The Actuary magazine - June 2022

JUNE 2022 theactuary.com

The magazine of the Institute and Faculty of Actuaries HEALTH The rise of valueadded services in protection policies

MODELLING

Can catastrophe modellers make use of IPCC projections?

ROUNDTABLE SPONSORED BY

Clarence George & Actuartech

RISK

Measuring and mitigating damage to biodiversity

ata nd d w Ho ation a g llin ifer prol modeaping neware sh e r s toolthe futu e of thsion es prof

IEWLucy V R TE and

IN Njeru sting mi boo ca

a i n Muk thoni o ast Afr Mu ies in E ar actu 1 cover_The Actuary June 22_The Actuary.indd 1

20/05/2022 15:34

p02_ACT.Jun22.indd 2

19/05/2022 16:53

Contents June 2022

23 17 Regulation: Obstacle course

Joan Mungai looks at possible barriers to IFRS17 implementation in Kenya

18 Health: The extra mile

A Up Front

13

Value-added services are growing in importance, says Richard Purcell

41 General insurance: United front

23 Careers: Filling the gap

42 World view: Turkey

Ayşe Arik, Andrew Cairns, Erengul Dodd, Adam Shao and George Streftaris on UK cancer mortality What drives differences in actuarial resources between nations? Ibrahim Muhanna investigates

Ruolin Wang introduces a special issue on education and careers Louise Pryor reflects on the highlights of her year as president

Ruolin Wang reports as five experts discuss the industry’s increasing appetite for data science skills

30 Careers: Home or away?

Expat actuaries share experiences with Yiannis Parizas and Nefeli Pamballi

6 IFoA news

The latest IFoA news and events

32 Modelling: Storm watch

Nigel Winspear and David Maneval examine whether IPCC models are too broad to be used in cat modelling

Features

35 Modelling: Talking census

Census data can be an asset for those in insurance, explains Jeremy Keating

13 Interview: Mukami Njeru and Lucy Muthoni Two pioneering women discuss raising the status of maths and the actuarial profession in East Africa

36 General insurance: Changing gears

Ben Hoster on the implications of electric autonomous vehicles

COVER: IKONIMAGES

Get the app Did you know you can also read The Actuary magazine on any tablet or Android phone? Click through to read more online, download resources, or share on social media via our links in the app. It’s an exclusive free benefit for our members. Download on the App Store at: www.theactuary.com/ipad Visit: www.play.google.com www.theactuary.com

3 contents_The Actuary June 22_The Actuary.indd 3

Darshan Purmessur recounts the role of insurance in helping Mauritius to recover from a damaging oil spill Özlen Kandemirli on studying as an overseas student in the UK, and the growing profession in Turkey

26 Sponsored roundtable: Meeting the data demand

5 CEO’s comment

Ahead of our AGM, Stephen Mann looks to future IFoA developments

We need a framework to help insurers decide whether a project harms biodiversity, says Oliver Schelske

20 Health: Uneven outcomes

4 Editorial

5 President’s comment

38 Risk: Reversing the decline

At The Back 43 Book review

William Morgan: Eighteenth-Century Actuary, Mathematician and Radical

by Nicola Bruton Bennetts

44 People/society news

The latest news, updates and events

45 Student

Vrishti Goel on the non-technical skills a modern-day actuary needs

46 Puzzles 47 Inside story

Matthew Facey talks the power of the collective and collaboration

Additional content including daily news can be found at www.theactuary.com Weekly newsletter: for all the latest actuarial news, features and opinion direct to your inbox, sign up at bit.ly/1MN3bXK JUNE 2022 | THE ACTUARY | 3

23/05/2022 09:13

Upfront News

theactuary.com

PUBLISHER Redactive Publishing Ltd 9 Dallington Street, London EC1V 0LN PUBLISHING DIRECTOR Anthony Moran MANAGING EDITOR Sharon Maguire +44 (0)20 7880 6246 sharon.maguire@redactive.co.uk SUB-EDITOR Kate Bennett N E W S / F E AT U R E S REPORTER Christopher Seekings +44 (0)20 7324 2743 christopher.seekings @redactive.co.uk

