The Actuary - May 2020

MAY 2020 theactuary.com

The magazine of the Institute and Faculty of Actuaries Interview Dr Emily Shuckburgh Facing down climate change through mathematics

IMPACTING THE LIVES OF EVERYONE ON THE PLANET Health An investigation into the coronavirus co-morbidity claims: is there any truth to them?

Is the North Atlantic seeing increased hurricane clustering?

Life The COVID-19 effect: issues for actuaries and beyond

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Contents May 2020

Features 12 Interview: Dr Emily Shuckburgh The director of Cambridge Zero talks about modelling climate change

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16 Life: The co-morbidity question Matthew Edwards and Stuart McDonald on COVID-19 victims

12 Up Front 4 Editorial Dan Georgescu discusses staying socially connected and mentally active during the coronavirus lockdown 5 President and CEO’s comment The IFoA is doings its best to support members during this unprecendented period, say John Taylor and Stephen Mann 6 IFoA news The latest IFoA news and events 11 Letters

20 Health: Modelling minds How do different personalities cope with risk? Geoff Trickey explains 22 Life: A new world order Alistair Chamberlain looks at longterm COVID-19 implications 24 Modelling: A fine scale Elena Kulinskaya, Ilyas Bakbergenuly and Lisanne Gitsels discuss dynamic statistical analysis 28 Investment: Turning the tables A walk through the history of compound interest, by Chris Lewin 30 Investment: Sustainable investment’s new frontiers Gareth Sutcliffe and Holger Schalk on approaches to ESG investing 32 Risk: Clarity on climate Actuaries can cut through the climate data noise, says Russ Bowdrey 35 Recruitment: Embracing change COVID-19 and the hiring process

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At The Back 36 Pass it on Brian Ridsdale explains the work of the IAA’s Mortality Working Group 38 The art of being an actuary Working with maths can still involve creativity, says Richard Lewis 40 Puzzles 42 School of thought Refilwe Modise discusses pensions versus property as investments 43 People/society news The latest news, updates and events 44 On the record Trishla Doshi on mystery novels and motivation

Web exclusive Investment: Long term product guarantees Why they still have a role bit.ly/2Y0x80j

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PUBLISHER Redactive Publishing Ltd Level 5, 78 Chamber Street, London, E1 8BL +44 (0)20 7880 6200 PUBLISHING DIRECTOR Anthony Moran MANAGING EDITOR Sharon Maguire +44 (0)20 7880 6246 sharon.maguire@redactive.co.uk A S S I S TA N T E D I T O R Kathryn Manning +44 (0)20 7324 2792 kathryn.manning@redactive.co.uk SUB-EDITOR Kate Bennett NEWS REPORTER Christopher Seekings +44 (0)20 7324 2743 christopher.seekings @redactive.co.uk D I S P L AY SALES theactuary-sales@redactive.co.uk +44 (0)20 7324 2753 RECRUITMENT SALES theactuaryjobs@redactive.co.uk +44 (0)20 7880 6234 ART EDITOR Sarah Auld PICTURE EDITOR Charlie Hedges

EDITOR Dan Georgescu editor@theactuary.com F E AT U R E S E D I T O R S Sharad Bajla, general insurance Stephen Hyams, pensions Paul Malloy, reinsurance, life insurance VS Rajeshwarie, GI Thanuja Krishnaratna, life Contact: features@theactuary.com PEOPLE/SOCIETY NEWS EDITOR social@theactuary.com Kathryn Manning kathryn.manning@redactive.co.uk STUDENT EDITOR Jason Brett student@theactuary.com IFOA EDITOR Kate Pearce +44 (0)207 632 2118 kate.pearce@actuaries.org.uk EDITORIAL ADVISORY PANEL Peter Tompkins (chairman), Chika Aghadiuno, Nico Aspinall, Naomi Burger, Matthew Edwards, Jessica Elkin, Martin Lunnon, Richard Purcell, Sonal Shah, Nick Silver INTERNET The Actuary: www.theactuary.com Institute and Faculty of Actuaries: www.actuaries.org.uk

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Apart, together A side effect of the coronavirus is that it has turned our friends, family, colleagues and others we may normally interact with face-to-face into potential threats – hence the need to stay at home as much as possible.

However, we are social animals, and need our connections more than ever during lockdown and in the socially distant world that will undoubtedly follow when restrictions are eased.

I have taken a lead from my children, who despite not yet being in their teens have already mastered Zoom chats with friends, Skype calls with family, YouTube activities with Joe Wicks and Gareth Malone, and many more ways of interacting digitally, staying healthy and learning new skills. They were early adopters of all that technology has to offer, which has encouraged me to organise things like family video chats and virtual pub sessions with old friends, keeping me connected to the people I care most about. It turned out to be so simple that we are all wondering why we haven’t done it before. If you are lucky enough to have a garden, then perhaps tormenting the weeds may be your way of staying physically active, but it can be too easy to become mentally isolated: that’s where the magazine can help.

This month we have a mix of articles about the pandemic and other actuarial work. Matthew Edwards and Stuart McDonald feature again (p16), this time critically examining claims that the majority of COVID-19 deaths would have happened anyway. On a different topic, I would recommend you read Russ Bowdrey’s article (p32) on cutting through climate uncertainty, and not letting perfection be the enemy of the good when it comes to taking decisive action. The fact that we have a public health crisis does not mean the climate emergency has gone away.

Enjoy the issue, and look after yourselves and others.

DAN GEORGESCU EDITOR editor@theactuary.com

www.theactuary.com

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J O H N TAY LO R

STEPHEN MANN

Carrying on amid uncertainty arely six months ago, pandemics were the preserve of a small group of experts. Now, COVID-19 and its consequences are all too pervasive. We see the distressing effects on the afflicted and those working hard to save them. Beyond that frontline, so many aspects of our world have profoundly changed, from the way we interact with those closest to us to the outlook for the global economy.

As we adapt to this dramatic change, the work of the actuarial profession remains as important as ever. Indeed, our work over many years in asset-liability matching, scenario modelling and risk management has meant our employers and clients have faced this crisis with a degree of resilience.

Some actuaries, particularly those involved in pandemic risk, are now at the forefront of understanding COVID-19. Many more are involved in supporting clients and employers dealing with the varied implications.

Balance sheets of insurer and pensions schemes are being revisited; mortality and morbidity assumptions are being revised; operations risk plans are being implemented and adapted – and many of us are leading organisations and guiding colleagues through these difficult times.

Throughout all of this, the IFoA’s priority has been to support our members, as we ourselves have rapidly been adapting to new ways of working. Since mid-March, our 170 employees around the world have been working full-time from home, many with caring responsibilities and with little notice to prepare for this arrangement. Our members

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“The IFoA’s priority has been to support our members, as we ourselves have rapidly been adapting to new ways of working”

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have been conflicted about what this means for exams – some assert they should be cancelled entirely, others are determined they should continue. We have pivoted to offer many of our events via virtual platform, rather than face-to-face – a change that we may have made eventually, but that COVID-19 has accelerated. As we continue to learn and adapt to new ways of working and providing member value, we are grateful for your patience and support.

In the absence of full information, our leadership (both elected and Executive) has been presented with many difficult choices, and we won’t begin to assume that we’ve got them all right. What we are sure of is that our principles which guide those choices – support for our members, care for our people, a desire to keep learning and growing, a promising future for both the IFoA and the profession – have not wavered.

Despite the uncharted territory we have entered, we look ahead with optimism. The IFoA has a rich history and, we believe, a promising future. We have been heartened by countless stories of people showing one another kindness and support. We have been inspired by how our members have risen to challenges, adapted to new ways of attending events or sitting exams, and shared their feedback on how the IFoA can continue to improve these services.

As we make choices, we continue to place priority and emphasis on how we stay in touch with you, how we ensure a sense of JOHN TAYLOR community and support during this period is the president of of change, and how we focus the IFoA and the Institute and Faculty of Actuaries its work for the benefit of all our people.

We will continue to make the very best STEPHEN MANN decisions we can for you – our members, is the chief our stakeholders and our people – and hope executive of the those choices will lead us into a bright Institute and future. Thank you, as ever, for your support Faculty of of, and trust in, the IFoA. Actuaries AUTUMN MAY 2020 2017 | THE ACTUARY | 5

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Upfront News

IN BRIEF...

Consultation update

RISK

COVID-19 and our work As the response to COVID-19 gathers pace, we are seeing individuals and institutions struggle to cope with the many financial risks they face at this difficult time: whether it’s the impact of insecure work, problems with insurance, or not being able to meet care needs while frontline services are otherwise engaged. Our 2020 campaign, The Great Risk Transfer, looks at how risks that used to be shouldered by governments, financial services providers and employers are being transferred to individuals. Our latest blog looks at how these risks will be exacerbated as a result of the current crisis – find it at bit.ly/2K5lrgI

Earlier this month the IFoA submitted its response to the Bank of England consultation on proposals for stress testing the financial stability implications of climate change (bit.ly/2xj8sFu).

IFoA recognises climate change as a material financial risk and welcomes the Bank’s plans to carry out the 2021 Biennial Exploratory Scenario exercise – the first exercise of its kind. IFoA’s response identified that, while the Bank has defined a number of prescribed scenarios, the current proposal requires participants to interpret and assume a significant amount. Rather than require firms to make numerous assumptions, which could result in large discrepancies in analysis, the IFoA recommended the Bank move to a strongly defined framework. This will allow firms participating in the exercise to better understand and respond to their exposure to climaterelated risk.

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Online learning resources

Video and audio Find a diverse range of valuable content relevant to your area of expertise:

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Visit:

www.actuaries.org.uk/online_learning_resources

Due to the global COVID-19 situation, the IFoA is reviewing its events programme. Our primary goal is to ensure the wellbeing of our members and employees while minimising the disruption to our service.

Although this means that many events will be cancelled or postponed, many are being reformatted as webinars or other forms of digital delivery. If your event is disrupted, we will let you know by email as soon as possible.

We’re asking all members and stakeholders to check our event programme web pages for the latest information. actuaries.org.uk/events

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Events

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Upfront News ACTUARIAL DIRECTORY

Make the most of the IFoA network Our online Actuarial Directory offers a way for members to plug into the IFoA’s global network of 32,000 colleagues.

You can make contact with IFoA members around the world and elect to have your contact details available exclusively to IFoA members, opening yourself up to network building and professional opportunities. If you prefer, you can choose to keep your contact details private.

You can update your Actuarial Directory preferences in the My Account section on the IFoA website.

Our online directories also provide listings of IFoA members for the general public, and a public listing of companies providing actuarial services.

Our directory of actuarial firms receives more than 15,000 page views each year – browsers discerning enough to conduct their search through the website of the UK’s actuarial regulator. We hope our members will support their professional body and draw this service to the attention of their employer.

Visit actuaries.org.uk/find-actuary

DISCIPLINARY TRIBUNAL PANEL

Hearing of Mr Cheng Gang Zhu On 20 February 2020 the Disciplinary Tribunal Panel considered a charge of Misconduct against Cheng Gang Zhu (‘the Respondent’), in the absence of the Respondent.

The IFoA’s Charge was that he submitted an application form for student admission to Education Services at the IFoA and an application form for exemptions, including a falsified copy of his academic transcript and/or university degree certificate. These actions were alleged to be dishonest and in breach of the Integrity principle of the Actuaries’ Code. It was also alleged that the charges constituted misconduct in terms

of Rule 4.2 of the Disciplinary and Capacity for Membership Schemes of the Institute and Faculty of Actuaries (effective 1 February 2018).

The Panel found all elements of the Charge proved, determining that the Respondent tendered documents to the IFoA knowing they were false. The Panel was satisfied this was misconduct.

The Panel determined that the only appropriate and proportionate sanction was to exclude the Respondent for the maximum period of five years. A copy of the Panel’s full determination, including reasons, can be found on the IFoA’s website at bit.ly/3a9mPt0

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Book now

Finance & Investment Conference 2020 webinar series Delivering the same high quality event programmes to help you meet your CPD requirements online – beginning 5 May Climate change and ESG specific practices Climate Change Preparedness Speaker: Stefan Lundberg – Cardano

Deep dive into liquidity risk management–developing a robust framework Speakers: Sam Tufts and Ed Hawkins – EY

ESG and climate change readiness – Putting it into practice Speaker: Ross Evans – Hymans

Asset specifics

Exclusions vs Engagement Speaker: Adam Ruddle – LV=

ESG forays into fixed income : Alpha factor and not sacrifice Speaker: Akshay Dua – Mercer

Macro, scenarios and portfolio construction

Implementing ESG principles within Real Asset Investment Decisions Speakers: Munawer Shafi and Stanley Kwong – Aviva Investors

Tackling climate change risk, one scenario at a time Speaker: Jonathan Cross – Mercer

Sustainable private equity investment, an insurer’s free lunch?

Speakers: Punil Chaubal and Daniel Banks – River and Mercantile Solutions

Resilient portfolio construction: incorporating ESG and climate change Speakers: Martijn de Vree, Wai Lee and Hannah Skeates – Wells Fargo

Incorporating Climate Change in Analytical Tools Speaker: Miroslav Petkov – Parker Fitzgerald

To find out more and to book please visit:

www.actuaries.org.uk/FinanceandInvestment2020 www.theactuary.com

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Get involved and help shape the future of your profession

Develop personal and professional skills as part of your lifelong learning Build and enjoy a strong and active network of peers Raise your proďŹ le and the proďŹ le of a particular area of your expertise Give something back and encourage actuaries of the future.

Browse the latest volunteer vacancies:

www.actuaries.org.uk/volunteervacancy

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Upfront News I F O A O P E R AT I O N S

Up for the challenge CEO of the IFoA Stephen Mann shares how the organisation is adapting to the COVID-19 pandemic When I joined the IFoA in January this year, I knew it would be important to get up to speed quickly: to meet and understand our members, forge trusting relationships with our volunteers, and work with Council to develop and communicate a compelling vision for the future that would inspire my colleagues to meet the needs of both groups.

What seemed, in theory, to be quite straightforward and obvious at the outset has turned out to be a little different in practice. I was pleased to get my feet ‘under the desk’ for the first two months or so, but little could I have imagined that the tail end of the first 90 days or so of my tenure would unfold as they have. The effects of COVID-19 have been devastating, and at the time of writing it is difficult to grasp how wideranging they may eventually be. While it may not have been the catalyst we wanted, the pandemic has also accelerated, out of necessity, some of the things that had already been in other people’s minds, as well as my own early plans, and I am grateful for the opportunity to highlight some of these.

Remote working Our colleagues in Asia have been working remotely since January; in mid-March, colleagues across our three UK offices joined them, so that all 170 employees of the IFoA are now conducting our daily business from their homes. Add to this the many colleagues who have caring responsibilities, and we are viewing workplace flexibility in an entirely new way. While the nearly-overnight adjustment to these new arrangements has not been without occasional hiccups (we are especially grateful we tested our setup and systems with a business continuity exercise earlier in March), it has shone a light on how we can best support our members in the future – whether or not that involves our staff being located in a traditional office space. www.theactuary.com

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Exams

Events

Within a week of finding that it was no longer safe or feasible to offer our exams in exam centres worldwide, we were able to offer the majority of our April exam diet online. We had some basic capability in place already, but we scaled it up very quickly and I was very proud to see how volunteer and employee teams alike pulled together to ensure we could offer this to our members so quickly. Doing this has also helped us to protect exam capacity for our September diet. We look forward to learning and refining our approach to online exam administration in the future, particularly as it has been important to stress to students that taking exams in April this year is voluntary.

Many of our events – both large-scale and niche – have been moved online. While the ways we deliver this kind of content may continue to evolve, what remains unchanged is our commitment to providing valuable thought leadership and a meaningful participant experience.

Action Speaking of content, you will no doubt have seen mention of the IFoA COVID-19 Action Taskforce (ICAT), chaired by incoming president-elect Dr Louise Pryor. Working in close partnership with president-elect Tan Suee Chieh, we are ensuring that the unique contributions that actuarial professionals can give in this unprecedented time are offered up for the benefit of others.

