Page 1


Interview Rosaline Chow Koo

The magazine of the Institute and Faculty of Actuaries

On transformation and ďŹ ntech success

Life Calculating and ďŹ nancing the Zinszusatzreserve

Modelling Embedding and modifying internal capital models

Technology How data analytics is improving the internal audit process

Seizing investment opportunities in Chinese capital markets

01 cover_The Actuary December 2018_The Actuary 1

26/11/2018 12:45

IT TAKES VISION Becoming IFRS 17 compliant is a daunting challenge. But with the right partner, it can also be a great opportunity to gain new insights into your organization. As an independent consulting and technology firm with unmatched actuarial expertise and a comprehensive understanding of the regulatory landscape, Milliman can help you get out in front of compliance and take your business to the next level. Visit

p02_ACT.Dec18.indd 2

26/11/2018 11:09

Contents December 2018

32 Features 12 Interview: Rosaline Chow Koo The founder and CEO of CXA Group on disrupting traditional health insurance models


19 Life: An easier pill to swallow Sebastian Dany and Silke Longoni explain the new method for calculating the Zinszusatzreserve

Up Front 4 Editorial Francisco Sebastian on the rising tide that is digital currency 5 President’s comment Actuaries have a valuable role to play in determining the future of social care, says Jules Constantinou 5 CEO’s comment Derek Cribb introduces the 2018 IFoA Members Survey 6 IFoA news The latest news, updates and events from the IFoA


16 Investment: Eastern promise The time is ripe to invest in Chinese markets, says Haijing Wang

22 Technology: Take the reins Could central bank digital currencies transform global finance systems? Orla Ward and Ian Collier investigate

28 Modelling: A foot in the door Andreas Tsanakas and Laure Cabantous provide tips for establishing internal capital models within organisations

Did you know you can now read The Actuary magazine on any tablet or Android phone? Click through to read more online, download resources, or share on ssocial media via our links in the app. It’s an exclusive free benefit for our members. Download on the App Store at: V Visit:

03 contents_The Actuary December 2018_The Actuary 3

32 Cryptocurrencies: If money were no object Nick Furneaux on crypto-assets 34 Puzzles 35 School of thought Syed Danish Ali discusses the future of transport 36 People/society news The latest news, updates and events 38 On the record Keir Harvey on his actuarial habits 38 People moves

26 Data analytics: Delve into the data Andy Cox and Tom Bryant discuss the benefits data analytics can bring to internal audits

Get the app

At The Back

19 Additional content including daily news can be found at Weekly newsletter: for all the latest actuarial news, features and opinion direct to your inbox, sign up at DECEMBER 2018 | THE ACTUARY | 3

26/11/2018 15:31

PUBLISHER Redactive Publishing Ltd Level 5, 78 Chamber Street, London, E1 8BL +44 (0)20 7880 6200 PUBLISHING DIRECTOR Joanna Marsh MANAGING EDITOR Sharon Maguire +44 (0)20 7880 6246 A S S I S TA N T E D I T O R Kathryn Manning +44 (0)20 7324 2792

EDITOR Francisco Sebastian F E AT U R E S E D I T O R S Stephen Hyams, pensions Garry Smith, banking, regulation Joanne Joseph, general insurance Sharad Bajla, general insurance Paul Malloy, reinsurance, life insurance Contact: PEOPLE/SOCIETY NEWS EDITOR Yvonne Wan STUDENT EDITOR Jason Whalley

SUB-EDITOR Kate Bennett NEWS REPORTER Christopher Seekings +44 (0)20 7324 2743 christopher.seekings D I S P L AY S A L E S EXECUTIVE Nila Marma +44 (0)20 7324 2753 SENIOR RECRUITMENT SALES EXECUTIVE Shamil Bhoyroo +44 (0)20 7880 6234

IFOA EDITOR Kate Pearce +44 (0)207 632 2118 EDITORIAL ADVISORY PANEL Peter Tompkins (chairman), Naomi Burger, Matthew Edwards, Martin Lunnon, Nick Silver, Jessica Elkin, Sonal Shah, Richard Purcell, Nico Aspinall INTERNET The Actuary: Institute and Faculty of Actuaries:


Circulation 30,432 (July 2017 to June 2018)

SENIOR PRODUCTION EXECUTIVE Rachel Young +44 (0)20 7880 6209 PRINT Southernprint

Recycle your magazine’s plastic wrap – check your local LDPE facilities to find out how.

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 Students on actuarial courses may join and receive The Actuary as part of their membership. Apply to: Membership Department, The Institute and Faculty of Actuaries, Level 2 Exchange Crescent, 7 Conference Square, Edinburgh EH3 8RA. T +44 (0)131 240 1325 E Changes of address: please notify the membership department. Delivery queries: contact Rachel Young E


Modern money Coin tossing has been crucial at different points in my life: as a child, heads or tails would often decide who took the highly undesired goalkeeper position in playground football. On ski trips with friends, the question of who would take the small bedroom was often settled with a coin toss. At university, coins featured prominently in statistics courses, along with jars full of marbles. Other, more important events have also been based on the fate of the flip: 115 years ago, Wilbur Wright won a coin toss against his brother Orville, earning him the first attempt at flying. Wilbur probably ended up hating coin-based decisions as much as I do (I played goalie and slept in the small bedroom far too often), as his failed attempt gave Orville the opportunity to make history. With the recent rise of digital currencies, however, the days of the coin flip could be numbered. These new forms of money are a hot topic among technology connoisseurs, economists and investors. What about actuaries, though? Digital currencies do not seem to have become a subject of rigorous actuarial debate yet, despite the challenging risk problems that they entail. This may be due to actuaries’ lack of familiarity with the issues. This issue aims to help readers better understand digital currencies: Orla Ward and Ian Collier discuss central bank digital currencies and their potential impact on the banking system as we know it on p22, while Nick Furneaux provides excellent insight on the risks involved in owning cryptocurrencies – find that on p32. And continuing with the theme of innovation, this month’s interviewee is Rosaline Chow Koo, a pioneering woman in the fintech world, who is eager to shake the foundations of corporate benefits (p12). Enjoy the read!

Published by the Institute and Faculty of Actuaries (IFoA) The editor and the IFoA are not responsible for the opinions put forward in The Actuary. No part of this publication may be reproduced, stored or transmitted in any form, or by any means, without prior written permission of the copyright owners. While every effort is made to ensure the accuracy of the content, the publisher and its contributors accept no responsibility for any material contained herein. © Institute and Faculty of Actuaries, December 2018 All rights reserved ISSN 0960-457X


04 editorial_The Actuary December 2018_The Actuary 4


26/11/2018 15:33



The future of social care

Tailored to fit


as invited in ited to sit on a panel of ust over a year ago, I was independent experts advising the UK government on the development of the social care green paper, and as I mentioned last month, this has been a big project for me. It is a great example of an opportunity for actuaries to step out of the shadows and contribute to one of the big questions facing society today. To coincide with the publication of the green paper, the IFoA has just released the first in our social care briefing series, The State of Play. Social care in England is in crisis. An ageing population is placing unprecedented strain on demand and funding for social care. This is exacerbated by a lack of public understanding around who is responsible for meeting the costs of care. For many people, it’s not clear when funding will be met by the state and when the individual will be expected to bear the cost. The actuarial profession is well-placed to offer a unique perspective on long-term funding solutions. We have a history of quantifying and managing long-term risk and assessing mortality and morbidity. Given that reform will need to address both current care needs and potential future needs, we want to emphasise that there is no one-size-fits all solution, and to spark debate on how the system can be funded fairly. An ageing population will result in a shrinking tax base over the coming decades, and we would caution the government against asking younger generations to bear a disproportionate amount of costs for supporting future older generations. We would also ask the government to encourage JULES individuals who can self-fund to make CONSTANTINOU necessary provisions ahead of time. is the president of During the past year, one thing has the Institute and become clear: there are no easy answers. Faculty of Actuaries #iamanactuary

05 dc prez_The Actuary December 2018_The Actuary 5


e last conducted a full survey of our members in 2011, and we want you again to tell us how we can support you in your careers both now and in the future, given the changes we have seen during the intervening period. While we regularly gather feedback through smaller groups, including the 400 Club, our membership has changed materially in the last eight years, and so have many of your needs. Our member numbers have risen 50% to over 32,000, students now outnumber qualified actuaries, our General Insurance membership has more than doubled, and member numbers outside of the UK have risen from 42% to almost exactly half. With technology evolving fast, we see more threats and opportunities arising and disappearing at an unprecedented rate. The work our members do has necessarily changed to reflect this, even within our traditional domains. How we support our members in their careers has also changed; we now have a greater variety of online content and reinvigorated regional activity in the UK and beyond. Our Asia conference, for example, is scheduled for 9-10 May 2019, and will hopefully attract more than 300 members from the region. I’m asking you to share your views in the IFoA 2018 Members Survey. It gives you the opportunity to share your perspectives and let us know what you value and where we can improve. Your views will provide DEREK CRIBB the IFoA with the evidence base is the chief needed to ensure our strategic executive of the decision making reflects your Institute and needs and delivers relevant, Faculty of Actuaries tailored support for your career.


26/11/2018 16:04


Stepping into a bright future IFoA president Jules Constantinou talks to Gareth Groarke about his campaign to boost the visibility of the actuarial profession, ‘Stepping out of the shadows’, and how he sees it progressing during the next few years. Constantinou’s presidential address in June 2018 called for actuaries to ‘step out of the shadows’. When I ask him how he sees this playing out during the next couple of years, he explains that actuaries have a great opportunity to put themselves forward. “We are in a moment where actuaries have a key role to play in shaping the future of society and industry,” he says. “First, we’re seeing this proliferation of data out there – every breath you take can be recorded somewhere. Every heartbeat can be recorded somewhere. Actuaries can identify themselves as the original data scientists. We certainly need to adapt and learn how to interpret and analyse this often-unstructured data, but it is something we can do. That’s the first premise. “The second premise is really based on ageing populations, intergenerational fairness, and almost all the economic and demographic outcomes that could occur in the future. That’s core to what we do. It’s needs-driven – we have to step up.” So there’s a collision of two trends. One is data and its associated platforms, and the technology tools that come with it; the other is a series of seemingly distinct but

“We are in a moment where actuaries have a key role to play in shaping the future of society and industry”

actually fairly interconnected social trends. Those two issues are coming together, and need actuaries to interpret them – and help guide societies, employers and governments through any challenges. So, does Constantinou feel that the profession currently keeps itself too much to itself – and is there a risk that it will remain that way going forward, and fail to fulfil its potential? “Both,” he says. “In some respects, it’s part of actuarial DNA to be more humble and reserved, to only speak up when you’re the expert. That constrains us. In certain cases, though, we’ve seen people who’ve done really wonderful things with their careers and their businesses, and with the profession. We are too reticent to actually step into areas where we don’t have the expert knowledge, the deep expert knowledge – and yet we probably know more than anybody else.” There’s also the issue of the public’s perception of actuaries. “If we asked people outside of the financial district what an actuary is, I’m not sure we’d get an informed response,” he says. “However, we’ve done good work from a policy perspective. We are actually beginning to be recognised as a group of people who have contributions to make in answering some of the big questions, which is why we get asked to respond to consultations.”

One of the other possibilities Constantinou mentioned in his address is the threat of the profession being overwhelmed by the growth of similar skillsets, such as those held by data scientists. What steps does he think we could take now to try and realise a more favourable future? “The first step is to recognise that there is a risk. I think most people would say they see the need for actuaries in traditional areas actually shrinking. In the modern world, we can’t plough alone. We have to understand where we sit within the whole spectrum of skills and industry professionals, and form alliances and collaborations that get taken forward by this wave of change. I see this as part and parcel of the work the IFoA has been doing during the past couple of years with regard to the Chartered Actuary qualification. Whether you are an Associate or a Fellow, it’s about being agile and nimble and fit for the future.”


06-10 IFOA news_The Actuary December 2018_The Actuary 6

26/11/2018 15:35


Upfront News We know we want to be more visible to the public; are there any other groups that Constantinou thinks actuaries need to raise their profile with? “Employers are a key constituency for us, especially those outside of our traditional areas. If you think of accountants as people who record the past, actuaries are people who understand the past and think about the future. Why couldn’t each finance department have an actuary in it to do that type of work?” Does Constantinou think actuaries need to tailor the way they raise awareness of the profession based on the concerns of the audience they are speaking to? “Yes,” Constantinou says. “We do have a public interest responsibility, as a profession. The government has introduced auto-enrolment for retirement savings, and we should have a voice in that debate. If we believe, for example, that what the government has introduced is going to be insufficient for people to retire on, we should be saying that. I know we’ve started work in that area. “I got an email a week ago from somebody saying, ‘Surely we should be part of the debate around student fees and other similar topics’. These are huge undisclosed liabilities that are not really appearing anywhere in the government finances. These liabilities are an area we are exploring with the Government Actuary’s Department. You’re right that to raise our visibility within the community, we need to begin with these social issues. Just responding to a consultation is not going to raise awareness among the public. We must convey to the public that we have a voice, and that we have responded.” Constantinou has stated he would like to see actuaries on the boards of giant brands such as Amazon or Facebook. How would this benefit those companies? “Well, Amazon, for example, deals with a vast amount of data. If Jeff Bezos is thinking about what his strategic and tactical options might be in the long term, actuaries could certainly help him understand the risks in many scenarios.

06-10 IFOA news_The Actuary December 2018_The Actuary 7

“There’s this misconception that we’re purely technical people but that does a disservice to our skillset. A large part of our training is interpreting and communicating the results of the technical work we do. It’s that combination of analysis and translation that makes us such a formidable force, and could enable us to help companies and organisations navigate their businesses through challenging times. “But it’s not just about our technical skills. We’re also bound by our ethical code, which begins with ‘Members will act honestly and with the highest standards of integrity’ – a very powerful statement to take out to people.” The conversation moves on to what actuaries can do individually to help the profession ‘step out of the shadows’. “When we are asked what we do for a living, many of us are guilty of simply saying that we’re ‘in insurance’. We don’t say: ‘I’m an actuary by training. This is what I do, and this is what I add to my business through my training.’ “I think it is down to each individual. We should do a little bit more of the visiting school career fairs, that type of thing. It starts with us helping to make young people aware that this career exists and then sharing with them how fascinating, diverse and exciting it can be. Many of us have children, and we should just volunteer to go and do something like that once a year.” What advice would he give to those who are just starting out on their journey towards becoming an actuary? “I’d say they made the right choice. What we’ve done from an educational perspective, thinking about Curriculum 2019 and how actuaries can reposition themselves, is very important for young people. It gives them licence now to do many things in their career. I regret not making more changes in my career as I was going along, and yet I see the opportunities now for younger actuaries to be braver and to take their skillsets into different areas.” Finally he says: “We can all play our part. Contribute to the ‘I am an actuary’ campaign using the #iamanactuary hashtag, and let’s spread the word about how much we have to offer.’’

IN BRIEF... IFoA Risk Alert on GMP equalisation The IFoA has issued a Risk Alert following the recent decision of the English High Court in a case brought by Lloyds Banking Group Pensions Trustees Limited (26 October 2018, It held that UK pension schemes with Guaranteed Minimum Pensions (GMPs) accrued from 17 May 1990 must equalise for the different effects of these GMPs on men and women. The issues arising from this ruling are complex, both from an actuarial and legal perspective, with potentially significant funding implications for schemes. The Risk Alert draws attention to the importance that actuaries are not drawn into providing advice on the legal (as opposed to actuarial) implications. Separate legal advice may also be appropriate.

IFoA social care policy briefing series During the past couple of decades, successive governments have made numerous attempts to reform the UK’s social care system, but funding remains under extreme and constant pressure. The current government publishes its long-awaited green paper this autumn. To coincide with this, the IFoA has released the first in a five-part social care briefing series entitled The State of Play ( These briefings aim to help inform debate around the options put forward by the government. The series will cover topics ranging from the means test to financial products and solutions that can be used to pay for care. The final briefing will provide an international viewpoint from other countries that have found themselves in similar predicaments.