EDITOR Ruolin Wang editor@theactuary.com F E AT U R E S E D I T O R S Kimberly Chimsasa: Pensions and investment Travis Elsum: Environment and sustainability Alex Martin: Environment and sustainability Blessing Mbukude: Life Fiona Neylon: General insurance Yiannis Parizas: General insurance and data science Rajeshwarie VS: General insurance PEOPLE/SOCIETY NEWS EDITOR social@theactuary.com Sharon Maguire sharon.maguire@redactive.co.uk STUDENT EDITOR Adeetya Tantia student@theactuary.com

D I S P L AY S A L E S theactuary-sales@redactive.co.uk +44 (0)20 7324 2753

IFOA EDITOR Kate Pearce +44 (0)207 632 2118 kate.pearce@actuaries.org.uk

RECRUITMENT SALES theactuaryjobs@redactive.co.uk +44 (0)20 7880 6234 ART EDITOR Sarah Auld PICTURE EDITOR Akin Falope SENIOR PRODUCTION EXECUTIVE Rachel Young +44 (0)20 7880 6209 rachel.young@redactive.co.uk PRINT PCP

EDITORIAL A D V I S O R Y PA N E L Peter Tompkins (chairman), Chika Aghadiuno, Nico Aspinall, Naomi Burger, Matthew Edwards, Jessica Elkin, Martin Lunnon, Richard Purcell, Sonal Shah, Nick Silver INTERNET The Actuary: www.theactuary.com Institute and Faculty of Actuaries: www.actuaries.org.uk

SUBSCRIPTIONS Subscriptions from outside the actuarial profession: UK: £100 per annum.

Europe: £130 per annum, rest of the world: £160 per annum.

Contact: The Institute and Faculty of Actuaries, 7th floor, Holborn Gate, 326-330 High Holborn, London WC1V 7PP. T +44 (0)20 7632 2100 E kate.pearce@actuaries.org.uk.

Changes of address: please notify the membership department.

E: membership@actuaries.org.uk Delivery queries: contact Rachel Young E: rachel.young@redactive.co.uk Published by the Institute and Faculty of Actuaries (IFoA) The editor and the IFoA are not responsible for the opinions put forward in The Actuary. No part of this publication may be reproduced, stored or transmitted in any form, or by any means, without prior written permission of the copyright owners.

While every effort is made to ensure the accuracy of the content, the publisher and its contributors accept no responsibility for any material contained herein. © Institute and Faculty of Actuaries, June 2022 All rights reserved ISSN 0960-457X

4 | THE ACTUARY | JUNE 2022

4 EDITORIAL_The Actuary June 22_The Actuary.indd 4

A career for all As we approach the end of the academic year, I am proud to present this special issue of The Actuary focusing on education and careers.

For our interview (p13), Kim Chimsasa and Chris Seekings speak to Mukami Njeru and Lucy Muthoni, two actuarial trailblazers from Kenya who are determined to clear the path for new and aspiring actuaries through their work at the Actuarial Academy of East Africa.

Taking a bird’s-eye view of actuarial education, Ibrahim Muhanna examines why there are fewer actuaries in some countries than others, and considers how international and domestic stakeholders can help foster local actuarial professions (p23). On a more personal note, Özlen Kandemirli shares her journey as one of the first Turkish nationals to become IFoA-qualified, and some of the challenges and rewards of working in a small actuarial market (p42).

For our careers theme, I speak to Valerie du Preez, Patrick Flanagan and three others about data science (p26). Why has adoption been less widespread than some had hoped? And why are the opportunities and threats it presents to individuals, and the actuarial profession, closer than some might think?

Finally, as international borders begin to re-open, and after two years of introspection, moving abroad – or returning home – is again on the table for many professionals. What are the relative advantages of working in a smaller market versus a more mature market? What should an aspiring expatriate expect, and how can they prepare for one day going home?

Yiannis Parizas and Nefeli Pamballi explore what it means to be an expatriate and returnee actuary today (p30).

I hope you enjoy this issue.

RUOLIN WANG EDITOR editor@theactuary.com Ruolin Wang is a Solutions Manager at Schroders. Any views are her own and not those of Schroders.

www.theactuary.com

23/05/2022 09:14

Upfront CEO

Upfront LOUISE PRYOR

STEPHEN MANN

A year of progress

Changing of the guard

T

his is my final column as president – I can’t believe the year has gone so quickly! It’s been a year of ups and downs, as COVID-19 has continued to be an influence, but I’d like to focus on the good things that will make it a year to remember for me.