Engagement It was evident to me, even before joining the IFoA, that our understanding and engagement with employers of actuaries was limited and yet presented both a huge risk and opportunity for us. Many of employers have also expressed the challenges they and their organisations are facing at this time, and understandably so. We recently launched a virtual ‘employer roadshow’, where we are spending significant time understanding what our major employers need and how the IFoA can prove a valuable partner in navigating a way forward for the actuarial profession.

These are just a few of the ways our volunteers, members and employees are coming together in a time of extraordinary challenge. But this challenge presents opportunity, too – and I thank you all for the opportunity to be part of this important work as we go forward together. My job is to support you in helping to ensure that the IFoA is best placed for whatever world we find ourselves in once this moment has passed.

MAY 2020 | THE ACTUARY | 9

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LETTER OF THE MONTH

Have your say y

Upfront News More comments are posted online about news stories published on www.theactuary.com

Taking re research seriously Jon on Spain’s letter (April) refers refer to my sessional paper per on monitoring DB pension pensi funding. This concerned concer erned a valuation that ‘takes ‘tak stock’ of the financial al position of a scheme (rather than budgeting I support ng and investment strategy). stra liabilities based on placing a value b va on cashflows independent independeent of whether they are a assets or liabilities (I ( recognise there are ar issues, eg credit risk and illiquidity, illliquidity, so there isn’t isn a ‘pure’ answer).

Using a (deemed) discount rate (d deemed) risk-free dis produces compare reasonably with es liabilities that comp the insurance insu urance buy-out cost (there (th are reasons for differences). ere rences). Financial economics econom covers a wider range nge of issues; that is a different ere debate.

A major problem is that, contrary to financial con economics, many pensions actuaries regard act liabilities as regulatory-defined ne technical provisions, meaning that their value depends on investment strategy. But a new asset mix with a

higher estimated rate of return doesn’t really reduce the liabilities, which depend on salary, service, mortality etc.

I would expect trustees to take stock of scheme finances with a valuation using a ‘risk-free’ discount rate. That is consistent with several papers in the British Actuarial Journal. But it is missing from The Pension Regulator’s (TPR) new proposal that the sponsor covenant is relevant for technical provisions, which surely cannot then be regarded as scheme liabilities, a point I would expect the Pensions Board to make to TPR. Pensions actuaries’ practice has ignored actuarial research for too long already; it must change if we are to be regarded as a profession that is serious about research.

CHRIS O’BRIEN 15 APRIL 2020

ILLUSTRATION: ISTOCK

Different approaches to pen pension scheme funding I write in response to Jon Spain’s letter of 16 March, where he states that he does not think it is possible that ‘evidence can be produced supporting the applicability of financial economics to long-term entities such as DB pension schemes’.

Financial economics, or at least the part of it that I think Jon is mostly referring to, is a group of abstract theories that can provide conceptual insights that are useful in some forms of financial analysis. The degree of usefulness of these insights will ultimately be a matter of judgment for the expert practitioner who has sufficient knowledge of both the theory and the potential domain of application for the insights it offers. But I would argue that the fundamental actuarial questions that arise in the financial management of DB pension schemes do not require particularly advanced or complex economic theory.

The fundamental question that must drive the financial analysis of DB pension schemes www.theactuary.com

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is: what is the purpose of the advance funding of DB pension schemes? This question has been debated by actuaries for as long as DB pension schemes have existed (and, indeed, long before the key theories of financial economics were developed). To my mind, there are two basic answers to this question: to generate future asset proceeds that can fund liability cashflows as they fall due; or to ensure sufficient assets are currently available to fund the transfer of accrued liabilities to a third party in the event that the sponsor is no longer willing or able to provide further funding for the cost of those liabilities. These two answers imply radically different approaches to the assessment of funding adequacy and the setting of pension scheme investment strategy. These implications are neither hard to identify nor reliant on advanced economic theory.

I am not a DB pension practitioner, and this may be an over-simplification, but it

seems apparent that for many years the methods of UK pension actuaries, perhaps at the behest of their clients, have tended to be driven by the first of these two answers. The second answer would appear to have more direct relevance to the financial security of pension fund members’ benefits. If the second answer had been adopted more readily by our profession and the DB pension entities that we have advised, I think a reasonable case may be made, albeit with the benefit of hindsight, that UK DB pension schemes would, in aggregate, be likely to be in a healthier financial position than they find themselves in today. Of course, the funding adequacy of DB pension funds is not a UK-specific issue, and I suspect a similar point could also apply to the DB pension fund positions that may be found in a number of other countries.

CRAIG TURNBULL 11 APRIL 2020 MAY 2020 | THE ACTUARY | 11

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Features Interview

PHOTOS: SARAH COLLIN

Climate scientist and mathematician Dr Emily Shuckburgh talks to Chris Seekings and Sharad Bajla about modelling the future impacts of climate change, and how actuaries can help 12 | THE ACTUARY | MAY 2020

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Features Interview

T

he overwhelming majority of scientists agree that man-made climate change is real and threatens to radically change both the environment and society.

Rising sea levels, frequent extreme weather and vanishing ice sheets are just some of the impacts predicted under a business-as-usual scenario.

Dr Emily Shuckburgh, mathematician, climate scientist and director of Cambridge Zero, explains how these forecasts are made, the challenges behind designing accurate models, and the role actuaries can play in helping predict future outcomes.

The volume of water in the ocean expands when heated, and ice that was once on land finds its way to the ocean due to melting; in this way, sea levels have risen by around 25cm since the 1900s. Perhaps the most impactful change scientists have observed, though, is the frequency and intensity of extreme weather events such as heatwaves, flooding and wildfires. “Whenever there is an extreme weather event, the scientific community systematically asks: ‘Has climate change increased the risk of these events occurring?’”

Dr Shuckburgh says. “In the last couple of years, we’ve been able to say that that risk has increased, and in many instances, increased manifold – that’s been the current impact of climate change.”

First, the facts Cambridge Zero brings together all the engineers, scientists, lawyers and social scientists responding to climate change at the University of Cambridge, with Dr Shuckburgh responsible for coordinating this effort. Although many unknown variables go into forecasting the scale and urgency of the issue, she first outlines various “observational facts”.

“We know from the ice core records that over the last almost million years, carbon dioxide levels have ranged between 180 and 280 parts per million in the atmosphere,” she explains. “It’s observational fact that carbon dioxide levels are now well above 410 parts per million, grossly exceeding historic levels.”

Scientists say temperatures are rising thanks to the greenhouse effect, with gases trapping heat in the atmosphere and preventing it from escaping into space. “It’s also observational fact that the average temperature is now about 1.1°C warmer than it was 150 years ago, before the Industrial Revolution was really starting to ramp up. We know that we’ve changed the atmosphere in terms of its chemical composition and that has had an impact in terms of temperature.”

Making models She explains that, to forecast future impacts, scientists first have to appreciate the physics of the climate system. “Both the atmosphere and the oceans are fluids sitting on a rotating sphere that is subject to gravity,” she says. “Those are the key inputs if you want to build a model of how the atmosphere or oceans evolve. Just writing down the physical equations describing that is at the heart of every weather forecast or climate model.”

There are, however, other key inputs when predicting the climate, such as the equation for how energy from the sun moves through the atmosphere. “We need to understand how energy from the sun, which is shortwave radiation, moves through the atmosphere compared to the longwave radiation that is reflected back from earth,” she explains. “The difference between that is the greenhouse effect.”

There are also limitations to how much detailed data scientists can put into the model. Processes behind the evolution of sea ice and formation of clouds cannot all be directly included in computer models. “We have to use statistical representations of

Sea levels have risen by around 25cm since the 1900s

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Features Interview

them instead and look at the patterns of change,” Dr Shuckburgh says. “It’s a bit like the resolution of a digital photograph. The higher the resolution that we have, the more information we have, the greater fidelity of the model, but there’s a limit because we have limited computer power.”

Looking back Actuaries use a process of backtesting when modelling life expectancy and other future outcomes, comparing previous predictions with what has actually happened. Climate scientists use a similar process. “We will develop our models and then run them over the last century and compare them to actual temperature changes. We will then also test models completely out-of-sample, and look to see they have been able to replicate very different climates.”

Climate scientists test models in so many ways, and there are so many aspects to the climate system, that improving these models is “often very, very complicated”. “It might be that there’s a systematic difference in the temperature profile in the South Atlantic in the models compared to the real world,” Dr Shuckburgh explains. “That might be because clouds have been misrepresented in the region, which is having a knock-on impact on oceans. Trying to trace back how you can improve one aspect of the climate model involves looking at how the model is represented through the physics.”

Data from satellites is now available to scientists on a daily, or even hourly, basis, and modelling centres around the world each have marginally different ways of representing the physics. “They’re all slightly different and come up with slightly different projections that then give a further range in terms of our predictions,” she says. “Of course, the other key thing that is uncertain is what our future emissions of greenhouse gases will be.”

Known unknowns

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Machine learning One way that scientists have been trying to quantify known unknowns is through artificial intelligence (AI) and using machine learning algorithms with strong mathematical underpinnings, including to automatically interpret satellite data. This can help not only with climate forecasts, but also with predictions about the world generally. “It might be being able to count the number of a particular species of whale from space and to see how those numbers are evolving in the context of climate change, or the evolution of unplanned settlements around growing cities in developing countries.”

Air quality sensors and wearable technology can also be used to inform AI about indoor and outdoor air pollution as people move around in their everyday lives. “We are integrating climate-related datasets with very different epidemiological datasets to understand the relationship between different weather conditions and health outcomes,” Dr Shuckburgh continues.

“We can then use those two together to try and predict how climate change might alter our health outcomes.”

We speak to Dr Shuckburgh as many countries go into lockdown amid the COVID-19 crisis. “Trying to understand the ways in which climate change might impact how different diseases transmit between humans, animals and plants and so forth is a key area of research that many people are involved in.”

She says that coronavirus could provide some relief for the environment in the short term as restrictions on air travel and falling oil demand bring down global emissions. “It is a very direct and immediate impact just in terms of this year’s CO2 emissions – I suspect this year they will be low because there’s lockdown,” she continues. “How that plays out in the longer-term is very uncertain.

If this crisis can be used as an opportunity for restarting the global economy on a cleaner trajectory, then that might be at least one fruitful outcome from what is currently very much looking like a hugely concerning global crisis.”

The average temperature is now about 1.1°C warmer than it was 150 years ago. The world is on course to exceed 3°C of warming by the end of the century

Scientists don’t have one single prediction for the climate. There are a range of different scenarios, and it is difficult to incorporate what Dr Shuckburgh describes as the “known unknowns”. These could include the collapse of vast ice sheets covering Greenland and West Antarctica, the rapid dieback of the Amazon rainforest, or the melting Arctic releasing vast quantities of methane, a powerful greenhouse gas, into the atmosphere. “There are a set of high-impact but low-probability aspects of the climate system that we know might occur, but it’s difficult to incorporate those formulae within predictions – West Antarctica has three meters of sea-level rise equivalent within it.”

Dr Shuckburgh explains. “Then, of course, there’s a whole set of unknown unknowns that we have no possibility of being able to include. As our scientific understanding evolves, then more and more things get moved from the unknown unknowns into the known unknowns and so forth, helping quantitative understanding.”

14 | THE ACTUARY | MAY 2020

Climate scientists look for trends, rather than isolated changes, and another potential known unknown involves the international pledges made by countries to cut emissions. Even when these commitments are incorporated into models, the world appears to be on course to exceed 3°C of warming by the end of the century, warns Dr Shuckburgh. “That’s the state of play, and then we need to understand what the implications of those temperature rises are.”

This area could be of particular interest to insurers who might be looking to devise flood or fire policies. “We’re seeing an increase in flood risk because a warmer atmosphere is able hold more water vapour, which means the air is wetter and more prone to heavy rainfall events,” she says. “Damage caused by tropical cyclones tends to be through storm surges, and with rising sea levels, storm surges are able to penetrate much further inland. We’re very much seeing an increase in the frequency of heat waves in some few parts of the world, too, and that could be a contributing factor to wildfires.”

www.theactuary.com

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Features Interview

Actuarial opportunities As director of Cambridge Zero, Dr Shuckburgh understands the importance of drawing on expertise from various different disciplines, and always wanted to use her mathematical background for causes outside academia. “Mathematics is very beautiful in its own right, but I was very keen to use maths for useful real-world purposes,” she explains. “I started being involved in climate-related research right at the start of it becoming an international political topic, and it’s been a convergence of different interests.”

The subject is of increasing interest to actuaries, too, as it becomes clearer how climate risks threaten to impact health, weather and the global economy. Dr Shuckburgh believes there are “huge opportunities” for actuaries who wish to apply their skills in this area. “Something which is very relevant to people with a mathematical background is understanding how machine learning and data science methods can be applied,” she continues. “There are a lot of exciting opportunities there. My work is involved with quantifying risk in different dimensions, and I think a huge number of opportunities are at the interface of climate and actuarial studies.” www.theactuary.com

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THE CO-MORBIDITY QUESTION Would the majority of COVID-19 victims have died this year anyway, as some have suggested? Matthew Edwards and Stuart McDonald investigate

T

here has been comment and speculation in the media about the actual and likely future life expectancy of COVID-19 victims – often with an implied downplaying of the impact of the virus, as ‘they were about to die anyway’. This became a perceived official view when Professor Neil Ferguson said in a session with the UK Parliament’s Science and Technology Committee (25 March) that “the latest research suggested as many as half to two-thirds of deaths from coronavirus might have happened this year anyway, because most fatalities were among people at the end of their lives or with other health conditions”.

“Two thirds of coronavirus victims may have died this year anyway, government adviser says.”

The Daily Telegraph

given COVID-19’ (ie the case fatality rate, [CFR]), along with equivalent probabilities of deaths from other causes. If the CFR is very low compared with the ‘other causes’ probability of death for an individual, it follows (via Bayes) that their death in any year can be attributed largely to natural causes, not COVID-19.

The other argument for this case arises simply from observing that many of the deaths reported from COVID-19 have been deaths of people with existing medical conditions. For instance, 17% of Italian COVID-19 patients in intensive care had a history of diabetes, and 49% had hypertension (bit.ly/2KhdrsP). (We will take a look at some equivalent UK intensive care [ICU] figures later.)

“There is a big difference between COVID-19 causing death, and COVID-19 being found in someone who died of other causes… It might appear far more of a killer than flu, simply because of the way deaths are recorded.”

Dr John Lee, professor of pathology and NHS consultant pathologist (retired), The Spectator

How this view has arisen The strongest case we have seen for the ‘they would die soon anyway’ position is based on use of Bayes’ theorem. Most readers will realise how this will apply here: we can calculate ‘probability of COVID-19 causation given death’ from an assumption about ‘probability of death

The reporting of such aspects, along with other risk factors such as obesity or smoking, has so far (with data emerging only recently) been ‘crude’ in the sense that it has not been adjusted for age.

However, deaths from COVID-19 have generally been occurring at high ages.

For instance, in Italy, 84% of male deaths have been in those above the age of 70 (ISS statistics as of 26 March 2020), while, at the time of writing, 93% of deaths in the UK have been in those older than 65. At these ages, many people will have some form of ‘existing condition’. For instance, the 2018 Health Survey for England (bit.ly/2x3oByr) shows that among those aged 65 and over, 29% have hypertension, 16% have diabetes, and 30% are obese.

While the differences between countries reduce comparability, it is clear that the prevalence of existing conditions at high ages is not massively out of line with the proportions being seen among those dying from COVID-19.

Typical life expectancies of impaired lives When considering the life expectancy of people with conditions such as those above, a useful approach is – do they have just months to live, or many years?

For this, we have made use of a proprietary underwriting engine that calculates life expectancies for people according to age, gender, disease history, lifestyle (body mass index, smoking habits) and various other factors. The engine was calibrated to a rich data set, has been used by, or on behalf of, most of the UK’s annuity writers, including impaired life writers, and has been validated extensively against market data.

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FIGURE 1: Life expectancy bands for obese male smokers. Life expectancies are shown in broad bands for simplicity. None are below one year.

AGE

TYPE II DIABETES

COPD

HEART DISEASE

50

> 15

> 15

> 15

60

10-15

> 15

> 15

70

5-10

10-15

10-15

80

3-5

5-10

5-10

90

1-3

1-3

5-10

By looking at men rather than women (men having a lower life expectancy), considering the ‘obese smoker’ subset of these impaired lives, and assuming no future mortality improvements, this table shows a worst-case scenario. Even with this extreme selection, we do not see life expectancies below one year, and it takes a lot of ‘forcing’ the factors in the engine to find life expectancy as low as two or three years.