26/11/2018 15:35

Upfront News


Have your say JOHN TAYLOR

You should have received an email inviting you to take part in our 2018 Members Survey. This is an important piece of work that will inform the development of the resources, services and support we provide for our members. As we are all aware, our professional landscape is undergoing a period of rapid change. To help the profession navigate this change and ensure we’re fit for the future, we’re looking to gain a detailed understanding of the challenges you face and how we can best support you, whatever your career stage and wherever you are in the world. By taking part in the survey you will help shape the support and services we provide, making sure they are relevant and valuable to you, and meet your changing needs and priorities. The results of the survey will inform our strategic planning, helping us to ensure we are providing the support you need to excel in a continually evolving business environment. Our online 2018 Members Survey will be open until 21 December – make sure you take this opportunity to have your say in the future of the profession. If you haven’t received your email and survey link, please contact


Strategising for the future Council’s second meeting of the 2018-19 sessional year took place in London on 19 October. Ahead of that meeting, we held a strategy day that focused on the future shape of the actuarial profession, and what the strategic direction of the IFoA should be in order to help deliver a sustainable future for the profession. There was rich discussion on what our priority goals should be in both the short term and beyond, and we will be following up regularly at our future meetings on the actions and activities we agreed should be at the top of our to-do list. At our meeting we discussed the ongoing work to build a more flexible qualification framework by redeveloping and repositioning Associateship as the initial destination for qualification as an actuary, following our Qualification Framework consultation earlier in the year. There is more work to be done in this area, and you can expect to see more on this during the coming months and into 2019. 8 | THE ACTUARY | DECEMBER 2018

06-10 IFOA news_The Actuary December 2018_The Actuary 8

We held a deep dive review into the Markets Development Board, which was established earlier this year to help ensure that the IFoA succeeds in delivering its market development objectives and that those developments stay relevant. We discussed the Board’s initial thoughts on its priorities, which include developing a vision for 2028 and beyond, enhancing our digital engagement and capabilities to help build digital communities, and capacity building with employers. We also examined the work the Regulation Board has done in the past year, which touched on a wide range of subjects; these include the ongoing Kingman Review into the Financial Reporting Council (and its potential implications for the IFoA and the wider profession), the proposal to introduce monitoring of actuarial work, the reviews of the Actuaries’ Code and the practising certificates regime, the expansion of the Quality Assurance Scheme outside the UK, and the delivery of

professional skills training, including a new suite of video case studies. There was some discussion of Brexit and the potential impact it may have on the IFoA and its members, though of course much remains uncertain until the UK’s negotiations with the EU are concluded. What is certain, however, is that data science is becoming critically important to the future of the profession, and this too was the subject of discussion at both our meeting and our strategy day: there are initiatives under way in this area, but Council emphasised the importance of getting fully behind them and challenged the IFoA to raise the profile and priority of this work. We will next meet on 12 February 2019 to hold our president-elect election meeting. Our third formal meeting of the sessional year will take place the following day. Minutes are available at and you can contact us at

26/11/2018 15:35

Join major influencers in your sector Share your expertise or research with your peers and colleagues

2019 event programme highlights: January

đƫ Speaking at our events provides an opportunity to share your expertise,

contribute to the development of actuarial science and be recognised as a thought-leader in your field. đƫ By speaking you will be supporting the development of the actuarial

community and providing CPD opportunities for IFoA members. đƫ As a speaker you will also enjoy networking opportunities with leading

figures in finance, policy, research or the profession.

We deliver a wide variety of events throughout the year

đƫ Capital Modelling Seminar đƫ Data Science Virtual Event

February đƫ IFRS 17 Workshop

March đƫ Highlights of Life conference

May đƫ Asia Conference 2019 đƫ CILA đƫ Pensions Conference

Residential conferences đ Professional business skills seminars đ Webinars đ Sessional meetings đ Networking events đ seminars đ workshops

đƫ IFoA Spring Lecture

And in 2019 our inaugural Virtual Event

đƫ Africa Roadshow 2019

Find out how to submit a speaker proposal or suggest a topic for a presentation at

June đƫ Protection Health and Care

Conference đƫ Risk & Investment Conference


Support your lifelong learning and enhance your CPD through our event programme

đƫ GIRO 2019

October đƫ Chief Actuaries Workshop

Current topics, latest research and future industry trends in your sector are presented by leading speakers as part of thought provoking and topical programmes throughout the year. View the IFoA event calendar for our full programme of events as they go live:

06-10 IFOA news_The Actuary December 2018_The Actuary 9

đƫ Pensions and the Law

November đƫ CHIPS đƫ Life Conference 2019

26/11/2018 15:35


Have you paid your subscription fee? If you have not already renewed your IFoA membership for 2018-2019, you can still renew your membership by paying your subscription fee before 31 December. If you have not paid your subscription fee by 31 December your IFoA membership will default and you will no longer have access to the resources in the members’ area of the IFoA website, including the Virtual Learning Environment (VLE), exam bookings, My CPD and My PPD. Fellows and Associates will no longer be able to use their FFA, FIA, AIA or AFA status. Pay your subscription fee today by logging onto the member’s area of the website or by calling our Membership Team on +44 (0)131 240 1325. If you wish to cancel your membership, please let us know by emailing Members based overseas who haven’t submitted their yearly application for partial regulation ( should also send their completed certificate of eligibility by email to the Membership Team by 31 December 2018. Members who intend to apply for a reduced rate subscription should also return their completed reduced rate application (find the form at to the Membership Team without delay.


The actuary as data scientist This one-day event exploring data science for actuaries took place at Staple Inn Hall on 5 November. It was fully attended and covered a broad spectrum of topics, as well as real-world case studies. The event kicked off with data science applications for automating life underwriting and improving policyholder experience. These included facial analytics from ‘BMI selfies’, the use of wearable technology and other non-traditional data sources. Pitches for six case studies followed. These crossed all practice areas, and each had a focus on a practical data science application that could be taken back to the office. Attendees later sought out more information on their three chosen case studies through ‘speed dating’ style talks. The afternoon sessions covered the applications of artificial intelligence in healthcare, and lessons learned from embedding data science projects into actuarial work. Questions on how actuaries could modernise some work practices were also raised, and the day rounded off with a lively panel debate on ‘The Future Actuary’, looking at how the role may evolve and the new skills that will be needed.

Curriculum 2019: Arriving January Our new curriculum – developed with the support and expertise of Volunteers, Associates, Fellows and Students – will be arriving on 2 January 2019. Make sure you’re ready by taking a look at our Curriculum 2019 hub:


06-10 IFOA news_The Actuary December 2018_The Actuary 10

26/11/2018 15:35

Upfront Letters More comments are posted online about news stories published on

Film edits

Have your say

The Secret Actuary’s exposé of actuaries in films in the November edition of The Actuary ( missed a few tricks: more notable instances would be Jack Nicholson’s dour portrayal of an archetypal life office actuary in About Schmidt. In the 80s comedy Fletch I still find it amusing how Chevy Chase seems to think underwriting actuaries really need photographs of the lives they insure. However, the prize must surely go to John McMartin’s hilarious portrayal of a painfully shy actuary in the lift scene with Shirley MacLaine in the 1969 musical Sweet Charity. Perhaps one common thread is that at least these three films made you laugh!

INSIDE Interview: Rosaline Chow Koo The CXA Group’s founder and CEO talks building a successful fintech start-up and revolutionising health insurance

Eastern promise GERRY DEVENNEY 14 November 2018

Out of pocket I was disappointed at the All change for small change article in October’s magazine ( It was a good and well presented article, apart from two comments: the first couple of lines of the second column is unrealistic. Whilst it might be fair to say “a cash-free society is on the horizon, rather than being around the corner”, the phasing out of cash would disadvantage a significant proportion of the elderly population of the country – and would seem to be politically impracticable in the near future. As an ex-Hon. Treasurer of the Institute (1984-1986) and former finance director of a UK international reinsurance group with overseas subsidiaries, I have had a lot of experience of finance and money matters in multiple currencies – including online sterling banking, which my wife and I still use extensively. However, since downsizing 12 years ago and moving to a smallish village of about 2,000 residents, many of whom are elderly pensioners, my wife and I still have to draw out about £400 cash a month. We now have no bank in the village (the nearest is about six miles away), and although the local Post Office provides a range of financial services, a lot of the local facilities still rely on cash settlements – for example the older persons’ weekly lunch club, which charges £4, and various other organisations and clubs for the elderly, including some local bridge clubs.

With China’s markets increasingly opening up, Haijing Wang discusses the various ways foreign investors can access them

An easier pill to swallow Sebastian Dany and Silke Longoni break down the new method for calculating the German Zinszusatzreserve

Take the reins Central bank digital currencies are poised to transform global financial systems, say Orla Ward and Ian Collier

Delve into the data Andy Cox and Tom Bryant explain how data analytics can aid the internal audit process

A foot in the door Andreas Tsanakas and Laure Cabantous share their findings on how best to embed internal capital models within organisations

PETER DOWNING 22 October 2018 The editor welcomes readers’ letters of approximately 300 words in length but reserves the right to edit them for publication. Please email DECEMBER 2018 | THE ACTUARY | 11

11 letters sec b_The Actuary December 2018_The Actuary 11

26/11/2018 15:36

Features Interview

12-14 interview_The Actuary December 2018_The Actuary 12

26/11/2018 15:37

Features Interview

Rosaline Chow Koo is the founder and CEO of fintech start-up CXA Group, which recently won InsurTech of the Year at the Asia Insurance Industry Awards. Sharad Bajla and Francisco Sebastian spoke with her about her journey Problem solving While at Mercer, Koo heard clients complain that brokers added little value, and tried to convince her employers to invest in technology that could add value for clients. She wanted to solve problems such as rising premiums and fast paperless reimbursements, and to explore how tailored benefits could be provided to workplaces where different generations were being covered by a ‘one-sizefits-all’ insurance programme. Eventually she decided to branch out on her own, and invested her family’s life savings to establish the CXA Group in 2013. This new venture uses technology to facilitate access to corporate benefits. Koo believes this adds value for customers in three areas. In the first area, rising healthcare costs are tackled through the identification of over-utilisation and the combating of chronic diseases. “No one can solve the rising cost of healthcare unless you can solve the issue of individual health,” she says. The second area concentrates on offering choice to employees, so they can manage their own health and insurance within a defined contribution plan – “people can only fix their health if they know what’s wrong with them and how to modify their behaviour,” Koo points out. The third area integrates the whole health ecosystem under one platform. This includes insurance companies, health screeners, third party administrators (TPAs), gyms, weight management, smoking cessation, disease management and mental health. “We are like the Netflix of healthcare, where employees and employers pay per use,” says Koo. “We have hundreds of vendors on the platform and we let employees decide how much insurance they need and how they want to get healthier.”

Disrupting traditional models When asked how her approach differs from that of traditional brokers, Koo points out that traditional brokers still operate the way travel agencies, or the stock brokerage industry, operated before the tech transformation, with people ‘manually’ negotiating prices. However, she believes that, due to ageing populations and the earlier onset of chronic diseases, employers will not be able to escape increases in healthcare costs if they don’t address the root causes of why people claim.



ransformation is a word that is often used when Rosaline Chow Koo talks about her career: she has successfully managed to transform her own professional path, along with the businesses she has worked at or led. Koo’s first job was at a Procter & Gamble toothpaste factory in the US state of Iowa, where she gained experience in operational transformation; during her time there, she cut production cycles from three months to just three days. As a young, female manager from an Asian background who was working in a white, male-dominated environment, she also contributed to a change in the workplace culture. Soon after graduating from Columbia Business School, a new transformation process began: she joined the banking industry and helped implement retirement services and foreign exchange margin trading around the clock. “No matter what I touched, something had to happen,” she jokes. But even by current standards, those changes are no laughing matter. Koo moved to Singapore in 1996, when her husband became head of Asia for a global management consulting firm, and took a three-and-a-half-year career sabbatical, which she spent taking care of her children. In 1999 she re-entered the workplace, pushing into Asian start-ups with Bain Capital, where she raised $35m and set up an e-business – the first pan-regional payroll outsourcer in Asia. She next brought her experience to ACE Insurance, building a worksite marketing business that helped to disintermediate brokers, and was subsequently hired by Mercer Marsh Benefits to run their 14 countries across the Asia Pacific region. During her eight years with the insurance brokerage firm, Koo built flexible benefits and regional brokerage mandates, managed internal conflicts between sister companies and helped build up the Asia Pacific practice. “Because we worked so hard, we grew 800%, to about a billion dollars in premium.”


12-14 interview_The Actuary December 2018_The Actuary 13

26/11/2018 15:37

Features Interview

Another difference from the traditional broker ker platforms is how the data is collected and used. Leveraging ng actuarial skills, the platform identifies health and disease risks,, advises on how they can be improved, and rewards employees for achievements such as weight loss, smoking cessation or diabetes betes reversal. Group insurance policies for employers yers are priced based on their health scores – comprised of claims ms information, blood test results and lifestyle habits, with medical dical device and sensor data. The proprietary health score analytical model that her reinsurance partners developed defines the links between variables and pricing. Employers can then use that information ation to manage down the increase in the premium they pay to insurers by encouraging improvements in their employees’ health score. Actuaries have had a heavy involvement in the developmentt of the business. Beyond the traditional pricing workstream, they also work in the data science division, helping improve the response for the chatbot and building predictive models or recommendation engines. Actuaries are also directly involved in analysing health data.

A modern approach Fintech businesses broadly, and insurtechs specifically, are intensive in highly-skilled labour that can develop sophisticated analytics and advantageous technology. Gaining access to such expertise requires substantial amounts of capital, which Koo has gathered through a combination of rapid business growth and fundraising. Beyond funding, for insurtech companies to be successful, she says, they have to work with the industry – if they build something on their own, they are likely to be ignored. It is difficult to get traditional insurance participants such as brokers, insurers and reinsurers to move rapidly, so the start-up has to “build all of the technology and bring everyone else along with them”. Insurtech start-ups also have to show the industry that their product works, to gain traction before they run out of money. This is where Koo’s modern approach meets traditional techniques: partnerships with the bancassurance networks provide an extensive platform that helps reach out to SMEs and corporations seeking to revamp or expand group health insurance while electronically cross-selling voluntary benefits to corporate employees. Following the diversification path that Amazon, Google and other online giants took, Koo foresees that the health analytics models could be leveraged to cover both health and general insurance products travel, gadget, auto, pet and accident) oducts (such as tra in the short term. erm. Regional diversification is also an intrinsic feature to most insurtech companies. When it comes to medium-term plans, Koo’s aim is to go global. She points out that the business model doesn’t just work for the insurance industry, but also for banks, telecommunications, healthcare, power, ride hailing and even e-commerce companies. “We are expanding in all types of directions that we never imagined we would go in.” Looking at the future, she thinks many different industries will enter the healthcare space, citing Amazon; the e-commerce conglomerate is moving into healthcare, and will need local 14 | THE ACTUARY | DECEMBER R 22018 0188

12-14 interview_The Actuary December 2018_The Actuary 14

““You You h have ave tto o sshift hift m most ost of of the the money money towards towards preventing preventing claims, claims, rather rather than than waiting waiting for for people people to to become become hospitalised” hospitalised” partners Asia. part tneerss to to drive driv dr ivee its iv i s off it offeeering ring ri ngg forward for orwa waard rd iin n Asia A As siaa. She Sh he also allso feels fee e lss the industry will shift heavily towards hif iftt he heav vil ilyy to tow ward ward wa ds re rremote mote mo te ssensor enso en sorr devices so devices and platforms. “You have shift off th money u ha ave v to o sh hift mo most o most the he mo m ney towards t preventing claims, rather ather than a waiting an waiiting for for o people to catch diseases and become hospitalised.” “Don’t do a transformation at the same time you do a start-up,” ma Koo advises, asked about the challenges she has faced. “It’s quadruple the work, because once you start getting investors, your revenues cannot go down.” A tech start-up competing head-on with global players needs constant attention, she explains, because it must keep growing exponentially ntially to keep investors happy. Transforming an existing company, meanwhile, le takes years. “Legacy is hard. Changing people and mindsets is hard.” On potential competition in the SME bancassurance platform m space, Koo says nobody has tried replicating the model yet, and notes that the industry is probably waiting to see how her company turns out. She believes that, with all the M&A activity currently taking place in the brokerage industry, companies are “internally distracted”, focusing on simply replicating their global models in the Asian region, rather than innovating. Another challenge that she faces is attracting good senior-level talent – “no one who is super-experienced wants to leave a really good, high-paying, stable job to work at a high-risk start-up,” she says. “Something similar applies to clients, who are equally riskaverse. You have to be 10 times better than the incumbent in order to move anybody.”

Learning from experience As we approach the end of our interview, we cannot avoid asking Koo about the challenges she has faced as a woman during her professional and business career. She does not hesitate in replying that women have to work twice as hard as men to be considered just as good. “Earning your respect is so key to becoming a good leader,” she says. “That’s the same for men and women – but it’s harder for women.” She flags up the fact that women tend to underestimate themselves: many refrain from taking tougher jobs that they feel are outside of their comfort zone, while men will apply for a challenging role even if they are not fully qualified for it. time together might be useful Some of the closing words from our tim for all of us, no matter where we are in our careers: “Learning skills is like riding a bike; you can’t just read about it. Learning to build something from scratch, learning to see the future before anyone else does, learning to get to the future first, learning to lead – you have to do it over and over and over again to succeed.” www.theactu

26/11/2018 15:42

FEATURES LIST 2019 PLEASE NOTE THE THEMES FOR EACH ISSUE ARE NOT EXCLUSIVE. The schedule is subject to occasional revisions. Please check with the features team prior to contributor deadlines for further details. Contact:

ISSUE Jan/Feb 2019

March 2019

April 2019

May 2019

June 2019

July 2019

August 2019

September 2019

October 2019

November 2019

December 2019

FURTHER INFORMATION For further information and advice please contact


SUBJECT THEMES ■ General insurance

Published: Contributor deadline: Ad booking deadline:

07 February 2019 14 December 2018 18 January 2019

Published: Contributor deadline: Ad booking deadline:

07 March 2019 14 January 2019 15 February 2019

■ Investment

Published: Contributor deadline: Ad booking deadline:

11 April 2019 18 February 2019 22 March 2019

■ Health and care

Published: Contributor deadline: Ad booking deadline:

09 May 2019 18 March 2019 16 April 2019

■ Investment/Risk

Published: Contributor deadline: Ad booking deadline:

06 June 2019 15 April 2019 16 May 2019

■ Regulation/Solvency II/IFRS17

Published: Contributor deadline: Ad booking deadline:

11 July 2019 20 May 2019 21 June 2019

Published: Contributor deadline: Ad booking deadline:

08 August 2019 17 June 2019 19 July 2019

Published: Contributor deadline: Ad booking deadline:

05 September 2019 15 July 2019 15 August 2019

Published: Contributor deadline: Ad booking deadline:

10 October 2019 12 August 2019 20 September 2019

Published: Contributor deadline: Ad booking deadline:

07 November 2019 16 September 2019 18 October 2019

■ Regulation/Solvency II/IFRS17

Published: Contributor deadline: Ad booking deadline:

05 December 2019 14 October 2019 15 November 2019

■ Modelling solutions

WRITING FOR THE ACTUARY See terms and conditions at

■ Environment ■ Regulation/Solvency II/IFRS17

■ Risk management ■ Technology/Big data/Analytics

■ International/Emerging markets ■ Life insurance

■ Lifelong learning ■ Pensions

■ GI/Reinsurance ■ Banking/Finance ■ GLOBAL VISION ■ Careers/Professional development

■ Longevity/Mortalityy ■ Health and care ■ Life insurance ■ GI/Reinsurance ■ Environment ■ Modelling

Are you interested in writing for The Actuary?