The biggest event of the autumn was COP26. I had the privilege of hosting a webinar series that connected sustainability experts, thinkers and decision-makers with IFoA members to debate sustainability issues at the intersection of actuarial work and society’s interests. We heard from a wide range of parties interested in the climate issue, and promoted our contribution to addressing climate change. There were some fascinating discussions, and it showed how we can be at the heart of conversations on climate change and sustainability. Find them online at bit.ly/3LSrqn4 Another highlight was the launch of our Climate Risk and Sustainability Course (bit.ly/3MZ7e3k). I’m thrilled that the first group of members to complete the course have given positive feedback, and look forward to a growing body of members becoming actuarial experts in the sustainability field.

We have seen growth in online events, which shows the IFoA is learning how to operate in new ways and increasing options for members – we no longer have to get to major UK centres to attend events, and being able to view them on catchup provides flexibility.

I’ve been impressed by the work on diversity, equity and inclusion (DEI). The DEI strategy provides a solid basis for progress, and we’re seeing it permeate all our activities – for example influencing the development of the Practising Certificates scheme.

Finally, I appreciate the work that goes on in the background to keep the IFoA operating. Much of it only comes to people’s attention when something goes wrong, so I’m happy to say there has been nothing particularly memorable this year! Thanks to everyone LOUISE PRYOR who’s been involved in the IFoA’s activities is the president of this year. It has been a privilege to be the Institute and president and I look forward to supporting Faculty of Actuaries Matt Saker as he takes on the role in June. www.theactuary.com

5 PREZ CEO_The Actuary June 22_The Actuary.indd 5

T

his month marks the turn of our sessional year, with the AGM, our change of president and new Council appointments. It’s a time for looking back and looking forward, as well as an important checkpoint, demonstrating our accountability to our members.

Those of us involved with the IFoA are simply its custodians, and aim to support a thriving, influential, rewarding profession. We are mindful that this career can be for everyone. As a small profession, we are also in competition with other sectors to ensure we attract talented people, whoever they are and wherever they come from.

We are committed to improving DEI in our community. This challenge is not unique to our profession, and if not addressed, could be a major disadvantage for key sectors and employers in the ‘war for talent’. At the beginning of 2021 I was asked to join a UK governmentcommissioned taskforce led by the City of London Corporation (bit.ly/CoL_diversity). This aims to improve socio-economic diversity at senior levels in UK financial and professional services. UK financial services and professions can feel exclusive – if one of your parents is a lawyer, you are 17 times more likely to follow them than someone who is not in that position. For many, these professions can feel like a different language or country, and their careers progress more slowly than the careers of those who feel more comfortable.

Recently, the taskforce invited UK-based IFoA members to take part in a short survey, and more than 1,000 of you did so, accounting for 23% of responses. The results will be used to help develop a sectorwide baseline to track progress and support action, and we will follow through with our key employer relationships to complement their own initiatives or help them put this issue higher up their company’s agenda. The high response rate from our community was encouraging.

Finally, I would like to thank Louise for her leadership and support during the past couple of years. She was part of my STEPHEN MANN selection panel when I was interviewed to is the chief executive be CEO and was one of the reasons I was of the Institute and keen to join. Her support and counsel has Faculty of been invaluable.

Actuaries AUTUMN JUNE 2022 | THE ACTUARY | 5

23/05/2022 09:14

Upfront News CPD

The benefits of reflective practice In simple terms, reflective practice is thinking about what you did and what happened as a result. Reflection is important to gain the most from your learning and to progress. The act of reflecting enables us to recognise what we have learnt, why we learnt it and how the learning took place.

Using reflective practice discussions (RPDs) as part of the IFoA Continuing Professional Development (CPD) scheme encourages members to identify links between their CPD activities and the impact on their individual learning objectives. In

addition, they can prompt you to recognise the purpose of each CPD activity, the specific take-away or learning outcome, and areas of potential future development.

RPDs are intended to give members space to recognise and articulate their learning. A conscious effort is required to actively think about learning activities or events that have taken place, to develop an insight or an understanding of the outcome and ascertain whether lessons have been implemented.

Reflection presents an opportunity to decide what you would do differently next

time, or if you would adapt your approach.

