The Actuary - November/December 2024 by Redactive Media Group

STEPPING IT

The team on a pensions message mission

MODERN SLAVERY

The role of ﬁnancial services: special report

YOUR NEW STATUS

The introduction of ‘Chartered Actuary’

INFRASTRUCTURE

Infra is ‘in’ right now. Time to invest

ONLINE

Magazine: theactuary.com IFoA: actuaries.org.uk

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Kate Bennett

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SUBSCRIPTIONS

EDITOR

Yiannis Parizas editor@theactuary.com

FEATURES EDITORS

features@theactuary.com

● Travis Elsum: Environment and sustainability

● Sachal Gandotra: General insurance

● Lily Hallett: Pensions

● Alex Martin: Environment and sustainability

● Blessing Mbukude: Life

● Lisa Morgan: Health and care

● James Reeder: General insurance

● Aoife Walsh: Life

● Ruolin Wang: Investments

● Adeetya Tantia: Student editor student@theactuary.com

IFOA COMMS LEAD

Sonia Sequeira sonia.sequeira@actuaries. org.uk

IFOA EDITORIAL

ADVISORY PANEL

Peter Tompkins (chairman), Chika Aghadiuno, Nico Aspinall, Naomi Burger, Matthew Edwards, Jessica Elkin, Richard Purcell, Sonal Shah, Nick Silver

Subscriptions from outside the actuarial profession, per annum: UK: £125, Europe: £160, rest of world: £195. To subscribe, email: editor@theactuary.com

Changes of address and subscription queries, email: membership@actuaries.org.uk

Published by the Institute and Faculty of Actuaries (IFoA), Staple Inn Hall, High Holborn, London WC1V 7QJ.

The editor and the IFoA are not responsible for the opinions put forward in TheActuary. No part of this publication may be reproduced, stored or transmitted in any form, or by any means, without prior written permission. While every effort is made to ensure accuracy of the content, the publisher and its contributors accept no responsibility for any material herein. The editorial content of this magazine is intended for your personal information only and all views expressed are the author’s/authors’ own. No part of the editorial content shall constitute legal, financial, professional, corporate or career advice, and should not be relied upon as such, regardless of location, circumstance and jurisdiction; nor is it intended to solicit business.

A highly varied profession

The approaching end of a year is always cause for both reflection and prediction. This is the last issue of 2024 for this magazine. For me, the main takeaway is the same as usual, however: that our varied professional field is fascinating, complex, ever-evolving. We aim for The Actuary to reflect this; it’s certainly itself evolved these last few months.

I hope you’ve enjoyed the series on net zero for insurers that we’ve run over the past few issues. The third and ﬁnal article, focusing on the role of actuaries in the UK’s transition to electric vehicles, is on page 45.

The complexities of what we do are demonstrated by our deep dive into a Part VII transfer – two life actuaries outline their experiences (p48). On the evolving aspect of our profession, IFoA working party chair Alexandra Miles is eager to make UK pensions fairer and more accessible for all, and to get the messaging ‘out there’– see our cover story, page 28.

Our interview this time (p18) is with Labour peer Bryn Davies, a lifelong pensions advocate and trade unionist – and the one actuary representative in the House of Lords. And our long-read special report examines modern slavery (p22). What are the responsibilities of actuaries – and those working in ﬁnancial services more generally – in combating this global issue?

“MY TAKEAWAY IS THE SAME: THAT OUR FIELD IS FASCINATING, COMPLEX AND EVER-EVOLVING”

If you’re hoping to take a break this December but ﬁnd it hard taking time off, how about a ‘bleisure trip’ – a hybrid holiday that combines business and leisure? See page 54.

Thank you for your continued engagement this past year with The Actuary –as always, we value your insights and contributions to our content and community. Have you listened to our ﬁrst podcast or seen our ﬁrst video yet? Find them, plus loads more online, at theactuary.com.

YIANNIS PARIZAS

YIANNIS PARIZAS Editor editor@theactuary.com

Need-to-know from the IFoA, including events and volunteering, plus profession-wide news

LORD BRYN DAVIES

“BEING AN ACTUARY GIVES YOU A STANDING WHEN TALKING ABOUT PENSIONS POLICY”

IN FOCUS

28 PENSIONS LEVELLING UP

The IFoA Pension Gap Working Party and its partners are speaking up about breaking down barriers

33 INVESTMENTS POWER PORTFOLIO

Now’s the right time to back infrastructure, as Chris Howells and Mehdi Khalili explain

36 GENERAL INSURANCE CROWD PLEASER

Karol Gawlowski, John Condon, Davide Ruﬃni and Jack Harrington on the beneﬁts of ensemble modelling

41 HEALTH PAID FOR SHADE

Sarah Ebrahimi on a pilot parametric insurance product for Indian women who work outside

45 SUSTAINABILITY ARE WE NEARLY THERE YET?

Can actuaries help the UK’s move to electric vehicles? The third article in our series on net zero for insurers

48 LIFE TRANSFER SKILLS

The view from the inside of a complex Part VII transfer, and the vital role of the independent expert

HORIZON

54 SOFT SKILLS

Need a break but feel you can’t take time off? Julia Lessing describes her ‘bleisure’ trip

56 MEMBER NEWS

All about you, and the actuarial community

57 ACTUARY AND…

Gaelic chorister. Donald Macleod on his part in a Scottish musical tradition

ONLINE

More features, more opinions, more bespoke content… You don’t have to wait for our next bimonthly magazine –ﬁnd much more online at theactuary.com

● Real deal: A hands-on challenge for students

● A better actuary: The art of altering habits

58 PUZZLES

Our popular page of brain teasers

60 STUDENT AUTHOR

Edward Lovelock shares the concept of the ‘Pareto mindset’

62 BACK FOR MORE

Suggestions for what next to read – and watch, listen to, explore…

Cover Image: Louise Haywood-Schiefer

Bechartered. Beseen.

Give your skills and hard-earned qualiﬁcations maximum visibility by claiming chartered status. Find out more at:

Masimba Zata

Chartered Actuary (Fellow)

WELCOME

The importance of connection

In my presidential speech, I talked about the importance of engagement and connection. At our Council meeting in September, one topic was how to engage more effectively with members so we can understand your experiences of the IFoA. Our conferences are a good place to start, and we’ll be making time at these events to listen and learn.

It was exciting to attend the Life Conference in October. I heard from members at the presidential town hall, women’s networking breakfast, volunteers’ reception, Council clinics and the informal mingling.

This month, I will be at the GIRO and inaugural India conferences, and am keen to hear your thoughts.

I also want to mention the joy it brings me to attend qualiﬁers’ events, congratulate our next generation of actuaries and hear about the successes and challenges they’ve faced on their journey to qualiﬁcation.

On a trip to Scotland, I spent time with the Scottish Board and met Heriot-Watt University students and faculty. I was inspired – we could all learn from the high levels of engagement there. In London, in August, I was also delighted to meet the young people taking part in our Data Driven Futures programme. This provides opportunities for those who may face barriers to employment.

I am passionate about engaging with stakeholders to promote our members’ work. In the UK, I represented the IFoA at our fringe events at the Labour and Conservative party conferences, which promoted better long-term policymaking. This allowed us to engage with the two main parties in the early stages of this Parliament, and show how actuarial expertise could help to solve some of the UK’s big challenges.

Networking with other actuarial societies creates a strong foundation for the global profession. At September’s International Actuarial Association meeting in Tallinn, we discussed how to foster the

“WE’LL BE MAKING TIME AT OUR CONFERENCES TO LISTEN AND LEARN”

DO GET IN TOUCH

Email me to share your thoughts: presidents@actuaries.org.uk

global growth of the profession and were updated on the association’s AI Taskforce, launched earlier this year. In October, at the Actuarial Association of Europe (AAE) meeting in Budapest, I had fruitful discussions about building closer ties. The IFoA looks forward to hosting the AAE Spring 2025 meeting in Edinburgh.

You will notice the adverts in this issue introducing chartered designation for Fellow and Associate members. Chartered status is already well established in other professions, and we believe it will emphasise actuaries’ high levels of training and professionalism. It is also legally protected. Anyone carrying out actuarial work may call themselves an actuary – but only a qualiﬁed member of the IFoA will be able to call themselves a Chartered Actuary. Please do consider adopting the designation (see page 10).

KARTINA TAHIR THOMSON President of the Institute and Faculty of Actuaries

THE LATEST NEWS AND NEED-TO-KNOW FROM THE IFoA

UPDATE

SHACKLETON IN SCOTLAND: it’s 150 years since the birth of explorer Sir Ernest Shackleton, and 110 years since he failed in his Antarctic expedition on the Endurance but saved all his crew. Did you know that first officer Lionel Greenstreet was a marine insurer? Two years ago, the wreck of the ship was finally found. The wooden cross that marked where Shackleton was buried in South Georgia in 1922 is now on display in Dundee, Scotland, beside RRS Discovery, the first ship that he sailed to Antarctica in 1901. Use the QR code for more

SOLID GROUND FOR STANCE ON SCOTLAND

The IFoA has published Building a Resilient Scotland, a policy prospectus developed with the IFoA Scottish Board. It suggests how government and civil society could take a different approach to consider the long-term.

Since devolution was introduced in 1998, the Scottish parliament has been able to develop policy in a variety of areas, from health and social care to education and beyond. However, recent events such as the Covid pandemic and Brexit have made it harder to plan and execute long-term policy.

From infrastructure investment to the adult social care system, a strategic focus on the long-term could ensure Scotland harnesses growth opportunities and faces emerging challenges in good time, the IFoA believes.

The prospectus calls on Scottish policymakers to embrace the long-term and take risk-informed approaches towards investing for growth and building a resilient economy that will support a healthy population.

The IFoA looks forward to engaging across the political spectrum and highlighting how actuaries’ skills, knowledge and expertise can help.

FCA TO PROBE PREMIUM FINANCE FAIRNESS

The Financial Conduct Authority is to investigate whether people who borrow to pay for motor and home insurance are receiving fair, competitive deals. Around 20 million people in the UK pay for insurance via premium ﬁnance, with the average yearly rate ranging from 20% to 30%. The review will look at whether the products represent fair value, and barriers to competition.

NATCAT LOSSES SLIP BELOW DECADE AVERAGE

Losses from natural catastrophes amounted to least $280bn in the ﬁrst nine months of 2024, according to Gallagher Re –below the 10-year average of $309bn. Insurers covered at least $108bn of the losses, which were driven by low to mid-size events, particularly in regions with higher coverage. For the seventh year in a row, global insured losses breached $100bn.

RESEARCH REVEALS SCALE OF GREENWASHING

36% of financial companies linked to greenwashing in 2023 were repeat offenders in 2024, according to environmental, social and governance technology specialist RepRisk. While 2023 saw a 70% rise in climate-related greenwashing risk in the banking and financial services sector, this figure fell by 20% in 2024 – and the number of companies linked to the practice overall fell by 12%.

The IFoA at the party conferences

SHARING OUR PROFESSIO N’S PRIORITIES

Since 2018, the IFoA has had a strong presence at the Labour and Conservative annual Autumn party conferences. This gives us invaluable opportunities to bring the actuarial profession ‘to life’ for political stakeholders, and to share our policy and legislation priorities.

This year, we partnered with the Institute for Government to host events at both party conferences. First was Labour in Liverpool, where we hosted a panel that included IFoA president Kartina Tahir Thomson and Labour MP Josh Simons, looking at how Labour can succeed in its mission-led approach to government.

Next was the Conservative conference in Birmingham, where the focus was on how prime ministers can deliver long-term objectives – a topic covered in our policy prospectus, Beyond the Next Parliament. The IFoA is grateful to Kartina Tahir Thomson, Lord Norton of Louth and shadow Paymaster General John Glen MP for their insights.

DESIGNATIONS

BECOME A CHARTERED ACTUARY

The IFoA is the only actuarial body in the world awarding chartered status. From November, Fellows and Associates will be able to use chartered designations.

In the past few decades, more and more actuaries have moved into roles outside the traditional practice areas of insurance and pensions. We believe the introduction of chartered status will help better communicate the level of training, professionalism and range of expertise actuaries bring to the table.

At present, anyone carrying out actuarial work may call themselves an actuary, regardless of their qualiﬁcations. However, only a qualiﬁed member of the IFoA will be able to call themselves a Chartered Actuary.

Chartered designation retains the distinction between Fellows and Associates in long-form title and post-nominals. As before, Associateship recognises qualiﬁcation as an actuary at a generalist level, while Fellowship remains our ‘gold standard’ qualiﬁcation.

We encourage members to adopt the proposed new designations and post-nominals, but members are free to choose the designation that works best for them.

APPOINTMENT

NEW IFOA CEO

The IFoA has appointed Paul Lewis as its new CEO. Currently chief operating officer at the Royal Society of Chemistry, he will join the IFoA on 6 January.