■ Life Insurance ■ Mortality/Longevity ■ Health and care

■ Pensions ■ Banking/Finance

■ Risk management ■ Reinsurance

MORE CONTENT ONLINE Additional content can be found at


15 feature list_The Actuary December 2018_The Actuary 15

26/11/2018 15:47

Features Investment

Haijing Wang discusses the opening up of Chinese capital markets, and the ways foreign investors can access them


16-18 Chinese bonds_The Actuary December 2018_The Actuary 16

26/11/2018 15:48

Features Investment

hinese markets have been expanding for decades, and international insurers have shown growing interest in including China in their strategic asset allocation. Asset managers often used to place China within the ‘emerging markets’ category, but, increasingly, large asset managers have started covering China separately in their house views of global capital markets. This article discusses topics for institutional investors looking to invest in China’s capital markets, such as the channels they can use to access them and the distinct features that make China a separate asset class.

China’s capital market internationalisation Since the official launch of the Qualified Foreign Institutional Investor (QFII) and Renminbi Qualified Foreign Institutional Investor (RFQII) systems in November 2002, China has made progress in opening up its stock and bond markets – and since 2014, the opening of China’s capital market has been accelerating. Regarding equity markets, the Shanghai-Hong Kong Stock Connect was set up in 2014. In 2016, the Shenzhen-Hong Kong Stock Connect began removing the total quota limit, marking the completion of the interconnection mechanism between the two places. Meanwhile, the ShanghaiLondon Stock Connect is close to being launched. Before these were set up, QFII was the main route to invest in China’s stock market for institutional investors. A-shares – shares of mainland China-based companies, quoted in Chinese renminbi (RMB) – were added to the MSCI Emerging Markets (EM) Index in 2017; consequently, China’s stock market has started to attract more global investors and capital. In the fixed income space, China has been releasing new investments, such as repurchase and interest rate forwards and swaps, since 2015. The auditing system has also been replaced by a filing system, removing the requirement for issuers to get prior approval and replacing it with a notification process that streamlines issuance. These developments have attracted interest from overseas institutions and increased their exposure to the bond market. In 2017, the BloombergBarclays Global Aggregate Bond Index and the JPMorgan Government Bond Index-Emerging Markets (GBI-EM) added Chinese bonds to the indices. That same year, the Bond Connect programme was approved, helping to cut down thresholds and costs for foreign investors. RMB has also experienced a degree of liberalisation. China’s central bank has exchanged around $440bn worth of currency with more than 20 countries in the past five years, and as RMB is increasingly used in global trading and settlements, offshore RMB market centres have mushroomed. In 2016, RMB successfully joined the IMF’s Special Drawing Rights (SDR) basket, making it more stable and attractive as a reserve asset.

Accessing China’s stock market There are two main ways for foreign investors to access China’s stock market: QFII/RQFII and Mainland China-Hong Kong Stock Connect. QFII and RQFII allow foreign investors to access the A-share market; for this, qualification approval from the China Securities Regulatory Commission (CSRC) and quota approval from the State Administration of Foreign Exchange (SAFE) are required. After converting foreign currency into RMB, these investors can invest in A-share stocks traded in Chinese exchanges through Chinese domestic brokers. QFII/RQFII is open to institutional investors only; smaller investors can only make cross-border investments through mutual funds or other products issued by professional asset managers and other financial institutions. Mainland China-Hong Kong Stock Connect allows investors in mainland China and Hong Kong to submit cross-border trade orders to local exchanges through local brokers. The connection between exchanges and clearing houses has removed the administrative qualifications and approvals that institutional investors and brokers were previously subject to. Stock Connect and QFII/RQFII each have their advantages. Stock Connect has a wider audience and a lower cost, and is more flexible, but investable securities are limited to a white list. QFII/RQFII is less restrictive on investable securities, and has an advantage when it comes to exercising shareholders’ rights. In Stock Connect, shareholders exercise voting rights through the Shanghai office of the Hong Kong Stock Exchange. Due to the two systems’ different designs, it is difficult for Stock Connect to completely replace QFII/RQFII, but they do complement each other. Overseas investors mainly trade Shanghai and Shenzhen stocks through Stock Connect, whereas QFII/RQFII are mostly used for other securities that aren’t on the Stock Connect white list.


“Since 2014, the opening of China’s capital market has been accelerating”

16-18 Chinese bonds_The Actuary December 2018_The Actuary 17

Investing in Chinese domestic bonds There are three main ways for foreign investors to invest in Chinese domestic bonds. The first is QFII/RQFII; the process and supervision for bond investment in this system is the same as for equities. The second is China Inter-Bank Market (CIBM) Direct, the only channel through which foreign investors can access China’s inter-bank bond market. Here, the bonds stay in China and are subject to administration and regulation. The third way foreign investors can invest in Chinese domestic bonds is through Bond Conect, which involves three aspects: Access – foreign investors can directly get ‘one-point access’ to the mainland inter-bank bond market through infrastructure interconnection and multi-level custody between the mainland and Hong Kong. Transactions – during the transaction process, foreign investors can get bond quotes from market makers and then trade in the inter-bank bond market. Custody and settlement – overseas institutions are subject to a multi-level custody model to invest in the inter-bank bond market through Bond Connect, where Shanghai Clearing House is the general registered custody institution and the Central Moneymarkets Unit (CMU) is the sub-custodian institution. DECEMBER 2018 | THE ACTUARY | 17

26/11/2018 15:48

Features Investment

Prospects for global investors in China

FIGURE 1 Scale and proportion held by foreign funding rise 3.5%

200 180 160 140 120 100 80 60 40 20 0 2013-12 2014-11

3% 2.5% 2% 1.5% 1% 2015-10 2016-09 2017-08

Market cap held by foreign fund (billion, left) Foreign shareholding ratio in circulated A-shares (%, right) FIGURE 2 The rising influence of foreign funding 7.2% 6.2% 5.2% 4.2% 3.2% 2.2%

Foreign fund

Insurance fund

20 18 Q2



Q4 20 14 Q2 20 14 Q4 20 15 Q2 20 15 Q4 20 16 Q2 20 16 Q4 20 17Q 2 20 17Q 4


Mutual fund

FIGURE 3 The proportion of foreign-held bonds in foreign-owned RMB assets has increased with the greater openness of the bond market



10% 18 -0






20 1




14 20

-0 14











16 -0 6


15 -12


15 -0 6




13 -12


Total value of bonds held (bn, left) Proportion of holding bonds (%, right) Since March 2016, when the central bank simplified the process of entering the market and cancelled the limitation on investment for certain overseas medium and long-term institutional investors, the inter-bank bond market has been completely open. Bond Connect has not expanded the scope of overseas institutions investing in the inter-bank bond market, but does simplify the process, and further promotes opening up at operational level. With less stringent foreign exchange restrictions and simplified ‘one-point access’ operations, the initial cost of participating in the market declines, making asset allocation more flexible. The trading mechanism of requesting a quote is more attractive for institutions with less bargaining power. 18 | THE ACTUARY | DECEMBER 2018

16-18 Chinese bonds_The Actuary December 2018_The Actuary 18

During the past two years, foreign capital has become the largest source of incremental funding for China’s A-shares. The value of stocks held by overseas investors reached $187bn, as of the second quarter of 2018. Of this, $99.3bn was held through mainland China-Hong Kong Stock Connect and $87.7bn through QFII/RQFII. This makes up 3.19% of A-shares’ floating market cap. Bond Connect has increased demand for China’s bonds from overseas investors. These have increased their holdings of domestic bonds – especially short and medium-term maturities. As the bond market opens further, once government bonds are included in key global bond indices, its position in the global bond market will be further enhanced. The Chinese bond market has accelerated the process of openness to the outside world since 2010, and in 2016, the central bank further broadened the range limitations of overseas institutional investors and trading instruments in the inter-bank bond market, cancelled investment quota restrictions and simplified investment management procedures. As a result, plenty of overseas investors entered into the mainland bond market at the opening of the Bond Connect in 2017. According to the statistics of the central bank, the total amount of bonds held by overseas institutional and individual investors reached $234bn by the end of the second quarter of 2018. In the short term, inclusion in the MSCI index will result in foreign incremental funding in China’s A-shares market. In September 2018, the MSCI inclusion factor was raised to 5%, which brought a new inflow of around $10bn. In the long term, foreign funding is expected to reach trillions of dollars after being fully integrated into the MSCI international index. If the MSCI inclusion factor is gradually increased by 100% from 5% in the future, it is expected that the new inflow will reach $400bn. At the same time, as A-shares are also expected to be gradually included in the FTSE Russell index, the incremental funding from international investors will grow. Based on the internationalisation experience of Taiwan and South Korea markets, incremental growth of foreign investment after a market is fully opened is even broader. Taking the proportion of foreign capital in local equity markets in Japan (30%), Taiwan (25%) and South Korea (16%) as a reference, if the proportion of foreign investors’ holding reaches 5%, 10% and 15%, the incremental capital into A-shares will reach around $200bn, $600bn and $1trn, respectively. Regarding foreign incremental funding in the bond market, the RMB-denominated Chinese government bonds and policy financial bonds are to be included in the Barclays Global Aggregate Index. This will start in April 2019 and is expected to take 20 months. At the end of January 2018, 386 Chinese bonds were included in the HAIJING WANG Bloomberg Barclays Global Aggregate Index is head of solutions – 5.49% of the index market cap of $53.73trn. at Ping An Asset Chinese bonds are also likely to be included Management Co into the JP Morgan Government Bond Index-Emerging Markets Index and the Citigroup World Government Bond Index. With their increased openness and numerous options, Chinese markets are increasingly showing themselves to be fertile ground for the foreign investor.

26/11/2018 15:48

Features Life


EASIER PILL to SWALLOW Sebastian Dany and Silke Longoni explain the German Ministry of Finance’s new method for calculating the Zinszusatzreserve

19-21 German ZZR_The Actuary December 2018_The Actuary 19

26/11/2018 15:49

Features Life


n October 2018, following intense discussions with the German life insurance sector, the German Ministry of Finance published a new method for calculating the additional reserve requirement, the Zinszusatzreserve (ZZR), which will be effective by year-end 2018. The new method follows arguments from several stakeholders – including insurance companies, the German Federal Financial Supervisory Authority, the German Insurance Association (GDV) and the German Actuarial Society – that the previous calculation method forced insurers to build up an excessive amount of reserves in a very short period of time. As a consequence, to finance the ZZR, most German life insurers had to realise a large amount of gains on their fixed-income investments, subsequently losing the income-generating power of those investments. In contrast, the new calculation method is intended to reduce the ZZR allocation for the whole life insurance industry, making ZZR buildup more affordable.

One of the main components used to calculate the ZZR is the so-called reference yield. Under the old method, the reference yield was calculated as the 10-year average of the 10-year zero-coupon euro swap rate. For each insurance contract with a guaranteed rate above the reference yield, life insurance companies must build an additional reserve, on top of the standard reserving requirement. The sum of these additional reserves is the ZZR. All else being equal, the lower the reference yield, the greater the amount that must be reserved for the ZZR. Under the old method, the reference yield has declined sharply due to the low interest rate environment in the Eurozone since the Global Financial Crisis. In practice, as the old high 10-year interest rate values are replaced with lower ones, the moving average declines. For instance, in 2017, the reference yield value was 0.86%, compared with 4.23% in 2008. The ZZR pre-finances the guarantees provided by German life insurers. As a whole, these have been reducing the average guarantee over time, from 2.89% to 2.0% at the end of 2017. However, the rapidly declining reference yield has led to much higher ZZR requirements than originally expected. Therefore, most German life insurers have had to realise high amounts of valuation reserves on fixed-income assets to finance the ZZR. The main goal of the new calculation method is to smooth the increase of the ZZR by adjusting the calculation of the reference yield. The starting point for the calculation is the reference yield under the old method. Then, upper and lower boundaries are defined. The new method includes three possibilities: If the old reference yield is below the lower boundary, the new reference yield is set to the lower boundary. Symmetrically, if the old reference yield is above the upper boundary, the new reference yield is set to the upper boundary. FIGURE 1 Proportion of interest rate generations 2017 for S&P rated German life insurers (inner circle represents individual life insurers) Interest generations below reference yield 20% 9% 3% 1% 20% 7%

A new calculation ZZR was first introduced by the German regulator in 2010. The goal was to ensure that German life insurers were able to build additional buffers to meet future commitments to policyholders, stemming from their traditional guaranteed endowment and annuity products. So far, ZZR build-up has exceeded expectations at the time of introduction. The total amount of ZZR reached €60bn in 2017, and the allocation that year was a record high €17bn. To put this into perspective, the German life insurers’ shareholders’ fund was €16.1bn in total as of year-end 2017, according to the GDV. 20 | THE ACTUARY | DECEMBER 2018

19-21 German ZZR_The Actuary December 2018_The Actuary 20


14% 13% 15% 4% 80% Interest generations above reference yield

26/11/2018 15:49

Features Life

Supporting and preserving

FIGURE 2 New vs old reference yield 4.50% 4.00%

New method Old method Underlying yield

3.50% 3.00% 2.50% 2.00% 1.50% 1.00%

Due to a higher reference yield under the new calculation method, allocation to the ZZR in 2018 will likely only be €6bn-€8bn, compared with about €24bn under the old method (see Figure 3). Asset valuation reserves and capital buffers will be better preserved. Moreover, insurers may also be able to retain bond portfolios with large capacity to generate income, which they can maintain in their investment portfolios instead of realising them to preserve higher running investment yields. Simultaneously, the ZZR still supports life insurers’ capacity to meet future guaranteed payments to policyholders, while its buildup will be better aligned with the long-term nature of the guaranteed liabilities.


19 F 20 21 F 20 23 F 20 25 F 20 27 F 20 29 F 20 31 F











FIGURE 3 Cumulative ZZR expenses 20




If the old reference yield is within the upper and lower boundaries, the new reference yield equals the old yield.


Old cumulative ZZR (€bn) New cumulative ZZR (€bn)

120 100

“Under the old method, the reference yield has declined sharply due to the low interest rates environment in the Eurozone since the Global Financial Crisis”

19-21 German ZZR_The Actuary December 2018_The Actuary 21

80 60 40 20



20 20

20 1


18 F 20



6 20 1

20 1

14 20

13 20

12 20



20 1

The upper and lower boundaries depend on the previous year’s reference yield, the underlying yield of the current year, and the so-called ‘X-factor’ (set to 9%), which defines the width of the corridor. Under the new method, we expect the reference yield per 2018 will be 2.09%, compared with 1.88% under the previous method The ZZR for individual companies can vary due to the composition of their back books and the reserve practices they have used to date (for example, the inclusion of surrender and cash options, and individual reserve strengthening). There are currently nine tariff generations in the German life insurance market, with maximum guaranteed rates between 4% and 0.9%. Overall, the larger the difference between the guaranteed rate and the reference yield, the higher the ZZR. Under the old method, in 2018, the amount of tariff generations with a guaranteed rate above the reference yield would be more than 87% (for S&P Global Ratings-rated German life insurers). Under the new method, the reference yield will not fall below 2% for 2018, so the amount of tariff generations with a guaranteed rate above the reference yield will stay closer to 80% – which is comparable to 2017 (see Figure 1). Finally, the ZZR build-up and release pattern is dependent on the development of the underlying yield. Figure 2 shows the consequences of gradually rising yields – 0.96% in 2018, 1.4% in 2019 and 1.7% in 2020 and beyond.