Reflection should also bring to light achievements and successful learning outcomes that may help you to understand your preferred approach to learning. During the process, you can focus on how what you have learnt impacts your personal goal or objectives, and how your learning could be developed or used further, if applicable.

It is suggested that one should approach reflective practice with an open mindset, and without judgment or self-criticism. There is no one correct way to reflect; finding what works best for you is key to successful reflection, and we hope that the RPDs will enable you to explore this.

You can read more information on RPDs as part of the CPD scheme at bit.ly/387lPel

IMAGES: SHUTTERSTOCK/NOUNPROJECT

SPOTLIGHT ON VOLUNTEERING

IFoA ‘Appropriate Person’ Volunteer Pool Would you like to support fellow members to reflect on their learning and development?

As part of the IFoA CPD Scheme, members should participate in an RPD with an ‘Appropriate Person’ every CPD year. The IFoA has established a pool of volunteers for

6 | THE ACTUARY | JUNE 2022

6-8 news_The Actuary June 22_The Actuary.indd 6

members who are unable to identify an Appropriate Person with whom to have their RPD. Through a wide-ranging, open discussion, the volunteer will support the member in assessing the value and outcomes of their

CPD activities, and whether their learning needs were addressed.

All Appropriate Person Pool members will receive training (via webinar).

You can find more information at bit.ly/IFoAVolunteerVacancies

www.theactuary.com

23/05/2022 09:15

Upfront News S AV E T H E D AT E

Annual General Meeting, Wednesday 15 June This year’s IFoA Annual General Meeting will take place on Wednesday 15 June at 09:30am BST. Book your place at bit.ly/IFoA_AGM22 To foster the IFoA’s vibrant global community and enable our members to participate, we have decided to hold our AGM virtually again this year.

This improves accessibility to this important annual event, and IFoA accountability.

The formal notice of our AGM is available on our website at bit.ly/IFoA_ AGM22_notice Members who join the meeting will have the option to submit questions to presenters. You can also submit questions in advance by emailing IFoA corporate secretary James Harrigan.

Matt Saker’s inaugural address as IFoA president will take place virtually the next day on Thursday 16 June.

Book your place at bit.ly/ IFoA_PresAd22

A D J U D I C A T I O N PA N E L M E E T I N G S

Mr Philip ND Berman FIA

Mr Alastair JR Lauder FIA

On 4 February 2022 the Adjudication Panel considered an allegation of misconduct against Mr Berman FIA (the respondent). The allegation relates to his role as an actuary employed by Company 1.

The panel found evidence to support the allegation that the respondent co-wrote an executive validation report for Syndicates A and B that was not compliant with the Reliability Objective within Technical Actuarial Standard 100 (TAS 100), in that: adjustments made outside of the core capital model for Syndicate A were not communicated to users of the validation report; and the reason for the adjustments to Syndicate A not being applied to Syndicate B was not communicated to users of the validation report. The panel also found associated breaches of paragraphs 1, 3.2, 3.3, 3.5 and 5 of TAS 100.

The panel upheld that the respondent’s actions were a breach of the Communication principle and Competence and Care principle in the Actuaries’ Code (versions 3.0), and determined that these allegations disclosed a prima facie case of misconduct.

In considering sanction, the panel considered all relevant information and was satisfied that the appropriate and proportionate sanction in this case was a reprimand and a period of education, training or supervised practice.

Read a full copy of the published determination at bit.ly/IFoA_IDP_Determinations

On 4 February 2022 the Adjudication Panel considered an allegation of misconduct against Mr Lauder FIA (the respondent). The allegation relates to his role as an actuary employed by Company 1.

The panel found evidence to support the allegation that the respondent co-wrote a Solvency II capital report for Syndicates A and B that was not compliant with the Reliability Objective within Technical Actuarial Standard 100 (TAS 100), in that: adjustments made outside of the core capital model for Syndicate A were not communicated to users of the capital report; and the reason for the adjustments to Syndicate A not being applied to Syndicate B was not communicated to users of the capital report.

The panel also found associated breaches of paragraphs 1, 3.2, 3.3 and 5 of TAS 100.

The panel upheld that the respondent’s actions were a breach of the Communication principle and the Competence and Care principle in the Actuaries’ Code (versions 3.0) and determined that these allegations disclosed a prima facie case of misconduct.