Lewis is an experienced senior leader in the professional body and not-for-proﬁt sectors, and has previously been director at City & Guilds and University of Cambridge Assessment.

He is a graduate of the Royal Military Academy, Sandhurst and holds an MBA. He is a Freeman of the City of London, and a Fellow of both the Institute of Leadership and the Royal Society for the Arts.

“I am delighted to be joining the IFoA at this important time for the future of the profession and honoured to be appointed CEO,” said Lewis.

IFoA president Kartina Tahir Thomson said: “We are pleased to welcome Paul to the IFoA at a pivotal point in our development. We believe that his experience in a larger Royal Charter body will be essential as the IFoA continues to grow while simultaneously modernising to meet the changing needs of our membership.”

Lord Currie, chair of the IFoA Board, said: “Paul is joining the IFoA at an exciting time as we begin our work over the next year to plan our 2026-2029 strategy, which will deliver on the vision set out by our Council.”

IFoA FOUNDATION AWARDS

ACTUARIAL ASIA-PACIFIC AWARD

Congratulations to Dr Michelle Vhudzijena, the ﬁrst winner of SCOR’s Actuarial Award in Asia Paciﬁc, launched in partnership with the IFoA Foundation. Vhudzijena, a senior research associate at the Centre of Excellence in Population Ageing Research at the University of New South Wales in Sydney, Australia, won for her thesis on modelling mortality heterogeneity in longevity products. She receives a cash prize of SGD5,000.

Runner-up Yanbin Xu, a PhD graduate from Nanyang Technological University in Singapore, received praise for his research on climate change and sustainability.

ACTUARIES OF TOMORROW SCHOLARS

Funded by the IFoA Foundation in partnership with the Worshipful Company of Actuaries Charity and the Staple Inn Actuarial Society, the Actuaries of Tomorrow scholarship programme provides promising undergraduate actuarial science students with ﬁnancial assistance and enrichment opportunities. The £3,000 cash prize is augmented by invitations to partner events, tailored career guidance, work experience, internships and industry networking.

The 2024 scholars are Joshua Bonafe (University of Essex), Saniyah Carrim and Siva Sivanathan (Bayes Business School),Sarah-Rose McElroy(Dublin City University) and Evelyn Heryanto and Eric Iannaccone (University of York).

“This scholarship will significantly ease the financial burden of studying at university,” said McElroy (pictured). “I am excited about the opportunities that come with the award, which will empower me to excel in the field of actuarial science.”

THE MARY SOMERVILLE PRIZE

The Mary Somerville Prize is awarded to school students in Scotland who achieve 100% in the SQA Higher Mathematics paper. This year, 24 individuals aced the exam. Each young mathematician is given a £50 prize and a Certiﬁcate of Achievement by the IFoA Scottish Board and IFoA Foundation.

Amy Campbell from The High School of Glasgow (pictured)said shewas delighted to be one of this year’s winners. “It is ﬂattering to be acknowledged for this, and will certainly encourage me to keep giving 100% to my maths studies in the future.”

SCOTTISH UNIVERSITIES PRIZES

The Scottish Universities Prizes are presented by the IFoA Scottish Board and the IFoA Foundation to second-year students who excel at maths, probability and statistics at selected Scottish universities.

This year’s winners are Sam Ballantyne of the University of Strathclyde, Gavin Angus of the University of Glasgow, and James Carter and Qianhao Meng of the University of Edinburgh. Each student receives £200 cash and a Certiﬁcate of Achievement, presented during a talk on actuarial careers at their university.

WHAT NEXT FOR PENSIONS?

On 9 September, political and pensions experts gathered at Staple Inn for a discussion, ‘What next for pensions?’, following the UK’s change of government. The IFoA and the Royal Society of Arts’ Collective Deﬁned Contribution Forum brought together trade union, industry and think tank representatives to discuss how the new administration’s priorities might translate into pensions policy.

The government has inherited several existing initiatives, as well as new opportunities to improve pension outcomes and investment. In particular, the panel discussed how pension funds might help to unlock investment, and the government’s priorities in its promised forthcoming pensions review. This is important in light of the government’s goal for the UK to have the G7’s highest economic growth rate.

NEW THEMATIC REVIEW

The IFoA has launched a thematic review on pension scheme design. This will look at actuarial advice when benefit changes are proposed for UK DB pension schemes. Advice in this area includes guidance on changes to future benefits, adjustments to the timing or structure of accrued benefits, and discretionary pension increases.

The review will examine actuaries’ current practices and how to deal with potential conflicts of interest. Submissions close on 29 November.

IFoA India Conference 2024

sponsor: Silver sponsors:

Knowledge partners:

REFLECTIONS

‘If ever the world needed the actuarial skillset, it is now’

MEMBERSHIP EXPERIENCES,

BY INTERIM CEO BEN KEMP

IFoA members are used to dealing with complex challenges, combining attention to detail with big-picture analysis. The latter has been on my mind, triggered by meetings with members from around the world. These included fascinating and inspiring conversations with members from Scotland and Japan about using actuarial skills to understand the implications of global population movement. Actuaries have a valuable contribution to make in improving understanding of these macro-demographic challenges. In a similar vein, planetary and societal challenges were ﬁrmly on the agenda at the latest International

Actuarial Association (IAA) meetings in Tallinn, Estonia. With their long-term risk management expertise, actuaries bring a unique perspective to some of our era’s most important challenges, such as, among other things: health and social care, retirement provision for ageing populations, climate change and biodiversity, and insurance provision for vulnerable groups. So many of these issues call for collaborative global conversations.

The IAA, chaired this year by IFoA Fellow Charles Cowling, is an important forum where actuaries from across the world can collaborate on these issues, sharing knowledge and building on shared learning. As an IAA member, the IFoA makes an important contribution to this global dialogue, bringing expertise and experience to help provide a rich diversity of thought.

If ever the world needed the actuarial skillset, it is now. The stakes are high, but so is the opportunity to influence and make a difference. All we need to do is open our minds to the potential, and step forward with conﬁdence. Please consider getting involved.

DO GET IN TOUCH

Please contact me to share your thoughts: email ben.kemp@actuaries.org.uk

DISCIPLINARY HEARINGS

FORMER MEMBER

MR ANTHONY PEPPER

On 17 May the Adjudication Panel considered an allegation of misconduct against Mr Pepper (the respondent). It found evidence that he: inappropriately submitted to the IFoA an allegation of misconduct against Person X that was spurious and/or vexatious; provided a quantity of incorrect and/or misleading information in support of his allegation, which he knew (in some instances) to be incorrect and/or misleading; and that this was dishonest; and did not adequately understand the roles of the independent ﬁnancial adviser and/or the Life Office when advising Mr and Mrs B in 2012 and/ or when submitting the allegation against Person X to the IFoA in February 2023. The panel found associated breaches of the Integrity, Communication and Competence and Care principles of the Actuaries’ Code and a prima facie case of misconduct. The sanction was a reprimand and a ﬁne of £2,000.

LAPSED STUDENT MEMBER

MS CHENGYUE ZHOU

On 14 May the Disciplinary Tribunal Panel considered a charge of misconduct against Ms Zhou (the respondent), in her absence. The charge was that she dishonestly submitted: an exemption application with an altered academic transcript and/or cover letter for the academic year 2020/21 that she knew did not show the correct position for that time; and an exemption application with an altered exemption letter from [University D] that she knew had been altered. The panel found the charge proved, including an associated breach of the Integrity principle of the Actuaries’ Code, and that her actions constituted misconduct. The sanction was a reprimand, a ﬁne of £2,500 and exclusion from membership for a period of one year.

SEE THE FULL FINDINGS

Use the code to go to the full published determinations

GET INVOLVED

Q&A: JAKE IVESON

GENERAL INSURANCE COMMITTEE AND BOARD

JPOPULAR CLIMATE COURSE RETURNS

The IFoA wants its members to understand and consider climate-related risk just like other major risk, such as interest rate or mortality risk, and its Climate Risk and Sustainability Course will be running once again in 2025.

Broken down into nine modules (seven self-study and two half-day online seminars), the course teaches members about climate risk’s main concepts, why they are relevant and how you can apply them in your work.

The course will run three times in 2025, with the ﬁrst starting on 9 April and ﬁnishing on 11 June. Booking opens on 15 January –register in the new year to secure your slot.

Use the QR code to ﬁnd out more

ake Iveson volunteers for the IFoA in several ways, mainly as chair of the General Insurance (GI) Research and Thought Leadership Committee and member of the GI Board. He also chairs the Brian Hey Prize judging panel.

What made you volunteer?

My career has given me so much and changed my life in so many ways. Once I qualiﬁed, I wanted to give back to the IFoA.

Has it informed your work life?

I have met many amazing and inspiring people, many of whom have become good friends. It has also meant that if there is a topic I ﬁnd myself interested in, I probably know an expert in that area; it ends up forming a circle of knowledge sharing.

Any unexpected insights?

How deeply ingrained the IFoA is in society. People see it as just an exam body, but this couldn’t be further from the truth. For example, it responds to government consultations, helping the government in its decision-making. The research working parties liaise with the IFoA to form an integral part of these consultations. Additionally, chairing the GI Research Committee has given me a view of all the research currently performed by its volunteers. This alone has given me insights into cutting-edge areas and relevant topics for the profession.

Would you recommend it?

The more you put in, the more you get out. For me, volunteering has been a positive experience that has enhanced my personal and professional life in countless ways. The IFoA is only able to have an impact because of its large volunteer network,

which keeps the profession relevant. Without volunteers, we wouldn’t be where we are – and given how fast the world is changing, we need more volunteers than ever. Anyone who is even considering it should do so. It is an awesome experience, and you can become a leading expert in a particular topic, if you so wish.

A highlight?

Judging the Brian Hey Prize. I enjoy reading all the papers submitted; there is something special about reading someone’s hard work, and you always learn something new. This year, more papers were submitted than ever before, which is fantastic to see and a huge testament to the actuarial community’s passion for research.

This year’s Brian Hey Prize winner will be announced at the IFoA GIRO conference. Use the code to ﬁnd out more about GIRO

LATEST IFoAVOLUNTEER OPPORTUNITIES

Diversity Action Group – online content and engagement support: deadline 10 November

Life – Consumer Duty Working Party

– members: deadline 17 November

Student employer contacts: deadline ongoing

Machine Learning in Reserving Working Party: deadline ongoing

CPD coordinators: deadline ongoing

APPLY FOR A ROLE

Use the code to see all volunteering positions on the IFoA website

VOLUNTEER SPOTLIGHT

‘THINK’ PIECE ON PPPS

The IFoA’s ‘think’ series aims to promote debate on topics across the spectrum of actuarial work. It allows members and stakeholders to share views that may differ from the IFoA’s ‘house’ view, challenge the status quo and highlight complex or under-examined issues.

Its sixth paper is by Chris Lewin, chair of the IFoA Infrastructure Working Party, and notes that the UK has no standard mechanism for investing in infrastructure through public-private partnerships (PPPs). It argues that a new, simpler system of PPPs should be created to harness the different strengths of public- and private-sector partners. This could boost pension funds’ and insurers’ investment in infrastructure projects and unlock growth. Use the QR code to read the piece. Turn to page 33 for more on infrastructure

AAS GOES OPEN ACCESS

From 2025, the IFoA’s Annals of Actuarial Science (AAS) will be an entirely open access journal, with all articles published under a Creative Commons licence to increase their reach.

AAS papers will be freely available online, with no paywalls or subscriptions. This will increase opportunities for it to be read by and shared across wide audiences, and provide a framework for practitioners and researchers to readily use its content to inform their work. And there are no charges to authors – funding arrangements make it possible for every author, regardless of their circumstances, to beneﬁt from open access publication. Find out more in forthcoming pieces on the IFoA blog and website. Use the QR code to access the AAS

The monthly after-tax income of someone falling just inside the RICHEST 10% and POOREST 10% of the population

MEMBERS’ VIEWS AND THOUGHT-PROVOKING PIECES

OPINION

SHOULD STATES HELP WITH CYBER RISK ?

GOVERNMENTS SHOULD PRIORITISE PREVENTION

The argument for a government cyber insurance backstop often centres on concerns about insurance capacity and the diﬃculty of modelling aggregation risk. However, it would be inappropriate.

First, it would reduce the market forces that drive innovation in cyber risk assessment and pricing. Insurers are already motivated to develop better risk management practices so they can understand systemic exposure and client cyber hygiene. A backstop would reduce this incentive – especially as the payoff may be distant, given the uncertainty over when a large systemic risk event could happen.

Unlike traditional risks, such as terrorism or ﬂood, cyber risk is evolving and uncertain. It could take forms that we cannot foresee, and the lack of historical data limits the reliability of projections. Reducing the incentive to innovate and understand would be counterproductive.