Of course, life expectancy is an average, and some of these cases would still die during the course of a year in the absence of COVID-19. In most instances, though, the number is not high. For instance, Figure 2 shows the distribution of deaths for a cohort of 60-year-old obese diabetic male smokers as per the above table – fewer than 3% are expected to die in the next twelve months.

UK intensive care experience ICU supports failing organs while a patient’s underlying illness is treated, and is usually only helpful when the patient has a potentially reversible condition.

The Intensive Care National Audit and Research Centre’s (ICNARC) report of 17 April 2020 (bit.ly/3bzWGoI) on COVID-19 critical care patients and their outcomes presents a useful profile of the 5,578 patients recorded. Figure 3 18 | THE ACTUARY | MAY 2020

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FIGURE 2: Expected distribution of deaths for 60-year-old obese diabetic male smokers during the next 30 years. Fewer than 3% are expected to die within one year.

Percentage of deaths

5%

4%

3%

2%

1%

0% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

Years FIGURE 3: Age and sex profile of UK ICU COVID-19 patients.

25%

20%

Percentage

Using this underwriting engine, a life expectancy below a couple of years can be found only by assuming acute cancers, or other serious but less critical conditions at ages above 90, or such conditions conjoined with adverse risk factors (eg smoking) from the mid-80s.

For anything else, life expectancy is typically five years or more. For instance, Figure 1 shows the life expectancy for obese male smokers of different ages, with additional various disease combinations.

Chronic obstructive pulmonary disease (COPD) is of particular interest in the context of a virus that kills via a pneumonialike mechanism causing respiratory failure.

15%

10%

5%

0% 16-30 KEY:

Male

30-39

40-49

Female

summarises the age and sex profile of these patients.

Most patients (72%) are male and, on average, 60 years old; 38% are obese (BMI > 30), compared to 30% in the general population. Just 7% have very severe comorbidities and 7% needed some assistance with daily activities prior to contracting COVID-19. (ICNARC also provides corresponding numbers for normal viral pneumonia cases during the past two years, where we see 24% of patients with very severe comorbidities, and 26% needing assistance with daily activities).

It seems clear from this high ratio that the majority of deaths can be regarded as being due to COVID-19, not to other conditions.

For reference, of the actual deaths detailed in the report, only 9% were recorded as occurring in the presence

50-59

60-69

70-79

80+

Age

of severe comorbidities. In the next section, we consider whether that statistic is representative.

Are ICU patients representative?

ICU patients are obviously not representative of the general population – it would be worrying if they were – but, other than the severity of the disease, are they broadly representative of all those known to have COVID-19? In other words, is the triage process applied to COVID-19 sufferers likely to have removed, for instance, those deemed incurable or too frail, given that the numbers of potential ICU patients may exceed the number of spaces?

We can consider the impact of triage by examining the COVID-19 Decision Support Tool, believed to be in use by the NHS at the time of writing. This sets out a points-based www.theactuary.com

27/04/2020 14:43

Features Life system to help clinicians prioritise patients who are most likely to benefit from intensive care. Core to the assessment is a Clinical Frailty Score, ranging from ‘1 – Very Fit’, through ‘4 – Vulnerable’ up to ‘9 – Terminally Ill’. Most people without life limiting conditions would score 1-3. Points are added to this score based on age/sex and certain comorbidities as indicated in the tables below (the full co-morbidity list is not shown for simplicity).

FIGURE 4: Points table for age/sex from COVID-19 Decision Support Tool.

AGE

POINTS (MALES)

POINTS (FEMALES)

<50

0

50-60

1

0

61-65

2

1

66-70

3

2

71-75

4

3

76-80

5

4

>80

6

5

-1

FIGURE 5: Points table for medical history from COVID-19 Decision Support Tool.

CO-MORBIDITY

POINTS

Cardiac arrest in last three years

2

Chronic condition leading to three or more hospital admissions in last year

2

Hypertension

1

Diabetes mellitus requiring medication

1

Various other conditions

1

Individuals whose score exceeds 8 would not typically be recommended for ICUbased care, though of course clinical discretion overrides. While it is clear that there will be some selection effect, the majority of patients below age 75 and a significant proportion of older people will be recommended for ICU-based care where necessary. We can cautiously conclude that the current ICU population is not highly selective and therefore the disease is making significant numbers of individuals who were otherwise fairly healthy (and certainly not ‘at death’s door’) seriously unwell.

This conclusion is consistent with our discussions with two critical care consultants, who have confirmed that COVID-19 ICU patients are broadly representative of general hospital patients (albeit with the most and least healthy tails of the distribution removed) and that “COVID-19 patients admitted to our ICU are generally healthier than our normal patient population, but despite this, have a high mortality. People are dying in middle age, with many years ahead of them.” www.theactuary.com

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While it is very likely that other conditions or unhealthy lifestyles weaken the immune system and increase the chance of death from COVID-19, that is quite different from attributing the deaths to those other conditions.

“This is a horrible, relentless, nasty disease in its severe form… They are NOT dying from comorbidities. They are dying from COVID-19.”

Sanjum S Sethi MD, MPH

Another perspective Another valuable perspective on the issue can be had by using the expected first-year mortality rates from the underwriting tool mentioned previously, applying these to a model point representing the ICU population described above, and working out how many would be likely to die this year purely because of their existing condition or risk factors.

For this we have taken a 60-year-old (the approximate mean age of the ICU group), but assumed an obese male diabetic smoker in order to have an ‘extra unhealthy’ individual (as we did for Figures 1 and 2).

Assuming 10 months (ie 1 March through to end of 2020) of mortality exposure applied to 5,578 lives gives: • Expected deaths: 111 • Actual deaths: 1,445 Note that the expected result is likely to be an overestimate, because of the fairly extreme model point used, while the actual deaths will be an underestimate, as a majority of the patients are still in critical care. Thus, the real Actual:Expected ratio is likely to be greater than the 1,445:111 ratio (ie a ratio of 13:1 of COVID-19 deaths to co-morbidity-related deaths) shown.

We can see from this that few of the ICU intake would be expected to die because of their other conditions, and that this expectation is backed up by the ICU data currently available.

Unfounded claims As with much of the work on COVID-19, the question cannot be answered fully and precisely at the moment. The issue will be better resolved once we are able to compare total deaths during a reasonable period against total deaths during the same period in previous years. For the UK, data that will

allow a meaningful comparison is only just beginning to emerge.

So far, we can say that more deaths were recorded in the week ending 3 April than in any other week during the past 20 years.

Death rates were 59% percent higher than the equivalent week in 2019. By early May there should be a reasonable body of evidence, and EuroMOMO data will provide equivalent Europe-wide comparisons.

However, even with such data, it is likely that some may say, ‘many of these deaths are because of, not from, COVID-19’ in the sense that healthcare resources have been deployed from, for instance, cancer care to COVID-19 care. Others will say, ‘their deaths are just accelerated from next year’.

Recapping the main arguments, COVID-19 does seem to disproportionately affect people with chronic health problems.

On the other hand, while it affects the old more than the young, and a large proportion of the elderly will have chronic health problems, only a tiny fraction of impaired lives have life expectancies of the order of one year. Therefore we feel it is unfounded to claim that a large proportion of those who have died from COVID-19 in 2020 MATTHEW would have died in EDWARDS any case this year. is a director at Willis This claim, in Towers Watson, addition to being where he leads the life demographic risk false, is also group. He is chair of dangerous from a the CMI public health perspective: it understates the risk from the disease, endangering adherence to government policy STUART on social distancing.

MCDONALD It also seems very is head of callous, encouraging Demographic a ‘why should I care?’

Assumptions and attitude to the Methodology at people in question Lloyds Banking – in our view, people Group, and sits on the CMI’s Executive who would (in the Committee as CRO great majority of cases) be alive now in the absence of the coronavirus, and would probably still be alive in several years’ time.

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FIGURE 1: The two orthogonal axes represent the two neurological systems that contribute to decisionmaking: emotion and cognition.

INTENSE

PRUDENT

ot Em Co g

ni tio

n

n io

CAREFREE

COMPOSED

FIGURE 2: The interaction between emotion and cognition generates eight risk types.

WARY INTENSE

N

PR

U

D E L I B E R AT E

E XC I TA B L E

T

IN

TE

WA RY

SE

EN

AXIS

D

SE O

FR

EE A DV

CO

ENTUROUS

M

P

FIGURE 4: The prevalence of the eight risk types is remarkably even.

WARY

PR

UD

T

D E L I B E R AT E

EF

RE E

Highly sensitive risk antennae, combined with their passion for maintaining order, will ensure that they are potent advocates for their viewpoint They may be driven to the point of exhaustion by worry and their efforts to make an impact on immovable forces to get things done

E XC I TA B

LE

TE

E NS

EN

These people are risk averse in two different ways: they will be fearful about infection, but also extremely troubled about being unable to make sense of what is going on. This makes them astute and critical followers of official pronouncements, media opinion and social media trends. They know their stuff and argue their case with passion.

ADVENTUROUS

FIGURE 3: Emotion influences sensitivity to danger, insecurity or loss; cognition is about ‘wanting to know’ and sensitivity about incoherence, ambiguity, dysfunction or chaos. Scores on these underlying scales position each individual within the compass.

D

THE ‘WARY’ RISK TYPE

COMPOSED

CAR

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1

CAREFREE

RE

20 | THE ACTUARY | MAY 2020

unwrapping established ideas in the hope of discovering new and exciting opportunities.

The Risk Type Compass is a psychometric personality assessment that models the ways we cope with risk. It is a continuously incremented 360° spectrum of risk dispositions, segmented into eight types.

How will each of these types be facing up to the pandemic, and how will they be coping?

Starting from the top of the compass, each risk type merges with the next.

DELIBERATE

CA

T

he events of recent weeks are unprecedented, and the disruption to our routines is profound.

People experience risk, react to it and make decisions in different ways, and risk dispositions vary from person to person.

COVID-19 manifests with different degrees of severity, but the risk is something we must all deal with.

As outlined in a previous feature, bit.ly/3bOSQbb, individual risk dispositions reflect an interaction between our emotions and the way we make sense of our world. Both are fundamental to decision-making and behaviour. In terms of emotionality, we range from those who experience the world as treacherous and threatening, to those that are emotionally unresponsive and see danger as just another problem to be dealt with. In terms of cognition, people vary from one extreme – those who need to resolve uncertainties about their world for things to add up – to the other extreme, those who revel in uncertainty and ambiguity, probing and

EXCITABLE

IN

In a follow-up feature on risk management and personality, Geoff Trickey looks at the significance of risk types in personality in the response to COVID-19

PRUDENT

AD

VE

NTU

RO U S

CO M

PO

SE

D

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2

PRUDENT RISK TYPE

Not especially emotional, their main concerns are about being organised and knowing what is going on; uncertainty will be a troubling discomfort. The daily drip, drip of information will be a source of acute discomfort and frustration. They will be checking the figures and keeping up to date with developments and statistics across the globe. As things become more predictable, they will experience considerable relief.

They will be a pandemic information resource for their friends and family.

Their ability to seek out and discern solutions means they will always be reliably well informed Having researched and decided, their viewpoint will become totally inflexible

3

DELIBERATE RISK TYPE

They hate being unprepared and will be profoundly unsettled by all the uncertainty, but this risk type is also unemotional and shows little anxiety. They view problems calmly and logically – something to solve rather than to fear. In a situation that is largely out of their hands, they will be trying to anticipate immediate consequences, trends and outcomes. During lockdown, the expression of these thwarted instincts may be displaced into obsessive attention to domestic organising.

Their search for coherence and order will help to ensure that policies are enacted In extreme and prolonged circumstances, they may become obsessional

4

Their unemotional focus on practicalities may make them seem insensitive

5

They will always focus more on the opportunities than the dangers Their unconventionality and enthusiasm will be unnerving for some

CAREFREE RISK TYPE

Relishing change and new opportunities, they see life as an everchanging panorama. Finding routine and continuity monotonous, they will always look for ways to avoid repetitive tasks. Their ideal roles give them freedom and variety, and commitment may be transient. In this crisis, they will feel concern and compassion, and bring refreshing and novel ideas to the table. They may also experience a heightened awareness and excitement.

The energy and excitement they bring into any operation will be a morale booster Routines and procedures associated with their role are likely to be challenged

COMPOSED RISK TYPE

Nothing fazes them. A calm imperturbability is their defining feature.

They seem always on an even keel, without the usual peaks and troughs. Situations are considered unemotionally, practically and logically, but their risk radar is weak. In any crisis they will often be the last to react, and their responses may seem low key. In the case of possible contagion, their optimistic fearlessness may put them at risk.

Their imperturbability will be a calming and reassuring influence

7

Their aims are often unconventional, but also aspirational and creative Their creative ideas may prove too eccentric or impractical

ADVENTUROUS RISK TYPE:

They want to be in command of their own destiny and will feel hugely frustrated by the imposed restrictions. They believe that with an element of good fortune, things generally turn out well. Their lack of deference to consensus or convention frees them up to pursue imaginative solutions.

They are intrepid big-picture people who have an eye on the disruption of business and the needs and opportunities that might arise in the aftermath.

6

in projects that are important, notorious or worthy in some way.

EXCITABLE RISK TYPE

They are never sure whether to listen to their head or their heart. Emotionally they are anxious and apprehensive, so risk averse from this point of view. But cognitively they positively embrace uncertainty and are excited by chaos and the opportunities that might arise. From this point of view they are risk takers. These are the ambivalent tensions of a stereotypic ‘artistic temperament’: high emotional sensitivity and precarious lifestyle. They seem to seek meaning in their lives through involvement

8

INTENSE RISK TYPE

The strongest examples of this risk type feel things in deeply emotional and complex ways. Persistent worriers, their risk antennae will have been giving them little rest; they react strongly to things others find unexceptional and are difficult to placate or reassure. They are likely to be struggling more than others with the threat posed to them and their loved ones. They find it difficult to trust others and are vulnerable to the sensationalised interpretations of the media. During this pandemic they will have been severely stressed.

Their anxiety and vigilance will serve well in protecting themselves and others Their views may be unrealistic and exaggerated by their anxieties

THE AXIAL GROUP These people score close to the mean on both the emotion and cognition scales. Risk dispositions will be varied and defined at the sub-theme level of analysis. Within a team setting, the central positioning of this group provides a perspective on the balance and dynamics of that combination of Risk Types.

This independence qualifies them uniquely as arbiters and conciliators – key roles in group decision-making.

This group are best placed to objectively appreciate team balance and dynamics They may find themselves caught GEOFF TRICKEY in the crossfire is managing director of Psychological between extremes Consultancy Risk Type descriptions are generalised interpretations based on research and are used here solely for illustrative purposes.

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C

oronavirus is one of the greatest challenges the modern world has faced. From its macroeconomic consequences to the human mortality impact and mental health challenges of self-isolation, it has the potential to impact the lives of nearly everyone on the planet.

Huge pressure is being put on healthcare services, and governments are having to act pragmatically, changing policies daily. For business, the watchword is ‘agility’, adapting to new ways of operating to protect the health of the workforce while trying to maintain continuity for clients, customers and business partners.

As we digest the news and the impact it is having on us, our families and communities, actuaries must also discharge the responsibilities and professional duty we have to the companies and societies we

serve. The impact to our respective businesses and wider society comes from multiple and varied sources.

Business disruption impact As white-collar workers, the go-to business interruption solution is working from home. As we settle into the new ‘normal’, specific home-working challenges for actuaries include mobile computing power (some companies allowing actuaries to take desktop and other equipment home, as well as laptops) and new communication challenges, including with those teammates and colleagues we would normally communicate with on a real-time, face-to-face basis.

Thankfully, this crisis has reached us in the broadband age, and in most cases the communication solutions are excellent. While conference call facilities and servers are challenged by the volume of traffic, and family interruptions on work video calls are now commonplace, those businesses that stress tested their business continuity and contingency plans will be grateful. When this pandemic is over, the largest work from home exercise of all time is likely to change the way we work forever. Overall, the business disruption impact seems manageable and rather minor in the context of the unfolding crisis.