In the stochastic cashflow projections for Solvency II, local GAAP (HGB) requirements also need to be considered, including ZZR financing. This is important because it reduces insurers’ own SEBASTIAN DANY funds and the overall solvency ratio. This is is associate director particularly relevant under unfavourable at Standard & Poor’s economic scenarios in the Solvency II calculations. In certain cases, this could lead to extraordinary measures, such as capital injections being necessary to finance ZZR. Overall, however, the proposed method reduces the financing needs in the projections, especially in unfavourable economic scenarios such as equity shocks SILKE LONGONI combined with prevailing low yields. is an associate at We expect the new method to have a Standard & Poor’s positive effect on solvency ratios in the long term, with some insurers experiencing improvements of over 10% of the solvency ratio (a solvency ratio of 150% might increase to more than 165%). This depends on the back book composition, and also on calibrations within Solvency II calculations. DECEMBER 2018 | THE ACTUARY | 21

26/11/2018 15:49

Features Technology


Central bank digital currencies would radically transform the way our financial systems work. Orla Ward and Ian Collier of the Cashless Society working party examine their potential



ith growing interest in and value of digital currencies, it is no surprise that central banks across the world are researching the feasibility of starting their own. The rationale for introducing a central bank digital currency (CBDC) is that it could provide a safe central bank instrument to help implement monetary policy, at a time when the use of digital payments is increasing and other digital currencies are gaining traction. A digital currency can be defined in many ways. Some will be backed by distributed ledger technology (DLT), which removes the need for commercial bank intermediation and allows payments to be made directly

between payer and payee. The disadvantage of DLT is that it requires the payment to be authorised, perhaps by ‘miners’, as is the case for bitcoin. This verification process poses issues as there is a maximum number of transactions that can be processed at a time, and the power requirement to do so would be very large if the currency is widely used. Many refer to digital currencies that use DLT technology as ‘cryptocurrencies’. The values of cryptocurrencies, such as bitcoin, have risen and fallen dramatically throughout 2018. This high volatility has stirred interest from a wide range of investors, some of whom think of cryptocurrencies as ‘crypto-assets’, instead of currencies. The currency characteristics of cryptocurrencies are eroded by the fact

that although they can be used for payments – anonymously and outside banking infrastructure – acceptance of those payments is far from widespread. Both the Bank of England and the US Federal Reserve believe cryptocurrencies are not likely to reach a volume that would pose a risk to sovereign stability, at least in their current format. Globally, central banks have been researching the introduction of CBDCs, over which they would have complete control. The CBDC would be exchangeable for the country’s fiat currency and used to implement monetary policy, making it more secure and less volatile.

Public access banking The implementation of a CBDC is not an entirely new phenomenon: the Bank of England already provides electronic accounts to banks and key financial institutions. There are two factors that a central bank needs to consider, should it decide on the use of a publicly accessible digital account: the technology required and the economic reasons for its introduction. It is often assumed that the technology is available. However, the actual shape of such technology has not yet been defined. The central bank payment system would likely be less intricate than the use of DLT. In order to maintain the distributed ledger – something that is only required in systems with distrusted participants – DLT involves significant computational costs for network participants. However, the most important consideration is the economic implications of a CBDC. In May 2018, the Bank of England released a staff working paper that constructed three models for CBDCs, which vary according to the sector that would have access to the CBDC. In the widest access model, the Bank proposes that access to the CBDC would be granted to all sectors of the economy, including the general public. Under this approach, the CBDC would be made available by the central bank alongside cash and reserves. This would enable individuals to hold a bank account directly with the central bank. It would be expected

22-23 digital currencies_The Actuary December 2018_The Actuary 22

26/11/2018 15:50

Features Technology

that the central bank would guarantee convertibility between cash, commercial bank reserves and the CBDC at a 1:1 ratio. Deposits held directly with a central bank could potentially be more secure, as they would not be exposed to commercial balance sheets and their inherent risks. This would reduce dependence on commercial banks, decreasing the systemic importance of these institutions and perhaps enabling governments to remove costly government guarantees on deposits.

Commercial shake-up A CBDC could also create significant risks for commercial banks. Their reduced capacity to hold money with the central bank could cause commercial bank ‘runs’ – particularly at times of market instability. This could inflict great stress on the banking sector and the fractional banking economy. A widely used CBDC, accessible to all economic agents, could impact banks’ ability to fund. Commercial banks’ ability to create money through the fractional reserve system, as they currently do, would then be reduced. Over the long term, this could provide the central bank with greater control over interest rates and, subsequently, allow it to further influence levels of private lending. However, in the near term, this would entail a sizable shift in the financial system, and would require titanic operational changes – fundamentally changing the banking system as we know it, and affecting market and credit risks. Commercial banks may compete with a CBDC by offering higher interest rates to depositors, overdraft and lending facilities, payment facilities, and the ability to handle multiple currencies. The central bank is the ultimate supplier of central bank reserves, bank notes and CBDC, and so would be able to set related terms and conditions to implement monetary policy. Deposits being made at the central bank, rather than with commercial banks, would make negative interest rate policy (NIRP) more feasible as a form of monetary policy (see section 5 of the IFoA paper A Cashless Society – Benefits, Risks and Issues – find the link at Currently, there is effectively a ‘zero lower bound’ on base rates. In an economy with no physical cash, it would be possible to implement a NIRP to affect economic

22-23 digital currencies_The Actuary December 2018_The Actuary 23

growth, as depositors would not have the alternative option of holding physical cash at, effectively, a zero interest rate. Another monetary policy that would become operationally feasible through CBDC accounts is the transfer of ‘helicopter payments’ to depositors in order to stimulate the economy. This would enable the central bank to create money and provide individuals with additional cash, thereby increasing spending and stimulating growth. This is possible without the use of a CBDC – in 2011, for example, the authorities in Hong Kong distributed part of the government’s fiscal surplus to the public through direct deposits of HK$6,000 into the bank accounts of eligible citizens and through cheques distributed via Post Offices. From an administrative perspective, this would be simpler to carry out with a CBDC.

petro, in February 2018, to avoid international economic sanctions. It is backed by oil reserves, but the exact mechanism behind this remains unclear. While the likelihood of CDBC issuance by large, developed economies remains low, countries at other stages of economic and political development may benefit from them. Some of the benefits arise from the increased efficiency CBDCs offer when it comes to financial transactions and inclusion. They may also eliminate the need for a trusted service provider and reduce high crossborder transaction costs. CBDC transactions could avoid costs such as payment processor fees and exchange rate charges. Digital payments could be completed in a few minutes, rather than waiting for three to five business days to complete a cross-border transaction. Nevertheless, CBDC issuance should be subject to careful consideration, regardless of the status of the issuer. Central banks need to understand their potential ORLA WARD effects on interest is a risk and analytics rates, financial actuary at Legal & intermediation and General economic stability. Launching a CBDC entails large risks as potential economic disruption could outweigh the desired, but mostly untested benefits. IAN COLLIER However, what is is director at Solstice right for some Capital developed economies may not be true for developing ones, where risks and benefits are inherently different.

“While the likelihood of CDBC issuance by large, developed economies remains low, countries at other stages of economic and political development may benefit from them”

Frontier markets Across the world, there are widespread differences in central banks’ attitudes to CBDCs; many are researching the topic without committing to creating one. Sweden is the only European country whose central bank (Riksbank) is seriously considering the possibility of introducing a CBDC. It has started a project examining whether the krona needs to be issued in an electronic form – an ‘eKrona’– with the inquiry expected to be finalised in late 2019. In contrast, Jerome Powell, chair of the US Federal Reserve, has stated that the Federal Reserve is not considering a digital currency. Among emerging and frontier markets, several countries have already introduced CBDCs. One of the earliest adopters was Tunisia, which in 2015 issued the eDinar, a blockchain digital national currency. It was closely followed by Senegal, which issued a blockchain-based national currency in 2016. Venezuela issued its digital currency, the


26/11/2018 15:50

Sponsored feature In partnership with

The road to

successful finance transformation Actuaries are model specialists – and they consider it normal to develop the entire reporting framework themselves, but is this really an efficient way forward?


nsurance company finance directors have seen related costs mounting in recent years because of the historical development in reporting frameworks. These are likely to progress in only one direction, driven by the need to prepare for IFRS17 implementation in January 2022. However, rethinking business and financial systems, and how they interconnect, can help companies to reduce costs and derive more business value from the large amounts of new regulatory and accounting financial information that insurers have had to generate. To date, system and process evolution has tended to address a small number of needs at a time – often in isolation from other business considerations. As digitisation becomes real, we believe finance transformation solutions will have to involve new thinking. Changes that would previously have focused on simply ‘faster’ or ‘better’ will now need to encompass ‘faster’, ‘better’ and ‘cheaper’ at the same time, as well as enabling companies to make better and wider use of information in the business. This applies the same logic that leads consumers to buy production line cars for their reliability, speed and price, as opposed to buying component parts and building it themselves. Our experience emphasises the benefits this brings to reporting and business intelligence frameworks for insurers. 24 | THE ACTUARY | DECEMBER 2018

24-25 advertorial_The Actuary December 2018_The Actuary 24

What do you want from business and financial systems? A first step is to determine what a financial framework should deliver. If asked, most finance directors would like to industrialise regulatory and accounting standards compliance in order to save time and money, work more sustainably and allow their financial experts to add value back to the business. At the same time, if asked whether the investment to date in their systems and processes has delivered those savings, we’d wager on there being a similar level of negative responses. Figure 1 gives a snapshot of a platform where all financial information, including information needed for regulatory or accounting purposes, would be available to improve product design and sales performance. With the right technology, methodologies and processes, as well as people who have the mindset to deliver them, such a platform can be within reach. Let’s consider how a company could benefit from a more connected approach for some common business applications.

of repetitive modelling tasks will also free up actuaries, accountants and controllers to use their expertise to add real value.

Sales Many companies already analyse which parts of their salesforce are the most successful. However, instances where this information feeds in to other parts of insurance operations – particularly to improve sales incentives and in the management of the existing client portfolio – are more limited.

In-force book management (life insurance) Good sales analysis information can be put to use in many ways for more effective in-force management. From a high-level perspective, it will help determine how incentives and changes to the way policy surrenders and claims are treated – and can therefore reshape the in-force book over time. In the shorter term, it will assist decisions on moving policyholders out of certain types of products, such as those with expensive guarantees.

Product design With the right connectivity, feedback loops, enrichment of data used and depth of analysis, companies can improve their understanding of issues in the product portfolio and seek to address them. In tandem, better industrialisation

Reserving An effective reserving process needs to interface with the wider business, both from an input and output perspective. The more this can be streamlined and reduce the need for manual processes

26/11/2018 15:54

Sponsored feature In partnership with

and transfers, the better. This means having the ability to seamlessly interrogate information such as policy and claims data and discount rates. It should also provide information for use in areas such as reporting and capital allocation.

Profitability reviews All of this information will contribute to a better understanding of how and where companies make profits, including the influence of factors such as product, salesperson, geography, age, profession, specific risks and general consumer behaviours.

Joining the dots The people who should be thinking about the insights from analyses are too busy keeping the many moving parts of disparate reporting frameworks going. The infrastructure does not allow them to focus on adding value. But it could. The components that insurers need, to avoid having to design new add-ons and maintain the complex landscape of existing solutions for financial systems, already exist. Take, for example, our own framework solution for insurers, which uses our Unify portal in conjunction with our Data Validator, RiskAgility and other software. This has been designed with the following principles in mind: A single machine – More revolutionary financial frameworks should be (and can

be) delivered through a single system. These should join the multiple dots of the finance and analytics infrastructure to help control costs. Standardised design – Modern framework solutions should handle a variety of portfolios with all their specifics in the same design landscape, using a standardised structure for managing roles and governance that provides the flexibility to deal with the specialities of particular organisations. This avoids the need to constantly reinvent the wheel, and drives cost down by sharing it among many companies. Plug and play – The technology should be ‘plug and play’ and negate the need for multi-year development projects. Power under the hood – Companies today need processing power, but the need for flexibility to deal with peaks and troughs in the financial calendar means they do not need to own it. The cloud and other on-demand technologies are far more efficient and help manage costs. A reliability guarantee – If companies are going to go down this route, they need assurances about cost, service quality and the ability of the framework to adapt to future needs, including new regulation. Pay-as-you-go – The solution should eradicate huge upfront costs by making the framework technology available as a solution-as-a-service.

How you use a tool is the key differentiator Having the components is only half the battle. Insurers looking to do effective finance transformation won’t get very far without good technology to offer speed, control, governance and automation. However, you win or lose the race to an excellent framework based on how you use the technology. For insurers looking to transform financial information systems to achieve cost, efficiency and business value improvements, knowing ‘how to use’ translates into better conceptualisation of the issues to be addressed. This can then lead to better thinking about how reporting and analysis frameworks could operate and link, which in turn will lead to better results. Our experience shows that typically, the biggest issue is achieving ‘easy maintenance’ – achieving long-term low run-cost through optimal upfront design. Finance transformation won’t happen overnight, but the eventual risk of constantly putting plasters on the existing reporting framework is that your view on the required levels of value added and running costs deviates more and more from reality – which is an unpleasant competitive disadvantage. John Morley is global head of business process excellence for Willis Towers Watson and is based in London

Figure 1: Illustrative example of closing the modelling circle on product development and sales

Improve product design


Product design


Client view

P/C in-force book

P/C insurance gaps

Life in-force book

Life insurance gaps



Actuarial Profitability review Improve sales effectiveness

24-25 advertorial_The Actuary December 2018_The Actuary 25

Improve effectiveness

Improve the in-force



26/11/2018 15:54

Features Technology


s the availability of data increases and powerful tools for analysis become cheaper and more accessible, internal audit is expanding its use of data analytics to replace or enhance traditional ways of assessing controls. Auditors are improving the efficiency and reach of their testing to give greater insight into the risks faced by businesses. Insurers now use data science specialists, and often have teams of data specialists. A recent survey of UK insurers’ audit departments suggests there are two key ways in which data analytics are being used: 100% sampling, and highlighting challenging areas.

100% sampling Traditionally, auditors have used sampling techniques to test characteristics of populations. For example, faced with the population of payments made by an insurer in a year, an auditor would establish an appropriate sample size and then use a selection methodology to pick the sample. The sample would then be tested to confirm each payment had been initiated and approved by appropriate staff within the firm. This situation is problematic for a number of reasons – the large number of payments requires a significant sample size, the controls may not be homogenous across the sample, and the testing results give limited insight. Data can be downloaded and interrogated more easily than ever before, so auditors can now check years’ worth of payments using analysis tools. The payments can be downloaded to a data manipulation tool and other data tables can be joined, using database tools to enhance checking. For example, the ledger may contain staff numbers of those involved in making the payments; these staff

numbers can be automatically linked to an HR data table containing up-to-date information on staff seniority and department. The auditor can therefore check that all payments have been made by a person from the appropriate department for the payment type concerned. A check can also be made to ensure the approver is the more senior of the two parties – a fraud red flag being where a junior person reporting to a more senior person is coerced into approving an inappropriate payment. This can be done for hundreds or thousands of payments, rather than what might have been dozens under the traditional manual sampling methods. The resulting exception list may not, of course, reveal any fraud – but it can identify areas of concern or provide assurance that controls are working effectively, providing comfort to audit committees.

Highlighting challenging areas Sometimes it is necessary to pick a sample in order to understand whether a control is working. Data analytics can help to focus sample testing on those areas that may be higher risk. One of the more interesting cases we’ve come across involves voice recognition on customer phone calls to a financial services firm. There are now increasingly accurate tools in existence that can recognise the key topics being discussed in a call, as well as caller sentiments such as anger or dissatisfaction. These tools use now-familiar techniques, but in powerful combinations; the customer call is first converted to written text which can then be analysed. The word cloud in Figure 1 shows the most commonly mentioned words in customer calls to a firm; the bigger the font, the more the words have been mentioned. Key words can be identified and/or scored, and a sentiment score can be calculated via a publicly available dictionary that categorises words as having either a negative or positive sentiment. This, in turn, can be used to assess whether the customer is making a complaint. Counts of certain ‘trigger’ words, as seen in Figure 2, can also be used to identify potentially vulnerable customers who need to be treated


Andy Cox and Tom Bryant explain how data analytics is improving the internal audit process, and why it’s important actuaries get to grips with it

into the data 26-27 Andy Cox data analytics_The Actuary December 2018_The Actuary 26

26/11/2018 15:54

Features Technology

FIGURE 1: Most common words in customer calls

appropriately. As shown in Figure 3, internal audit can then investigate whether calls involving complaints and/or a vulnerable customer have been dealt with appropriately. As costs fall and cloud-based technologies become increasingly accessible, what was leading-edge is rapidly becoming normal practice.