Second, the liabilities would likely outweigh the societal beneﬁts. Cyber

risks are not conﬁned to a particular region or sector, and a systemic event could have a widespread effect. Governments could struggle with the additional liabilities, making a backstop a ﬁnancial burden.

Third, governments should prioritise prevention. Cyber insurance’s low penetration has as much to do with limited appreciation of the risk as with capacity and appetite constraints. By raising awareness of cyber risks and promoting better cyber hygiene, governments can reduce the likelihood and severity of systemic events. For example, Israel’s National Cyber Directorate works closely with private companies to strengthen their defences. On the contrary, an increase in capacity without commensurate demand could result in further rate softening and a signiﬁcant pullback when a large event does occur.

Fourth, a backstop could create a moral hazard, with insurers and insureds expecting government intervention and reducing their focus on managing cyber risks. Governments should avoid creating such an expectation. And the use of cyber threats as tools of geopolitical disruption complicates the situation. Accurately attributing a cyber attack to a speciﬁc actor is diﬃcult, making policy exclusions hard to enforce. This would also enable a backstop to be used against a nation as a tool of economic disruption.

VISESH GOSRANI

director of consultancy CyDelta and immediate past chair of the IFoA Cyber Risk Working Party

STATES ARE ALREADY INVOLVED, REGARDLESS

Technology and systems bring opportunities to the insurance industry, but their interconnected nature raises a challenge. The frequency, shape and size of future catastrophic cyber events remain uncertain, but it is clear that cyber is a systemically exposed insurance line.

You don’t need to look further back than this year for evidence. Ransomware attacks were launched on Change Healthcare in February and CDK Global in June. These companies’ signiﬁcant positions within their respective industries (health, automotive) led to widespread disruption across two major sectors of the US economy. And in July the Crowdstrike event, triggered by an erroneous software update, caused systems at a huge number of customers to crash, leading to global disruption across multiple industries and geographies.

It would be naive to ignore the challenges associated with implementing a government backstop, but states should be working towards this position. This

by no means reﬂects a negative view of the cyber insurance market – it’s a market I’m proud to be part of, because of its continuing adaptation and evolution in the face of changing risk. It should be given credit for the proactive work it does to keep pace.

Why am I in favour of more structured state involvement? I’d argue that the state is already involved, whether it chooses or not. The risks associated with interconnected technology exist within our societies, regardless of the private and public financial structures that we overlay with the aim of apportioning out the probable cost of events. Covid showed us that nation states must be the insurer of last resort in extremis, even in the absence of proactively pre-funded initiatives. The pace of technological change shows no signs of slowing down, and the associated risks are relevant to us all. As HM Treasury’s 2020 report on managing contingent liabilities in the public sector suggests, implementing a formal state response now could stimulate significant benefits, including improved government expertise, influence over risk controls, clearer ownership of the risk, and taxpayer compensation. Pool Re’s success in terrorism insurance shows that this can work well.

There is a tendency to wait for an event to happen before reacting. We’ve got our sights on what a future cyber event could look like; why not get ahead of it now?

MATT SILLEY is an actuary and senior broker in Lockton Re’s Global Cyber practice

“THE STRENGTH OF OUR PROFESSION IS THAT WE ALL HAVE SOMETHING THAT IS REALLY VALUABLE –SO DON’T BE AFRAID TO BE ECCENTRIC, BE YOURSELF”

Bryn Davies is the only actuary ever to have spoken in the House of Lords. The Labour peer has mixed with government greats and professional giants in a career combining politics and pensions in equal measure

ALEX MARTIN PETER SEARLE

f the more than 800 members of the House of Lords, only one is an actuary. And he has just bought me a coffee.

It is a sunny day as we sit in a café overlooking the Thames and I am honoured to be with Lord Davies of Brixton –or Bryn, as he likes to be known. He is the only actuary to have spoken in the House of Lords and he has agreed to spend his morning telling me how he came to be here.

After a childhood in north London and a degree in economics at the University of Hull, Davies began his career in 1966 as a life administrator at Legal & General. He was already politically active at this point, and a move to Lane Clark & Peacock in 1969 didn’t stop either his campaigning or his studying; he became a councillor on Croydon Borough Council in 1971 and a Fellow of the Institute of Actuaries in 1974.

Getting political

Davies was able to merge his political interests and actuarial skillset after qualifying, becoming the Trades Union Congress’s ﬁrst pensions oﬃcer. “In some ways this was my ideal job, working within the labour movement and within pensions,” he recalls.

In this role he worked with two successive Secretaries of State for Social Services, Barbara Castle and David Ennals, on the then Labour government’s white paper ‘Better Pensions: Fully Protected Against Inﬂation’, which proposed a new UK pensions system. This gave rise to the State Earnings-Related Pension Scheme (SERPS), the country’s dominant state pension scheme between 1978 and 2002.

In 1976, he joined the Occupational Pensions Board, exposing him to people whom he calls “giants of the profession”. He was elected to Lambeth Borough Council in 1978, becoming its deputy leader that same year.

Davies’ career became purely political in 1980, when he won the Greater London Council’s Vauxhall by-election for Labour. He held the seat for ﬁve years until he was drawn back into pensions in 1985, joining consulting ﬁrm Bacon & Woodrow as a research actuary.

He remembers his colleagues there fondly, having spent time alongside “those great people Kevin Wesbroom, John Sparks and David Peacock” – but his true interest lay in the trade union movement, and it became clear that the only way to follow this passion was to strike out on his own. In 1989 he set up his consultancy Union Pension Services, which allowed him to work almost entirely for trade unions – something he pursued for the following three decades.

Accounting for change

Huge change took place in the pensions industry during Davies’s time running Union Pension Services, as defined benefit (DB) occupational pension schemes were gradually being replaced by defined contribution (DC) schemes. He has a more interesting take on this than most, putting it in large part down to accounting standards. “Previously, negotiating on a good scheme was a discussion with the HR director. Introduce the accounting standards and the figures started appearing on company accounts – then you had to negotiate with the finance director.”

POTTED THE

LORDS

Red benches

The Upper Chamber of UK Parliament

Made up of Lords and Baronesses

The second largest parliamentary chamber in the world, after China’s Currently has around 800 members (the total number is flexible)

Most members are appointed as ‘life peers’; others are peers by hereditary means or through appointment as bishops

The new government plans to remove the remaining 91 hereditary peers

CAREER HISTORY

1966

Life administrator, Legal & General

1969

Trainee actuary, Lane Clark & Peacock

1971

Elected to Croydon Borough Council

1974

Qualiﬁes as a Fellow. First pensions officer for the Trades Union Congress

1976

Elected to Occupational Pensions Board

1978

Elected to Lambeth Borough Council and becomes deputy leader

1980

Elected to the Greater London Council as Labour member for Vauxhall

1981

Leader, Inner London Education Authority

1985

Research actuary, Bacon & Woodrow

1989

Founds consultancy Union Pension Services

2006

Gains a second degree, in social policy, London School of Economics

2020

Joins the House of Lords as Lord Davies of Brixton

That isn’t to say he thinks DC is by nature inferior to DB: for him, it comes down to a particular scheme’s quality – and his role in supporting trade unions’ collective bargaining resulted in some schemes that were close to their DB predecessors.

The main change in the pensions landscape, he thinks, has been the ‘Great Risk Transfer’, with the risk involved in funding retirement shifting from employers to individuals.

Overall, Davies believes the quality of both the state pension and private pensions has declined. “I sort of feel it’s my failure, really,” he says. “I should have fought harder to defend SERPs. It was ‘death by a thousand cuts’ and then it gradually faded away, and when it was totally muted it was abolished.”

Taking his seat

In 2019 the Labour Party, under Jeremy Corbyn, called on Davies to serve as a life peer in the House of Lords. “They were looking for someone who would know something about pensions and came from a labour movement background,” he explains. He had just 15 minutes to decide whether to accept, but the decision was easy, given that the role would allow him to inﬂuence future pension regulation.

He joined the Lords in the middle of the Covid pandemic. “It was a very strange time… there were all sorts of restrictions,” he remembers. “We were still meeting and there was a presence in the chamber but you could also join and speak from home.”

There has only been one other actuary in the Lords: Lord May of Weybridge, who was active in the 1930s and 1940s. However, May never spoke in the house, making Davies the ﬁrst actuary to do so when he made his maiden speech on 25 November 2020, during a debate on mental health provisions and the Coronavirus Act 2020.

“One thing I had to learn in the ﬁrst two years [in the Lords] is that you have to focus on topics,” he says. “There is so much going on that is interesting that you could end up doing too much.”

While pensions and pensioners are unsurprisingly one of Davies’s main

interests in Westminster – indeed, he spoke this autumn to oppose the government’s plans to reduce pensioners’ winter fuel payments –other issues are also close to his heart.

Having served as leader of the Inner London Education Authority while on the Greater London Council, education is still at the top of his agenda. And mental health is another priority, something inﬂuenced by his wife’s role as a senior academic at the Institute of Psychiatry, Psychology and Neuroscience at King’s College London. “Over the years we’ve talked about mental health issues, and it doesn’t get enough attention,” he says.

Davies is a full-time peer, sitting in the Lords at least four days a week, most weeks. Monday, Tuesday and Wednesday evening sessions often run to 10pm. “And sitting in the chamber is the least of the work,” he says. “There is no point going in the chamber if you’re not prepared.” With no staff to speak of, it’s a demanding job.

Does being an actuary make any difference to his work in the Lords? “It gives you a standing when talking about pensions policy,” he notes. “It has short-circuited a lot of debates –people didn’t think, ‘What does this guy know?’”

Speaking out

What message would Davies give to readers? “In my ﬁrst interview for my ﬁrst role at Legal & General, I was interviewed by a senior actuary who told me that all actuaries have some eccentricities. The strength of our profession is that we all have something that is really valuable – so don’t be afraid to be eccentric, to be yourself.”

While he is worried about this sounding trite, I’m hearing it from a man wearing a dazzling tie who is about to speak in the Chamber on topics that could impact millions of pensioners. Perhaps a little bit of eccentricity is just what we all need. GREAT

LORD DAVIES

A LONG LOOK AT THE KEY TOPICS, ACROSS ALL ACTUARIAL

SECTORS

IN FOCUS

Most of us feel distanced from it but modern slavery is a pervasive global problem. What responsibility do actuaries and ﬁnancial services bear?

SPECIAL REPORT

IN PLAIN SIGHT

HAMDA MASOUD, RALUCA STEFAN, OSCAR MARSHAK GETTY/SHUTTERSTOCK/NOUNPROJECT

id you know that about 50 million people worldwide are living in modern slavery? It’s a sobering reality, and the financial sector could play a pivotal role in combating the problem. While there has been huge focus on the ‘environmental’ aspect of ESG – environmental, social and governance – with regulators mandating that insurers disclose their ecological impacts through the Task Force on Climate-related Financial Disclosures, the ‘social’ aspect is often overshadowed. However, it warrants significant attention both in its own right and in relation to environmental issues. Modern slavery is a term describing situations in which individuals are exploited and controlled against their will, often through threats, violence or deception. It takes many forms, including forced labour, human trafficking, debt bondage and forced marriage. Victims – often hidden in plain sight – are denied their freedom and basic human rights, trapped in situations and unable to leave or change their circumstances. Such exploitation occurs in all sorts of industries in the global financial chain, from agriculture to manufacturing to domestic work. Concerted efforts are required to eliminate it.

The regulatory landscape

During the past two decades, there has been a global legislative push to help victims and remove modern slavery from supply chains. The UK’s Modern Slavery Act 2015, for example, requires businesses to disclose actions taken to eliminate slavery from their operations, and India and South Africa have enacted similar statutes. China’s National Action Plan aims to tackle slavery, but its eﬃcacy is questionable given the allegations of state-imposed forced labour of the Uyghur ethnic minority in the country’s Xinjiang region.

Many nations have been criticised for not taking the issue seriously enough. For example, while the UK has had one of the world’s strongest legislative responses to modern slavery, critics have pointed to challenges in enforcement, including concerns about the true independence of the anti-slavery commissioner. Past commissioners have raised issues over government interference and oversight limiting their autonomy and effectiveness. There are also questions about the training of anti-slavery enforcers and the quality of intelligence, both of which impede operational responses. This means corporate anti-slavery actions often fall short.

A study by Walk Free, a non-profit fighting modern slavery (see page 27), did not find a strong link between the prevalence of slavery in a country and the strength of that country’s legal response. For example, Saudi Arabia has the fourth-highest prevalence of modern slavery despite its relatively strong legislation on the issue. This shows that while law is important, the willingness to enforce it – and effective resources for doing so – are crucial.