A NEW WORLD ORDER Alistair Chamberlain, examines the impact that COVID-19 is having on business, the actuarial profession and the way we work

22 | THE ACTUARY | MAY 2020

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Business volumes impact In Q1 2020, consumer behaviour changed in a way we couldn’t have imagined in January. Sorting out one’s personal finances, often seen as a ‘job for tomorrow’, is even further down the priority list in the immediate term. A long face-to-face meeting with a complete stranger – a standard element of financial planning in many places – is currently unimaginable. Actuaries need to distinguish between short-term disruption and long-term paradigm shifts, bearing in mind that the long-term change in trend is likely to be facilitated by our nowintimate familiarity with remote connectivity. Financial planning via video conference is likely to be rapidly accepted and normalised.

Consumer appetite for insurance is also likely to change, with awareness of and sensitivity to potential life events at an all-time high, and an increasing demand for new types of cover. People may start to think about their policy, and the cover provided, in more detail – a number of customers have had travel insurance claims rejected as a result of government advice regarding travel, even though customers reasonably changed their plans. In Asia, insurance companies saw strong demand immediately after the SARS crisis. In some markets, we are already seeing a large increase in uptake of protection products that consumers have, in the past, struggled to engage with.

change people’s willingness to pay for stronger cover, or if governments will accept that they effectively underwrite unexpected universal loss events such as COVID-19. Either way, it will provide a test for insurance industry bodies, insurers, reinsurers and intermediaries, determining how far they are willing to go to define what they are prepared to protect individuals and businesses from during an ‘unexpected, unforeseen event’ for a customer.

While mortality cases make vivid images and headlines, as an insurance mortality claims event, the experience has so far not been extreme; even medical insurance claims are limited, with treatment in most countries restricted to government-controlled facilities.

The mortality impact is focused on some of the most vulnerable groups of society, who are either aged, and therefore largely not in the insured population, or who may have struggled to get insurance in the past due to inherent health conditions. The latter group especially may be one where we have questions to answer about access to insurance cover.

“The long-term implications of the crisis seem likely to be profound – maybe more so in the West, where this is the first major pandemic for 100 years”

Market impact The initial phase of the crisis, when cases appeared to be limited to Asia, was largely shrugged off by the financial markets. The current phase, in which the impact is hitting home in Europe and North America, has sent markets spiralling, calling the valuation of longterm assets into question. This, in turn, quickly generates questions about capital measures, what the numbers mean and what actions companies should take. As actuaries take this in, they need to bear in mind the limitations inherent in the bases and models, which are now being operated with previously unseen and unforeseen parameters. As well as understanding and relaying all this, actuaries need to consider the macro context and the underlying, sometimes implicit, limitations. Helping companies make sense of the numbers in fast-moving and uncharted territory is a moment when all of our skills, knowledge and judgment are put to the test.

ILLUSTRATION: ISTOCK

Claims impact So far, the insurance claims impact has largely been felt on general insurance product lines, with a massive incurrence of travel cancellation claims and business disruption cover potentially triggered. Indeed, swathes of suppliers in the UK responded to the crisis by completely withdrawing travel insurance products from the market before the government imposed travel restrictions.

In some markets, policy clauses will often exclude governmental action (eg forcible closure of businesses, even when they are not directly impacted) or can limit exposure with respect to new viruses.

Insurance that doesn’t deliver at the moment of truth, while being actuarially logical, will raise major questions about the effectiveness of the industry when it is most needed. It remains to be seen if this will www.theactuary.com

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Longer-term implications The long-term implications of the current crisis seem likely to be profound on many levels – maybe more so in Western society, where this is the first major pandemic for 100 years. Impact is likely to range from the relatively minor (maybe more appetite for remote working) to major questions about how we organise as a society on a local, national and global basis. For insurers, the impact will be felt for some time across life and general insurance, covering both immediate-term balance sheet implications and also some longer-term questions about how we serve society and how our products and services responded in the hour of need. Questions will be raised about policy limits, wording, exclusions and coverage levels – how will insurers, corporates and individuals react if another ‘unforeseen’ event hits? We will need to find new solutions to these societal challenges.

What can actuaries do?

First of all, we must keep going through these tough and strange days – which include extended working from home while managing our personal lives and supporting family near and far. These things should not be trivialised, and it will test our perseverance and impact ALISTAIR aspects of our mental and physical health.

CHAMBERLAIN Secondly, we must do what actuaries are is the group head required to do in our professional capacity – of product and manage the immediate and also take the long actuarial, global insurance, at view, exploring and optimising a range of HSBC Life plausible outcomes. Our businesses and societies are being asked tough questions, and so are we. While we won’t have all the answers, our training to understand a new range of implications and scenarios and enabling rapid, level-headed and sound decision-making is fully needed now.

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A FINE SCALE

Elena Kulinskaya, Ilyas Bakbergenuly and Lisanne Gitsels revisit longevity modelling 24 | THE ACTUARY | MAY 2020

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stratification and more personalised service. Traditional statistical methods use the baseline data for long-term outcome predictions (often beyond the study’s range). For instance, a person’s characteristics at retirement age are used to infer their hypothetical longevity. Dynamic analysis allows for changing personal circumstances and age-dependent changing risks, and incorporates them into more precise modelling.

The age-varying survival benefits or harms of various predictors obtained from dynamic statistical modelling of big health data can be used to obtain finely differentiated projections of life expectancy for numerous subpopulations. We provide a case study on statins.

Cox regression and landmark analysis Survival analysis, or time-to-event analysis, investigates the effects of various risk factors on mortality. The

type of regression model typically used in survival analysis in medicine is the Cox proportional hazards regression. The Cox model factorises the hazard or force of mortality μi(x) for a subject i with risk factors Zi at age x into an age-varying baseline hazard μ0(x) and a constant subject-specific risk score.

The risk score is a log-linear regression term which includes relevant risk factors, so that μi(x, β, Zi) = μ0(x)eZiβ Taking a ratio of the hazard functions for two subjects, the hazard ratio μ (x, β, Zi) μ(x, β, Z) = i = eβ(Z -Z ) μj(x, β, Zj) i

j

is constant over time and does not depend on the baseline hazard.

This proportional hazards assumption, if true, allows to easily estimate hazard ratios for various combinations of risk factors, regardless of the parametric form of the baseline hazards.

FIGURE 1: Hazard ratio of all-cause mortality associated with statin prescription compared to no prescription, for two birth cohorts of 1930-35 and 1936-40, from the landmark analysis with 30-year window. Results were adjusted for cardiac risk at three levels, sex, birth cohort, Townsend deprivation quintile, chronic kidney disease, diabetes, treated hypertension, hypercholesterolemia, aspirin, BMI, alcohol use, smoking status and general practice.

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ife expectancy (LE) and its changes are crucial to the pensions and insurance industry, society and government.

Longevity-trend projections are used to manage longevity risk in pricing and reserving for insurance and annuity products, as well as for costing public and private pensions. Changes in mortality projections directly affect annuities costs, especially in the decreasing interest rates environment.

LE is also a consideration for individuals planning their financial goals and retirement strategies.

Previously, a vast majority of people would buy a lifetime annuity with their pension pot. However, the introduction of pension freedoms in 2015 resulted in the emergence of a variety of flexible retirement options, from drawdown to fixed-term annuities. This has necessitated dynamic decision-making both by individuals and companies.

Many financial tasks, from underwriting to retirement planning, need to account for a large number of important and time-varying determinants of health and longevity, such as socio-economic factors (income or residence), health status (new conditions and/or prescriptions) and lifestyle factors (smoking, obesity, alcohol usage), as well as their interactions. In addition, they must take into account the medical advances and public health interventions that are aimed at increasing the health of populations.

Our research, funded by the Actuarial Research Centre, concentrates on dynamic statistical modelling of population-based individual-level data, collected over the long term and recorded in electronic health records (EHRs).

Dynamic statistical analysis allows us to make more accurate predictions, based on real-time data, dynamic risk

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FIGURE 2: Log-hazards between ages 60-80 years from the ONS period life table centred at 2010 (circles) and fitted regressions

by Townsend score quintiles (Q1 least to Q5 most deprived area) and sex (lines).

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However, the main assumption of the Cox model – that the risk score does not change over the age span – is rightly distrusted by actuaries.

Landmark analyses is a recent statistical method used to dynamically predict the survival effects associated with changing risk factors. This method builds a series of L Cox models, each in a sliding window of width w from the landmark age xLM = sl to sl+w, for l = 1,…, L, and then smoothes the obtained trajectories. This means that the latest medical history at the landmark age xLM is used to predict survival conditional on survival to the landmark, thereby allowing for time-dependent covariates and time-dependent survival effects (Van Houwelingen and Putter, 2011).

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FIGURE 3: Screenshot from Step 1 of the mylongevity.org/v2 life expectancy calculator.

Landmark analysis of statins We have recently completed a landmark analysis on the survival benefits of statins, a medication used to lower the lipid levels in the blood.

We followed up a cohort of 110,000 healthy people who hit 60 between 1990 and 2000 for the next 25 years, updating their health status and statins use every six months (51 time points) (Gitsels et al, 2020). The time-varying hazards of all-cause mortality for two birth cohorts (1930-1935 and 1936-1940) are depicted in Figure 1.

The results show that statin therapy is associated with increasing survival benefits in older ages: age 65 hazard ratio HR = 0.86 (95% confidence interval of 0.78-0.94), age 75 HR = 0.81 (0.74-0.89), age 80 HR = 0.72 (0.62-0.84) and age 85 HR = 0.57 (0.35-0.91). The survival benefit of statin therapy differed by birth cohort, but not by sex or cardiac risk.

The 1936-40 cohort showed larger survival benefits than the 1930-1935 cohort, probably due to more efficient drugs or higher dosages.

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FIGURE 4: Life expectancy at age 65 by Townsend score quintiles (Q1 least to Q5 most deprived area) and sex.

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and 30 years are very similar. This is also true, say, for diabetes, but not for smoking, where the hazards are significantly higher for a five-year window than for a 30-year window, at 2.95 (2.77, 3.15) vs 2.34 (2.26, 2.42) at age 65. This is because in the landmark analysis, only the risk profile at the start of a window is used, and while a chronic condition such as diabetes will not go away, people may change their lifestyle choices (eg give up smoking) in the longer term.

Calculating life expectancy To estimate life expectancy, we need to make an assumption about the baseline hazards. We use the Gompertz baseline hazards, μ0(x) = ea+bx which describe well the mortality between ages 50 and 95 and increase log-linearly between these ages (Brenner et al., 1993; Spiegelhalter, 2016). Under the Gompertz law, the increase in the annual hazard of mortality associated with ageing one year is approximately constant. However, it is well known that the force of mortality differs by gender and by deprivation.

To measure area deprivation, we use the Townsend score, obtained from the UK Census 2001 and available from the UK Data Service.

Gompertz log-hazards for different deprivation levels measured by the Townsend score quintiles are depicted in Figure 2.

Combining age-varying hazard ratios obtained from landmark

analysis with the Gompertz baseline hazards, we obtain cumulative hazard functions, and hence life expectancy.

The overall life expectancy is a weighted average of LEs of people with different socio-economic and health profiles. Our methodology (Kulinskaya et al., 2020) allows to subdivide it into component LEs for people with particular risk profiles.

The weights, based on the counts of people with the specific covariate values, are also estimated from the EHR data.

As an application of our methodology, we are developing a life expectancy calculator, available at mylongevity.org (web developer George Oastler). Results of our

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“Dynamic statistical analysis allows us to make more accurate predictions, based on realtime data, dynamic risk stratification and more personalised service”

landmark analysis are translated into LEs for 648 different risk profiles at different ages within each sex and deprivation quintile. The list of risk factors we use include hypertension, diabetes, hypercholesterolemia, BMI category, QRISK2 (the risk of a cardiac event within 10 years), smoking status and statin use.

As an example (Figure 4), for a healthy 65-year-old female who is resident in the least deprived postcode, our calculator provides a LE of 87.8 vs 89.5 years with or without statins; for a male, those numbers are 86.4 vs 88.1 years.

Diabetes decreases LE by more than three years; among diabetics, statins increase the LE from 84.6 to 86.2 years for females and from 83.1 to 84.8 years for males. Smoking decreases LE by approximately six years; among smokers, statins increase the LE from 81.9 to 83.5 years for females and from 80.4 to 82.0 years for males. In comparison, the ONS online LE calculator just reports, for a 65-year-old, an average LE of 87 years for females and 85 years for males. Deprivation decreases LE by one to 1.5 years for healthy people, but by two to 2.5 years for people with diabetes or for smokers.

These life expectancies do not take future health and lifestyle choices into account. If we assume the same health and lifestyle continuing to age 85, life expectancies for healthy and prosperous people on statins increase to 91.9 for females and 90.1 for males.

LE calculation at such a fine scale will not only be useful for individuals and their physicians for improving life expectancy via healthy lifestyle changes, but also for individuals, independent financial advisors and the insurance industry for financial planning and reserving of actuary products. Our R software, which will enable bulk calculation of LE, is due to be released later in the year.

PROFESSOR ELENA KULINSKAYA holds the Aviva Chair in Statistics at the School of Computing Sciences, University of East Anglia

DR ILYAS BAKBERGENULY is a senior research fellow in actuarial statistics at the School of Computing Sciences, University of East Anglia

DR LISANNE GITSELS is a senior research fellow in biostatistics at the UCL Great Ormond Street Institute of Child Health

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TURNING THE TABLES ompound interest, one of the foundation stones of actuarial science, has a long history. One writer has suggested it may have originated from people lending a herd to a neighbour for several years and finding it had become more numerous when returned.

Compounding for loans lasting more than a year was known in ancient Rome; Cicero wrote to a friend in 50BCE, “I had succeeded in arranging that they should pay with interest for six years at the rate of 12%, and added yearly to the capital sum.”

In medieval times, much borrowing was for months rather than years, so compounding usually did not arise.

Richard of Anstey, for example, was a plaintiff in a legal case starting in 1158, which necessitated him making several journeys round the south of England; he needed 21 loans to cover his expenses. The largest loan was £20, but many amounted to £5 or less. These loans had to be obtained from Jews, because religious restrictions prevented Christians from moneylending.

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Richard borrowed from nine different people for periods ranging from two months to three years, with 15 loans running for a year or less. The rates of interest were all expressed as “per pound per week” and were four pence in nine cases, three pence in eight cases, and two pence in three cases (corresponding to about 86%, 65% and 43% per annum). One small emergency loan was charged at the equivalent of 4.5 pence.

The lenders reduced their interest rates once Richard had repaid the first loan and then needed another – one lender charged three pence on the first five occasions and two pence on the last three. This suggests that part of the highest interest rates was regarded as a risk premium.

Mounting debts When loans extended for several years, they could mount up rapidly, as illustrated by the transactions that occurred at Bury St Edmunds Abbey from 1172 onwards. For example, an abbey official secretly borrowed £27 to repair the monks’ room. After some years, the debt had accumulated at compound interest to reach £100, and it was agreed that the debt should be rolled over into a new loan of £200 repayable in four years’ time. However, at the end of this

period the abbey still could not afford to repay the debt, and it was converted into a loan of £440.

The science of compound interest was studied by mathematicians such as Fibonacci who, by calculating what a sum lent would become after 18 years at 25% per annum, showed in 1202 that compounding could cause loans to become enormous.

By looking separately at the sum required to secure each payment, he also worked out how much must be invested to secure an annuity payable for five years and 70 days.

In Europe, annuities were often granted by one person to another as part of a property transaction, and towns needing to raise money to finance wars or expansion would grant perpetual or life annuities.

Social concern grew, as long-term borrowers often became desperate.

In 1233, a new law in England prohibited moneylenders from compounding interest, and in 1275 the law went further and banned them from charging any interest at all. A way round the ban was found when, in 1276, Henry of Berkeley received a payment of £120 from a moneylender and granted him an annuity of £40 per annum for 10 years, so that he received a return equivalent to about 31% per annum compound interest. Another

IMAGES: © IFOA LIBRARY / IKON IMAGES

Chris Lewin examines the emergence of compound interest over the course of history

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Features Investment way of evading the ban was to avoid any mention of interest in a loan contract but specify a repayment sum higher than the sum lent.