In considering sanction, the panel considered all relevant information and was satisfied that the appropriate and proportionate sanction in this case was a reprimand and a period of education, training or supervised practice.

Read a full copy of the published determination at bit.ly/IFoA_IDP_Determinations

Mr Walter Thomas Benedict Canagaretna FIA On 4 February 2022 the Adjudication Panel considered an allegation of misconduct against Mr Canagaretna FIA (the respondent).

The allegation relates to his role as chief actuary at Company 1.

The panel found evidence to support that the respondent failed to ensure a Solvency II capital report and/or executive validation report for Syndicates A and B were compliant with the Reliability Objective within Technical Actuarial Standard 100 (TAS 100), in that: adjustments made outside of the core capital www.theactuary.com

6-8 news_The Actuary June 22_The Actuary.indd 7

model for Syndicate A were not communicated to users of the capital report and/or validation report; and the reason for the adjustments to Syndicate A not being applied to Syndicate B was not communicated to users of the capital report and/or validation report. The panel also found associated breaches of paragraphs 1, 3.2, 3.3, 3.5 and 5 of TAS 100.

The panel upheld that the respondent’s actions were a breach of the Communication principle and the Competence and Care

principle in the Actuaries’ Code (versions 3.0) and determined that these allegations disclosed a prima facie case of misconduct.

In considering sanction, the panel considered all relevant information and was satisfied that the appropriate and proportionate sanction in this case was a reprimand, a fine of £4,000 and a period of education, training or supervised practice.

Read a full copy of the published determination at bit.ly/IFoA_IDP_ Determinations JUNE 2022 | THE ACTUARY | 7

23/05/2022 09:16

Upfront News

IFoA COUNCIL

Council elections – vote now!

Vote in our council elections and have your say on the future of your profession. Voting will close on Monday 13 June for the elections to vacant positions on the IFoA Council.

As a member-focused organisation, Council is the voice of our members and representation is key, so we encourage you to use this opportunity to have your say. As we

move forward with our bold strategy, it is more important than ever that we listen to our members and make sure that we deliver value. A representative Council is just one way we can do this, and that’s why your vote matters.

Read why Council members think voting is important at bit.ly/37uA6Bi

How to cast your vote on the IFoA’s election website If you are eligible to vote, you will have received an email on 10 May from our Election Services Provider Civica with a unique link to cast your vote.

This year there is a contested election for the General constituency of Council, but not for the Scottish constituency.

For further explanation, see bit.ly/38zsIFh Voting will close at 9:30am BST on Monday 13 June and the results will be announced at the IFoA’s Annual General Meeting, which will take place via live webinar at 9.30am BST on Wednesday 15 June.

Book your place at bit.ly/IFoA_AGM22

Book now!

The IFoA Conference 2022 22–23 June – etc.venues, 133 Houndsditch, London Join us this June for the inaugural IFoA Conference:

• Thought-provoking sessions, thought-leadership and industry insights

• Over 100 speakers and 50 sessions over two days • Speakers including Sir Colin Mayer from Said Business School,

• Interactive panel discussions, workshops and talks on key topics • Valuable insights from the Bank of England’s Climate Biennial Exploratory Scenario

• Career-enhancing sessions, technical workshops, networking

Paul Johnson, Director of the IFS, and Sir Geoff Mulgan

• Social care agenda discussion with Sir Andrew Dilnot,

opportunities, and more

• A choice of one-day, two-day, in-person, virtual and hybrid

Jules Constantinou and Tom Kenny

tickets, giving you maximum choice

Book your ticket now at: bit.ly/IFoAConf With special thanks to our sponsors:

8 | THE ACTUARY | JUNE 2022

6-8 news_The Actuary June 22_The Actuary.indd 8

www.theactuary.com

23/05/2022 09:16

Upfront News

AMP

making impact The Actuarial Mentoring Programme (AMP) is a cross-company mentoring initiative that is designed to improve diversity and inclusion within the actuarial profession. Run

by Moving Ahead, the programme was launched in 2017 with the support of the IFoA and sponsorship from Pension Insurance Corporation plc.

Participating organisations put forward mentees from groups who are underrepresented at senior levels in industry, and mentors from leadership positions. Pairs are matched across different companies.