Corporate reaction and inaction

In response to modern slavery legislation, many corporations now publish statements explaining how they are eradicating slavery from their supply chains. However, analysis of these statements across various industries generally reveals vague condemnation of the problem and unsubstantiated pledges to treat people with dignity and respect. Corporations commonly use third-party supply chain audits as part of their slavery eradication efforts. Despite their implied thoroughness, these audits are not infallible, according to reporting from Humans Rights Watch, an NGO. Critics argue that third-party audits cannot guarantee human rights compliance because they are funded by brands themselves, meaning time and cost pressures may compromise the audit’s depth. Additionally, client pressures can skew audit outcomes, with reports of auditees being prewarned and clients requesting that some ﬁndings be excluded. The language in statements relating to third parties can also be ambiguous, suggesting compliance is ‘expected’ rather than mandatory. Overall, weak legislation and poor enforcement have led to insuﬃcient corporate action; we need more robust measures.

The role of the ﬁnancial sector

The financial sector’s relationship with modern slavery is complex: it will be instrumental in eradicating the problem but many financial activities run the risk of contributing to it. For example, financial institutions may unknowingly contribute to slavery through their investments, loans or insurance services. And digitalisation introduces additional challenges: anonymous online transactions complicate customer identification and victim detection, while proper workforce oversight may be difficult if online business processes have been outsourced to regions with lower labour standards.

Despite these challenges, the ﬁnancial sector can ﬁght modern slavery in three main ways: 1 Advanced data sharing – Implementing sophisticated online systems for sharing customer data to identify suspicious patterns and detect potential instances of modern slavery.

Collaborative endeavours – Strengthening partnerships within electronic supply chains to improve modern slavery detection through robust monitoring mechanisms and stringent compliance standards.

Engaging with regulators and the public sector – Developing effective legislation and implementing risk management and mitigation strategies.

Such co-operative approaches would underscore the ﬁnancial sector’s commitment to combating modern slavery.

The climate connection

Modern slavery and climate change are intrinsically linked. Research into the issue indicates a connection between unsustainable labour practices and exploitative working conditions – for instance, a study on farming in Myanmar showed a correlation between unsustainable agricultural methods such as deforestation, and abusive working conditions such as child labour.

Climate change also compounds the problem of modern slavery because it degrades socioeconomic conditions, thus increasing the supply of vulnerable workers. A vicious cycle is established: unsustainable corporate practices heighten the risk of climate disasters, which then expand the pool of exploitable labour. This enables organisations to sustain or escalate harmful activities.

The links between climate change and modern slavery give us a framework to address the latter. We have seen progress in the corporate world on climate and biodiversity, including directives, accountability and risk measurement methods. If we can integrate the need for sustainable work into climate adaptation legislation and implementation plans, we can promote resilience to instances of slavery that are caused by climate-related shocks.

Combined effort

Modern slavery is a multifaceted problem that will require co-ordinated action from governments, corporations and society if we are to solve it. The challenges include a lack of reliable data, the diﬃculty of identifying and tracing both victims and perpetrators, and weak enforcement of laws and regulations. To overcome these barriers, we must foster a culture of transparency and accountability, and use technology to enhance supply chain traceability and visibility. We must also recognise the connections between slavery and climate change, and understand that addressing one can alleviate the other. Modern slavery is not only a violation of human dignity, but also an impediment to a sustainable future.

MONEY MATTERS

How the UN’s

International Labour Organization is helping to front the issue through insurers and investors

HAMDA MASOUD is a senior actuarial analyst at Grant Thornton

RALUCA STEFAN is associate director at Grant Thornton and co-chair of the IFoA Managing Sustainability in the Absence of Metrics and Measurements Working Group Group

The International Labour Organization (ILO), the UN agency promoting social justice and human rights in the labour market, has launched a series of initiatives with the ﬁnancial services industry to tackle modern slavery and child labour.

“We see work in areas such as inclusive ﬁnance and insurance as integral to creating decent jobs and improving working conditions,” explains Craig Churchill, chief of the organisation’s social ﬁnance programme.

One good example is the technical assistance that the ILO provides to ﬁnancial institutions to help them understand the support needed by vulnerable customers and communities –and the products and services that could help.

“In practice, households at risk of ﬁnancial exclusion, and therefore susceptible to modern slavery or child labour, need more than just credit,” says Churchill.

In one research programme, the ILO worked with three microfinance providers to address child labour. In Nigeria, microfinance bank LAPO launched a loan for school expenses; in Pakistan, the non-profit National Rural Support Programme extended its health insurance coverage; and in Mali, microfinance organisation Nyèsigiso developed training for clients on entrepreneurship, financial management and

OSCAR MARSHAK

an actuarial analyst at Grant Thornton

child labour. The ILO then measured the effects of each, to find effective strategies that other financial services firms could use. The health programme in Pakistan made the most difference, reducing child labour by 7% over two and a half years.

Impact insurance is a focus for the ILO: its Impact Insurance Facility works with insurers and actuaries to explore how insurance can contribute to the development agenda. For example, research on agricultural insurance – particularly parametric policies that pay out after trigger events such as heavy rainfall – has shown how such cover can stabilise rural families’ incomes. This could stem the flow of vulnerable migrant workers and combat child labour. Health insurance also figures, with the ILO exploring how insurers can help families to enrol in national benefits schemes, and close gaps in public sector provision.

In Indonesia, the ILO worked with actuaries to assess the cost of implementing an unemployment insurance scheme – and how to ﬁnance it in a cost-effective way. It has also conducted research

EXPLORE

Use the QR code to ﬁnd out more about the ILO and slavery

projects to help insurers provide more services for women, as part of a focus on gender equality.

“Where there is good data and qualitative insight, ﬁnancial services are in a better position to address gaps and vulnerabilities,” says Churchill. “That might be through directly offering new products, perhaps in partnership with the public sector, but it might also mean support for projects such as village savings and loan associations that operate in individual communities.”

Impact investment

Another strand of the ILO’s work is focused on the investment sector, says Patricia Richter, senior technical officer for social finance. “We are trying to raise the awareness of global investors about the unintended consequences of their investments in areas such as child labour,” she says. “We are also conscious that there is a wide range of institutions that are looking to make impact investments, from national development finance institutions all the way through to certain pension funds.”

The ILO’s Forced Labour Observatory is an online platform providing global and country information on forced labour, including regulation and enforcement advice. The ILO has also worked with the Africa Agriculture and Trade Investment Fund (AATIF) to develop tools enabling investors to integrate child labour screening into decisions.

As for impact investment, the ILO is keen to support investors in areas such as measurement and monitoring, as well as the design of new ﬁnancial instruments to promote its objectives. For example, it works as sustainability adviser to the AATIF, supporting its efforts to measure and manage the social effects of agricultural investments. It has also developed a sustainability management system for the Common Fund for Commodities, the UN-backed intergovernmental ﬁnancial institution. Other initiatives include a feasibility study on an impact bond to reduce child labour in the cocoa value chain in Côte d’Ivoire.

Such investments do not have to sacrifice financial returns. Work done with smallholder farmers, for example, has shown that alternatives to child labour can sit alongside better productivity – and thus better financial outcomes.

“WE ARE TRYING TO RAISE THE AWARENESS OF GLOBAL INVESTORS ABOUT THE UNINTENDED CONSEQUENCES OF THEIR INVESTMENTS – IN AREAS SUCH AS CHILD LABOUR”

In any case, adds Richter, the global regulatory environment is prompting all investors to focus on many of these issues, even where impact is not an objective. “The need for greater due diligence and wider reporting is pushing almost everyone to get a better handle on problems such as modern slavery and child labour,” she says. “Investors recognise the importance of compliance with international labour regulations and standards.”

For more on impact insurance, see page 41

KNOW THE REGULATIONS

Putting

the ‘S’ into ESG: what’s required on

Financial services ﬁrms have got used to dealing with regulation relating to climate change and environmental performance – and most understand their corporate governance responsibilities. However, obligations related to the ‘S’, the social, in ESG may feel like an afterthought. At least until the bottom line is hit, such as when fashion retailer Boohoo saw £1bn wiped off its value following allegations of slavery in its supply chain.

In part, this situation reﬂects the debate about what it involves. Issues within scope include human rights and modern slavery, diversity and inclusion, organisational culture and behaviour, and health, safety and wellbeing. But many of these overlap – and they cut across the business, impacting different functions in different ways.

Still, in major areas of the social domain, regulation is now increasing, forcing companies to take action even where they had not previously prioritised it. On diversity and inclusion, the UK’s Financial Conduct Authority (FCA) now requires listed companies to report data on the representation of women and ethnic minorities at senior levels. And almost all businesses are required to publish an annual statement setting out the measures they take to prevent modern slavery in their staff operations and supply chains.

The UK is far from alone in stepping up its regulation of social issues. The EU, for example, is discussing how to introduce a social taxonomy that would provide a classiﬁcation system to determine whether an economic activity is socially sustainable. Countries such as Canada have introduced laws requiring corporates to report on their compliance with international human rights laws.

Risk-based approach

slavery?

FACT: Slavery was only completely abolished in 1981, when Mauritania in Africa became the last country to outlaw forced labour

How to navigate this regulation? Clearly, legal teams and risk functions need to identify the speciﬁc requirements with which their companies must comply. However, Rory Oake, consultant at sustainability, business and human rights adviser Ardea International, says it is a mistake to focus narrowly on compliance. “We suggest businesses start with a risk assessment – what are the biggest potential red ﬂags?” he says. “Many are starting to panic about the work involved in due diligence and data disclosure, but we advocate a risk-based approach that enables them to prioritise.”

In practice, that will vary between sectors. Those in retail and manufacturing may be particularly exposed to suppliers in countries regarded as high-risk from a social perspective. Others may need to focus on issues closer to home – ﬁnancial services, for example, may need to focus on diversity and inclusion, particularly as the FCA continues to introduce new regulation in this area.

On slavery, Oake urges companies to think about annual statements as a starting point rather than a goal. “Too often, the modern slavery statement is just cut and pasted from one year to the next, with little thought about what actually goes on beneath the surface,” he says. “Rather, this should be an annual opportunity to get a wide group of people from across the business more involved.”

Functions such as procurement will have a major role to play – but people in every part of an organisation may need training on modern slavery issues relevant to their work. Overall, Oake says, awareness levels need to be higher.

INVESTOR BEST PRACTICE

As advised by Walk Free (see opposite):

Improve reporting under slavery laws and regulations

Use strong risk assessment processes prior to investing Engage regularly with investee companies

Share good practice industry-wide Advocate for tougher frameworks and further resources

“START WITH A RISK ASSESSMENT — WHAT ARE THE BIGGEST RED FLAGS?”

LEVELLING

It’s a UK pensions problem: savings are inadequate; inequality is increasing.

Alexandra Miles of the IFoA’s Pension Gap

Working Party is on a mission to break down barriers and push for change

MILES, LUCY NEILAND, FLORA VIEITES LOUISE HAYWOOD-SCHIEFER

Auseful lens through which to assess life’s inequalities – that deﬁnitely can be said of pensions.

According to the not-for-proﬁt Independent Age, around two million pensioners in the UK live in poverty. That’s close to one in ﬁve, and that number is predicted to double over the next few decades.

The UK provides a smaller state pension relative to average earnings when compared to most other advanced economies, but pensioners’ relative positions converge if income from all sources is considered. According to analysis by the OECD, the UK has an overall net replacement rate of 58.1% from mandatory pensions for an average earner – below the OECD average of 69.1%. So don’t give up the day job just yet.

Changes in pension provision, at least in the private sector, mean that around 90% of employees are now accruing a defined contribution (DC) pension, with 10% remaining in a defined benefit (DB) pension. This is ‘the Great Risk Transfer’ in action. A legion of ill-equipped individual savers has been born, with everyone now personally responsible for ensuring they are saving enough for retirement. Affordability issues have been replaced by adequacy issues.

Systemic changes such as falling fertility rates, ageing populations and stalling life expectancy

improvements at lower income deciles are exacerbating structural retirement inequalities and making the current system unsustainable. The ﬂames are fanned further by a lack of economic growth and high levels of macro-uncertainty and geopolitical risk.

The playing ﬁeld wasn’t level to start with, but our current trajectory seems likely to result in even more pension inequality. In 2023, the UK government issued an analysis of adequacy levels and pension equity. A comparison of a DB accrued pension’s adequacy versus a DC accrued pension’s adequacy provides a stark picture: it is around six times lower for a DC pension. The current pension gap for DB pensioned employees was estimated at 44%, compared with the 60% gap for those with DC pensions.

So, we have lower overall adequacy levels and higher levels of pension inequity. It should be no surprise that future generations of retirees are starting to think retirement may be out of reach.