The first compound interest tables Francesco Balducci Pegolotti worked for the great banking house of Florence, known as the Bardi. He served it in various countries, including England from 1317-21, and produced a lengthy manuscript on mercantile practice, of which a copy written in 1472 survives today. This manuscript is important because it contains the earliest known tables of compound interest. Banks often made short-term loans to merchants and others, charging only simple interest.

However, officials of these banks would have been well aware that a sum they set aside for a portfolio of short-term loans, with simple interest reinvested, would have increased in value over a period of years at much the same rate as if the sum set aside had benefited from interest compounded at least annually. Tables of compound interest would therefore have been useful.

From about 1500 onwards, the publication of printed books started to give wider audiences access to materials that had only been known in manuscript to a few.

There was an increasing focus on loans, because changing attitudes in both Europe and England during the 16th century led to the gradual relaxation of legal and religious restrictions on charging interest. Estienne

de la Roche of Lyon devoted nine chapters to compound and simple interest in his arithmetic book of 1520. He used somewhat similar methods to those pioneered by Fibonacci three centuries earlier, but delved into the subject in greater depth.

Using a trial and error method, he tackled the difficult question of finding the rate of interest in a compound interest transaction lasting two years and eight months. He also developed a formula for finding the annuity payable for three, four, five or six years which could be bought for a given sum.

Later developments The mathematical methods required considerable laborious computation, which was very time-consuming and liable to error.

An important step forward was when Jean Trenchant, also of Lyon, published the first compound interest tables to appear in print, in 1558. He was followed by Simon Stevin of Bruges, who, in 1582, published more

“An important step forward was when Jean Trenchant of Lyon published the first compound interest tables to appear in print, in 1558”

FIGURE 1: Manuscript compound interest tables written between 1625 and 1651, showing the present value of £1 and of £1 p.a., based on an interest rate of 8% p.a. There is an error in the third table at years 2 and 3, but the error is not carried into the fourth table, where the figures are broadly correct.

extensive tables, in present-value CHRIS LEWIN form rather than is chair of the IFoA’s Trenchant’s Infrastructure accumulation form.

Working Party, and has written Stevin wrote that numerous articles on such tables had actuarial history. His previously been in book Pensions and use by some people Insurance before but had been kept 1800: A Social hidden as a great History was secret, and the published in 2003 method of composing them was known to few people. In England, an excellent book written by London mathematical practitioner Richard Witt appeared in 1613: this contained numerous tables of compound interest, in both accumulation and present-value form, and a wealth of practical examples showing their use in property transactions. Witt clearly understood the mathematical basis of compound interest, and his book is a landmark in the subject.

Various other tables of compound interest were published during the 17th century and were used quite extensively, though they sometimes contained annoying mistakes.

An example of such mistakes occurs in an English manuscript table written between 1625 and 1651, now owned by the IFoA (see Figure 1). Based on the 8% interest rate then prescribed by law, that table is in the same format as modern tables, showing the year by year accumulations and present values of a single payment and a series of payments for up to 30 years. The table must have been needed in practice, since someone took the trouble to copy it out.

In 1671, Jan de Wit in the Netherlands combined compound interest calculations with age-dependent survival rates linked to a mortality investigation; Edmond Halley carried out a similar analysis in England in 1693. The compound interest techniques developed over a period of 500 years thus became a basis for the development of actuarial science.

For more detail and full references, see: Lewin CG, ‘The Emergence of Compound Interest’.

British Actuarial Journal (open online access), December 2019.

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SUSTAINABLE INVESTMENT’S

NEW FRONTIERS Gareth Sutcliffe and Holger Schalk look at the impact of ESG regulation, and different approaches to implementation

What are insurers doing?

Many insurers have stopped underwriting and investing in coal companies. This is not without challenge, even for early adopters that are passionate about sustainable investment. While some are taking these decisions because of convictions that supersede purely financial considerations, most are engaged in sustainable

investment because of the improved risk-adjusted outcomes.

Divestment from polluting industries such as coal may be a factor, although a more important consideration is the full integration of sustainable investment principles throughout policies, processes and portfolios.

The industry is about to be hit by a raft of regulations, driven by EU commitments made under the Paris Accord of 2015 and by the European Commission’s 10-point action plan, which has aggressive timelines for implementation. Two of these 10 points are particularly significant: the classification system for sustainable investments, and the incorporation of sustainability into financial advice and prudential requirements. This means insurers must understand the ESG preferences of their customers, and will need a way to identify their beliefs and put them into an ESG category.

More importantly, the Commission says that, in future, insurers must offer customers products that fit their ESG preferences – and they will be subject to mis-selling risk if they fail to do so.

According to the European Insurance and Occupational Pensions Authority, there are financial risks associated with sustainability.

Insurers should therefore already be managing these in their investment strategy through the Prudent Person Principle, and on the risk management side through their Own Risk and Solvency Assessment. The Prudential Regulation Authority has also stated that it expects insurers to be modelling and managing physical, transitional and liability risks.

ENVIRONMENTAL FACTORS

SOCIAL FACTORS

contribute to environmental objectives:

contribute to social objectives:

Climate change mitigation and / or adaption Sustainable use/ protection of water and marine resources Transition to a circular economy Waste prevention and recycling Pollution prevention and control Protection of healthy ecosystems

Tackling inequality Fostering social cohesion, social integration and labour relations Or an investment in human capital or economically or socially disadvantaged communities

GOVERNANCE FACTORS contribute to good governance practices, for example companies with: Sound management structures Employee relations Remuneration of relevant staff Tax compliance

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nterpretations of sustainable investment differ, and investors behave along a spectrum of investment approaches.

While traditional investment often does not involve any real consideration for sustainability practices or societal impacts, responsible investment is concerned with avoiding the downside risks associated with sustainability factors.

You then have the sub-asset class of sustainable investment, which is about adapting progressive sustainability techniques in your investment portfolio with a view to adding value and outperforming a traditional investment portfolio.

Impact investing, on the other hand, aims to address specific societal challenges. Some of these types of investments provide a risk-adjusted return that can compete with or beat traditional investments, but others offer a lesser return – you are essentially making an investment for the greater good of society.

Whatever your precise definition of sustainable investing, three core factors are likely to play a key part in investment decisionmaking – environmental, social and governance (ESG) (Figure 1).

SUSTAINABLE INVESTMENT FIGURE 1: A common taxonomy for sustainable investment?

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Physical risks may concern exposure to climate change events or natural disasters, and the subsequent risk of damage or loss to an insurer’s assets.

Transitional risk is when an asset suffers a loss of value, possibly caused either by regulatory change or disruptive technological advancement. For example, a global ban on the use of coal at some point in the future could result in the value of mining company shares suddenly falling to zero and becoming a stranded asset.

Liability risks will arise from parties seeking compensation for losses incurred due to the physical and transition risks associated with climate change. Legal liability for losses and damages associated with these risks could be transferred to the insurer through some types of policies.

Sustainable investing, sustainable profits?

With sustainable investing being a relatively recent phenomenon, the historical data available for analysing its performance is far more limited compared with that for other investment themes.

On balance, the evidence does suggest either a neutral impact from having a sustainable investment-tilted portfolio, or a moderate risk-adjusted long-term benefit.

More compelling evidence can be found by differentiating between individual ESG components. The strongest evidence is for the impact of governance on investment performance. Most asset managers have shown a commitment to embedding the governance principle into their policies, as a company with good governance, a long-term horizon and good corporate social responsibility is likely to be better managed and add more value over time.

As the focus on ESG factors is a recent trend, the link between environment and social factors and investment performance is less clear cut. That being said, environmental scientists, regulators and politicians are increasingly pointing to the real risks associated with climate change, suggesting a tipping point may have been reached in which companies that do manage this risk are more likely to achieve a better outcome.

Exclude, engage or tilt There are three options for implementing a sustainable investment portfolio: exclude, engage or tilt. Exclusion means not investing in certain

assets, such as munitions, cluster bombs and landmines. These are sometimes excluded on moral grounds and, from an investment point of view, are so insignificant in size that investment performance is unaffected. While there is significant evidence to suggest that excluding stocks will detract from value in the long run, this is increasingly being challenged, and the issue is unresolved.

Tobacco stocks, for example, have tended to outperform indices in the past, but this has become less clear in recent times and there is no indication that they will continue to do so. In industries that may qualify for exclusion from an ESG-focused portfolio, some companies have started to invest in alternative products and services. This complicates the issue of exclusion and raises the question of whether it is more productive to engage with these firms and their move towards more sustainable business models.

Oil companies, for example, are some of the biggest investors in renewables. Engaging with them would enable an insurer to use their ownership to push for change within the company. Exclusion, on the other hand, should perhaps be left as a last resort when engagement fails to deliver the necessary results.

A tilt signifies ‘leaning’ towards good ESG risk management through portfolio construction. Individual names or shares need not be excluded but can be underweighted, either due to a current ESG score or a trend in the score.

Adapting portfolios to climate risk A recent study from Smurfit Business School showed that only 43 companies worldwide reported 100% of their greenhouse gas emissions. Another 23 companies reported at least 95% of the same emissions, while the remaining companies reported less.

Consequently, the ability to monitor the investment portfolio with regard to environmental impact remains an issue.

In the past, a lack of interest and scrutiny GARETH has made it possible for ESG risks to remain SUTCLIFFE hidden. Today, the steady growth of ESG is head of insurance investing has brought sector risks to the investment at Willis surface and impacted asset prices. The big Towers Watson challenge for governments, industries and individual companies will be to successfully adapt to a new environment that favours smarter, cleaner and healthier products and services by rebuilding and reshaping the economy in a more sustainable way.

Whole sectors will inevitably be affected, from greenhouse gas-intensive industries HOLGER SCHALK to the automotive sector. is a director of Regardless of a company’s belief in insurance consulting sustainable investment, few question and investments at Willis Towers the escalating threat presented by climate Watson risk. At the very least, insurers will need to incorporate climate change effects into their investment and underwriting strategies. Insurers will also need to be prepared for changing customer demand, as this may happen quickly and shift the landscape dramatically.

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H ILLUSTRATION: IKONIMAGES

ave you heard? Actuaries can save the world! Well, sort of. If we set aside our love of fine detail and getting super-nerdy over the models, we can draw on a key part of our skillset in acting as ‘master translator’ for decision-makers – helping them to slice through the fuzz of uncertainty and take decisive action. The key is to not fixate on the numbers, but instead to consider the trends that will lead to the right outcomes.

The critical first step is, sensibly, measurement. But how do you make sure you take it seriously? In short: disclosure. The point of committing to disclose is to give the business the insight it needs to understand this ‘new’ risk. Take a look at Travis Elsum’s excellent article from the February issue of The Actuary (bit.ly/TravisETheActuary), showing what leaders in this field are doing. It is worth bearing in mind that taking climate disclosures seriously will not be optional for much longer, and that those viewed as leaders are not that far down the road. This is not to detract from their achievements – they have certainly expended a lot of time and effort – clearing a new path always takes a lot of work. However, with a focused project, appropriately guided by those with domain knowledge, it is very possible

CLARITY ON CLIMATE There is considerable uncertainty in the output of climate change risk and exposure data – how should decision-makers cut through all this? Russ Bowdrey explains.

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to catch up. Committing to disclose and applying a short concerted effort will yield a rich dataset for internal use – even if disclosing it all may be unwise until the market has learnt how to digest such information.

Let’s call these data ‘climate change metrics’.

They include, for example: Carbon footprint Emissions intensity Portfolio warming potential Exposure metrics Climate scenario losses.

How useful is this for making tangible, profit-moving, risk-reducing business decisions? In my experience, using the figures in absolute terms, not very useful at all. There is simply too much going on: what does it even mean to align a portfolio to a temperature? And if you believe you can, is 2.4˚C better than 2.5˚C or is it materially the same?

What is Climate-VaR? Is the one you’re looking at even a value-at-risk? This simply breeds confusion and paralysis.

Then there is the uncertainty embedded in the analysis, something that we as a profession should be comfortable dealing with. Until we’re actually faced with it.

Just think about the components required to assess the portfolio warming potential alignment of a portfolio – I need to: Work out the trend of emissions that might lead to ‘Paris-aligned’ temperature rises in 2100. Then do the same for other temperature rises. There are multiple paths for each, none of which are certain to result in Paris alignment (or better) – leading to uncertainty #1.

Work out what emissions we attach to different activities (hundreds, if not thousands if we’re doing this properly). We can reasonably estimate this in the near term, but such is the pace of technological change that beyond 10 years, this is guesswork – which gives rise to uncertainty #2.

Attribute the activities of each company to those described above. Even doing this for today is hard, as few firms disclose revenues in enough granularity.

Moreover, no company publishes (or even creates) business plans beyond three to five years, but we really need 80 years – so are left with more guesswork, and uncertainty #3.

For each uncertainty we need a model, with assumptions about how the world works. These are FIGURE 1: This modified risk management control cycle provides a great framework for approaching a relatively unfamiliar set of risks, such as climate change.

Model risks It’s rapidly becoming clear that climate change data will become as crucial to disclosures and risk management as market data. This is why the leading vendors of climate change risk data have been snapped up by big names in market data and ratings in the last year. But here is the rub: despite the Herculean effort of those involved in producing climate change metrics, if you scratch the surface of any climate-related metric you find a lot of the features we dread in model output: Spurious precision Parameter uncertainty Model uncertainty Misleading parameter/output naming Conflict of interest in assumption setting Bias/anchoring triggering units. www.theactuary.com

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Measure

Describe the system

Interpret Risk management cycle

Wider context

Manage

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Don’t let ‘perfect’ stand in the way of ‘good enough’ But – and it is a big ‘but’ – used on a relative basis, this data is good enough to act upon. Especially given that we know we have to take decisive action now. We can take actions that are directionally right, without needing to know every underlying detail with total precision.

What do these insights look like, and why can we be happy with such a broad-brush approach?

1 There is considerable concentration of climate change risk in a few names/assets.

2 If we normalise the data, stripping out units that might anchor or distract users trying to interpret unfamiliar data, and carefully controlling for model or parameter drift, then we can infer trends. Yes, it’s simplistic. Yes, it’s not perfect. But these cut through the fuzz of uncertainty and get to the heart of what we need to achieve: the transition of our portfolios towards supporting a green economy and away from (soon-tobe) stranded assets and those imperilled by physical climate change risk.

This approach will lead to decision-useful outcomes, particularly helping us to identify hotspots of risk and a more streamlined list of assets on which to focus our attention. Using these, we can engage with our asset managers and get them to apply their skillsets to validating what we’re seeing in the climate risk data. For example, equity and credit analysts are well placed to consider what could happen to a business’s revenues or physical assets under plausible but extreme climate scenarios. Asset managers can use this to place a higher priority on engaging with management on key climate change topics, such as adapting the business mix.

Consequently, the CIO and CRO, informed by both the climate change metrics and insights from the asset managers, can make well-informed decisions about rebalancing long-term portfolios with climate change risk in mind.

A call to action Here is a call to action with regard to three aspects of assessing climate change risk, and using it to make world-changing impacts via investments and engagement.

1 Be mindful of biases, anchoring and fixation on meaningless details There is, rightly, a strong call from policymakers for investment funds and investors to publish the 34 | THE ACTUARY | MAY 2020

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FIGURE 2: The Z-score shows the number of standard deviations from the mean climate exposure dollar losses that a particular stock has. We see that 15% of the holdings account for all the downside risk.

Climate exposure Z-score -6

-4

-2

0

2

4

6

% of portfolio holdings

choices that are often driven by expert judgment. This drives a lot of variability between different providers.

Even individual providers change their models from time to time, with material differences in output. If you use a consistent model over time (or can accurately say what changes in a model do to its outputs), then you can start to extract meaningful relative measurements.

alignment of their funds to doing the right thing for climate change. However, the inconsistency of these measures makes comparison very hard. When considering your own funds and risk profile, be mindful of fixation on meaningless detail and challenge yourselves on cognitive biases.

2 Challenge conflict of interest positively For financial institutions, the most widely used source of scenarios for projecting emissions pathways is produced by the International Energy Agency (IEA).