FIGURE 2: Most common words associated with vulnerability

Volume of key words indicating a complaint

Figure 3: High-risk areas can be further investigated by audit sampling Higher risk of complaint

Vol ind ume o icat f ke y ing a vu word lner s abil ity

Higher risk of vulnerability

Source: Illustrative data only

A survey on which profession is best at data analytics was recently conducted with members of the Internal Actuarial Auditors Network (IAAN). Nearly 75% of the surveyed group said that data scientists are the best at data analytics, while approximately 25% chose actuaries. The remaining professions on the list – accountants and auditors – made up less than 1% of answers. The survey is likely to be biased in that it was completed by actuaries, but it gives an indication of the perceptions people have of each profession. Actuaries recognise their abilities within data analytics, but also credit data scientists for having capabilities beyond those that are traditionally part of actuarial training. Accountants and operational auditors have some training to do if they want to be seen as leaders in data analytics. One observation is that actuaries are good at coming up with the original ideas for data analytics in internal audit; they usually know the business model well and can come up with ideas for spotting potential issues. However, they do need to develop ANDY COX their skills so they can produce polished is an actuary and graphics that are accessible to those outside audit manager at an area of expertise – for example an audit Legal & General committee receiving internal audit reports. GroupDelhi If you are audited this year, do actively engage in the data analytics discussion. Data analytics in audits can help you demonstrate to stakeholders that controls are working well, and new data science and visualisation techniques can provide insight in areas that were previously too expensive or time consuming to explore. Actuaries must ensure TOM BRYANT that communication of the results is tailored is a chartered to the non-technical audience. Working in a accountant and diverse team may help actuaries develop head of audit for these skills and make significant Retirement & contributions to the audit process. Group Finance at Legal & General The Internal Audit Actuarial Network (IAAN) GroupDelhi is an informal meeting of actuaries working in internal audit within UK insurance offices. It usually meets three times a year to discuss areas of common interest. If you are an insurance actuary working in internal audit and are interested, please contact:


Where can actuaries help?


26-27 Andy Cox data analytics_The Actuary December 2018_The Actuary 27

26/11/2018 15:54

Features Modelling

A foot I in the door

nternal capital models are increasingly used across the insurance business, including in reinsurance optimisation, risk appetite and business planning. While this expansion is well documented, less is known about what modellers do in practice to embed capital models within their organisations. To address this question, we interviewed 31 insurance practitioners – primarily modellers, but also underwriters and board members – working in London market insurance firms, as well as regulators. We found that modellers facilitate the embedding of the internal model in two ways: they keep the model ‘ajar’, by selectively ‘opening’ it to stakeholders, and they create a model that is flexible enough to be consistent with multiple conceptions of uncertainty.

Model ‘ajarness’ Modellers expose parts of the model to modification or debate by stakeholders,

Andreas Tsanakas and Laure Cabantous report on how keeping internal capital models ‘ajar’ can facilitate their embedding within organisations

28-30 Ajar modelling_The Actuary December 2018_The Actuary 28

26/11/2018 15:55

Features Modelling

“You’ll always see challenge of model assumptions from the underwriting side because it’s affecting their business plan.

TABLE 1: Modeller activities, stakeholder concerns, and areas of the model opened



(A1) Choosing and updating the model’s parameters

(C1) Technical validity: does the model satisfy technical standards?

(A2) Performing and interpreting validation tests

Model parameters

Model structure and design (C2) Realism: are the model design and properties consistent with Input/output interactions modellers’ understanding of the (for validation purposes) business?

(A3) Changing the way something is modelled (A4) Explaining the model’s design and limitations (A5) Generating business recommendations (A6) Responding to challenge and negotiating the model specification

(C3) Operational usefulness: can the model be used to support the specific decisions that users need to take? (C4) Consistency with underwriter judgment: are the recommendations of the model consistent with the judgments and preferences of underwriters?

Model structure and design (focus on capabilities and limitations) Input/output interactions (at the level of line-ofbusiness) Model parameters (at the level of line-of-business)

(A7) Responding to challenge and negotiating the model’s scope of applications

Model scope of application (in relation to specific decisions)

(A8) Presenting model outputs

Input/output interactions (at the level of the whole portfolio)

(C5) Performance implications of strategic choice: what will be the risk / reward trade-offs under (A9) Running the model to alternative strategies? investigate scenarios and opportunities (C6) Governance: are modelling judgments carried out by qualified (A10) Evidencing how staff, using rigorous processes? modelling judgments have been made

If we turn around and say, ‘we think this account’s poor and isn’t going to make you a good return’, then that may affect how much of that income they can write next year. So underwriters will challenge that.” The use of the model, while supporting underwriters’ decision-making, also generates concern as to whether the model’s recommendations are consistent with underwriting judgment (C4). When underwriters sense such inconsistency, they can dispute the validity of the model, including that of key statistical input parameters. Modellers respond to this challenge by negotiating the model specification (A6) with them. The model therefore becomes the result of a

Model parameters (only those that affect the risk profile of the portfolio as a whole) Modelling process and governance

negotiation, to which modellers’ efforts to satisfy their own concerns around technical validity (C1) and realism (C2) form a baseline, rather than the last word.

Model flexibility Despite the fact that all stakeholders deal with the same model, they have different modes of engagement with it, which depend on their conception of the model and concerns (or uncertainties) about it, as presented in Table 2. Modellers facilitate the expansion of model use by creating a model that is flexible enough to accommodate such multiple understandings of the model. Modellers experience the model as a mathematical/statistical representation of the world – that is, the business and its external environment. This conception of


enabling them to have a say in model development. However, such ‘opening’ is selective, referring only to aspects of the model that resonate with each stakeholder’s concerns. The model is thus not fully ‘open’ – which would undermine its usefulness – but nor is completely ‘closed’, which would prevent stakeholders’ buy-in. In Table 1, we give a summary of the modellers’ activities that help maintain the model in a state of ‘ajarness’, or partial opening. To provide one example, modellers generate business recommendations (A5) with the model. For this, they reveal to underwriters the modelled relations between inputs (for example, the Loss Ratio assumptions and planned premium) and outputs (for example, portfolio performance). As a result, the values of model parameters for the line of business considered are sometimes discussed, as explained by a senior actuary:


28-30 Ajar modelling_The Actuary December 2018_The Actuary 29

26/11/2018 15:55

Features Modelling

the model is aligned with a view of uncertainty as referring to the existence of multiple such representations that pass modellers’ validity and realism checks – and that may lead to different outputs. A senior actuary says:

“For certain key assumptions, we’ll have alternate views. We’ll sort of say ‘Look, the correct assumption could be anywhere between here and here. We’ve picked one because we have to pick one’. And when we’re doing our capital modelling we will make sure that we’re looking at ‘Well, what’s the impact if we go at the lower end, what’s the impact if we’re at the higher end?’ So, we can judge how material this assumption is.” This conception of a model differs from the one that underwriters and boards hold. For instance, board members view the models as calculative engines: formulas that generate performance and risk metrics under current and alternative strategies. As a result, they can be less interested in discussing the broader meaning of model outputs than in drawing precise conclusions from them. One chief actuary says:

“I wanted the risk tolerance stuff to spark a debate, but management and risk people, they like red, amber, green charts – they like clear, defined lines.” Satisfying the board’s concern about performance implications of a strategic choice (C5) requires unambiguously interpreted outputs. Consequently, modellers sometimes find that boards have a limited appetite for understanding the extent of model uncertainty. While this may serve embedding of the model, it generates a new concern: whether, through the effort to embed the model and expand its uses, crucial information about its technical limitations gets neglected within the organisation. Boards’ conception of the model-ascalculative-engine is consistent with their own view of uncertainty, as revolving around the possibility that the model produces numbers that have adverse implications, such as an excessively large level of regulatory capital. Modellers deal with this concern by running the model to investigate 30 | THE ACTUARY | DECEMBER 2018

28-30 Ajar modelling_The Actuary December 2018_The Actuary 30

TABLE 2: Conceptions of model and uncertainty of stakeholder groups




Representation of the world

Multiplicity of technically plausible representations


Instrument of control

Practices affected by an instrument that is not fully understood, in ways outside users’ control


Calculative engine

Model gives outputs with adverse strategic implications


Inherent limitations of quantitative modelling scenarios and opportunities (A9), an activity that enables boards to prepare for (and avoid) such eventualities. Given that sufficient validation has been performed and evidenced (A10) by modellers, boards do not spend time agonising over alternative plausible models. A board member says:

“I suppose that my view about whether the internal model could give us a very different result would be no, I don’t think it could. You might use slightly different techniques on this or slightly different techniques on that… I can’t feel that we would actually come up with an answer which is dramatically different to that which we had. Boards are not unfamiliar with models’ limitations. However, their view of uncertainty relates not to specific shortcomings of their model, but to broader limitations of quantitative modelling, particularly in relation to capturing novel and extreme risk scenarios. Boards manage such uncertainty by accepting that the model informs their judgment, but only forms one of several inputs into their decision process. Thus, we find that the co-existence of alternative conceptions of models and uncertainty forces compromises. Modellers witness their notion of uncertainty being transformed as it journeys through the organisation: from a technical idea relating to alternative statistical assumptions, to political problems relating to the role of models in the workplace, to concerns about the implications of using the model as a formula for generating key metrics. An extended version of this article can be found at

LAURE CABANTOUS is professor of strategy and organisation at the Faculty of Management, Cass Business School, City, University of London

ANDREAS TSANAKAS is reader in actuarial science at the Faculty of Actuarial Science and Insurance, Cass Business School, City, University of London

26/11/2018 15:55

INSIDE Cryptocurrencies The rise of crypto-assets has created a whole new frontier of risk; Nick Furneaux explains how they work, and the issues they raise for actuaries

Puzzles Brain teasers for your coffee break

People and society news A round-up of actuarial and social news

On the record Keir Harvey on his actuarial habits

People moves Career changes in the profession

Student Transport will look radically different in the future – requiring different insurance, says Syed Danish Ali


31 section break_The Actuary December 2018_The Actuary 31

26/11/2018 15:57

At the back Cryptocurrencies


he concept of a cryptocurrency was first mooted by the enigmatic Satoshi Nakamoto in their 2008 bitcoin whitepaper. Nakamoto’s paper suggested a decentralised currency that was not controlled by any government or financial policy, with transactions enabled and recorded cryptographically. The ledger of transactions would be public and available to anyone who wished to download it. The concept of decentralised currencies had, in fact, been used by several tribes over the centuries – including the people of the island of Yap in Micronesia. Yap money, known as Rai coins, were huge calcite stone rings, sometimes larger than a person. Ownership was not recorded in a ledger but in the memories of all the islanders. When the ownership of a coin was transferred, all villagers were told about the transaction, and agreement was simply by consensus of ownership. Bitcoin works in a similar way, with a decentralised public ledger called a blockchain that is available to all – but coin ownership is proven using cryptographic methods. Rai coins were expensive to mine, as they came from an island hundreds of kilometres away, across the Pacific; this difficulty gave each coin its inherent value. In the same way, cryptocurrencies such as bitcoin introduce new coins into the ledger through a system known as ‘mining, where computers carry out complex calculations to solve a problem. When the problem is solved, new coins are introduced. Although this seems as though value is being


32-33 Cryptocurrencies_The Actuary December 2018_The Actuary 32

created from nothing, the computers used to do these calculations are expensive to buy, power and cool. New bitcoin has value because it is expensive and mathematically difficult to produce. Since 2008, more than 1,500 cryptocurrencies have been launched. As yet, none can really be termed a ‘currency’ in the strictest sense, and many specialists in the field prefer the term ‘crypto-assets’ (I will use the terms interchangeably in this article). Bitcoin has raised awareness of decentralised currencies among the general population, while also damaging the reputation of the technology due to the boom and (almost) bust nature of its trading values. Actuaries should not be overly disturbed by the vagaries of these value fluctuations; the concept, mathematics and implementation of blockchainbased transactions are sound. Whether bitcoin survives or not, the technology is here to stay. It is tempting to just focus on bitcoin when writing articles such as this, but although it holds the popular attention, there are many other cryptocurrencies that are having a significant impact. Ethereum, with its programmable contract system, offers considerable flexibility that allows people to build blockchain-based gambling systems, auction transactions, property trades and even marriage contracts. Venezuela’s new, devalued currency (introduced on 20 August 2018) is supported by a cryptocurrency called the petro, which is supposedly (and dubiously) linked to the country’s oil reserves. One Russian farm is selling its goods via a cryptocurrency, and many banks are using the blockchain-based transaction system Ripple for international money trades.


How can cryptocurrency be stolen or insured when it has no physical existence? Nick Furneaux explains

26/11/2018 15:57

At the back Cryptocurrencies

Crypto-asset risk How can a crypto-asset be stolen? It is tempting to try and reinvent the wheel when considering the safe storage of crypto-assets. The buzzwords involved, such as ‘decentralisation’, ‘blockchains’ and ‘cryptography’, can make these assets feel esoteric and ethereal. To understand the risk of theft, we need to understand how a cryptocurrency works, and that means understanding how public and private key infrastructure works. It is hard to simplify the topic, but let’s take bitcoin as an example. A bitcoin address that can receive or send bitcoins is a 34-character string of letters and numbers formatted in Base58 (a group of binary-to-text encoding schemes that covers numbers 1-9, letters A-Z and letters a-z, omitting upper-case I, upper-case O and lower-case l to avoid confusion between similar-looking numbers and letters). This string is simply a public key calculated from a secret, private key using a one-way algorithm. If you have the private key, you can calculate all the public keys, but it is computationally unfeasible (read impossible) to reverse back to the private key if you have a public key. To ‘spend’ the bitcoin held in a public key address, you need the private key to ‘unlock’ the transaction, so that you can transfer the value to another address. No private key, no transaction. To protect a crypto-asset, then, we simply need to protect the private key. Like a public key, the private key is a sequence of letters and numbers (sometimes backed up to a system of mnemonic seed words) that can be written on a piece of paper, stored on a computer or chiselled into stone tablets. This means that the asset is, essentially, tangible. If the private key is safe and sound, the assets on the blockchain that it can transact are safe. We constantly hear about bitcoins and other cryptocurrencies being stolen – how is this happening? While some minor cryptocurrencies have suffered from code problems that left them vulnerable, the majority of thefts are achieved when private keys are stolen. This can happen in a number of ways: ● The hacking of a computer or device that contains private keys – this has happened to a number of cryptocurrency exchanges ● The infection of a computer with malware, allowing the infector to search for private keys ● The use of social engineering attacks to convince the owner of a private key to hand it over. This is incredibly successful – there is even a website that asks you to type in your private key, so it can ‘check that your private key has not been hacked or leaked’! Many recent cryptocurrency investors lack technical knowledge, making them an easy target for attackers requesting their private key.

and risks when storing and selling a Ferrari is straightforward; it’s more difficult when considering a seemingly intangible crypto-asset. However, as we have learned, the asset in this case is really the private key. There simply needs to be a process ensuring that the private key controlling the funds is secured, and that the subsequent process for unlocking and transferring funds is equally safe. It is easy to get carried away with the requirements; some companies around the world are recommending what amount to pseudo-standards that complicate the methods of storage and transaction. As anyone in security will tell you, where there is complexity, there is someone who will cut corners. The insuring of value is more complex due to the massive price fluctuations that have been recorded, but many believe this will sort itself out as cryptocurrencies achieve a reasonable maturity. In late 2017, one bitcoin was worth almost £15,000 at some exchanges. At time of writing, the value is around a third of that figure. These extreme fluctuations have spooked some insurers, as it is very difficult to provide an insured value with any confidence that it will be accurate for any period of time. Investors are also struggling because the standard matrices and indicators used for predicting movements of fiat currencies simply do not seem to translate to cryptocurrency trading. However, bitcoin, Ethereum and other cryptocurrencies have been reasonably stable for the past three months, in comparison to the vast fluctuations seen throughout 2017. Although valuation graphs still show gains and losses that would make a fiat currency trader tremble, the candlestick graph for bitcoin shows a more reasonable adjustment in values taking place during the past three months, which many serious investors expect to continue to improve over time. When assessing crypto-asset risks in areas such as investment, insurance and even criminality, it is critical to understand the technology that supports the asset, and the need to protect the private keys that control cryptocurrency coins. Even learning the maths and cryptographic systems that underpin NICK FURNEAUX cryptocurrencies would be useful to the is a cybersecurity actuary when deciding on the factors for and forensics assigning risk. The sensationalist stories consultant in the tabloid press and the selfspecialising in aggrandisement of investors and other cybercrime interested parties are not really relevant to prevention and the understanding of risk in this arena. investigation for law Although we do not have a true ‘currency’ enforcement and in play at the moment, it will only be a corporations. matter of time before a mobile-based ‘value transfer app’ supported by blockchain technology gains general use as a currency of sorts. However, in the meantime, it is important to dig deeper than bitcoin to understand the future and potential of this fascinating technology.

“Protecting cryptoassets against theft means simply protecting the private key(or keys) to them”

Insuring crypto-assets Can a crypto-asset be insured? I have recently been consulting with an asset management firm that is well known for handling assets seized from suspected criminals, storing and then disposing of the assets as required by the courts. The firm recently launched a service for the storage and disposal of crypto-assets, but it was difficult getting insurers to understand the risks. Understanding the value

32-33 Cryptocurrencies_The Actuary December 2018_The Actuary 33


26/11/2018 15:58

At the back Puzzles


Risk modeling. Don’t leave it to chance.

To the letter Mensa puzzle 734

R3S Actuarial and risk modeling made simple

The alphabet is written here but some letters are missing. Arrange the missing letters to give four different words. All four words must contain all the missing letters. What are the words?


Contact us today for more information

Venezuela Guyana French

Guiana Suriname

Colombia Ecuador


City links Mensa puzzle 736

Bolivia Paraguay

Uruguay Argentina Chile

Continental conundrum Mensa puzzle 735 Rearrange the letters of

RUDE PECULIAR ECHO to give three South American countries. What are they?