Working on it

In the pensions industry, concern is growing over retirement adequacy and inequalities in retirement savings. We can all do better, but a few passionate people were keen to use their experience and expertise to make a difference and shift the narrative – and thus the IFoA’s Pension Gap

ALEXANDRA

ALEXANDRA MILES

Founder and chair

IFoA Pension Gap Working Party

Co-chair Data and Research Group, part of the industry-wide Pensions Equity Group

Group member Living Pension Methodology and Policy subcommittee, Living Wage Foundation Highly commended Unsung Hero Award, Women in Pensions 2023

Regular speaker on pension adequacy and equity at various events

MUST-LISTEN

Use the code to hear fellow IFoA Pensions Gap Working Party member Polly Cripps in the new The Actuary podcast, available on the magazine’s website

Working Party was born, in September 2022. The idea goes that you need experts to be able to innovate. The actuarial profession has a wealth of experience and expertise; if we can’t crack it, or at least signiﬁcantly contribute to the debate, who can?

In our ﬁrst report, How Much Could You Lose?

Opening the Conversation on Closing the Pensions Gap, we focus on some of the signiﬁcant moments in life, of which individuals should be mindful when saving into a pension – and we show how much could be lost because of actions taken at these moments. Such moments include starting a pension later in life, not maximising additional matched contributions from your employer, starting a family, and moving to part-time work. The report also includes several recommendations for government, employers and individuals that would reduce future pension gaps.

The conversation around pension gaps has mostly focused on the pension savings gap between men and women. According to current data from Legal & General, women are retiring with 55% less than their male peers, a ﬁgure that hasn’t shifted much over the last few years.

Other pension gaps are less well documented, partly because the data is less available, or not available at all; these include the gaps experienced by part-time employees, single-parent households and ethnic minorities. Figures from the Oﬃce for National Statistics seem to be the only public source that shows the depth of this issue in any detail (Figure 1).

As the average individual will accrue workplace pension savings across an average of 11 different employers by the time they retire, it is hard to build a holistic picture of a person’s retirement pot.

THE ‘TRADWIFE’

The trending ‘tradwife’ movement encourages women to embrace homemaking, child-rearing and submission to their husbands. The concept is gaining popularity on social media platforms such as TikTok, Instagram and YouTube, especially among younger women. According to Ipsos’s Global Trends Survey 2024, more than a quarter of respondents in Great Britain think a woman’s primary role is as a mother and wife, with even higher numbers agreeing in the US. This shift is not only fuelling debates around feminism and gender roles but is also likely to exacerbate the pensions gap. As populist narratives gain traction across Europe, promoting traditional gender roles and the ‘tradwife’, it’s likely that more women will be in ﬁnancially vulnerable positions in future.

Source:

Office for National Statistics, Wealth and Assets Survey

Figure 1: Median value of private pensions not in payment, by selected characteristic in Great Britain, April 2018 to March 2020

This is something the government’s Pensions Dashboard programme will hopefully address when it aims to launch in April 2025.

More communication and engagement with individual members is required, but it will be a slow process, and the responsibility for making up the gap cannot lie solely with the individual. Other stakeholders must address the structural barriers that impede saving. These stakeholders, such as employers, trustees, pension providers and the government, must play their part if change is to happen – and quickly.

Leaping the hurdles

To build a case for change, we must explore the hurdles that people face when saving for retirement by assimilating data and research from numerous different ﬁelds and experts.

Facts and ﬁgures

50%

MORE WOMEN THAN MEN ARE HEADING TOWARDS RETIREMENT WITHOUT ANY SAVINGS

4.25 MI LLION

SELF-EMPLOYED PEOPLE IN THE UK DO NOT READILY HAVE ACCESS TO AUTOMATIC ENROLMENT

6 MONTHS’ MATERNITY LEAVE COULD REDUCE A PENSION POT BY MORE THAN

ONE IN

WORRY ABOUT RUNNING OUT OF MONEY IN RETIREMENT

Lots of the information already exists; the power lies in using it to argue for shifting the status quo. The implications of a person’s life decisions for their accumulated retirement savings has an effect not just on them but also on society.

In her book Already Toast: Caregiving and Burnout in America, author Kate Washington identiﬁes one of the core problems: caring for others is often seen as an individual family responsibility, rather than a broad societal need with systemic implications. “The challenges of caregiving arise not because individual families have foolishly failed to set themselves up better to do it,” she writes. “They exist because our society consistently devalues care and does little or nothing to support it.”

One hurdle is the cost of childcare. A report from the Women’s Budget Group think tank, Where Do We Go From Here? An Intersectional Analysis of EXPLORE MORE Use the code to read the IFoA report How Much Could You Lose?

SNAPSHOT

IFoA member Alexandra Miles (centre), with Lucy Neiland (left) and Flora Vieites of Ipsos

Women’s Living Standards Since 2010, estimates that part-time nursery costs for a one-year-old have increased by 81% since 2010 – nearly twice as much as overall prices (43%) and much faster than wages (49%). Because of this, many parents – mostly mothers – can’t afford to return to work after having a baby.

They lose the chance to contribute to a workplace pension, and the UK loses their contribution to its economy. If the system were reformed to provide better support for those who care for others (children, the disabled and the elderly), we could all beneﬁt.

Research from the International Monetary Fund suggests that narrowing the gender gap in labour markets could increase GDP in emerging markets and developing economies by almost 8%; fully closing the gap would provide even bigger gains, lifting GDP in such countries by 23% on average. This isn’t a call for those in full-time work to take on more caring responsibilities – it’s a call for proper mechanisms so that all those who can and want to contribute can do so, beneﬁting everyone.

Other areas of focus include housing costs –the number of people aged 25 to 64 who rent a home has increased by 21% during the past decade, according to the English Housing Survey – and there are the cost implications of a life as a lone retiree. Around a ﬁfth of men and a quarter of women now live by themselves by age 64 to 74, and this ﬁgure is rising.

It is often said that in a traditional household setup, resources are pooled – so the fact that one person might take a ﬁnancial hit during their working life shouldn’t matter when retirement looms (for example, in the common case of a woman taking time out from work to look after young children).

But this is lazy thinking. Life almost never works out as we plan. We should strive to make sure that absolutely everyone is ﬁnancially secure, regardless of their life path and personal relationships.

Case studies

The voice of the ‘average Jolene’ has been missing from industry debate and consumer discussions. There also hasn’t been as much exchange as their could have been with experts in other ﬁelds. In the next phase of the working party’s campaign, we aim to right this wrong. We have partnered with market research organisation Ipsos and are using its expertise in getting under the skin of the average consumer to build and test a more robust proposition for change.

EMPLOYERS, TRUSTEES, PENSION PROVIDERS AND THE GOVERNMENT MUST ALL PLAY THEIR PART IF CHANGE IS TO HAPPEN – AND QUICKLY

When Jan got divorced, she needed to secure housing for her children immediately. “I had to negotiate a house instead of a pension,” she says. “My family needed somewhere to live, so I put off thinking about the future. I kicked it down the road.”

Now, as the head of a single-parent household, like many women in the UK, Jan can’t afford to invest in her pension. This isn’t unusual; the average woman’s pension pot after divorce is signiﬁcantly smaller than the average man’s.

ALEXANDRA

is senior DC fund manager at Legal

When people have children or form a household, pensions aren’t often a priority. No one enters a relationship expecting it to end but, as divorce rates rise, we need to consider how to set up people as ﬁnancially independent units within households instead.

This is something Brooke thought about when calculating the ﬁnancial effects of taking time off after her pregnancy – including the hit to her pension. When she discussed it with her partner, his response was: “I can afford to pay you x per month.”

At ﬁrst, this seemed fair, but as Brooke says: “I realised it wasn’t about what he could afford –I didn’t want him to ‘gift’ me money. It was about equity – he needed to make sacriﬁces too. I wanted us to take the hit equally for the long term.”

Brooke had no idea what was in his pension but could see that hers was taking the blow. She searched for ﬁnancial products such as a household pension, but found little to support her.

In the UK, 54% of men consider themselves the head of the household, versus 45% of women. Of women who are the head of the household, 39% live in single-parent households, with a quarter also having children in the home –increasing ongoing expenditure and possibly meaning that these women cannot adequately provide for their future.

All of this is challenging, given that 60% of people believe the important thing is to enjoy today and tomorrow will look after itself, according to the latest Ipsos Global Trends survey. This puts the onus on businesses and government to ensure tomorrow is taken care of.

FLORA VIEITES is director for the Financial Research Survey at Ipsos

LUCY NEILAND is a business anthropologist at Ipsos

MILES

& General Investment Management and chair of the IFoA Pensions Gap Working Party

POWER PORTFOLIO

With cashﬂows and fundamentals suiting insurance investors, and the drive for a cleaner, digitised world, infrastructure is inviting investment

nfrastructure investments are a resilient subset of private assets. Even in equity form, they are usually secured against underlying project assets, typically associated with long-term contracts that provide stable, predictable cashﬂows: for example, telecom tower leases with telecom providers, government contractsfor-difference for renewable energy sales, and so on. Depending on loan structure, debtholders may also have additional downside protection, thanks to liquidity reserves from excess cashﬂows, covenants and collateral security.

Other attractive features include diversiﬁcation from public equity and corporate debt markets, and inﬂation protection. Infrastructure can also play a measurable role in meeting insurers’ ESG (environmental, social and governance) investment targets.

Investment themes

Infrastructure is broadly split into three areas: digitalisation and modernisation, decarbonisation, and demographics. Within these, there are opportunities to improve and modernise how we live, create economic growth, and

meet communities’ evolving needs.

Digitalisation and modernisation – examples include data centres, communication networks, container ports, tunnels, rail networks and airports

Decarbonisation – facilitating the energy transition through renewable energy. Examples include operating and development platforms, waste management, recycling and landﬁll facilities, power generation and utilities

Demographics – incorporates social and economic infrastructure, such as hospitals, prisons and other healthcare, education and public safety requirements.

These investment opportunities can be accessed in debt or equity form; each has its own speciﬁc beneﬁts, depending on the investment objectives.

Debt investment

Infrastructure debt has characteristics that make it an attractive vehicle for inclusion in an insurer’s investment portfolio. These include: Additional yields from illiquidity and complexity premia

Stable long-term cashﬂows that can span decades, making it suitable for long-term liability matching. For example, hydro-related project debt can have terms of 40 to 50 years

Diversiﬁcation from corporate debt, thanks to

CHRIS HOWELLS, MEHDI KHALILI SHUTTERSTOCK

its lower sensitivity to market cycles and market movements. Consider the stability of returns and lower default rates during the Covid pandemic, when power and data access were still required

In recognition of the previous point, infrastructure investments receive favourable risk-based capital treatment in some jurisdictions (for EU and UK Solvency II, US risk-based capital, Bermuda and parts of the Asia-Paciﬁc region)

In jurisdictions with a matching adjustment or similar (such as Bermuda’s scenario-based approach, or the Insurance Capital Standard’s illiquidity premium), infrastructure debt can be an eligible asset, although different rules regarding structure and rating apply

Strong alignment with sustainable investment goals, particularly environmental and societal ones

Defensive qualities supported by barriers to entry and value preservation, and through sourcing by experts with relevant industry experience (such as civil engineers) who focus on stable and transparent jurisdictions.

Insurers can invest in debt directly in the case of project ﬁnance, indirectly via funds for project and corporate ﬁnance structures, or via corporate debt. Co-investment of both fund and direct investment in the same debt is also possible. Direct investment requires more project involvement, so is usually restricted to insurers with the resources for this. Like its corporate cousin, infrastructure debt can be accessed in various formats, including senior, subordinated, mezzanine and securitised structures (Figure 1). The format will depend on intended usage or investor appetite. For example, mezzanine debt could be used to further leverage the asset and appeal to investors with higher risk appetites. Securitised debt is often used by larger

DEMAND FOR THIS ASSET CLASS HAS GROWN, ENCOURAGED BY THE NUMBER AND BREADTH OF AVAILABLE PROJECTS IN WHICH TO INVEST

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Scan the code to read the latest IFoA ‘think’ piece, on infrastructure

Typically, for infrastructure assets that are backed with longterm subsidies (15-20 years, the investment grade senior debt can range from 50%–70% LTV). The debt is usually rated under project ﬁnance methodology. Mezzanine debt comes with higher risk due to the subordination and is usually the smallest within the total capital stack (5%–15%) and usually subinvestment grade.

The equity is usually held by the asset owner. This is usually the excess cashflow after payment of the senior debt and mezzanine. Returns are typically 10%+, depending on the asset type.

companies with more assets that want to raise cash upfront by issuing notes to different public market investors (for example asset-backed securities securing against a pool of rooftop solar loans).

The US has one of the world’s largest and most liquid asset-backed securities markets, with several infrastructure-related issuances such as solar, data centres and ﬁbre. These deals tend to have a multi-tranche structure, with ratings ranging from A to BB and sizes above $250m.

Securitised assets attract unfavourable capital charges under the Standard Formula, but this is not the case in most other major insurance jurisdictions and may not be the case for internal model users.