This intergovernmental body historically safeguarded the supply of fossil fuels, and is partially funded and staffed by that industry. So without agenda, one should be wary of potential conflict of interest here. The criticisms of systematic bias in their projections are well documented elsewhere. However, the IEA dataset should still be accepted as part of the set of plausible scenarios. Importantly, I would like to see the whole financial sector come together to fund an independent, unconflicted scenario set.

3 Challenge yourself and your firm to reflect on the true nature of this risk, how it affects you, and start to take mitigating action While there is currently no requirement to explicitly reflect climate change under Solvency II Pillar 1, most regulators expect it to be covered in Own Risk and Solvency Assessment and in raising supervisory expectations. In my mind there is a distinct RUSS BOWDREY competitive advantage for early movers and is a senior ALM incentives to act: customers want it, shareholders manager at Aviva, are demanding it and are holding boards and led the Climate accountable.

Change Physical Risk Workstream for Aviva’s TCFD report Climate change, and the associated mitigation and adaptation required from our businesses and the wider world, is so far-reaching that there are few areas of business actuaries are involved in that will not be touched. Helpfully, the profession has prepared practical guidelines (bit.ly/2V88wAP).

Now, what are you waiting for? www.theactuary.com

27/04/2020 14:49

Features Recruitment

Embracing change The insurance sector is currently facing unprecedented challenges, one of which is filling actuarial vacancies. A leading recruiter advises on best practice

Building rapport As companies begin to explore the unfamiliar territory of remote onboarding, there are two key factors to focus on: the all-encompassing engagement, and the emotive elements of onboarding. Of course, ensuring a clear and structured plan for the practicalities, such as having a robust IT infrastructure in place, are paramount.

However, due to its nature, remote onboarding makes www.theactuary.com

35 Recruitment_The Actuary MAY 2020_The Actuary 35

building that immediate rapport and trust with your new starter noticeably harder. Both of these are important cultural aspects and must not be overlooked.

Firms should be proactive and open to having transparent and consistent communication earlier and more frequently than usual. Now more than ever, people will need reassurance – especially to limit the increased risk of counteroffers during notice periods. Many companies are including new starters in virtual team quizzes and Friday drinks before their start date to help embed them into the team culture, increase buy-in and offer essential reassurance around job security.

Meet-the-team virtual meetings have also been added at the end of some interview processes, enabling the candidate to meet their future colleagues and develop a sense of the culture that they may have missed during a fully remote interview process.

Proactive engagement Once a new candidate has joined, it is important for the employer to replicate day-to-day interaction by introducing innovative virtual solutions for anything that is usually face-to-face – such as a video team lunch on their first day. Some companies are also scheduling daily morning and afternoon team meetings and coffee breaks, in order to maintain the agile working environment and give employees a sense of accountability. Many people within the team may be cautious of technological adoption – particularly junior members, due to the immediate exposure it gives them to their new colleagues – so managers should lead from the front by ensuring they are using virtual communication wherever possible. The team will soon follow suit.

It is no secret that many people will be worried about job security; it is important to focus on supporting your new starter and creating proactive engagement within the team. Both elements are imperative to achieve a successful induction. Some firms have introduced virtual yoga sessions, team cookery classes and personal training sessions to help improve wellbeing and team morale during this time. It is also vital to keep employees up to date on the health and position of the company, so they have confidence that the business is adapting well to market changes.

ROSS ANDERSON is a principal at Oliver James

ROB GORMLEY is a manager at Oliver James

LAURA SHARKEY is a principal at Oliver James

IMAGE: ISTOCK

T

he reassuring news for businesses looking to attract talent and for those seeking new opportunities during these unfamiliar times, is that most companies have shown a resilient approach and are rising to the unique hiring challenges by continuing to interview via video conference and onboard remotely.

A minority of companies in the permanent market are implementing a two to three-month hiring pause.

Where this is the case, they are doing so in order to give themselves time to adapt to these extraordinary circumstances. Similarly, companies looking for contractors tell us that any delays are temporary, as they work through logistics and teething problems.

Early feedback across the market indicates that many insurers are reacting to the ‘new norm’ by taking time to reassess hiring needs, implement new interview solutions and create remote onboarding processes before pushing ahead with business-critical hires.

While video interviewing and remote onboarding quickly becomes the norm for companies, there are still understandable fears among candidates that offers may be withdrawn and opportunities could vanish. In our experience, firms that are still recruiting are doing so because they have completed unprecedented analysis of their hiring needs and the remaining roles have been marked as ‘business-critical’.

Candidates should concentrate on their own development as people are still moving, there is confidence in the market and, if anything, the caution exercised by some prospective candidates has created less competition for a number of excellent opportunities. Our advice is to remain positive, as many companies are still hiring – but patience is essential, as interview progression may take a little longer than usual.

MAY 2020 | THE ACTUARY | 35

27/04/2020 14:49

At the back Mortality

PASS T IT ON The IAA’s Mortality Working Group provides a valuable forum for sharing information on mortality research around the world, says Brian Ridsdale

he International Actuarial Association’s (IAA) Mortality Working Group (MWG) was formed in 2008 to address the difficulty in tracking global mortality research, both within countries and internationally. I was an inaugural MWG member as the representative of the IFoA. In our first meeting, we outlined our vision: The Mortality Working Group will be the preeminent international actuarial body to provide insights and knowledge with respect to mortality and trends in mortality (ie encouraging research, but also making sure that people know what is going on internationally).

Members shared information from their own countries, and I was able to report on progress in the IFoA’s Mortality Research Steering Committee and highlight the work done by the CMI and the ONS. The IFoA had just finished a mortality research scoping study in the UK, and was starting on a multidisciplinary approach for future research which it was going to sponsor. What was missing was the international dimension.

Opening up access From the start, the MWG aimed to publish all our papers, presentations and discussions widely, putting them up for open access on the IAA website and publicising their existence.

We started producing Country Reports to give an overview of country demographics relating to mortality and longevity, products, research, and the governmental and actuarial organisations involved. By agreement with the IAA, all our materials were open access on www.actuaries.org/mortality In response to interest in research and developments in the UK, I produced the first of a series of UK Updates. If you are in any doubt as to how many organisations there are involved in high-quality mortality research in the UK, just have a look at the most recent Update at bit.ly/3aN247Q.

Sharing practice We were able to shine a light on the substantial longevity improvements throughout most of the world during the first decade of the 21st century – and then on the slackening of improvements, again in large parts of the world, during the second decade.

Early on it became apparent that while UK pensions and annuity providers were taking account of the early 2000s’ improved longevity trend, many countries were not. In some countries long-outdated life tables were in use, and no attention was given to projecting future improvements. Supported by the IFoA, we sponsored research on international longevity trends and reserving, and publicised the results to IAA Member Associations through our members.

Sharing information on developments News is transitory: a paper published this month becomes more difficult to find later. We felt there was an unsatisfied need for easier access to research and presentations, and in 2010 we decided to 36 | THE ACTUARY | MAY 2020

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www.theactuary.com

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At the back Mortality

introduce a web-based Information Base on 13 topics, with a selection of papers on each topic. The Information Base provides a title or brief introduction, and a hyperlink to the paper on its original web page. Updating the Information Base has proved difficult, although I believe it still has value.

Of course, academic papers are not always the first place practitioners turn to for new ideas and techniques. Conference papers, reports and presentations from governmental and non-governmental sources, consultancies and reassurers are useful, as are magazine articles. We aimed to make these equally accessible through half-yearly Updates and our Information Base.

FIGURE 2: How the MWG operates.

Supporting the development of the actuarial profession worldwide. This diagram summarises the inputs (left) the outputs (right) and the benefits of membership of the Working Group (centre).

Seminars

RESEARCH

Our meetings were held half-yearly alongside IAA council and committee meetings, which meant our members could participate in a variety of groups covering different areas of interest. It also provided a briefing opportunity for actuaries in other areas to catch up with progress in our field. We would invite a few local mortality and longevity specialists to join us, and soon realised there was scope for a seminar in the countries that we visited – for both local actuaries and our IAA group to be updated on progress in that country. In 2015 we ran our first country seminar in Zurich, Switzerland. By our November 2019 meeting in Tokyo, there was a fascinating seminar with nearly 100 attendees, run on a self-funding basis.

Building the team From an initial attendance of nine members in Quebec, the MWG has grown under successive chairmen to involve 45 members and 55 Interested Persons. The half-yearly MWG Mortality Updates now reach across the world, in 13 languages.

FIGURE 1: The impact of the Mortality Working Group.

ILLUSTRATION: IKONIMAGES

The IAA Mortality Working Group has 45 members and 55 Interested Persons.

The MWG’s work, too, has grown to meet new needs. It aims to recognise work being done in member countries, do its own research, maintain an Information Base of research and papers, and to disseminate its output to Member Associations and through them to practising actuaries worldwide. None of this could have been done without the small but enthusiastic and multitalented team in the IAA Secretariat. One of the benefits to MWG members themselves has been the fellowship that has built up, and this has contributed to the effectiveness of the group. www.theactuary.com

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KNOWLEDGE

RESOURCE LIBRARY

Country reports Research updates Sharing at meetings Conferences Visiting speakers

Open access on web to: Minutes and papers Country reports Information base actuaries.org/mortalityinfo

MWG

MWG research projects Own research Papers Presentations International: HMDB supranationals

DISSEMINATION

Updates in 13 languages promoted to associations Actuarial educators IAA seminars with PIWG In-country seminars Supranational meetings

FELLOWSHIP

Joint projects Dinners Shared research Worldwide contacts

Ongoing relevance Looking back over the years since the MWG was founded, is the concept still relevant? We’ve seen a further explosion in mortality and longevity research: in the way actuaries contribute to developments in the field, and in public awareness of this role. The IFoA’s Actuarial Research Centre, aimed at doing excellent research, has come into being, as have the IFoA’s Longevity Bulletins and a continuation of international conferences, seminars and courses.

However, these still don’t reach a number of people – particularly in countries outside the mainstream research centres – and there is a need for an online resource aimed at communicating new research to Member Associations and practising actuaries, and at making existing research more accessible nationally and internationally.

I completed my term as chair of the MWG at the end of 2019. It was a great experience and I made a lot of new friends. I am pleased that Dan Ryan, a member of the IFoA’s Mortality Research Steering Committee, will take on the IFoA representative role, and also the production of the half-yearly UK Mortality and Longevity Update.

His first meeting in May 2020 will be interesting as the IAA is undergoing a thorough reorganisation, with three key objectives: Influence supranational relationships Assure the promotion of the profession Advance the development of competence.

The MWG is focused on the latter two, and I hope the work we have done during the past few years, opening up international access to research and development in mortality and longevity, will continue to thrive and grow in the new structure.

Finally, I believe that opening up access to important actuarial research and developments is intrinsically valuable for the profession and our customers.

It deserves consideration in other fields, and I recommend this for discussion by actuarial professional bodies in the UK and internationally.

BRIAN RIDSDALE was Chair of the IAA Mortality Working Group from 2017–2019

MAY 2020 | THE ACTUARY | 37

27/04/2020 14:50

At the back Career development

Richard Lewis reflects on the unexpected creativity that can be found within the actuarial profession

THE ART

OF BEING AN ACTUARY 38 | THE ACTUARY | MAY 2020

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At the back Career development

W

hen you think of artists, you probably think of painters, poets and musicians… but anyone can be an artist. All you have to do is choose.

Actuaries are used to choosing – expert judgment is our currency. However, we’re also used to not choosing. Most days we go to the same places, see the same people and think the same things. We understand risks for a living, but how often do we take them?

I was so afraid of making music that I became an actuary, but it turns out actuaries make things as well.

Most people think we make numbers, but really, we turn numbers into decisions. We make stories.

Hiding behind technology Technology only turns data into more data, so computers aren’t great at making stories. In our data-driven world we need technology to evolve – but we need to evolve, too.

Sometimes it feels easier to let technology do the evolving for us. Computers put people on the moon and food on our doorsteps, so we think we can automate our way out of anything. Yet we still have bookshops, we still don’t have enough meeting rooms, and sometimes we still need the back of an envelope.

To evolve, we need to learn, and in return for relying on automation we can learn from it. It’s no coincidence that the only way to make anything foolproof is to fool around with it, because the best way to learn is to play.

Jazz pianist Bill Evans viewed learning to play the piano as an automation process. He obsessively focused on each level of playing until it became automatic. This might seem too rational a way to make inspired music – but coupled with commitment, hard work and love, this strategy led him to make some of the most beautiful music of the past hundred years. Think what happens when we hold on too tightly to our automations, when we stop playing with them. Repeating the same thing over and over may be how computers work, but it’s not how we work.

ILLUSTRATION: IKONIMAGES

Beautiful constraints Being an actuary could be the most constrained job in the world. Our work is heavily regulated, we have a reputation for relying on obscure technical knowledge, and we all know that garbage in equals garbage out.

Surely there must be no space left for creativity? Being an artist, in contrast, could be the least constrained job.

Where could you possibly start? But that’s it – you have

“Crafting your process is completely down to you, but it’s such a rewarding thing to work on” to start and find a way to finish. Once you have a plot for your novel, any subplots have to fit. Very soon, you might not like the box you’ve found yourself in.

Actuaries have a different kind of freedom. While artists feel personal responsibility for their constraints, actuaries work to rules set by the profession – so we can focus our time and energy on creating solutions.

The knowledge barrier can get in the way of communicating our work, but it gives us the freedom to play with models and assumptions, which is how we create our best work.

Dealing with bad data is probably our most common challenge. The only way forward is to be creative – find other data, change the model or change the story we’re telling.

The process is the work We’re often told that the result is the work. Goaldriven culture is great for proposals, decision-making and management, but does it really get you to do your best work?

Look back on work you’ve already done. Notice when you’ve been motivated and when you’ve been bored, when you learned something and when you forgot something. Instead of focusing on your results, focus on how you responded and how you changed.

No one else can give you permission to do this work.

Crafting your process is completely down to you, but it’s such a rewarding thing to work on. I’m still afraid of becoming a full-time musician and all the uncertainty that goes with it, but letting go of the stories other people have for me helps me see my creative process as work and gets me moving.

As actuaries we have so many opportunities to build processes, leveraging technology and the trust we’ve RICHARD LEWIS earned. Choosing to work this is a senior way is not going to be easy, and consultant at RPC it’s not for everyone. If you’re Consulting curious, you can start right now and move towards your art – the work that you love.

See what happens when you play more with technology.

Those stories aren’t going to write themselves.

MAY 2020 | THE ACTUARY | 39

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27/04/2020 14:50

At the back Puzzles

iQ

www.mensa.org.uk

On the road Mensa puzzle 783 A car is travelling slowly in heavy traďŹ&#x192;c. In the ďŹ rst hour it covers one eighth of its total journey. The next hour it covers one third of what is left. The following hour it covers one quarter of the remainder and in the fourth hour half of the remaining distance.

The car still has 15 miles of the journey remaining.

How many miles has the car covered?

Missing letter Mensa puzzle 784 What letter should replace the question mark in this sequence?

A C E ? F S H 40 | THE ACTUARY | MAY 2020

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www.theactuary.com

27/04/2020 14:51

At the back Puzzles

Dare to square Mensa puzzle 785

A

B

C

Spell it out Mensa puzzle 786 On each row, place two letters that can be attached to the end of the word to the left to give a longer word. When completed, the eight added letters will give the name of a game reading downwards. What is it?

ILLUSTRATIONS:

BOLE _ _ CONS _ _

Out of the kitchen Mensa puzzle 787

BALL _ _

Rearrange the letters of

ROTA _ _ www.theactuary.com

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‘PRICKLIEST COOKING’ to give three sports.

What are they?

Answers 783: 53.5714 784: O. The letters of the alphabet that contain only straight lines alternate with the letters that contain only curved lines. 785: A. One line moves 180 degrees each time, the other moves 45 degrees anticlockwise each time. 786: Roulette 787: Cricket, skiing and polo.

Which square should come next in the sequence?

MAY 2020 | THE ACTUARY | 41

27/04/2020 14:52

At the back School of thought

Student Refilwe Modise asks whether pensions or property makes the better investment choice

Opportunity or loss?

ILLUSTRATION: SIMON SCARSBROOK

T

he choice between where to invest in the long run depends on the concept of opportunity cost.