On each row place a four-letter word that goes after the word to the left and before the word to the right (ie SECOND – HAND – SHAKE). When completed, the initial letters of the added words will give the name of a city, reading downwards. What is it?


_ _ _ _ WORD _ _ _ _ GAME _ _ _ _ SIGN _ _ _ _ AGE _ _ _ _ PIECE

Answers . 734: Marbles, amblers, blamers and rambles. 735: Peru, Chile and Ecuador 736: Paris. The words are PASS, AWAY, ROAD, IRON and SHOW.



34 puzzles_The Actuary December 2018_The Actuary 34

26/11/2018 15:58

At the back School of thought

Student The congestion question Syed Danish Ali considers how new forms of transport could help to unclog overburdened traffic systems



e have all endured a traffic jam at some point. An exponential increase in urban populations, the easy availability of vehicles, a lack of investment in infrastructure, house prices that force people to live far from their workplaces, and many other factors have all contributed to a rise in congestion. Tech giants are attempting to come up with solutions that will save commuters time and money while reducing pollution levels. The actuarial angle here is quite simple: insurance is a form of risk mitigation, and as risks change, insurance changes. In the future, actuaries will be required to price for insurance that covers new transport modes, such as self-driving cars or drones. One possibility that tech companies are working on is sky transport: sky space is rarely used and could absorb the congestion on the ground. Uber is pushing the idea of flying taxis, and drones can be used to transport just about anything. Individual drones can carry pizza right to our doorstep, while drone ‘swarms’ could deliver, for example, house components to be assembled on the spot. Dubai police have even unveiled drones that can carry an officer. Another option, put forward by Elon Musk, is to go underground. The Boring

35 student guest_The Actuary December 2018_The Actuary 35

Company, a subsidiary of his business SpaceX, has already started digging tunnels. Building even 30 layers of tunnels, as envisioned by Musk, would be no issue, given that the average thickness of the Earth’s crust below the continents is 32km; the deepest tunnel dug by humans is the Soviet Kola Superdeep Borehole, which is 12km deep.

“In the future, actuaries will be required to price for insurance that covers new transport modes” And then there is the third option: remaining on the ground. In 2013, Musk proposed the idea of hyperloop technology, a ground-based mode of transportation that could travel at 1,000km per hour, drastically reducing the time required to cover distance. Musk even envisions ‘electric skates’ carrying cars and passengers underground through tunnels or hyperloops, resurfacing at the destination. Companies such as Waymo and Tesla also plan to launch the

self-driving car revolution; experts believe that self-driving cars will make fewer mistakes and be more orderly in their driving patterns, leading to a reduction in traffic congestion. Given these technology options, it is worthwhile thinking about how these ideas would fit into the larger context, sitting alongside the sharing economy, the Internet of Things, machine learning and smart cities. Most likely, the tech convergence will mean multiple options of travel running parallel to each other at the same time. Of course, all of this sounds like sciencefiction right now, given that we are still struggling with human problems such as economic collapses, poverty, inequality, and natural and man-made disasters. This is why it would be useful to take heed of Amara’s Law, which states that, due to the exponential nature of technological change, “we tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run”.

SYED DANISH ALI is a guest student editor DECEMBER 2018 | THE ACTUARY | 35

26/11/2018 15:58

At the back Society news


A visit to the London Mithraeum BY DEREK NEWTON

There are many antiquities in the City of London, and some particularly fine ancient relics were on display on 20 September, when the Worshipful Company of Actuaries visited the London Mithraeum, an ancient temple to the Roman god Mithras. It stood on the east bank of the now-hidden Walbrook River, between what is now Cannon Street and Queen Victoria Street. Probably built in the third century AD, it was used until at least the end of the Roman era in Britain. Thereafter, it disappeared from view as ground levels rose in London, before resurfacing in 1954 during the rebuilding of the war-damaged City. Parts of the temple that were excavated were dismantled and partially rebuilt at street level, next to the then-newly constructed Bucklersbury House. Restored to its original location, visitors to the temple are treated to an evocation of the atmosphere it would have manifested 1,700 years ago. It was hard for the 30 visitors from the Company to decide what was most interesting; the temple was well worth the visit – as were the contextual explanations given by our guide. We also learned about the work involved in the original excavation, and the reconstruction of the temple at its original location. Finally, in the ground-level exhibition space, there is a display of 600 Roman artefacts found during the most recent Ancient Roman excavations. The waterlogged Walbrook artefacts Valley provided ideal conditions for the preservation of organic materials, including wooden doors, shoes and other leatherware, as well as pottery, ceramics and metalwork. Having had their fill, Company members and guests adjourned to a nearby restaurant for refreshment and conversation.


SIAS held its 2018 Annual Dinner, theme ‘Hollywood Glam’, at City Central at the Honourable Artillery Company on 16 November. Guests were treated to a cocktail and sparkling wine reception, while enjoying jazz music by The Dapper Dudes. The 700 guests were then seated for a three-course dinner, during which the Showcase Performance took place – an array of musical numbers, tap dancing and a gymnastic display. Those still up for a boogie joined us for the after-party at Amber. As is tradition, a charity raffle was drawn on the night, where more than £700 was raised for our chosen charities Cancer Trust UK and the British Heart Foundation. Many thanks to our donors (High Finance Group, Arthur Financial, Barnett Waddingham, Oliver James Associates and XPS Pensions Group) for their generous prizes. SIAS would like to thank all guests who attended and made it such an incredible night. We look forward to seeing you at our future events, including the Pub Quiz on 31 January 2019 – more information is available at

Call for your news… We would be delighted to hear from you if you have any newsworthy items for these pages. Please contact Yvonne Wan at 36 | THE ACTUARY | DECEMBER 2018

36-37 people society_The Actuary December 2018_The Actuary 36


Actuaries launch a board game In the summer of 2016, while deep in the Amazon jungle, two intrepid actuaries, Welshman Ceri Price and Londoner Natalie Podd, drifted under the rainforest canopy in their canoe. As they paddled, Ceri asked Natalie if she knew the population of Brazil. Without the internet, her actuarial instincts kicked in – she made some assumptions and responded with her 95% confidence interval. This sparked a flurry of intriguing trivia questions, always answered with a range. While exploring the jungle during the subsequent days, they developed this concept into an idea for a board game: CONFIDENT? After returning to the UK, Ceri and Natalie tested the game with friends, family and game designers, and finalised the scoring system – players need to get the correct answer in their range while also getting the smallest range compared to their opponents. Although it wasn’t formally accepted as CPD by the IFoA, players loved it as it was easy to learn, they got to play every question and they always had a chance, thanks to the game’s unique ingredient of answering with a range. Ceri and Natalie knew they were onto something special when Ceri’s competitive sister played a whole game without flipping the table – and his dad stayed awake. Manufacturing began in June 2018. Since then, the duo has juggled full-time jobs with designing components and branding, coming up with questions, negotiating with manufacturers, building a website and organising logistics. Finally, it’s available to buy on Amazon! How confident are you on the number of Friends episodes that were made, or how many stations are on the Northern Line? There’s only one way to find out – go to Email with any questions or comments.

26/11/2018 15:59

At the back Society Student news



The 100-year life: fear or favour? This was the question Marjorie Ngwenya, the IFoA’s immediate past president, posed to the audience at TANC’s event on 18 October 2018. There’s no right answer, but below are some of the things that Marjorie highlighted as being important when solving the problem of an ageing society. The world’s population is ageing, with the retired population increasing while the population of those yet to retire decreases. A European Environmental Agency study cited by Marjorie expects this issue to be more severe in developed regions of the world. How do we adapt? Governments and employers will need to amend many of their policies, including those on employment, pensions and care

and support in later life. Employers will also need to adopt ‘age friendly’ business practices, and individuals will need to adapt. For example, older workers could take up more of an ‘advisory role’ in their organisations, freeing up other positions for younger workers. They may also need to learn new skills. Society will be different. Things that may become the norm include children living at home for longer and grandparents working until later in life. Technology will play a vital role in shaping the future, from advancements in healthcare and improvements in day-to-day living to dating apps for the over-80s. In closing, Marjorie left her audience pondering this question – “What do you want to be when you’re aged 100?” For more details on TANC and future events, please visit

D E AT H S It is with great regret that we announce the death of the following members. We offer our condolences to their families and colleagues. Mr Michael Lupton Pearce, 88. Based in the UK, gained fellowship in 1960. Mr John Keith William Davies, 79. Based in the UK, gained fellowship in 1962. Mr Graham Anthony Masters, 67. Based in the UK, gained fellowship in 1985. MARRIAGES Many congratulations to The Actuary student editor Jason Whalley (Aon) and Amy Brett, on their recent marriage. The happy couple honeymooned in Mauritius, where they went sightseeing with two very friendly big cats.

Marjorie Ngwenya (centre) with event attendees



The addactis® Alternative : No stress before Christmas!

While many of our Livery Company activities have a philanthropic objective, some Not much later are unashamedly for pleasure. So it was that our new Master Nick Salt’s first ‘home team’ social event saw 18 actuaries and guests gather on one of those splendid Hey, come and join summer evenings at Lord’s cricket ground. the Christmas party Cricket is one of the Master’s passions and we watched in style, inhabiting a box I need to finish Here I am! Wow! calculations with food my and drink laid on, enjoying some partisan banter as the Master’s team (Middlesex) came close but failed to reach the target set by Sussex. The outcome did not affect the group’s enjoyment of the entertainment both on and off the field, and we will retain this warming memory as the days shorten. Merry Christmas and a happy new year

INSURANCE SOFTWARE FOR ACTUARIES BY ACTUARIES LET’S STAY CONNECTED! AUTUMN 2017 NOVEMBER 2018 | THE ACTUARY | 37 36-37 people society_The Actuary December 2018_The Actuary 37

26/11/2018 15:59


At the back Actuary of the future

Aviva – Protection Pricing

On the record How would your best friend describe you?

What’s your most ‘actuarial’ habit?

How do you relax away from the office?

Smarter than I look.

Meticulously checking the macro content of everything I eat.

What motivates you?

Favourite Excel function?

Making a difference to others.

ALT + F4.

If you could go back in history, who would you like to meet?

What would d be your personal motto? otto?

What is the funniest thing that has happened to you recently?

Get rich or diee tryin’.

Getting roasted in the fortnightly team newsletter for allegedly not being able to finish a small chips at KFC (in reality I’d finished a nine-piece bucket to myself, but my colleagues like to think otherwise).

A younger version of me – I would have a few things to say to him (putting a bet on Leicester to win the Premier League wouldn’t hurt).

Name five dream companionss to be stuck on a desert island with??

Finding the cheapest pints in York with my friends (£1 pints on Wednesdays).

If you could be anyone else, who would it be? Harry Styles.

Alternative career choice? CEO (maybe one day).

Greatest risk you have ever taken?

I’m a big Lovee Island fan, so probably Jack,, Dani, Alex, Wes es and Eyal.

Cooking some salmon that smelled questionable stionable at best (it had set me back £3). The risk didn’t pay off.

If there was a movie produced about your life, who would play you, and why? D Dwayne Johnson – can you see the rresemblance? Do you know an actuary destined for D ggreatness? You can nominate an Actuary of th the Future by emailing



The Association of British Insurers (ABI) has announced new board appointments, among

them Craig Thornton, general insurance and protection director at Lloyds Banking Group. Thornton is also chair of the ABI Audit Committee. He joined Lloyds Banking Group as general insurance director in 2013 and became general insurance and protection director in 2016. Thornton


38 AOTF PEOPLE M_The Actuary December 2018_The Actuary 38

moved from Aviva where he was UK Life CFO and a member of the UK Board, having previously held roles as UK commercial director and UK CRO. A qualified actuary by profession, Craig was also chair of the Industry Advisory Board which supported and led to the creation of Flood Re.

Miller Insurance Services LLP has recently announced the appointment of Phil Wheeler as an equity holding partner. Wheeler now leads Miller’s marine liability reinsurance team. He brings technical expertise to develop innovative reinsurance solutions.

He joined Miller in 2012, initially responsible for developing the in-house actuarial team, which focuses on developing innovative risk transfer solutions. Particular attention was given to developing actuarial focused negotiation strategies for use with underwriters.

26/11/2018 16:00

At the back Appointments


To advertise your vacancies in the magazine and online please contact: Shamil Bhoyroo +44 (0) 20 7880 6234 or

Actuarial Vacancies HFG’s consultants specialise in matching you to the right role at the right …‘Â?’ƒÂ?›ǤƒŽŽ—•–‘†ƒ›–‘Šƒ˜‡ƒ…Šƒ–ƒ„‘—–›‘—””‡“—‹”‡Â?‡Â?–•ƒÂ?†–‘ƤÂ?†‘—– what opportunities are available. Please see a snapshot of our actuarial vacancies below.


HFG Insurance Recruitment

Capital Contractor

Head of Reserving

An expanding syndicate is looking for someone to join their new capital team and assist in their model development with Tyche. The role will work closely with the Chief Actuary and CRO and will suit someone who likes dynamic and interesting projects. Previous capital experience is desired.

This client is searching for a senior actuary for nine months to cover their Head of Reserving. The candidate should have a strong reserving background and be comfortable defending the reserves to Non Actuaries both internally and externally. Strong communication skills are vital.

ÂŁ750 - ÂŁ1000 per day, London

ÂŁ800 - ÂŁ1200 per day, London

William Gallimore

William Gallimore

M&A Actuarial Analyst

Catastrophe Model Developer

This specialist insurer is looking to make several acquisitions and needs to strengthen their quant team. Candidates with a 2nd language would be a positive but not essential. You will Â?‡‡†Â•Â‡ÂŽÂˆÇŚÂ…‘Â?Ƥ†‡Â?…‡ƒÂ?†–Š‡ƒ„‹Ž‹–›–‘™‘”Â?ƒ–’ƒ…‡‹Â?ƒ†›Â?ƒÂ?‹… environment, recognising the needs and expectations of the M&A market.

The Catastrophe Model Developer will work with the risk analytics and model development team and focus on developing Â?‘†‡Ž•ƒÂ?†™‘”Â?ƪ‘™•–‘‡Â?ŠƒÂ?…‡–Š‡…ƒ–ƒ•–”‘’Š‡ƒÂ?ƒŽ›–‹…•Ǥ‘— will be responsible with streamlining and automating process and reporting systems whilst working on projects to help develop modelling in non modelled areas.

ÂŁ50k - ÂŁ80k, London

ÂŁ45k - ÂŁ50k, London

Mark Dainty

This is an excellent opportunity at an established Lloyd’s insurer. You will be working between the catastrophe and capital modelling teams and developing and providing pricing models to maximise portfolio performance. The individual will also lead the development and programming of tools and systems for catastrophe management.

ÂŁ60k - ÂŁ80k basic, London

Angus Mackie

Lead Data Scientist A recently established InsurTech start-up is now seeking an experienced Data Scientist with previous insurance industry ‡š’‡”‹‡Â?…‡ǥ ƒÂ?† ’”‘Ƥ…‹‡Â?…› ‹Â? ›–Š‘Â?ÇĄ  ƒÂ?† ƒ„Ž‡ƒ—Ǥ‘— will be working with large, unstructured data-sets and will be responsible for managing a team of three data scientists.

up to ÂŁ100k, London

+44 (0) 207 337 8800

Ahad Shadab

Mark Dainty Head of Actuarial +44 (0) 207 337 8816

Angus Mackie Paul Fox GI Actuarial & Risk Lead +44 (0) 207 220 1103

Featured Vacancy

Pricing Manager

William Gallimore UK Managing Director +44 (0) 207 337 8826

Head of Reserving - London ÂŁ125k - ÂŁ160k As a result of internal promotions and restructure, this leading insurer are looking to hire a Head of Reserving to lead the development of the current processes. The successful applicant will have a wealth of reserving expertise and a can-do attitude. You will be well supported by the current team, but be happy †”‹˜‹Â?‰ˆ‘”™ƒ”†…ŠƒÂ?‰‡ƒÂ?†…‘Â?Ƥ†‡Â?–…‘Â?Â?—Â?‹…ƒ–‹Â?‰ changes with the business.

Angus Mackie Risk +44 (0) 207 337 8808

Please contact Paul Fox for further information.