Equity investment

In equity form, infrastructure has many of the characteristics referenced above for debt that make it suitable for insurers, although there is more focus on the longer term. Other aspects of note include: Enhanced risk and return characteristics (for example upside beneﬁt, equity holders receive all additional income after debt has been paid)

Diversiﬁcation beneﬁts (versus other types, such as traded equities)

Obsolescence risk (will the asset still have value in, say, 20 years’ time?). For example, as data centre processors get more powerful, data centres will need technology to cool the area – so there must be a regular capital expenditure budget for ‘modernising’ this asset over time

The asset’s useful life. Some assets, such as solar and wind, have a useful life of 25 to 35 years, meaning their long-term value tends towards zero.

Figure 1: Infrastructure debt formats

On the other hand, if you own the freehold, there could be value in the associated land.

ESG considerations

Infrastructure focuses on long-term investment in developing and improving essential services, making it a good fit for insurers wanting to achieve sustainable investment objectives. Examples of how infrastructure projects align with ESG include: Energy transition – adapting to a low-carbon economy through carbon capture and storage, renewable energy sources and efficiency upgrades. It is estimated that more than $3trn would be required for a renewable transition that would meet today’s consumption demands. There are already many government schemes around the world that support the growth of renewable energy technology, such as the US Inflation Reduction Act Climate change – adapting and enhancing the resilience of transport networks, energy facilities, coastal infrastructure and communication networks; modernising and expanding structures and systems so they can withstand extreme weather events, while incorporating green (and blue) elements to improve durability and enhance outcomes for both society and investors

UN Sustainable Development Goals – aligning with these global goals promotes value creation for insurers in numerous ways. First, there are often incentives such as tax reliefs or government subsidies involved in targeting speciﬁc goals. And second, assets aligned with these goals promote access to new technologies and new industry partnerships.

WHAT’S INCLUDED?

Transport eg tunnels, rail, ports, airports

Telecomms eg data centres, wireless, ﬁbre

Utilities eg power plants, water supply, renewables, waste/recycling

Social eg hospitals, schools, housing, prisons

ESG-related infrastructure development can also positively inﬂuence claims outcomes through reduced impact on physical property risks, and longer-term health and morbidity outcomes through improved air and water quality, health services, education and social cohesion.

Top trends

There are two major trends in infrastructure: digitisation and clean energy.

Digitisation

The world is becoming more digital (partly accelerated by the pandemic and resulting increase in home working) and more connected (via greater access to mobile phones as they became more affordable). Demand for data and data processing (for example via AI applications, and sensors in cars and homes that constantly analyse or transmit data) is on the rise. This is driving demand for associated digital infrastructure assets such as data centres, telecommunications towers and highspeed ﬁbre networks.

Clean energy

Regulatory bodies and political and industry associations are increasingly demanding clean power adaptation. This is driving development in energy infrastructure, such as solar, battery, wind and emerging technologies like green hydrogen.

CHRIS HOWELLS is head of international insurance solutions at Macquarie Asset Management

MEHDI KHALILI is investment strategist at Legal & General Retirement America

The two areas are connected: more demand for data will mean more demand for data centres, requiring more power. However, they use emerging technology, and what may not be possible today may be possible tomorrow – and look different to what we have now. It is important to take a long-term view of risks (and reward).

From niche to core asset

Infrastructure investment is no longer the purview of large global insurers only. Familiarity with and demand for this asset class has grown, encouraged by the increasing number and breadth of available projects in which to invest – in turn driven by digitisation and the demand for clean energy. Infrastructure has gone from being a relatively niche element in long-term portfolio construction to a core allocation, with some insurers even building expert teams to assess opportunities. Actuaries can (and do) play a role in evaluating the suitability of infrastructure investment, for example where strategic asset allocation and asset liability management objectives are concerned. And with unique features attached to risk, complexity and sustainability, increasing involvement beckons!

INFRA

Jewel Changi Airport, Singapore

CROWD PLEASER

Actuaries no longer need to choose between accuracy and explainability when modelling. Ensembling can enhance both

t the heart of every predictive modelling exercise is the accuracy-explainability dichotomy, which can pull actuaries in different directions. Traditional models such as generalised linear models (GLMs) have long been favoured for their simplicity and transparency, but the quest for better performance has introduced more complex algorithms, such as gradient boosting machines (GBMs).

Practitioners often feel forced to opt for one or the other, depending on whether interpretability or predictiveness is the primary goal. However, the approach need

not be so binary: a wide array of architectures combine the two.

Combining multiple model predictions into one is known as ensembling, with ‘bagging’ and ‘boosting’ being the standard techniques. Our goal is to use these combinations to improve predictive performance while retaining as much explainability as possible.

Bagging

Bagging, short for ‘bootstrap aggregating’, involves randomly sampling with replacement from the data, and training a model on each of these bootstrapped samples. For a regression task, the ﬁnal prediction is the average of all the model predictions.

KAROL GAWLOWSKI, JOHN CONDON, JACK HARRINGTON, DAVIDE RUFFINI SHUTTERSTOCK / ISTOCK

This idea is not new – the ‘wisdom of the crowd’ concept was ﬁrst observed by statisticians such as Sir Francis Galton, who witnessed a ‘guess the weight of an ox’ contest at a fair in 1906 and found that the median estimate was within 0.8% of the true weight. The crowd’s success can be attributed to averaging out random errors, assuming independence among individuals. However, this approach can be undermined by systematic errors. In ensemble models, to reduce the risk of correlation between errors in the constituent models, bagging can be extended to only use a random subset of features when training each bootstrapped model. This approach is a random forest and typically performs better than bagging alone.

Boosting

Boosting builds an ensemble of decision trees sequentially, with each new tree correcting the errors of the previous ones. The chosen optimisation method during the ﬁtting process is gradient descent – hence ‘gradient boosted’. While bagging and random forests achieve random model diversity, boosting creates targeted model diversity, improving performance. Figure 1 shows the process.

For the boosted method, we modelled using XGBoost instead of the vanilla GBM. GBMs tend to have a longer training time than XGBoost because XGBoost implements parallelisation during training. XGBoost also includes regularisation techniques such as Lasso and Ridge or row/column subsampling and various other hyperparameters that prune overly complex and overﬁtting trees. Other differences include XGBoost’s automatic handling of missing data and more eﬃcient splitting algorithm.

We set the different architectures a common task: predicting the frequency of third-party motor liability claims. The dataset used is publicly available and is commonly used in literature on actuarial models and model benchmarking, comprising 680,000 records and 11 features relating to a French insurer’s motor policies.

Unsurprisingly, XGBoost performed better than the pure GLM when ﬁtting to the data. The logical follow-up was to see if we could improve its performance using the GLM. It turns out that the different XGBoost-GLM ensembles did not outperform XGBoost alone. However, as we will explain, GBM practitioners may have many more uses for these ensembles, and performance improvements could be achieved on other, more varied datasets.

Figure 1: GBM model concept

Boosted GLMs

Can we improve the GLM’s predictiveness without losing explainability? Enter GLM + XGBoost: the boosted GLM.

A boosted GLM combines a standard GLM’s strengths with a GBM’s advanced capabilities. First, a GLM captures the main effects, providing interpretability and ease of use. XGBoost then identifies and models any residual patterns missed by the GLM. These are here defined as the difference between the response and the model’s prediction. The models’ outputs can then be added together to give the final prediction.

This approach provides improved predictive performance, as Table 1 shows. It also allows actuaries to explain the primary drivers of the model’s predictions to stakeholders, avoiding the black-box nature of purely tree-based models.

One point to consider is the risk of overﬁtting –present with all models, but particularly prevalent when capturing residual patterns. Actuaries must validate the model’s performance on unseen data to ensure its generalisability. Cross validation can be used to ensure a more reliable estimate of model performance compared with using a single train-validation-test split.

In our modelling pipeline, we performed fivefold cross validation. The model was fitted once over three partitions of the data, using one as validation and one as an unseen test. This was done five times, varying the partitions in each iteration.

This ensemble approach used an additive adjustment from XGBoost to improve ﬁt, but a core characteristic of premium breakdowns is their multiplicative nature. Therefore, adding a residual prediction to a GLM may not be the most intuitive approach and may make things harder to interpret.

We can instead use XGBoost to model the ratio of the response variable to the GLM prediction, rather than modelling the residual itself, which may be better at capturing non-linear relationships or complex interactions. Its (GLM x XGBoost) superior model performance can be seen in Table 1 – and it

delivers a more coherent and interpretable model. Sometimes you can have your cake and eat it!

Other approaches

We’ve seen how GBMs can help the GLM practitioner, but does it work both ways?

Let us consider a GBM initialised with GLM predictions (XGBoost_init_GLM). The rationale here is that initialising XGBoost with GLM predictions is like starting with a well-drafted sketch (the GLM) that captures a scene’s essence, allowing the artist (GBM) to focus on reﬁning and enhancing the masterpiece.

XGBoost_init_GLM can help the XGBoost algorithm to converge faster towards the best solution because it begins with predictions that are

Table 1: Results of the cross-validation exercise

IT’S LIKE STARTING WITH A WELL-DRAFTED SKETCH (THE GLM) THAT CAPTURES A SCENE’S ESSENCE, ALLOWING THE ARTIST (GBM) TO FOCUS ON REFINING AND ENHANCING THE MASTERPIECE

already aligned with the data characteristics. This may not be overly signiﬁcant for our small dataset, but the savings can be material in bigger modelling exercises. This speed improvement is often accompanied by more predictive accuracy.

Yet another approach is to use the XGBoost output as a predictor in the GLM. This can improve a GLM’s predictive performance while retaining its transparency. However, the meaning of the GLM coeﬃcients – ﬁtted in the presence of an XGBoost output – is now very different.

For example, in the case of a GLM driver age curve, those relativities would normally represent the inﬂuence on the risk attributed to the age factor. However, when XGBoost predictions are included as a covariate in the GLM, the XGBoost predictions will already have used the age information during ﬁtting, so the GLM age

Chris Smerald

Chartered Actuary (Fellow)

relativities are now a closer reflection of how age can reduce the residual after an XGBoost has been fitted. Given that the XGBoost prediction itself is difficult to interpret, the GLM relativities are also less interpretable in this setup.

In our exercise, this ensemble achieved only a very small performance improvement compared with a well-crafted GLM. Not every approach to combine models will result in meaningful improvements, and they can sometimes complicate interpretation without providing signiﬁcant performance gains.

We also considered how GLM performance affects the ensemble. When examining novel model architectures, authors usually evaluate their proposition against a vanilla GLM. In practice, however, a GLM will have been carefully crafted. For a deep dive on that topic, we recommend the Swiss Association of Actuaries’ (SAA) GLM study, ‘Case Study: French Motor Third-Party Liability Claims’. Its proposed GLM is more performant than a vanilla GLM, but considerably worse than an out-ofthe-box XGBoost.

Notably, ensembles of XGBoost with a basic GLM outperform ensembles using the superior GLM (SAA_GLM +/x XGBoost). This might be due to the basic model achieving more model diversity with the XGBoost, demonstrating the idea that ensemble models work best when the constituent models are uncorrelated in their residuals – but that is outside the scope of this article.

The ﬁnal architecture examined was a weighted average of the predictions from both the GLM and XGBoost:

Weighted average prediction = α * GLM prediction + (1- α)*XGBoost prediction where α is between 0 and 1.

The model performed best by solely taking the XGBoost prediction. Neither the basic GLM or the SAA GLM could contribute the model diversity required to generate a predictive improvement when combined with XGBoost. Again, this outcome is speciﬁc to our dataset and the models ﬁtted.

Results

Table 1 shows the results of the cross-validation exercise. The metric used to assess model performance here is the pinball score, which calculates the percentage improvement in Poisson deviance for each model with a homogenous (mean-only) model as the baseline.

Figure 2 compares the single SAA GLM against the SAA GLM assisted by the multiplicative XGBoost adjustment. The test dataset is divided into quintiles based on the ratio of the two models’ predictions. Each bucket contains both models’ mean actual values and mean predictions. The GBM adjustment’s effectiveness is seen in how closely the ensemble model aligns with the actual values compared to the GLM, indicating more prediction accuracy.

Historical wisdom

If he were around today, Aristotle would likely be a practitioner of ensembling: in his work Politics, he noted that “it is possible that the many, though not individually good men, yet when they come together may be better, not individually but collectively, than those who are so.”

This idea underpins both bagging and boosting, which rely on combining a series of weak learners and result in tree models that are leading the way when it comes to predictive power. It is further demonstrated by the improvement achieved in GLM performance when it is blended with a GBM.

The key to success, however, is model diversity. If diversity is guaranteed, the resulting ensemble can achieve good performance even if the individual models are only slightly better than random guessing, as described in Thomas G Dietterich’s paper ‘Ensemble Methods in Machine Learning’. Sometimes, incorporating less accurate models can enhance the ensemble’s diversity and improve its ability to generalise to new data, as seen in our use of the basic GLM over the developed version.