You can’t have more of one thing without sacrificing the other. As such, we could pose the question, “What is the right choice in longterm investment?

Investment in pensions or in property?”

A property purchase requires a substantial initial expenditure.

Pensions, however, allow you to save for retirement through monthly payments – which most people may be able to do. One commonly-used option to combat the problem with property investment is to use mortgages.

In the UK, one is allowed a mortgage of up to three to five times their salary. Taking a mortgage means one can purchase property and sell it at a higher price for capital gains; the average house price went from £58,000 in April 1990 to £225,000 in February 2018.

The combination of rental yields and capital growth means there is both immediate income and the potential for long-term profit. Nonetheless, according to the ONS, “Average house prices in the UK increased by 0.7% in the year to July 2019, down from 1.4% in June 2019. This is the lowest annual rate since September 2012, when it was 0.4%.

“During the past three years, there has been a general slowdown in UK house price growth, driven mainly by a slowdown in the south and east of England.”

This trend of downward increases in house prices means one would have to hold property for longer in order to raise a substantial profit.

42 | THE ACTUARY | MAY 2020

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Timescales to sell could differ due to demand and supply issues – and negotiations. Many landlords opt to hold the property for some time and buy-to-let. Rental yields can be used to cover-off interest payments from the mortgage over a few years. The house could then be sold for a profit and the revenue generated used to pay off the initial mortgage.

Repeating this process on a large scale can lead to exceptionally high investment gains.

Yet such ventures also lead to advertising costs, as well as the renovation and management costs of renting out property.

Mortgages are also dependent on occupation type and income, which act as limiting factors on how much you can actually make from the ‘mortgage, buy and sell’ option. In recent years, regulation changes have meant that the tax on property is more belligerent than on pension income.

For those opting to invest in property rather than a pension, what happens in the late stages of life with regard to property management? One of two things could happen, either assistance from family or using letting agencies to manage them, although the latter comes at a cost.

Pensions secured in DB schemes are often low-risk due to the backing of the central discontinuance fund in the UK. However, if your employer goes bust before you retire and you hold a defined benefit pension, you may lose up to 10% of your pension value.

The likelihood of this is fairly low, though, so pensions are a good option for the low-risk and additional contributions that come with it. DC schemes, on the other hand, allow the individual to tailor the contribution investment to align with their own risk appetite.

Risk is also limited within a pension by the fact that you are only investing money you have – so you cannot lose more than you invest.

By contrast, people borrow to buy property, which will magnify their return on their investment during good times, but leave them in financial problems during bad times.

Essentially, it all depends on your risk appetite, circumstances and expertise.

With regards to pensions versus property, the key question is: how much risk do I want to take? While the risk-averse may shield their funds using low-risk assets, real yields in the UK on government bonds have been negative for a while now. Therefore property, or, by proxy, property funds, can be the necessary device to push up risk-adjusted returns without facing stock market volatility head on.

REFILWE MODISE is a guest student editor www.theactuary.com

27/04/2020 14:52

At the back Society news

WCA

KEEPING GOOD COMPANY

SIAS

Poker faces

BY KISHAN PATEL

Some 45 people took part in the annual SIAS Poker tournament on 11 March. It was a strange tournament this year, taking place as the government’s COVID-19 policy evolved but before social distancing was at the forefront of people’s minds. Nevertheless, most who purchased tickets attended. It was fantastic to see some of our regulars, as well as some new faces. Plenty of food (and some drink) was provided to facilitate rational thinking.

The top 10 players all received cash prizes ranging from £35 to £370. The top three were Rajinder Poonian in first place, Lewis Wilson in second, and Peter Jackson in third. Congratulations to all the winners!

SIAS would like to thank everyone for attending and supporting our socials.

We are hoping to run more events in the future, but please check out our website, sias.org.uk. Given the current circumstances, these may be virtual. www.theactuary.com

43 people_The Actuary MAY 2020_The Actuary 43

KEEP ON RUNNING Fancy spending your ‘one time a day’ run or walk connecting with other actuaries and helping out your chosen charity?

SIAS is continuing it’s ‘run with SIAS’ programme for its members during the lockdown: 1 Take a photo or a selfie pre or post your run or walk (alone or with your pet) – it doesn’t matter if your run is long or short, if you are an experienced runner or you began during the lockdown 2 Post it on Twitter, Instagram, Facebook or LinkedIn with the very important phrase #IrunwithSIAS 3 Tag them in your post and follow SIAS (Twitter @siascommittee and/or Instagram @siasevents) 4 Send an email with your Twitter or Instagram name, postal address and your chosen charity to charity@sias.org.uk Previous participants are welcome to complete another three runs.

For your first run or walk with SIAS, a SIAS-branded water bottle will be sent out – albeit after the lockdown!

For your second and third run or walk with SIAS, a £10 donation will be made each time to your chosen charity. SIAS would like to encourage you to support any local food banks or COVID-19 related charities – at these difficult times, we should come together to support our local community and our carers. However, you can support any charity you wish to.

You can fundraise a maximum of £20 with each run or walk for your chosen charity.

Call for your news…

We would be delighted to hear from you.

If you have any newsworthy items for these pages, please contact us at: social@theactuary.com

IMAGES: ISTOCK

A recent message from Master Fiona Morrison outlined what the Worshipful Company of Actuaries (WCA) is doing to connect with its members during the lockdown period.

“There has never been a time in the Company’s 40 years when community was so important,” she said. “I usually think of this in terms of meeting and doing things together, whether at dinners or less formal social events. But all that is off for the foreseeable future. We all know that we must adapt to survive, and that is just what we are doing.” She went on to describe three ways to connect that are ‘COVID-19 compatible’.

First, the WCA is providing ‘virtual socials’ using the Zoom app, where members can meet on laptops, tablets and smartphones. The first took place on 26 March for an hour, and the WCA aims to make them a regular occurrence. “Pour yourself a cup of tea, or perhaps something a little stronger, and join me and other members on a video link,” said Fiona. “Join in for as long or short as you like during the hour, with your own drink and food…. In future we may do things like quizzes, or other themes.”

The new Whatsapp group has also been useful. “During this crisis, it has taken on a life of its own, enabling members to share thoughts, pictures and information,” Fiona said. “As well as the clerk posting practical information, some members have found amusing films and cartoons, bringing many smiles. Some members who are self isolating have said how the humorous posts are much appreciated.”

Realising that Zoom and WhatsApp aren’t for everyone, the Master is keen that the community be inclusive for all, and so the third way of connecting is more personal.

“If you would prefer to be put in touch with a member who would phone/email/text, or whatever you prefer, on a one-to-one basis, please let us know,” she said. “Do you need help with your shopping or other things? If so, we will try to find a member near you. We can’t promise, but we’ll certainly try to find a solution. This is clearly the first time we’ve ever attempted anything like this, but I have confidence that we can deliver, so don’t be reticent in asking!”

The charity and community the WCA is famous for is certainly coming into its own. If you are interested in joining, please visit www.actuariescompany.co.uk

MAY 2020 | THE ACTUARY | 43

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At the back Actuary of the future

On the record Place of residence

Adding the numbers on a number plate and the happy feeling when the addition is an even number.

Hobbies & interests Reading mystery novels, writing poems, drawing, listening to music.

Favourite Excel function?

Solver, it is so easy to use and has wide practical applications. ns.

I let an internship offer in a non-actuarial role go because I only wanted to intern in an actuarial department. Luckily, I secured a pricing internship at Hdfc Ergo General Insurance.

What sort of Actuary of the Future will you be?

An all-rounder, dedicated to my profession, have a good work-life balance and an active IFoA volunteer.

What kind of actuarial work are you aiming to be involved in?

I would like to start my career in valuations at a reinsurance company.

products might be insured 20 years from now.

What motivates you?

I imagine how happy I would be when I achieve a particular thing, and the excitement and motivation follows.

What would be your personal motto?

Winners don’t quit and quitters don’t win.

Name five dream companions to be stuck on a desert island with Sundar Pichai, Edmond Halley, the Wright Brothers (we won’t be stuck on the island for long) and Emma Watson.

If there was a movie produced about your life, who would play you, and why?

Emma Watson. She is an amazing actress and I feel el she has the talent to play me.

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

Recently, I calculated my attendance allowing for 2% error reduction and my actual attendance turned out to be the one I had calculated without the error reduction.

Alternative career choice?

A commercial pilot.

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

Agatha Christie. I would love to get some tips on how to write a good mystery novel.

If you could be anyone else, who would it be?

What’s an interesting actuarial topic you’ve been following?

JK Rowling.

I have been following updates on bicycle insurance and the companies that provide them. It’s fascinating to imagine what

Do you know an actuary destined for greatness?

You can nominate an Actuary of the Future by emailing aotf@theactuary.com

44 | THE ACTUARY | MAY 2020

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PICTURES: ISTOCK / ALAMY

Tell us an interesting fact about yourself

Greatest risk you have ever taken?

Student

What’s your most ‘actuarial’ habit?

Mumbai, India.

I don’t let go of things even if they seem impossible to achieve. Sometimes, it works in my favour.

TRISHLA DOSHI

www.theactuary.com

27/04/2020 14:53

At the back Appointments

Jobs

IPS GROUP IS STILL

To advertise your vacancies in the magazine and online please contact: theactuaryjobs@redactive.co.uk or +44 (0) 20 7880 6234

FOR MORE INFORMATION VISIT

www.ipsgroupltd.com/covid-19/

MAY 2020 | THE ACTUARY | 45

ACT recr May20.indd 45

27/04/2020 17:04

At the back Appointments

Permanent and Contract Opportunities at APR Permanent roles for entry-level (school leavers and graduates), mid / senior students and qualified actuaries Positions based in London and Edinburgh, with the option of locating to Dublin Contracting opportunities across UK for actuarial professionals at all levels of experience

Join our growing team - opportunities for a range of placement and consulting projects Drawing on the high quality of the solutions we are providing to clients, whether individuals on placement or delivering project-based services, our business is continuing to grow. Our permanent actuarial staff gain exposure to a wide range of clients and projects, while benefiting from our highly-regarded training and support. Those who contract through APR enjoy our professional, focused approach to finding suitable roles and supporting our contractors on placement. We currently have the following opportunities: Graduate Actuarial Associate

Actuarial Contractor Roles

Our well-established graduate training programme is based on comprehensive initial training and exposure to project roles selected with your development in mind.

We are suppliers to most of the UK’s largest insurance firms, giving you access to a wide range of contracting opportunities. Our actuarial expertise and targeted approach to filling roles maximises your chances of securing contracts that suit your skills and preferences.

Our exam pass rate far above the UK average gives you maximum chance to qualify quickly as you launch a successful and varied actuarial career.

We can work with contractors on a range of different engagement bases, whether through limited companies or payrolled.

Actuarial Analyst (CAA)

Actuarial Associate / Senior Actuarial Associate

Drawing on our experience and strength in training actuarial students, we have now been recruiting Actuarial Analysts for three years.

We are looking out for high-quality actuarial students and qualified actuaries to supplement our team.

As well as giving you experience across a range of client projects we support our analysts to take the CAA qualification, hopefully as a first step towards full FIA qualification.

Those attracted to an associate role at APR are often looking for a broader range of actuarial experience or an increased level of responsibility through working for a smaller firm.

For further information see: https://aprllp.com/working-for-apr/ https://aprllp.com/actuarial-contracting-with-apr/

Or contact: recruitment@aprllp.com

www.aprllp.com

KEEPING YOU IN THE LOOP 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 www.theactuary.com Browse www.theactuaryjobs.com and www.theactuaryjobsasia.com the official jobsites of the actuarial profession.

www.theactuaryjobs.com

The magazine of the Institute and Faculty of Actuaries

46 | THE ACTUARY | MAY 2020

ACT recr May20.indd 46

27/04/2020 17:04

At the back Appointments

Jacqui van Teutem

Susan Bradley

Ireland’s Leading Actuarial Recruitment Agency Actuarial Audit Manager

Life Risk Actuary

Deputy HOAF

Well-known insurance provider seeks both Life and Non-Life Actuarial Managers for Internal Audit roles.

FantasƟc opportuniƟes for nearly or newly qualiĮed actuaries to work with senior actuarial and business leaders. The role would suit independent actuaries with ambiƟon.

Risk actuary required to join the team of an insurer/reinsurer. This is an excellent opportunity to take ownership of many of the BAU risk acƟviƟes. The company are going to be building a new internal model and this work will bring further opportuniƟes within the organisaƟon. A great step towards being a CRO in future years.

A fantasƟc opportunity for a qualiĮed actuary to join an internaƟonal insurance organisaƟon. The role will inŇuence the further development of the reserving and actuarial funcƟon. We are looking for an experienced actuary with strong reporƟng and regulatory experience. A great opportunity to join this company at a senior level.

Actuarial Solvency II Analyst

Finance and Capital Roles

IFRS17 Life Contract Roles

Reinsurance company seeks part qualiĮed actuary to join the Solvency II team as an actuarial analyst. The role will work closely with the HOAF. ResponsibiliƟes include calculaƟon and analysis of Solvency II. An excellent opportunity to gain exposure the business side of things.

A well-known mulƟnaƟonal requires Įnance and capital actuaries to join the team in Dublin. The company are open to individuals who are part-qualiĮed or nearly/newly qualiĮed, from either non-life or life backgrounds. This is an exciƟng opportunity working for a company with an excellent reputaƟon as an employer.

Despite COVID 19 and the extended IFRS deadlines there are sƟll upcoming IFRS contract opportuniƟes in Dublin. Roles include both complete systems design and rebuilds so 12-month contracts are typical. We are looking for Actuaries with strong reporƟng and systems/ modelling experience.

Financial ReporƟng Roles

Pricing Actuary

Reserving Analyst

Financial reporƟng opportuniƟes for a life reinsurer in Dublin city.

Roles available for nearly/ newly qualiĮed, and management levels.

Technical Life reporƟng experience is essenƟal. FantasƟc opportuniƟes for individuals that enjoy a dynamic work environment.

Do you want to move into a pricing role? Due to internal promoƟon a growing life insurance business have a vacant role in their pricing team.

Our client will consider high potenƟal candidates who want to move into pricing. This is a senior role with management potenƟal.

If you want an exciƟng company look no further. A reserving analyst is required to work with a senior team of Actuaries. Non-life and solvency II experience is required.

Full support for compleƟon of actuarial exams is oīered here.

For further information on these and other opportunities in Ireland please contact us at jobs@raretec.ie If you are a company looking for permanent or contract actuarial resources then call us on +35315311400 We look forward to hearing from you www.raretec.ie MAY 2020 | THE ACTUARY | 47

ACT recr May20.indd 47

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At the back Appointments

NON-LIFE

RISK PRICING ANALYST

PRICING DEVELOPMENT ANALYST

Midlands, up to £50,000

Midlands, up to £50,000

The actuarial team in a leading motor and household insurer is looking for an Actuarial Risk Pricing Consultant to join their team.

The actuarial team in a leading insurer is looking for an Actuarial Pricing Development Consultant to join their team.

Key responsibilities will include individual pricing assessment risk, communicating the impact of results to the underwriters and analysis of data from pricing models. Assistance of the building, review and maintenance of pricing models and business planning will also be within your remit.

Key responsibilities will include assistance in continuous improvement across the pricing function, assistance in more accurate forecasting of pricing activity and to identify capabilities of the pricing team.

The roles offers a competitive benefits package.

The suitable candidate will have a few years of experience in general insurance pricing.

The roles offers a competitive benefits package.

The suitable candidate will have experience in general insurance pricing and experience with Emblem.

Contact: sam.baker@eamesconsulting.com | 0207 092 3230

Contact: sam.baker@eamesconsulting.com | 0207 092 3230

RISK CAPITAL MODELLING MANAGER

PRICING AND RESERVING ACTUARY

London, up to £100,000

London, up to £90,000

A leading Lloyd's insurer is looking to bring on a Capital Actuary to their team.

The actuarial team in a leading global insurer is looking for an Actuary to join them across all lines of business and work on a mixed role.

The role will involve providing leadership and guidance on their internal capital model. You will also have the opportunity to interact with a range of senior stakeholders.

This is a vital role in one of the best-renowned Lloyd's insurers and would offer a huge amount to someone's career. The team below you is extremely talented and provides a great opportunity to help them grow and act as a mentor.