0207 220 1103

Ahad Shadab Data Analytics & technology +44 (0) 207 220 1203

Making moves in insurance recruitment


ACT recr Dec18.indd 39

26/11/2018 11:07

At the back Appointments

Shuyu Lim GI Actuarial EA Reg: R1433780 +65 6829 7153

Jessie Lim Life Actuarial EA Reg: R1769438 +65 6631 2805

Tong Yu Life Actuarial EA Reg: R176687 +65 6631 7166

Abby Tempest Actuarial - Hong Kong EA Reg: R1546112 +852 3750 7627

APAC Actuarial Assignments Treaty Pricing Manager

Pricing Manager (various openings)

Our client, one of the leading reinsurers in Asia, is seeking young and driven pricing actuaries who have solid commercial lines expertise to step up into this managerial role. The incumbent should have at least 5 years of relevant technical pricing experience and be comfortable with stakeholders and management. Ž‡ƒ•‡•‡†›‘—”–‘•Š—›—̻Šˆ‰Ǥ…‘Ǥ•‰–‘Ƥ†‘—–‘”‡Ǥ

Our clients are established global direct insurers with a strong presence across the APAC region and are seeking senior GI pricing actuaries who have both technical capabilities and leadership qualities. The incumbent should have at least 8 years of solid pricing experience and strong product knowledge of either retail or commercial lines of business. Please email for more information. $Competitive package, Malaysia Shuyu Lim

$Competitive package, Singapore

Shuyu Lim

Life Risk Manager

Deputy Chief / Senior Pricing Actuary

An established direct insurer is looking for a Life Risk Manager. It is a great opportunity for actuaries to gain exposure in risk management as technical actuarial experience is highly valued. The incumbent should possess at least 6+ years of technical life actuarial experience (e.g. pricing, valuation). Please email for more information.

A well-known reinsurer is looking for high calibre individuals to join its Life & Health business at senior pricing actuary level and above. The successful candidate will require at least 10 years of experience. Strong technical Pricing skills and excellent communication skills are required whilst an APAC market background is a plus. Please email for further information.

$Competitive package, Singapore

$Competitive package, Singapore

Jessie Lim

Tong Yu

Product Manager

Manager - IFRS17

Sitting in the product management team you will be the liaison point for the product development, pricing and valuation teams whilst overseeing all ongoing actuarial product support. Our client are one of the largest life insurers in Hong Kong and will give the chosen candidate vast exposure to multiple product lines such as universal life, protection products and investment linked products.

We are working with several multinational corporations who are looking to hire valuation actuaries with a minimum of 4 years’ experience to join their growing IFRS 17 teams. You will assess the data and assumption readiness for transition to IFRS 17, provide user requirement for various data and systems to IT and †‡˜‡Ž‘’–Š‡ ͙͟”‡’‘”–‹‰’”‘…‡••ƪ‘™Ǥ

$60k - $80k HKD, Hong Kong

$40k - $80k HKD, Hong Kong

Abby Tempest

EA Licence Number: 14C7034

Abby Tempest | +65 6829 7153

Contract roles with specialist actuarial consultancy Leading supplier to the UK insurance industry for over 10 years Projects available in Life and Non-life Roles at all levels of seniority

Are you looking for new contracting opportunities? We pride ourselves on our fresh approach to actuarial contracting, providing a high standard of service to contractors and clients alike. As a business run by actuaries, APR is uniquely placed to add value at all stages of the contracting process: • As actuaries ourselves, our expertise in the field means you can be sure that we will match you with suitable roles at realistic rates. Historically our focus has been on the Life side but we are now seeing, and filling, increasing numbers of Non-life roles. • We market our contractors effectively, including helping to tailor CVs to specific roles, ensuring submissions are wellpresented / error-free and providing support and guidance for interviews. • We will always deal with you professionally – we won’t bombard you with unsuitable roles, we guarantee never to share your CV with a client without your express permission and we will keep in regular contact with you. • As well as being on the supplier list to most of the UK’s largest insurance firms, some clients treat us as their sole supplier, so contracting through APR will give you access to roles unavailable through other sources. • We provide support with the practicalities of contracting, training in key industry topics and meaningful market insights. So whether you are currently in a permanent role and are considering actuarial contracting for the first time, or are a seasoned contractor who feels that our approach resonates with your view of how contracting should work, we would be delighted to speak to you.

Contact Alistair Taylor ( for more information


ACT recr Dec18.indd 40

26/11/2018 11:07

London : Chicago : Hong Kong : Singapore : Shanghai : Zurich

At the back Appointments

Actuarial Pricing Analyst

Catastrophe Risk Analyst

To £50,000 Base Salary + Bonus & Study Support – City of London




Contact: Tel: +44 207 481 8111

Contact: Tel: +44 207 481 8111

Mixed Actuarial Analyst

Senior Actuarial Analyst

To £60,000 Base Salary + Bonus & Study Support – City of London

To £80,000 Base Salary + Bonus & Study Support – City of London



Contact: Tel: +44 207 481 8111

Contact: Tel: +44 207 481 8111

Commercial Lines Pricing Consultant

Reserving Actuarial Analyst

To £70,000 Base Salary + Bonus

– City of London

To £60,000 Base Salary + Bonus & Study Support – City of London



Contact: Tel: +44 207 481 8111

Contact: Tel: +44 207 481 8111


GI Consultants

To £80,000 Base Salary + Bonus & Study Support – City of London

To £90,000 Base Salary + Bonus & Study Support – City of London



Contact: Tel: +44 207 481 8111

Contact: Tel: +44 207 481 8111

Email: IW^'ƌŽƵƉ͕ĞǀŝƐDĂƌŬƐ,ŽƵƐĞ͕ϮϰĞǀŝƐDĂƌŬƐ͕>ŽŶĚŽŶϯϳ: tĞďƐŝƚĞ͗ŚƩƉ͗ͬͬǁǁǁ͘ŝƉƐŐƌŽƵƉ͘ĐŽ͘ƵŬ DECEMBER 2018 | THE ACTUARY | 41 Telephone:ϬϮϬϳϰϴϭϴϭϭϭŵĂŝů͗ĞŶƋƵŝƌĞƐΛŝƉƐŐƌŽƵƉ͘ĐŽ͘ƵŬtĞď͗ǁǁǁ͘ŝƉƐŐƌŽƵƉ͘ĐŽ͘ƵŬ dǁŝƩĞƌ͗Λ/W^'ƌŽƵƉh< >ŝŶŬĞĚŝŶ͗/W^'ƌŽƵƉ ACT recr Dec18.indd 41

26/11/2018 11:07


LMA’s Actuarial practice specialises in actuarial opportunities at all levels, from Part Qualified to Chief Actuary, Chief Risk Officer or Partner, both in the UK and internationally, with a strong focus in continental Europe. Our experienced team has a strong track record; sourcing individuals and teams across a variety of specialisms within Life, Non-Life, Pensions, Investments and Healthcare. We work with a portfolio of clients including Insurance companies, Reinsurers, Regulators, Consultancies (boutique and multi-national), Rating Agencies, Life and Non-Life insurance businesses, FTSE listed companies as well as a selection of Asset Managers and Banks. SPECIALISMS


Our broad client base provides us with extensive coverage across the various specialist areas of our profession. In the Insurance and Investments sector our exposure includes such areas as Capital Management, ALM, Structuring, solvency II, Product Development, ERM, Pricing, Financial Reporting, and Specialist Modelling roles. Non-Life Insurance market coverage includes Lloyd’s of London, Personal and Commercial Lines, Global Corporate, Reinsurance, Consultancies, Brokers, and Run-Off.

Candidate acquisition is fundamental in any market – in the Actuarial sector it is absolutely paramount that our strategy is effective, and we are able to provide good quality candidates with the relevant experience for the role. Regardless of the level of actuarial candidate we therefore utilise a number of methods to acquire candidates that will then be pre-screened prior to submission; the cornerstone to which is the combined network of one of the most experienced headhunting teams in this sector.

Our coverage of Pensions and Investments markets extends to traditional consulting opportunities as well as specialist areas such as LDI, Risk transfer (Buy-out/Buy-in) Pensions & Insurance De-risking, Longevity, M&A etc. We service the entire Life Insurance Actuarial market in the UK, including roles in financial reporting and solvency assessment, product design, capital management, marketing and pricing, risk management, and investment strategy. Our clients within the life sector include insurers, reinsurers, banks, rating agencies, brokers, and consultancies.

Stuart Bullen Associate Director General Insuarance 020 7332 5886

OUR RANGE OF SERVICES INCLUDE: • Contingent recruitment • Exclusive contingent recruitment • Retained Search • Mapping and targeting exercises • Salary benchmarking and broader market information

Samantha Chan Consultant Actuarial and Risk 020 7246 2641 OFFICES IN LONDON AND SINGAPORE WITH A STRONG TEAM OF 65 PEOPLE


ACT recr Dec18.indd 42

26/11/2018 11:07

At the back Appointments

Pension Protection Fund


Renaissance, 12 Dingwall Road, Croydon CR0 2NA

â&#x20AC;&#x153;Having Sophie on board made each step of the job search so much easier. Sheâ&#x20AC;&#x2122;s extremely professional, energetic and efficient.â&#x20AC;? your future bright?


ACT recr Dec18.indd 43

26/11/2018 11:07

At the back Appointments M&A PROJECT MANAGER


London, c.£70k + benefits Currently seeking a Project Manager to join a global consultancy in London. The roleholder will be involved in the production of International Employee Benefits due diligence reports, the assembly and management of project teams to complete pre and post due diligence engagements and related transaction consultancy as well as assist on new business development and maintain existing relationships with clients. The suitable candidate would ideally have experience in the pensions market, International Compensation and Benefits/HR/M&A. Excellent communication skills and an ability to manage multiple projects at once is a must and actuarial or IEBA qualifications would be a great advantage.

Bristol, up to £60k + bonus + benefits

We are partnering exclusively with an innovative insurance company as they expand their growing portfolio and seek to recruit a life actuary in their Bristol office. The ideal candidate will be nearly/newly qualified with a good understanding of life products. Experience of working on change projects and good Excel skills (ideally VBA within Excel) strongly preferred. Contact: | 0207 092 3286

Contact: | 0207 092 3227



London c.£70k + benefits

London, up to £90k +bonus + benefits

A global leading consultancy is looking for a qualified pensions actuary to join their corporate pensions team in Bristol. You will be advising clients on strategic corporate pensions issues including funding negotiations, benefit design, risk management projects, and pension accounting disclosures. You will be a fully qualified actuary with post-qualification experience and a track record of developing client relationships and securing new business within the market. Excellent communication and interpersonal skills are a must as you will be liaising not only with new and existing clients but also HR and finance directors.

A global financial services firm is seeking a senior actuary to join their London team. You will be focused on leading the development of the methodologies and risk capital longevity assumptions. You will also be responsible for Risk Modelling and creation of model development, working on population and portfolio risk modelling in a longevity and mortality context. Suitable candidates will be qualified with solid longevity experience, possessing a comprehensive understanding of financial and insurance risk issues. Strong technical background in life insurance is essential. Excellent consulting skills with experience in a risk function is strongly preferred.

Contact: | 0207 092 3227

Contact: | 0207 092 3286



London, up to £75k + benefits

London, up to £120k + bonus + benefits

A growing pensions advisory team are looking to hire innovative individuals to contribute to the continuing growth of an already successful team with a strong and reputable brand. This team is now looking to grow their non-traditional business and give their pensions actuarial employees the opportunity to increase their cross-service line working within the business. They are therefore looking for individuals that have a strong pensions actuarial knowledge with a desire to diversify their skills set. You should be FIA qualified with a broad understanding of the UK DB pensions market including experience of advising corporate and/or trustee clients, asset managers, insurers and administrators on DB/DC pension scheme queries.

We are partnering with a top 5 global consultancy firm who are looking for a Life Actuarial Senior Manager to join their actuarial and risk team. Supporting the Partners & Director, you will take on a diverse role responsible for the management of key projects to clients, lead client engagement teams, providing hands on advisory service and insurance solutions. The ideal candidate will be a qualified actuary with technical actuarial experience. Strong project and people management skills with an ability to develop a strong network of contacts in the life insurance industry would be advantageous. Contact: | 0207 092 3286

Contact: | 0207 092 3227

ASSOCIATE ACTUARIAL CONSULTANT London, up to £50k + benefits

A dynamic and growing pensions team within a global consultancy is looking for a PQ Actuary to further enhance their actuarial services. You will be working across an exciting combination of corporate and pension trustee clients. You will be expected to work with client managers to lead the delivery of client projects. You will be covering areas such as liability management, scheme funding and financial reporting with the additional opportunity to get involved with workplace savings, employee benefits and share-based payments. The suitable candidate would ideally have a minimum of 2 years’ experience, making good progress in their actuarial exams and have a great academic record.

NEARLY/NEWLY QUALIFIED ACTUARIAL ANALYSTS Liverpool, up to £60k + bonus + benefits

Our client is seeking an Actuarial Analyst to join the team in Liverpool. The role will mainly focus on major projects and change activity within the business providing expert actuarial input on calculations across a broad range of products. The successful candidate will be a Nearly/Newly qualified actuary with practical life and pensions actuarial experience taking a technical role in projects and providing technical actuarial product support. Excellent analytical ability with strong excel and actuarial system knowledge is essential. Contact: | 0207 092 3286

Contact: | 0207 092 3227


ACT recr Dec18.indd 44

26/11/2018 11:07

At the back Appointments


SENIOR PRICING ACTUARY London, up to £130k + benefits + bonus

A leading international insurer are currently seeking a qualified actuary to lead reserving across their motor lines of business. This is a newly created role and as such will be responsible for the development of reserving models and processes from scratch. The role will also lead quarterly reserving and support the business planning process. Candidates will be newly qualified and have strong reserving experience, either from a personal lines or consultancy background. UK motor experience would also be beneficial.

A growing Lloyd’s syndicate are currently seeking a qualified actuary to lead pricing across a range of business lines, including casualty and A&H. The role will be responsible for developing pricing models from scratch whilst supporting the underwriters on large account pricing across a range of business lines. In addition you will also provide analysis of the portfolios, and support the business planning process. Candidates will be fully qualified and have a wealth of London market pricing experience. Ideally you will have had exposure to casualty lines of business, however all London market experience will be considered.

Contact: | 0207 092 3239

Contact: | 0207 092 3239

London, £ upon application


RESERVING ACTUARY, London, £70k-£90k

London, up to £80k + benefits + bonus

A growing Lloyd's syndicate is currently seeking a qualified actuary to undertake a mixed role covering reserving, SII technical provisions and capital modelling. Specifically the role will be responsible for undertaking quarterly reserving, calculating SII technical provisions, and contributing to the capital model parameterisation process. Candidates will be fully (or nearly) qualified and have strong London market reserving experience. Ideally they are keen to meet with candidates from a consultancy background, however all London market experience will be considered.

An international broker are currently seeking a nearly/newly qualified actuary to join their growing analytics function. The role will support pricing across their reinsurance business, covering marine, energy, political risk, and casualty lines of business. Candidates will have strong London market pricing experience, ideally with exposure to treaty business lines. Contact: | 0207 092 3239

Contact: | 0207 092 3239

ACTUARIAL MANAGER, Hampshire, £50k-£70k A diverse and interesting management role has become available with one of the UK's top insurers based in the South West of England. This role will be a mixed pricing and reserving role focusing on commercial lines of business and will involve line managing at least one more junior analyst. The role will be highly autonomous and offer the opportunity to innovate, drive positive change and implement new solutions. The successful candidate will have strong analytic capability and experience within either GI pricing, reserving or both. Applications are encouraged from non-actuaries, part qualified individuals and actuaries alike. Contact: | 0207 092 3230

REINSURANCE ACTUARIAL ANALYST London, up to £60k + bonus + benefits An international broker are currently seeking a part-qualified actuary to join their growing analytics function. The role will support pricing across their reinsurance business, covering marine, energy, political risk, and casualty lines of business. Candidates will be making good progress through the CT series exams, and have strong London market pricing experience. Exposure to treaty business lines would be advantegeous, however all London market pricing experience will be considered. Contact: | 0207 092 3239



London, £700 - £1000 per day

London, £800 per day

Due to growth and change my client is looking for a number of contractors to help with BAU work. You will be involved with Reserving under SII, TP’s as well as assist in building new and parameterise existing models in ResQ.

Looking for a personal lines pricing contractor with home or motor background. Those with experience in analysis, developing prices and the programming involved will be at an advantage. For more info call me ASAP.

Contact: | 0207 092 3249

Contact: | 0207 092 3249

Our team work on both permanent and contract opportunities across life and non-life insurance and the pensions and investment markets. If you are looking for your next career move or to discuss other opportunities we may have, get in touch with a member of our team today for a confidential discussion. Alternatively, please visit our website for more information on the opportunities our consultants are working on.


ACT recr Dec18.indd 45

26/11/2018 11:07

At the back Appointments

As a professional, you’ll no doubt want to keep up with the latest industry developments, people and news? That’s why The Actuary’s weekly email alert brings you a handy round-up of only the most relevant news stories and comment, straight to your inbox every Thursday. Register for weekly email newsletters at Browse and, the official jobsites of the actuarial profession

ASSOCIATE INVESTMENT CONSULTANT London £ Excellent A fantastic opportunity for an investment consulting professional with excellent communication skills who has 2 to 4 years’ experience, and is interested in helping clients make decisions based on insightful analysis, industry expertise, and gamechanging technology. You will get involved in a mixture of work and be offered a clear career path within a firm that is growing quickly. Candidates will require strong technical knowledge of UK pension fund investment consulting or have a background in pensions consultancy with at least a year in an investment advisory role. You will get involved with: • Identifying suitable investment structures to implement strategies, taking into account individual client’s circumstances and preferences. • Conducting investment manager research and formulate views on investment managers’ capabilities. • Conducting investment manager selection exercises, leading clients to reach decisions on managers. • Calculating investment performance figures for performance monitoring purposes. • Maintaining up-to-date knowledge of market practice and legislation. • Drafting performance monitoring reports, including commentary. • Understanding the basis of transfers of assets between investment managers and liaising with managers during the transfer. • Undertaking performance and risk assessment of portfolios. • Reviewing work done by other staff, including both detailed checks and a check for overall reasonableness.