Practitioners should consider ensembling even though it may increase the modelling workload. It uses the collective strengths of multiple models to achieve better predictive performance, echoing both historical wisdom and modern statistical insights.

DAVIDE RUFFINI is a pricing actuary at AmTrust Assicurazioni

JACK HARRINGTON is an actuarial contractor and predictive modeller at Allianz Personal

JOHN CONDON is a lecturer in actuarial science, School of Mathematical Sciences, University College Cork

KAROL GAWLOWSKI is a predictive modeller at Allianz Commercial and chair of the IFoA Actuarial Data Science Working Party Cork Party

Figure 2: Double lift chart

PAID FOR SHADE

With higher temperatures come greater hazards for the poorly paid working outdoors. One parametric insurance pilot aimed to help protect vulnerable women in India

SARAH EBRA HIMI GETTY

N

ews reports are increasingly dominated by headlines such as ‘Record-breaking temperatures’ and ‘Hottest summer ever recorded’.

For those with access to air conditioning and cooling centres, extreme heat is uncomfortable but not dangerous. However, for millions of people, it is a serious threat to health, livelihoods and wellbeing. And as the climate changes, the issue is becoming more relevant each year. The year 2023 was the hottest on record, and 2024 temperatures are already surpassing previous records in some cities.

In 2023, climate insurtech Blue Marble partnered with the Adrienne Arsht-Rockefeller Resilience Center (Arsht-Rock) and the Self-Employed Women’s Association (SEWA) – an Indian trade union with more than 2.9 million members – to design an insurance solution that would protect vulnerable women from the health and income effects of extreme heat. They piloted a new kind of parametric insurance product: extreme heat income replacement protection for women.

Gathering intelligence

Hundreds of people die each year during heatwaves in India as rising temperatures hit densely populated urban areas. The pilot product targeted 21,000 women living in urban areas and rural slums in the western state of Gujarat, working in trades where they were highly exposed to extreme heat – waste picking, recycling, shipbuilding, head loading, selling fruit and vegetables, and so on. These women worked outdoors for extended hours with little or no access to shade, water or toilets, in temperatures of 49.3°C

IF

THE SUM OF THREE CONSECUTIVE DAILY HIGH TEMPERATURES CROSSED A PREDETERMINED TRIGGER THRESHOLD, THE WOMEN IN THAT DISTRICT RECEIVED A PAYOUT

Figure 1: Yearly global average surface temperature from 1880 to 2023, ˚C (compared with the 20th-century average).

or more. As a result, they endured multiple health issues, such as rashes, infections, burns, headaches, miscarriages, urinary tract infections and dehydration.

Wanting to launch the product ahead of the 2023 heatwave season, the team worked quickly to understand the women’s needs. SEWA mobilised its network of grassroots community leaders to organise focus group discussions, which provided valuable information on the women’s sensitivity to heat, health effects, lost wages and the other effects of extreme heat on their lives and livelihoods.

Using this information, along with information from heat-health experts at Arsht-Rock, the team designed a parametric insurance product to help the women quickly recover lost income during heatwaves. Typically, such a product would take

up to a year to develop from inception to launch – perhaps even longer, taking regulatory delays into account. However, the team managed to design, test and launch the product within 90 days.

Designing the product

Unlike traditional insurance, where policyholders must prove their losses before they receive a payout, parametric insurance is designed so that a beneﬁciary can receive money directly to their bank account within days if satellite data shows that a predetermined threshold – or ‘trigger’ –has been crossed. This creates a quicker and more seamless claims process, removing lengthy wait times and the need for in-person claims adjustments.

The pilot product used a remotely sensed historical daily temperature dataset spanning 30 years, collected by a weather satellite, to determine the trigger temperature at which payouts would be made.

The heatwave season was broken into 10-day phases, with a different trigger for each phase to reﬂect ﬂuctuating temperatures. This was based on the women’s feedback. During each phase, if the sum of three consecutive daily high temperatures crossed a predetermined trigger threshold, the women in that district received a payout. The calculation determining the trigger

Cheaper, faster, unambiguous payouts

Figure 2: How parametric insurance works, compared with traditional indemnity insurance

Insured assesses damage Compare with index of event intensity

Insured submits claim

Automated predeﬁned payout

Insurer processes claim

Claims adjuster assesses claim

Payout based on assessment Index (parametric)

The parameters of the weather risks can be measured using satellite data

An analysis of the historical data determines the trigger values

The policy is triggered and a payout is automatically dispersed

varied across the ﬁve districts covered, to reﬂect geographical differences.

The team also used feedback from focus group discussions to offer tangible beneﬁts (‘valueadded services’) that would help the women cope with extreme heat; these included shade tarpaulins, water coolers and solar lamps. With each policy purchased, the women could select one of these items to receive on top of the insurance. This built trust between the women and the insurance ﬁrm, given that many of the women were unfamiliar with insurance. Solar lamps were particularly popular, enabling the women to complete chores and their children to study during the cooler evening hours.

Pilot results

The 2023 pilot took place during an earlierthan-usual monsoon season, with heavy rains, flooding and cooler-than-usual temperatures. The trigger temperature thresholds were therefore not met – but the women’s feedback remained positive. Although no payouts were made, the women expressed gratitude for the insurance because of the tangible benefits they had received, showing that the value-added services were crucial in increasing their satisfaction with the insurance. The women also shared valuable feedback for future seasons, for example suggesting that the coverage could be extended to include flood insurance during the rainy season. Looking forward, Blue Marble will be incorporating this feedback as coverage is extended to other states in India.

One woman commented: “We signed up for the insurance for our beneﬁt. When we are given a solar light, we save on electricity, when

there is no electricity we use the solar light, if we go to ﬁelds we take it with us, and we can educate our kids when there is no electricity. For all these types of work, the solar light is useful. If we get any sickness in this type of heat, then the money can be used for medicines or we can choose to stay inside. In these situations, the insurance is helpful.”

How else can actuaries help?

As well as supporting innovation by advocating for the development and implementation of parametric insurance products that are tailored to vulnerable communities, actuaries can also:

1 Promote climate resilience – champion climate adaptation strategies within their organisations.

Collaborate – partner with innovators and local associations to create effective insurance solutions.

3 Educate – inform policymakers and stakeholders about the beneﬁts of parametric insurance.

Implement pilots – support and reﬁne pilot programmes to gather data and improve product designs.

Rising temperatures and extreme heat are here to stay – and while efforts to reduce carbon emissions are ongoing, adaptation measures will also be needed. This insurance pilot showed that a solution can be designed, priced and rolled out relatively quickly, and has led to the crowding-in of capital and the emergence of several new schemes for the 2024-2025 heatwave season. Looking forward, this model could be replicated across India and in other countries affected by extreme heat.

SARAH EBRAHIMI is head of institutional partnerships and personal lines at Blue Marble

Figure 3: Developing the parametric insurance product

Can actuaries help the UK’s slow-moving transition to electric vehicles? So asks the third article in our series on net zero for insurers

lectric vehicle insurance costs

are up 72% year on year, and scare stories abound, with many insurers refusing cover or quoting renewal prices of more than £5,000 for standard models.

Battery electric vehicles (BEVs) are central to the UK’s net-zero ambitions – so are insurers doing enough?

Transport is the largest source of greenhouse gas (GHG) emissions in the UK, being responsible for 29% of the total. As part of its goal of reaching net zero, the UK has a target for 80% of all new car sales to be zero emission by 2030. This is just six years away, but in July 2024 only 18.5% of new car sales were of BEVs – up just 2.5% on the same month in 2023. There are several reasons for this, from lack of investment in charging infrastructure to a BEV backlash in parts of the media. And the insurance price hikes cannot have helped.

There is a transition risk for insurers here, too. As motor manufacturers electrify, is the insurance industry keeping up? Should insurers invest more in the BEV market now, to sustain future business? And what would a net-zero motor and BEV strategy look like?

To start with, insurers could consider measurement, pricing and underwriting, and claims fulﬁlment.

Measurement

The Partnership for Carbon Accounting Financials has good guidance on how to measure a motor portfolio’s GHG emissions, known as insuranceassociated emissions. It is a two-step process: measuring the portfolio’s total emissions, and then determining the proportion of those emissions attributable to the insurer. Total emissions are calculated from:

The emissions intensity of the vehicle’s make/ model/type Mileage driven.

UK emissions intensity data is available from the Vehicle Certiﬁcation Agency and mileage data from the Driving and Vehicle Licensing Agency, via MOT certiﬁcates. BEV emissions will come from the National Grid, for which estimates are available.

The proportion of emissions attributable to the insurer (attribution factor) is calculated from the premium paid for insurance as a percentage of all other costs related to owning and running a motor vehicle (for example vehicle depreciation, petrol purchases and road maintenance).

A BEV’s carbon dioxide emissions per mile are less than 25% of the average petrol vehicle and are continuing to fall as the grid moves to more renewable sources. The percentage of BEVs in an insurer’s motor portfolio will therefore affect its insurance-associated emissions.

Pricing

and underwriting

BEVs are a challenge for underwriters. They are more expensive to repair than combustion engine vehicles, and small changes in design can lead to signiﬁcant variance in claims costs – particularly in terms of battery location. Their sharp acceleration,

THE UK HAS A TARGET FOR 80% OF ALL NEW CAR SALES TO BE ZERO EMISSION BY 2030. IN JULY, ONLY 18.5% OF NEW CAR SALES WERE BATTERY ELECTRIC VEHICLES

DAVID ROCHESTER has worked in general insurance for 30 years, specialising in home insurance, including as sustainable ﬁnance director

RUDI VAN DELM has worked in general insurance for 35 years, including as a chief actuary, board member and NED, across many countries

HUGH KENYON recently retired from his role as pricing director at Allianz Personal, after a 35-year career

In the US, the Tesla Model 3 has the lowest theft frequency of all vehicles

UK BREAKDOWN

Cars are responsible for more than half (52%) of the UK’s total transport emissions

The government has promised to reintroduce the 2030 target date for the phase-out of the sale of new fully petrol and diesel cars. It was originally set in 2020 by Boris Johnson and revised to 2035 last year by Rishi Sunak

At the end of 2023, 3% of all cars in the UK were battery electric; 7% were hybrid electric

Battery electric cars accounted for 16% of all new car registrations in 2023, up from just 1% in 2018

This January, The Society of Motor Manufacturers and Traders reported the sale of the UK’s millionth battery electric vehicle

low noise and heavier weight could also lead to higher personal injury frequencies and severities. It may, therefore, be prescient to take a cautious pricing and underwriting approach.

On the other hand, studies from Germany have shown that BEVs’ liability frequencies are 5% to 10% lower than those of their equivalent combustion engine models. And in the US, the Tesla Model 3 has the lowest theft frequency of all vehicles.

So, there could be an advantage to moving early. By taking a lead, the insurer gains early claims experience, which can feed back into improved pricing and underwriting. This creates a virtuous circle, whereby data and claims management advantages allow the insurer to present a more competitive proposition and it thus maintains a leading share as the market grows. Taking a risk when the market is small could pay dividends over the medium term.

Claims fulﬁlment

A detailed analysis by the German Insurance Association found that BEV repair costs are 30% to 35% higher than repair costs for an equivalent combustion engine vehicle. Some of this is inherent in the technology, particularly the cost of battery repair or replacement, but the study also cited simple ineﬃciencies in the handling of the repairs.

In the UK, Thatcham Research’s comprehensive report on BEV repair management highlighted major deﬁciencies and concluded that, without signiﬁcant change, claims costs will probably continue to rise disproportionately.

This presents a risk to insurers unless they can support their repairers through this change. Can they collaborate with manufacturers and across their networks to close the gaps in areas such as technical skills, post-accident diagnostics and battery recycling and reuse? This could be part of a wider net-zero strategy to reduce GHG emissions across all motor claims, for example by prioritising repair over replacement, and the use of green parts.

A role for actuaries

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Use the code to book for the launch event of the IFoA’s newest climate change report, Planetary Solvency

The BEV revolution is a risk to insurers but also a huge opportunity. An actuarial perspective that balances long-term risks and opportunities against short-term gains will be crucial in setting a good strategy, and actuaries’ skills in technical pricing and data modelling could be critical to such a strategy’s success.

BEV take-up rates must increase dramatically if the UK is to reduce its GHG emissions; can the insurance industry take up the challenge?

TRANSFER

Two actuaries – one a senior internal project actuary, the other in the role of independent expert – reﬂ on the twists and turns of a successful Part VII transfer

Two – one a internal project actuary, expert – reﬂect on twists turns a Part VII

JOHN JENKINS, RICHARD PRESTON

ack in October 2023, Phoenix completed its largest ever Part VII transfer of life insurance business, involving four life companies, more than nine million policies and £190bn of assets. It required extensive involvement from both Phoenix and the independent expert, John Jenkins of Milliman, over several years.