Capital modelling experience is essential and there is a slight preference for previous Lloyd's exposure. This is a very visible role within the business, so an exceptional level of communication is also needed for the front-facing aspects of the role.

Key responsibilities includes assistance of the building, review and maintenance of pricing models and business planning will also be within the candidates remit. During the quarterly reserves, you also expected to assist the reserving team.

This role involves giving a lot of support to the underwriters and pricing and reserving managers, so excellent communication skills are required.

The suitable candidate will have at least 5 years of experience in general insurance/ reinsurance Pricing, Reserving and be nearly/newly qualified.

Contact: james.rydon@eamesconsulting.com | 0207 092 3239

Contact: james.rydon@eamesconsulting.com | 0207 092 3239

PRICING ANALYST

SENIOR PRICING ACTUARY

London, up to £60,000

London, up to £100,000

A global insurer is looking to bring on an Actuarial Analyst to their Pricing team.

A Lloyd’s insurer is looking to bring on a Senior Pricing Actuary to join their property division.

The candidate will support the Head of Pricing in improving their pricing exercises and will be looking at a range of different lines of business.

The candidate will support the Head Actuary and underwriters to develop rating models and methods communicating the output from pricing tools and reviewing the pricing.

The role involves strong interaction with team members so you will have strong communication and interpersonal skills. Candidates from a consultancy background, reserving or capital modelling looking to develop in-house pricing are encouraged to apply.

The ideal candidate will have 2+ years’ experience in general insurance and be working towards the actuarial exams.

This role will also have a lot of interaction with the Reserving team so knowledge of standard reserving methods used in the London Market are also important.

The ideal candidate will have 6+ years’ experience in London market Pricing and be a qualified actuary.

Contact: james.rydon@eamesconsulting.com | 0207 092 3239

Contact: sam.baker@eamesconsulting.com | 0207 092 3230

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.

48 | THE ACTUARY | MAY 2020

ACT recr May20.indd 48

27/04/2020 17:04

At the back Appointments

SENIOR RESERVING ANALYST

MIXED RESERVING/CAPITAL ACTUARY

London, up to £65,000

London, up to £75,000

A Lloyd’s insurer is looking to bring on a Senior Reserving Analyst to their Reserving team.

The candidate will focus on the delivery of quarterly IFRS 17 reserves and Solvency II technical provisions, communicating analysis to a wide range of stakeholders. The role will also extend to leading ad-hoc projects within the reserving team, overseeing and mentoring junior team members.

The ideal candidate will have at least 2 years of experience within a General Insurance Reserving role. Preferably within the Lloyd’s market or a Consultancy.

A prominent Lloyd’s Managing Agency is looking to bring on board an Actuary to assist across all lines of business.

The role will be split between the Reserving and Capital functions. Responsibilities will include delivering the Solvency II technical provisions for all managed syndicates and risk parameterisation of the capital model.

The ideal candidate is a near to fully qualified actuary with experience in a Reserving or Capital modelling role within the Lloyd’s Market or a Consultancy.

Contact: rafaela.fakhre@eamesconsulting.com | 0203 846 5909

Contact: rafaela.fakhre@eamesconsulting.com | 0203 846 5909

SENIOR ACTUARIAL ASSOCIATE - RESERVING

PRICING ACTUARY

London, up to £95,000 (perm), £105,000 (FTC)

A prominent Lloyd’s Insurer is seeking a Senior Reserving Associate to join their Market Reserving and Capital team.

The candidate will undertake a predominately reserving role, focusing on the central reserving process. This will involve calculating surplus reserves, investigating thematic aspects within the market, and ad-hoc assistance within the capital modelling team.

The ideal candidate is a fully qualified candidate with 5+ years of experience within the Lloyd’s Market or a Consultancy.

London, £80,000

A large Lloyd’s Syndicate is seeking a Pricing Actuary to join their Strategic Business Unit.

The Strategic Business Unit encompasses the Marine and P&C specialty lines. The candidate will therefore focus on individual case pricing, undertaking a front facing role and working closely with the underwriting team.

The ideal candidate is a near to fully qualified actuary with at least 3 years of pricing experience.

Candidates from all sectors of General Insurance will be considered.

Contact: rafaela.fakhre@eamesconsulting.com | 0203 846 5909

Contact: james.rydon@eamesconsulting.com | 0207 092 3239

RESERVING ANALYST London, up to £38,000

SENIOR ACTUARIAL MANAGER - RESERVING London, up to £125,000 (perm or FTC)

A large Motor insurer is looking to bring a Reserving Analyst into its Syndicate reserving team.

The candidate will support the Reserving Manager in calculating Solvency II technical provisions, providing input into the capital model, and communicating with the wider actuarial functions.

The candidate will also provide input into the business planning process, advising on strategy for the reserving, pricing, and underwriting teams.

The ideal candidate has at least a years’ reserving experience and a 2:1 in Actuarial Science, Mathematics, or any other relevant field. Experience using ResQ is also desirable.

A prominent Lloyd’s Insurer is looking for a Senior Reserving Manager to join their Syndicate Reserving team.

The role will involve overseeing the Reserving process of all Lloyd’s Syndicates. More specifically this will encompass determining surplus reserves, ensuring regulations are met, and communicating with all syndicates to relay any analysis.

The ideal candidate is a fully qualified candidate with extensive experience within a Lloyd’s Market reserving role.

Contact: james.rydon@eamesconsulting.com | 0207 092 3239

Contact: rafaela.fakhre@eamesconsulting.com | 0203 846 5909

MAY 2020 | THE ACTUARY | 49

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At the back Appointments

The magazine of the Institute and Faculty of Actuaries

PAVE A NEW PATH

theactuaryjobs.com is the oï¬&#x192;cial job board for the Institute and Faculty of Actuaries.

To register for our Jobs by email service simply go to theactuaryjobs.com 50 | THE ACTUARY | MAY 2020

ACT recr May20.indd 50

www.theactuaryjobs.com 27/04/2020 17:04

Q&A with leaders of the OJ Actuarial Division Oliver James has been leaders in the Actuarial recruitment market for over 15 years. Here, Rob Gormley and Laura Sharkey, two leaders within their UK permanent and contract business, provide you with an exclusive insight into the current state of the market and answer your frequently asked questions.

IS IT A GOOD TIME TO BE JOB SEEKING? Laura: We are experiencing a number of hiring pauses across the contract market, allowing business to adapt and put the appropriate infrastructure in place. However, many businesses will still be hiring for business-critical roles and are going above and beyond to onboard contractors remotely to enable business continuity.

Rob: Many businesses are rising to the unprecedented hiring challenges and are undertaking vigorous assessments of their hiring forecasts to determine where their JYP[PJHS OPYLZ HYL -VY [OLZL YVSLZ ^L HYL ZLLPUN I\ZPULZZLZ PU[LY]PL^PUN HUK VɈLYPUN remotely, so it’s important to remain positive and patient with the market.

ARE YOU SEEING ANY DIFFERENCES BETWEEN THE CONTRACT AND PERMANENT MARKETS? Laura: The recent 12-month delay of IR35 has meant businesses are becoming more open to contractors making their own determinations, although some will not revoke their policy about engaging with PAYE contractors. With this and the impact VM *6=0+ ^OH[ YLTHPUZ JVUZPZ[LU[ PZ I\ZPULZZLZ HYL Z[PSS OPYPUN JVU[YHJ[VYZ [V ÄSS critical roles.

Rob: Many in the permanent market know that securing the best talent now will enable them to emerge stronger when a degree of normality returns. Most businesses are working hard to ensure they have the technological infrastructure in place to ensure of business continuity, including the onboarding of new starters.

WHAT MEASURES ARE COMPANIES PUTTING IN PLACE TO ENSURE THEIR EMPLOYEES FEEL SETTLED AND ENGAGED WHEN WORKING FROM HOME? Laura: Mental health has certainly become a priority with businesses working hard to ensure employees’ welfare remains paramount. Mental health support networks and NYPL]HUJL JV\UZLSSVYZ HYL ILPUN PU[YVK\JLK [V VɈLY HKKP[PVUHS Z\WWVY[ HUK I\ZPULZZLZ are holding regular virtual social events to boost morale.

Rob: Many are coming up with creative ways to maintain those important face-to-face PU[LYHJ[PVUZ 6USPUL S\UJOLZ JVɈLL IYLHRZ HUK -YPKH` KYPURZ HYL ILJVTPUN [OL UL^ UVYT HZ I\ZPULZZLZ ^VYR [V LUZ\YL LTWSV`LLZ MLLS \UPÄLK LUNHNLK HUK Z\WWVY[LK whilst at home.

WHAT DOES THE FUTURE HOLD FOR THE ACTUARIAL MARKET? Laura & Rob: We believe that aspects of home working will remain the norm across the profession as businesses see a comparable level of productivity, as well as being in a better technological position to support it. Head over to our LinkedIn page to watch a recently recorded piece from one of our Associate Directors, Ani Pannell to ÄUK V\[ TVYL For further advice and guidance contact askoj@ojassociates.com and the team will be in contact.

At the back Appointments Live Global Jobs Live UK Jobs

761 261

Life Roles

450

GI Roles

151

Contract Roles

73

Pension Roles

64

Other Roles

23

Head of Financial Risk Greater London £100,000 - £120,000 + Benefits Richard Howard +44 (0) 203 861 9191 richard.howard@ojassociates.com Head of Pricing London £100,000

Damian Bialozynski +44 (0) 203 861 9208 damian.bialozynski@ojassociates.com Reinsurance Pricing Actuary – Broker London £70,000 - £100,000 Robert Gormley +44 (0) 203 861 9193 robert.gormley@ojassociates.com

Senior Life Actuary City of London £95,000 (will consider part-time) Natalie Lightfoot +44 (0) 203 861 9185 natalie.lightfoot@ojassociates.com

Capital Modelling Actuary - Igloo City of London £700 - £800 per day Ani Pannell +44 (0) 203 861 9163 ani.pannell@ojassociates.com

Prophet Developers (all levels) New Zealand Dependent on Experience + (relocation package/study support) Laura Sharkey +44 (0) 203 861 9149 laura.sharkey@ojassociates.com

+44 (0) 203 861 9200 ojassociates.com/theactuary MAY 2020 | THE ACTUARY | 51

ACT recr May20.indd 51

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At the back PLEASE CONTACT US TO DISCUSS OUR CURRENT VACANCIES OR Appointments

FOR EXPERT ADVICE TO HELP YOU ACHIEVE YOUR CAREER GOALS FINANCIAL RISK ACTUARY

Qualified

Qualified

Growing Niche Insurer

NON-LIFE LONDON / EUROPE

STAR6207

PUSH PRICING INTO THE FUTURE Global Player

NON-LIFE LONDON / FLEXIBLE

STAR6202

Qualified

Leading Specialist Insurer

NON-LIFE HEALTH GREATER LONDON

STAR6213

An exciting corporate role, enhancing and developing financial, capital and underwriting reporting capabilities. You will have strong people skills, and gain exposure across capital modelling, reserving, reinsurance and more.

A great chance to lead the team responsible for economic and capital modelling, providing oversight of financial risks. You will challenge the capital adequacy of the business and ensure effective risk management.

Developing the pricing, data science, analytics, and optimisation capabilities of a market leader, taking a strategic and technic role in complex projects.

RESERVING AND CONSULTANCY

REINSURANCE PRICING

ASSISTANT RESERVING MANAGER

Part-Qualified / Qualified

Award-winning Consultancy

Part-Qualified / Qualified

Global Reinsurer

NON-LIFE LONDON / NORDIC COUNTRIES NSTAR037

NON-LIFE LONDON

STAR6206

Take this excellent chance to build upon your reserving experience and your strong people skills within an entrepreneurial team. Clientfacing consulting and project-leading experience would be advantageous.

Reporting to the Chief Actuary, you will work on pricing reinsurance treaties across multiple lines of business, collaborating with other teams and communicating results. You will also improve the efficiency of the pricing processes.

Part-Qualified / Qualified

Specialty Lloyd’s Insurer

NON-LIFE LONDON

STAR6101

Take day-to-day responsibility for reporting workstreams, with a particular focus on Solvency II technical provisions and Pillar 3 reporting. Talented exam-stoppers will be considered.

RESERVING AND ANALYTICS

CASUALTY & SPECIALTY ANALYST

SENIOR PRICING ANALYST

Part-Qualified

Part-Qualified

Part-Qualified

Leading Global Insurer

NON-LIFE LONDON / SOUTH COAST

STAR6219

Take up this excellent opportunity to plan and analyse the business performance of our client’s extensive portfolio, reporting your findings to senior stakeholders. Part-time or job-sharing plans possible.

RISK ACTUARY Part-Qualified / Qualified

Leading Reinsurer

NON-LIFE LONDON

STAR6075

Take responsibility for the analysis and modelling of risks across casualty and specialty lines, whilst working closely with senior actuarial and underwriting colleagues.

Casualty treaty pricing experience advantageous.

SENIOR ACTUARIAL ANALYST

NON-LIFE LONDON / SOUTH EAST

STAR6180

Deliver pricing decisions to manage the performance and competitiveness of our client’s personal lines products. You will lead on pricing reviews and key projects whilst utilising a variety of software tools and data sources.

LEADING-EDGE PENSIONS

Major Global Insurer

Part-Qualified

Global Reinsurer

STAR6208

LIFE LONDON

STAR6048

LIFE SOUTH WEST

Managing Agency

Part-Qualified / Qualified PENSIONS BRISTOL

Leading Consultancy STAR6103

Join a leading risk team, supporting the CRO, and providing risk opinions for a variety of areas, including reinsurance, investments, product design and pricing. Flexible working options are available.

In this key role, you will manage existing and new protection treaties throughout their lifecycle, and contribute to the development of reinsurance solutions and services, considering risk appetite and client needs.

Deliver pensions advice across a wide range of projects, including valuations, accounting disclosures, options for de-risking, and advising on PPF levies.

IN-HOUSE PENSIONS ACTUARY

INNOVATIVE INVESTMENT CONSULTANCY

INVESTMENT EXPERT

Part-Qualified / Qualified

Part-Qualified / Qualified

Part-Qualified / Qualified

Global Leader

PENSIONS SOUTH EAST

STAR6014

An exciting opportunity to join a specialist in-house pensions team. Longevity swap experience would be beneficial. Our client offers excellent benefits and flexible working arrangements will be considered.

Leading Consultancy

INVESTMENT SOUTH EAST

STAR6216

Take the lead, developing, influencing and enhancing our client's products. This role offers genuine variety with exposure to a range of projects, as well as client-facing consultancy work.

INVESTMENT SOUTH WEST

Growing Consultancy STAR6187 / STAR6188

Develop bespoke, end-to-end investment strategies based on ALM output for a wide range of clients. You will provide advice on establishing, maintaining and developing interest rate and inflation hedges.

Irene Paterson FFA

Lance Randles MBA

Peter Baker

Jan Sparks FIA Ja

Paul Cook P

PARTNER P

PARTNER

PARTNER

PARTNER PA

ASSOCIATE DIRECTOR A

+ 7545 424 206 +44 iirene.paterson@staractuarial.com

+44 7889 007 861 lance.randles@staractuarial.com

+44 7860 602 586 peter.baker@staractuarial.com

+44 7477 757 151 jan.sparks@staractuarial.com ja jan

+4 7740 285 139 +44 paul.cook@staractuarial.com pa

Jo Frankham

Adam Goodwin

Satpal Johri

Clare Roberts

Diane Anderson D

ASSOCIATE DIRECTOR

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ASSOCIATE DIRECTOR

SSENIOR CONSULTANT

+44 7950 419 115 jo.frankham@staractuarial.com

+44 7584 357 590 adam.goodwin@staractuarial.com

+44 7808 507 600 satpal.johri@staractuarial.com

+44 7714 490 922 clare.roberts@staractuarial.com

+ 7492 060 219 +44 ddiane.anderson@staractuarial.com

Antony Buxton FIA

Louis Manson

Joanne O’Connor

MANAGING DIRECTOR +44 7766 414 560 antony.buxton@staractuarial.com

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OPERATIONS DIRECTOR +44 7739 345 946 joanne.oconnor@staractuarial.com

52 | THE ACTUARY | MAY 2020

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

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