Parvinder Matharu Newton Recruitment t +44(0)1689 862937 e w Contact


ACT recr Dec18.indd 46

26/11/2018 11:07

At the back Appointments

Acumen Resources Ireland - Run By Actuaries For Actuaries® Celebrating 20 years of success in 2018, Acumen Resources has become the most successful actuarial recruitment consultancy in Ireland, offering a high quality and con¿dential service to both employees and employers. Our Actuarial Directors have signi¿cant practical actuarial experience having worked in both direct-writing of¿ces and actuarial consulting environments. We specialise in all levels of actuarial recruitment, from student level right through to senior management, Partner and Head of Actuarial Function.

IFRS17 contracts Multiple day rate contracts available to support IFRS 17 implementation. Actuaries ideally with technical ¿nancial reporting expertise and experience implementing new ¿nancial reporting bases (e.g. IFRS 4, Solvency II) required. Financial Reporting Actuary This is the ideal role for an ambitious quali¿ed actuary. Your responsibilities will include: Production of Actuarial team‘s output within the Group; Producing monthly, quarterly, half yearly and Yearly reporting requirements (IFRS, SII QRTs) for Regulatory purposes, to tight deadlines; Producing ¿nal ¿gures for Capital Management, management of Shareholder Assets & Liabilities, IFRS, persistency and expenses; Responsibility for producing annual budgeting ¿gures and the 3 year plans’ ¿gures; Production & input to the annual HoAF reports, SFCR and RSR reports to the CBI. GI Actuarial & Risk Management Reporting directly to the Head of the Actuarial Function and the Chief Risk Of¿cer, you will interact with multiple other functional areas including underwriting, ¿nance, compliance, claims, senior management and colleagues in international of¿ces. Key responsibilities: support Head of Actuarial Function in providing Annual Opinion on Technical Provisions, on reinsurance and on ORSA; contribute to drafting the actuarial sections of the SFCR and Regular Supervisory Report; and assist the CRO in all aspects of the development, implementation, embedding and maintenance of the risk management framework across the company to ensure the company identi¿es monitors and manages risks in accordance with board, shareholder and regulatory expectations. Consultants – Life & GI Ambitious actuaries required to provide consulting to clients on a broad range of topics including: Corporate restructuring and capital enhancement (securitisation and M&A); all aspects of actuarial work including, ¿nancial reporting, solvency reporting, capital management and product pricing; Working with Heads of Actuarial Function and Chief Risk Of¿cers in meeting business and regulatory requirements relating to these roles and Enterprise Risk Management to manage risks and meet strategic objectives.

For Actuarial Recruitment or Executive Search & Selection, contact us now. Paul Walsh FIA, FSAI Director

Tel: +353 1 6099400

Jenny Johnston FIA, FSAI Director



ACT recr Dec18.indd 47

26/11/2018 11:08

At the back Appointments






Major Reinsurer



Managing Agency



Leading London Market managing agency has a fantastic opportunity for a qualified non-life actuary with extensive Lloyd’s reserving experience to manage the reserving workstream of the actuarial function and oversee future development under Solvency II.


Take up this chance to use your superb IT, audit and technical skills to play a major part in the IFRS17 implementation of a large international reinsurer. You will also help to train a wide audience on IFRS17 and its impact.

You will develop the technical capability of the reserving team and contribute to syndicate business planning.


With a detailed understanding of Solvency II regulations and developments, alongside excellent interpersonal and people management skills, you will also possess advanced knowledge of VBA, ResQ and SQL.


Contact Jan Sparks (+44 7477 757 151, now for more information on this exciting leadership position.


Growing Insurer STAR5247

Work alongside the business leadership, and play a key part in achieving an ambitious growth strategy, in this hands-on commercial role focussed on street pricing and optimisation.

SENIOR GI PRICING ANALYST Part-Qualified / Qualified


Major Insurer

NON-LIFE LONDON Part-Qualified / Qualified

Lloyds Syndicate



Seeking a part-qualified or qualified actuary with experience of a variety of business lines and knowledge of exposure and experience-based pricing methods to take up a pricing and reserving role within a growing team. You will have strategic understanding, along with a customer focus and will use your communication skills to form strong relationships with both clients and the underwriting teams.


In this exciting role, you will build statistical models to predict claim costs and expenses, and create technical pricing tools to monitor risk mix and expected loss ratios, whilst also designing and improving risk factors.


Managing Agency

You will also have good organisational skills in order to manage multiple deliverables.


Contact David Ellis (+44 7432 791 061, now for more information about this great role.

Use your capital modelling experience, relationship building skills and understanding of the London Market to ensure that each syndicate has an appropriate Internal Model in place.




Part-Qualified / Qualified


Leading Firms STAR5250 / STAR5334

We have exciting opportunities available for Capital Modelling specialists with either Igloo or Remetrica experience and strong interpersonal skills to join leading teams within the London Market.



Join this newly established and rapidly growing company and you will be involved in managing a broad range of activities across all aspects of actuarial and risk management.

Is your next role one of the



VACANCIES on our website?

Lance Randles MBA

Paul Cook

Satpal Johri

PARTNER +44 7889 007 861

A ASSOCIATE DIRECTOR + +44 7740 285 139

ASSOCIATE DIRECTOR +44 7808 507 600

Clare Roberts

David Ellis

James Harrison

ASSOCIATE DIRECTOR +44 7714 490 922

ASSOCIATE DIRECTOR +44 7432 791 061

ASSOCIATE DIRECTOR +44 7591 206 881

Antony Buxton FIA

Louis Manson

Diane Lockley

MANAGING DIRECTOR +44 7766 414 560

MANAGING DIRECTOR +44 7595 023 983

SENIOR CONSULTANT +44 7492 060 219


ACT recr Dec18.indd 48

Specialist Insurer


+44 20 7868 1900 26/11/2018 11:08



ACTUARIAL POST RECRUITER OF THE YEAR 2012 . 2013 . 2014 . 2015 . 2016 .At 2017 the back



Reinsurance Company



An exciting opportunity for a structuring and pricing specialist to work on alternative reinsurance solutions in a thriving global financial centre. You will be a good team player, with the ability to work independently.


Leading Financial Services Provider



This is a senior level role for a qualified actuary with experience in reporting and/or capital management. You will be responsible for quarterly valuation and reporting and presenting your findings on solvency and financial performance to the Audit Committee.



Leading Provider



Take up a key position, using your understanding of asset modelling and investment markets, to lead a team providing the delivery of the Solvency II and economic capital requirements.

The successful candidate will have good working knowledge of Solvency I (Peak 1, Peak 2 and Pillar 2), Solvency II and IFRS reporting processes with management expertise in at least one of these areas. Contact Peter Baker (+44 7860 602 586, to investigate further.





Major Insurer






Use your broad experience across pricing, reporting and, preferably, capital, to develop and communicate longevity assumptions, analytics and solutions for year-end reporting and pricing.


Leading Provider



Fantastic opportunity to use your strong reporting experience to work on the delivery of Solvency II results. You will also develop efficient reporting processes and strict controls around those processes.

Is your next role one of the


VACANCIES on our website?


Market-Leading Insurer



Would you like the opportunity to move to Australia? If you are a qualified life actuary with strong modelling skills, you could join our client’s office in Sydney, where you will be responsible for the pricing of reinsurance transactions from non-Australian markets. In this key role, you will primarily assess potential transactions in the longevity market, but you will also consider mortality and other insurance based risks. With excellent analytical, communication and interpersonal skills, the successful candidate will ideally have some knowledge of reinsurance pricing alongside client relationship management experience. Contact Jan Sparks (+44 7477 757 151, now for more information regarding this life-changing opportunity.


Leading Reinsurer STAR5278

Grab this excellent opportunity to develop your career in Paris. You will have market risk modelling experience within an insurance or reinsurance context. Strong programming skills would be an advantage.


Major Global Insurer



Support pricing and product development activities across a range of protection and wealth products, applying your problemsolving skills and maintaining good working relationships across the business.

Irene Paterson FFA

Lance Randles MBA

Peter Baker

Jan Sparks FIA

PARTNER +44 7545 424 206

PARTNER +44 7889 007 861

PARTNER +44 7860 602 586

PARTNER +44 7477 757 151

Jo Frankham

Adam Goodwin

Clare Roberts

James Harrison

ASSOCIATE DIRECTOR +44 7950 419 115

ASSOCIATE DIRECTOR +44 7584 357 590

ASSOCIATE DIRECTOR +44 7714 490 922

ASSOCIATE DIRECTOR +44 7591 206 881

Antony Buxton FIA

Louis Manson

Joanne O’Connor

Sarah O’Brien

MANAGING DIRECTOR +44 7766 414 560

MANAGING DIRECTOR +44 7595 023 983

OPERATIONS DIRECTOR +44 7739 345 946 m

SENIOR CONSULTANT +44 7841 025 393


Experts in Actuarial Recruitment ACT recr Dec18.indd 49

26/11/2018 11:08

At the back Appointments

The road to success

Brighter futures begin with Oliver James Associates Enjoy unrivalled access to the world’s WYLTPLYPUZ\YHUJLÄYTZ^P[O6SP]LY James Associates. We unite expertise in actuarial with an impressive network of industry contacts – and all while keeping a single aim in mind: to bring you the most exclusive career opportunities on the market.

Oliver James Associates Delivering with Excellence


ACT recr Dec18.indd 50

26/11/2018 11:08

Snapshot of Live Actuarial Vacancies






Life, Pensions & Investments Head of Actuarial Reporting London ÂŁ85,000 â&#x20AC;&#x201C; ÂŁ90,000 + Package ,_JLSSLU[VWWVY[\UP[`MVYHX\HSPĂ&#x201E;LK actuary to join this leading Reinsurer in London. The role will lead a corporate actuarial team responsible for the delivery VMĂ&#x201E;UHUJPHSYLZ\S[ZVUZL]LYHSYLWVY[PUN bases including US GAAP and IFRS.

Senior Manager Management Consultancy London Up to ÂŁ140,000 + Basic ,_JLSSLU[VWWVY[\UP[`MVYHX\HSPĂ&#x201E;LKHJ[\HY` with extensive consultancy experience. You will be working across asset managers, banks and insurers throughout Europe. Additional language is desirable.

Part VII Actuary UK ÂŁ800 â&#x20AC;&#x201C; ÂŁ1,000/ day A well-known life business currently requires assistance with Part VII work, and needs a knowledgeable contractor with experience of conducting a number of these processes. >P[O7YVĂ&#x201E;[ZRUV^SLKNL^V\SKILILULĂ&#x201E;JPHS

Data Scientist (Reinsurance) London ÂŁ65,000 â&#x20AC;&#x201C; ÂŁ80,000

Senior Actuarial Consultant London Up to ÂŁ90,000 + Basic

IFRS 17 Project Actuary London + Europe travel ÂŁ800 â&#x20AC;&#x201C; ÂŁ1,000/ day

Fantastic opportunity for a Data Scientist with 3+ years post-academic experience to join global reinsurer in London. Must have strong business awareness and R skills.

Unique opportunity for an ambitious pensions actuary to join an entrepreneurial consultancy whose work will include transactions, M&A and corporate advisory in a close-knit team of 12 with a high level of autonomy.

8\HSPĂ&#x201E;LKSPMLHJ[\HY`YLX\PYLKMVYSLHKPUN project role within international business. Must have previous methodology implementation experience. This is an exciting opportunity for any contract actuary looking to get involved with IFRS 17 projects.

Deputy Head of Planning and Insight Hampshire/London ÂŁ70,000

6GXZ7[GROߥKJ8KYKX\OTM Pricing and Capital Actuary London Up to 60,000

Non-Life Reserving Actuaries London ÂŁ1,000/ day

,_JP[PUNVWWVY[\UP[`MVYHULHYS`X\HSPĂ&#x201E;LKVY X\HSPĂ&#x201E;LKHJ[\HY`:\JJLZZM\SJHUKPKH[L^PSS manage the team in the reporting of actuarial ^VYRHUKOLSWJVTT\UPJH[LĂ&#x201E;UHUJPHSYPZR Experience in reserving, regulatory reporting, solvency II & auditing with Igloo is preferred.

Broaden your actuarial skill set in one of the most varied roles the London market OHZ[VVÉ&#x2C6;LYÂśWYPJPUNYLZLY]PUNHUKJHWP[HS across a range of business classes. Various backgrounds considered but strong academics and exam progress required.

Senior Pricing Actuary London ÂŁ130,000 + Package

Deputy Head of Reserving London ÂŁ100,000 + Package

Reserving Actuaries London ÂŁ750 â&#x20AC;&#x201C; ÂŁ850/ day

We are working with an established Lloydâ&#x20AC;&#x2122;s Ă&#x201E;YT[VYLJY\P[H:LUPVY7YPJPUN(J[\HY`HJYVZZ multiple business lines. The ideal person will ILHX\HSPĂ&#x201E;LKHJ[\HY`^P[OV]LY`LHYZ78, and will be looking to take the next step in their career. Lloydâ&#x20AC;&#x2122;s market background essential.

>LHYLZ\WWVY[PUNHOPNOWYVĂ&#x201E;SLJSPLU[VUH new Deputy Head of Syndicate Reserving HWWVPU[TLU[7VZ[X\HSPĂ&#x201E;JH[PVUL_WLYPLUJL is desired and strong presentation skills essential. Excellent opportunity for somebody looking to take a step up in their career.

A number of London-based general insurance businesses are currently looking for contract support, technical reserving experience within the London market and knowledge of ResQ is required. Long-term contracts and January start dates are available.

General Insurance

Multiple prestigious insurers based in Central London require experienced reserving actuaries to join on an interim basis. Exposure with software such as 9LZ8^PSSILILULĂ&#x201E;JPHS

Contact Us Richard Howard Life Specialist +44 203 861 9191

Sarah Robins Personal & Commercial Lines Specialist +44 203 861 9198

Helen Kinloch Pensions Specialist +44 203 861 9173

Ross Anderson London Market Specialist +44 203 861 9206

Elise Ogden Non-Life Specialist Contract +44 203 861 9169

Ani Pannell Life Specialist Contract +44 203 861 9163 '61(ZZVJPH[LZ oliver-james-associates


ACT recr Dec18.indd 51

26/11/2018 11:08







Experts in back Actuarial Recruitment At the





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. INVESTMENT CONSULTANT Qualified

Leading Firm



Our client is seeking a talented investment consultant with strong technical skills to lead client relationships and develop innovative solutions for complex investment and risk management problems.


Growing Consultancy



A fabulous opportunity for a qualified pensions actuary to take up a significant, leading role within a new team providing corporate pensions advice. You will have proven business development experience, entrepreneurial flair and a strong pensions network in the Midlands.

Growing Business



An ideal opportunity for a qualified actuary with a collaborative and commercial approach and technical experience in product development, pricing, strategy and research to play a key role in a wide variety of projects.

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, for more information regarding this opportunity to make a real difference.



Leading-Edge Consultancy


A great opportunity to take up a market-facing role, managing and developing our client’s investment consultancy offering, supervising all phases of asset transfers, investment strategy reviews and special projects.




Major Consultancy



Seeking a commercially-focused Scheme Actuary with strong client relationship management skills and enthusiasm for business development to take up this exciting position within a growing business.

Is your next role one of the



VACANCIES on our website?


Independent Advisory Business



This is a unique opportunity for a qualified actuary from a pensions or life background to play a leading role in the consolidation of the UK pensions market. You will work closely with the Managing Director in the development of a new independent advisory business, assisting the trustees of pension schemes in meeting their ultimate obligation to secure the retirement futures of their members. You will have a proven track record of success and exceptional interpersonal skills. Please contact Antony Buxton (+44 7766 414 560, for more information on this exciting role offering fantastic career development.




Part-Qualified / Qualified

Leading Consultancy



In this client-facing role, you will produce and deliver strategic advice, build asset liability models to help clients understand their risks, prepare monitoring reports and research fund managers.

Market Leader



Fantastic opportunity to join a market leader, solving a wide range of pensions problems. The successful candidate will possess excellent consulting skills alongside the commercial focus to spot opportunities to create value.

Irene Paterson FFA

Peter Baker

Adam Goodwin

PARTNER +44 7545 424 206

PARTNER +44 7860 602 586

ASSOCIATE DIRECTOR +44 7584 357 590

Antony Buxton FIA

Louis Manson

Joanne O’Connor

MANAGING DIRECTOR +44 7766 414 560

MANAGING DIRECTOR +44 7595 023 983

OPERATIONS DIRECTOR +44 7739 345 946


ACT recr Dec18.indd 52

+44 20 7868 1900

Star Actuarial Futures Ltd is an employment agency and employment business


PENSIONS – AGILE WORKING 26/11/2018 11:08

Profile for Redactive Media Group

The Actuary December 2018  

The Actuary December 2018  

Profile for redactive

Recommendations could not be loaded

Recommendations could not be loaded

Recommendations could not be loaded

Recommendations could not be loaded