Here, we share some highlights of the 2021–2022 cohort – the fifth to complete the programme – to show the impact that the AMP is having.

pairs of mentors and mentees from

participating organisations

82% 45%

of participants rate their mentor/mentee as good or very good

of mentees feel the programme has empowered them to network and self-promote

76% OF MENT 73% O F M EN EES T

OR

WOULD RECOMMEND THE PROGRAMME TO A COLLEAGUE

S

15%

IMAGES: NOUN PROJECT

of mentees have been promoted since the programme began

have expanded their roles and have moved to a different role

If your employer would like to participate in the AMP, or if you would like help building a business case for the programme, please email AMPmentoring@moving-ahead.org

www.theactuary.com

9 IFOA INFO GRAPHIC_The Actuary June 22_The Actuary.indd 9

JUNE 2022 | THE ACTUARY | 9

23/05/2022 09:16

Upfront News

There’s something for everyone at the IFoA Conference this year It’s just a few weeks until our inaugural IFoA Conference, which is taking place on 22–23 June – our first in-person conference for more than two years. We’re excited to be back and look forward to welcoming you to the event – whether that’s in person or virtually.

Our conference theme focuses on ‘Tomorrow’s actuary’ and we have a strong line-up of sessions and speakers across both days, providing a range of varied and thought-provoking content to help you progress and excel in your career. Both days of the conference end with a networking reception, giving you opportunities to connect and network with friends, colleagues and associates.

We have more than 50 sessions lined up across a range of cross-practice areas. Here’s a taster of just some of the sessions you can look forward to.

SESSION: Bank of England – Supporting the transition: insights from the Bank of England’s Climate Biennial Exploratory Scenario (CBES) The CBES explored the resilience of the UK financial system to the physical and transition risks associated with different climate pathways. This is the first time the Bank has tested both banks and insurers to capture interactions between them and understand the risk presented by climate change across the financial system. Expertise in modelling climate-related risks is in its infancy, so this exercise was designed to support capacity building for the Bank, CBES participants and the broader financial sector.

This session will cover the main lessons for the insurance sector.

SPEAKERS: Stefan Claus, Jethro Green and Giorgis Hadzilacos, Bank of England

SESSION: Profits versus purpose in business Join this plenary panel discussion to hear leading figures in academia and business provide their perspectives on the purpose of business, the future of corporations and how we can restore trust in commercial institutions.

COVID-19 and the climate crisis are shining a light on the way corporations act. How can we create more purposeful, trustworthy and ethical businesses to meet the needs of today’s society?

CHAIR: Tan Suee Chieh (past president of the IFoA) PANEL: Professor Colin Mayer CBE, Said Business School; Sara Drake, Chartered Governance Institute; Kalpana Shah (incoming president-elect) 10 | THE ACTUARY | JUNE 2022

10-11 CONFERENCE_The Actuary June 22_The Actuary.indd 10

2022

SESSION: Exploring the reforms to adult social care The history of social care reform in the UK is long. In February the government published its proposed reforms to adult social care (including a cap on care costs). Against this backdrop of funding promises and rising National Insurance taxation, this session will debate the resilience of these new proposals, the impact on future demand for care services, and the role for the insurance industry and the important role it has played in long-term care funding.

CHAIR: Jules Constantinou (past president of the IFoA) PANEL: Sir Andrew Dilnot CBE, Warden of Nuffield College Oxford and chair of the Geospatial Commission; Tom Kenny, IFoA Social Care Working Party; Natasha Curry, Nuffield Foundation and political/parliamentarian speaker

SESSION: Neurodiversity – a disability or a superpower?

Neurodivergent people – those who sense the environment, process information, regulate emotions or manage energy differently to most – make up 15% of the population. Conditions include autism, attention-deficit disorder and dyslexia, among others. Neurodivergent individuals are often innovative and quick thinking, and can ‘join dots’ and spot trends in data, among other things.

However, they may be perceived as ‘different’, have difficulty reading or suffer from tiredness brought on by noise or colours. Three experts explain how understanding this area can improve teams’ effectiveness.

SPEAKERS: Alicja Nocon, Expand the Circle; Charlotte Valeur; Brandon Horwitz, NomBon Consulting

www.theactuary.com

23/05/2022 09:18