and operation of the transport system. Insurance providers and car manufacturers need to share data through a common platform to promote a greater understanding of risk. This starts with telematics data and soon vehicle build data. This, we believe, is the starting point for the development of semi and ultimately fully autonomous vehicles.
1.
975,000 live policies, over 1m 17-19-year-old drivers - https://www.biba.org.uk/press-releases/biba-research-reveals-telematics-almost-reach-one-million-mark/ 2. Consumer Intelligence Research conducted September 2017 of 3025 motor insurance policyholders. Respondents were 50% males, 50% females and representative of the driving population across 7 age groups (17-19, 20-24, 25-34, 35-44, 45-54, 55-64, 65+) and social demographic groups –A, B, C1, C2, D, E. 3. LexisNexis Risk Solutions Research of the Automotive market conducted in 2018 4. https://www.gov.uk/government/speeches/future-of-mobility-urban-strategy
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TEMPORARY JOBS • LIFE • GRADUATE • PENSION • IMMEDIATE JOBS • £100K+ • CONSULTANTS • TEMPORARY JOBS • LIF GRADUATE • PENSION • IMMEDIATE JOB • £100K+ • CONSULTANTS • TEMPORARY JOBS • LIFE • GRADUATE • PENSION • IMMEDIATE JOBS • £100K+ • CONSULTANT • TEMPORARY JOBS • LIFE • GRADUATE • PENSION • IMMEDIATE JOBS • £100K+ CONSULTANTS • TEMPORARY JOBS • LIF GRADUATE • PENSION • IMMEDIATE JOB • £100K+ • CONSULTANTS • TEMPORARY JOBS • LIFE • GRADUATE • PENSION • IMMEDIATE JOBS • £100K+ • CONSULTANT • TEMPORARY JOBS • LIFE • GRADUATE • PENSION • IMMEDIATE JOBS • £100K+ CONSULTANTS • TEMPORARY JOBS • LIF
RECRUITMENT
• • FE BS Y TS E • FE BS Y TS E • FE
search & selection Capital Actuarial Analyst
Consultancy
General Insurance Up to £55,000 + Full Study Support City of London
General Insurance £Highly competitive London
Highly reputable Lloyd’s and London market player looking for a part-qualified analyst keen to work within the capital team of a leading Lloyd’s insurer, involved in capital modelling across multiple entities. To be considered, you will have 1-3 years of capital experience. Those from personal lines or consultancy experience will be considered for this role. Experience of .Igloo/Tyche is advantageous.
Leading independent consultancy practice is looking to strengthen its team at a senior level and hire strong actuaries who can lead and run reserving /capital projects. Looking for individuals of future Partner calibre who will provide highest level of service to clients whilst being proactive and commercially aware. Exceptional communication/presentation skills a must. UK experience essential.
. REF: ZB 000102 MM
Ref: ZB 001129 SC
Pricing Analyst
Reserving Manager – Reinsurance
General Insurance £50, 000 Per Annum City of London
General Insurance Circa £110,000 + bonus + benefits London
Due to business growth a highly regarded Lloyd’s insurer is looking to expand their pricing team. Ideally, you will have 2-3 years of London Market/Lloyds pricing experience but those with other market backgrounds will be considered. You must have an impressive academic background and strong communication skills are imperative. You will have excellent analytical. skills with an ambition to succeed.
Successful and growing reinsurance business has an opening for a reserving actuary to head up their reserves. Reporting into the Group Head of Reserving this is a business facing role with plenty of interaction with senior executives. You will be responsible for a small team and will ideally have experience of using Access. Some travel to Zurich.
Ref: ZB 001122 HT
Ref: ZB 001149 CS
Pricing Actuary, Start-Up
Chief Financial Officer
General Insurance Up to £120,000 depending on experience London
General Insurance Circa £200,000 basic London
Exciting 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. .
Extra-ordinary opportunity for commercial, qualified actuary to take the reins as UK CFO in an exciting new start-up insurer. Specialty insurance experience, and from within a finance function previously; part of the role will be FP&A; moreover, you will have the ability to interact with underwriters and business stakeholders, bringing a true value-add.
ZB 001152 PW
Ref: ZB 001153 ZB
www.bolton-associates.co.uk
+44 (0)207 250 4718
Bolton Associates, 5 St. John’s Lane, London, EC1M 4BH
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
You will maintain, validate and run internal models to calculate the economic capital benchmark, and will run the quarterly reserving exercises.
NON-LIFE SOUTHERN EUROPE
NON-LIFE LONDON
STAR5628
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 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
ASSOCIATE DIRECTOR +44 7740 285 139 paul.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
P LE A S E CONTACT US AT ANY TI M E TO D IS C USS YOUR RECRUI TM ENT NEEDS
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+44 20 7868 1900
staractuarial.com
ACTUARIAL POST RECRUITER OF THE YEAR 2012 . 2013 . 2014 . 2015 . 2016 . 2017 . 2018
LIFE HEAD OF PRICING Qualified
HEAD OF FINANCIAL & INSURANCE RISK
Leading Insurer
LIFE SOUTH COAST
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
GROUP RISK MANAGER
Global Reinsurer
LIFE MIDLANDS
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.
Market Leader 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.
E
IV
US
CL
Part-Qualified LIFE LONDON
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.
LIFE BERMUDA
VACANCIES on our website?
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
Forward-Thinking Business
LIFE LONDON
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91
ENTERPRISING LIFE ACTUARY
Part-Qualified / Qualified
IV
ISLAND LIFE
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.
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CAPITAL SOLUTIONS
Leading Financial Services Provider
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.
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 33
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. 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.
CL
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
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?
PENSIONS LEADERSHIP
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STAR4158
IV
Major Consultancy
INVESTMENT SOUTH EAST
US
Part-Qualified
EX
INVESTMENT CONSULTANT
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.
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
Qualified
IN-HOUSE PENSION RISK MANAGER