A Part VII transfer is the transfer of insurance business under Part VII of the UK Financial Services and Markets Act 2000, and requires court approval. The court assesses whether the transfer, detailed in the ‘scheme’, is likely to materially affect policyholders in an adverse way. In this, the court is helped by an independent expert’s report. Any policyholders who think they may be adversely affected are entitled to be heard in court, as are any other interested parties.

Four into one

Phoenix acquired Standard Life’s insurance business in 2018 and soon began planning a Part VII transfer in which the business of Standard Life Assurance, Standard Life Pension Funds and Phoenix Life Assurance would move to Phoenix Life, combining four companies into one. This was completed in 2023 and is known as the Phoenix 2023 Scheme.

SKILLS

The companies had different risk profiles, as well as more than nine million policies and £190bn of assets between them. The Standard Life business in Standard Life Assurance (£130bn of assets) comprised mainly unit-linked policies, annuities and four with-profits funds, while Standard Life Pension Funds comprised a small amount of annuities (£10m) that were reinsured to Standard Life Assurance. Phoenix Life Assurance comprised non-profit business and four closed with-profits funds (£10bn), while Phoenix Life comprised a mix of unit-linked business, annuities and 10 withprofits funds (£50bn).

As part of the initial integration, the companies’ management was aligned through common frameworks, governance structures and, with regulatory approval, a combined internal model to determine capital requirements. This enabled an in-principle ‘lift and drop’ of Standard Life Assurance, Standard Life Pension Funds and Phoenix Life Assurance without major changes to the way policies or funds operated, or how the business was managed, governed and administered. Figure 1 (overleaf) shows the scheme’s fundamental design.

SNAPSHOT

SCHEME SUMMARY

2018 Phoenix acquires Standard Life’s insurance business

2023

The ‘Phoenix 2023 Scheme’ completes: a Part VII transfer to Phoenix Life of the business of:

Standard Life Assurance (£130bn)

Standard Life Pension Funds (£10m) Phoenix Life Assurance (£50bn)

9m+ policies

5m+ transfer information packs

43,000 customer contacts at call centres

73 policyholder objections

5 objectors speaking in court

The new scheme replaced nine historic schemes while maintaining existing policyholder protections to avoid material adverse effects. One major challenge was developing an updated capital policy requirement that maintained the existing schemes’ pre-transfer requirements, which had been expressed very differently.

No changes were made to the management of the with-profits funds, except updates to some sunset clauses to improve their flexibility and reflect current market practices.

The scale of the transfer presented several challenges. Policyholders had to be informed of the proposed changes and their rights to object, prompting a major communication exercise. More than ﬁve million transfer packs were issued, including around 90 variations that were tailored to different brands and products. Temporary call centres were established, handling more than 43,000 customer contacts. There were 73 policyholder objections received and responded to, with ﬁve objectors speaking in court.

The transfer also required a large suite of complex and interdependent materials, including legal documents, actuarial reports and customer communications. It was diﬃcult to keep these updated and consistent through scheme wording changes, internal business developments and external events, such as the imposition of sanctions on Russia and the 2022 mini budget.

Figure 1: Overview of the Phoenix 2023 Scheme

AN INDEPENDENT EXPERT ASSESSES WHETHER A SCHEME WILL ‘MATERIALLY ADVERSELY IMPACT’ POLICYHOLDERS

Independent expert

An independent expert assesses whether a scheme will ‘materially adversely impact’ policyholders, considering factors such as benefit expectations, financial security, and the quality of administration and governance. The Court of Appeal’s December 2020 judgment on the Prudential-Rothesay transfer case provided helpful and up-to-date clarifications on what an independent expert should consider and how materiality should be defined.

An independent expert typically prepares two reports: a main report for the initial ‘directions’ court hearing, and a supplementary report for the ﬁnal ‘sanction’ hearing, with addendums for late developments, where necessary. Objecting policyholders are entitled to be heard at the sanctions hearing.

Although the transfer fundamentally followed a ‘lift and drop’ approach, it still required extensive analysis. Each company had its own risks, excess capital levels, historic scheme requirements and new business approaches. The independent expert, Jenkins, needed to consider whether combining these businesses would materially affect any

group of policyholders in an adverse way – for example by exposing them to risks that they would not reasonably expect, or causing them to subsidise other policyholders. The consideration extended to existing Phoenix Life policyholders, not just those being transferred.

Jenkins also had to be satisﬁed that the replacement of historic schemes with the new scheme would not inadvertently omit any existing protections. The solution was the use of ‘destination tables’, mapping the previous schemes’ requirements onto the new one.

One consideration was how the aligned capital policy would operate post-transfer.

Standard Life Assurance had an overriding requirement that the company be run in a way that did not unduly expose it to the risk of not meeting its Solvency Capital Requirement (SCR), and this resulting in a departure from core ﬁnancial management principles. After the transfer, this requirement was essentially extended to the whole of Phoenix Life, which required scrutiny and several drafts of the wording.

Jenkins also considered amendments to several with-profits sunset clauses that made them more flexible (subject to protections), and amendments to the unit-linked fund merger and closure provisions (again for flexibility, and subject to protections), as well as some operational simplifications. In addition, he reviewed customer communications and considered the scheme’s effect on regulatory approvals, permissions, and recovery and resolution plans.

As noted earlier, the companies involved had different risk mixes. On combining their business, the diversification effects between these different risks meant that the post-transfer SCR was significantly lower than the sum of the pre-transfer SCRs. Jenkins had to consider if this effect was genuine and if the magnitude of the reduction was plausible – and whether this could be demonstrated to the court and policyholders. He included a simplified but tailored worked example showing that the magnitude of the diversification was plausible.

The new scheme also presented some unusual and interesting challenges for him. For example, he had to consider whether any material adverse effects arose from the UK’s imposition of sanctions on Russia, which could affect both the transfer of policies and the transfer of assets underlying the policies.

One group of Standard Life Assurance policies was earmarked for a future Part VII transfer as

AN EMERGING FEATURE OF RECENT PART VII

TRANSFERS IS THE NUMBER

OF LATE-BREAKING ISSUES AND POLICYHOLDER OBJECTIONS RECEIVED JUST BEFORE THE SANCTION HEARING

part of a deal made with another company in 2021. He had to consider whether undergoing two Part VII transfers in succession would be better for policyholders than remaining in Standard Life Assurance until the second transfer took place, and concluded that the dual transfer was in policyholders’ best interests.

Policyholder objections

Jenkins reviewed all 73 policyholder objections to determine whether any of them highlighted issues that were not considered in his main report. Many of the objections were understandable, such as a preference for the status quo, or a belief that policyholders should beneﬁt more from the transfer, but these had been addressed in the main report. Some required additional explanation, which he provided in the supplementary report – but his conclusions did not change.

One policyholder was concerned that multiple Part VII transfers, each with no material adverse effects, could have a cumulative material adverse effect that would not be detected by the Part VII transfer process. Jenkins considered this possibility carefully but decided that its likelihood was remote, and that cumulative assessment would be impractical.

An emerging feature of recent Part VII transfers is the number of late-breaking issues and policyholder objections received just before the sanction hearing. Addenda to the supplementary report have become commonplace, and this transfer required two. The first provided updates on some internal Phoenix matters, while the second was in response to two policyholders who had previously raised objections and who significantly increased their correspondence and the extent of their objections shortly before the hearing. One made significant criticisms of Jenkins’ conclusion and the Solvency II matching adjustment. Jenkins had to ensure that all these concerns were addressed, despite the late stage of the process.

One thing is clear – undertaking the role of independent expert is not for the faint-hearted.

JOHN JENKINS is a principal at Milliman and was the independent expert for the Phoenix 2023 Part VII transfer

RICHARD PRESTON is a senior project actuary at Phoenix and worked extensively on the Phoenix 2023 Part VII transfer

Distinctive Relevant Chartered

Put the ﬁnal seal on your gold standard qualiﬁcations. Claim chartered status from the Institute and Faculty of Actuaries.

Leah Evans Chartered Actuary (Fellow)

A WIDER VIEW OF THE WORLD OF WORK, AND LIFE OUTSIDE

SOFT SKILLS

Hybrid holiday

THE DAYS OF THE SABBATICAL ARE LONG GONE BUT BURN-OUT IS ON THE RISE. IS A ‘BLEISURE’ TRIP THE MODERN ANSWER? AUSTRALIAN ACTUARY JULIA LESSING DESCRIBES HERS

When I embarked on an actuarial career, I willingly signed up for years of study and sacrifice in return for the allure of a financially stable future. Marrying my high school sweetheart in our first year of university, then graduating with a baby and a toddler, I was convinced that my study would provide a solid foundation for my adult life.

More than two decades later, I found myself wondering what I was thinking. Having qualiﬁed, raised four children, cared for family members through health challenges, moved away from a corporate career and launched my own actuarial training and coaching business, I was exhausted and unsure about how I’d got there.

Had I climbed the wrong mountain? Was running a business the best use of my strengths? And what was my

new role as the mother of adult children?

The plan

An old school friend, Tereska, called me after one of our games nights. She’d noticed I hadn’t seemed myself and asked what was going on. After I explained how I felt, she offered a solution: taking three weeks away on my own to relax and recharge surrounded by nature – in Australia’s Blue Mountains.

This seemed a ridiculous idea. How could I take three weeks off from my business? I’ve never had a few days, let alone weeks. How would my family manage without me?

Knowing these objections could be overcome, Tereska handled the logistics and gave me the dates and directions, complete with self-care homework for each week I was away. My ﬁrst solo ‘bleisure’ trip was booked!

A ‘bleisure’ trip, as the name suggests, combines both business and leisure; I came across the term in a conversation I had with actuary and keen traveller Andy Mirams. I tested the term with people around me – it was unfamiliar to many. One beneﬁt of a bleisure trip is that we can fulﬁl our work obligations while enjoying a change of scenery. This is helpful if you are self-employed and have trouble stepping back – or if you are employed and don’t have enough leave, or the

timing isn’t ideal for you to be away from work.

Post-pandemic, many actuaries still work from home at least some of the time, so remote work from a beautiful location could be a great solution.

The preparations

Under strict instructions from Tereska, I cancelled or rescheduled all nonessential work. However, this still left me with a sizeable task list: marketing my next leadership programme, running

I

STOPPED FOCUSING ON MY EXTERNAL RESPONSIBILITIES AND

CHECKED IN ON MY OWN NEEDS AND WANTS

webinars and promoting my podcast episodes that would be released while I was away. I didn’t want to hinder my business’s momentum, so I wasn’t willing to stop work altogether.

My husband was very supportive, knowing I needed a circuit-breaker. He took the reins on all family admin, allowing me to focus on my trip (easier said than done, after 25 years of parenting).

I wasn’t sure how others would react to the idea, so I didn’t tell many people about my plans. I told those who needed to know, and told my kids I’d be oﬄine for a few weeks and they should contact their dad if they needed anything.

My intention was to have as little work to do as possible – but without any domestic responsibilities, I found myself with a lot of free time. I’ve always enjoyed my job, so I did 20 to 30 hours each week. I only put on make-up and joined Zoom calls on three days, and having plenty of meeting-free time for quiet work was productive and recharging. A stable internet connection allowed me to complete essential work, such as planning semester programmes, writing content for a course, delivering a webinar and publishing podcasts.

odd. It took me a few nights to correctly estimate how many vegetables to cook for one person! But as I settled into a routine, I enjoyed the peace and quiet – some nights I just sat with a cup of tea and gazed into the ﬁre.

Is it right for you?

The leisure

I’ve always found nature to be restorative, so I made plenty of time for solo hiking through the lovely Blue Mountains, taking in their waterfalls, birds and canyons.

Being away from my routine let me reﬂect on my life and career. I had time to invest in professional development, working towards my next coaching accreditation, and to revisit my values and motivators, allowing me to chart my next direction.

I also ﬁnished a crochet project that I had started last September – involving 2.5km of yarn! – and read a dozen books that had been sitting on my ‘pending’ pile.

Since becoming a mother in my late teens, I have barely had a minute to myself, let alone three weeks on my own, so I wasn’t sure what to expect. After cooking for six people for so many years, and being used to the noise and bustle of a family home, the quiet and lack of requests was

It’s often said that a change is as good as a holiday, but a bleisure trip could be better than both. For me, it was certainly easier to schedule. My trip gave me the space to shift my perspective and reﬂect on my next chapter. I stopped focusing on my external responsibilities and checked in on my own needs and wants. As a result, I have a clearer view of what’s important to me.

Do you need a bleisure trip?

Ask yourself the following:

1 Are you feeling ‘stuck’ in your life and/or career?

2 Do you want to take a holiday but don’t have enough leave?

3 Do you wonder if you’re having a mid-life crisis?

4 Do you enjoy your work but need a break from your life?

5 Do you think the idea sounds intriguing?

If you’ve answered ‘yes’ to any of these questions, a bleisure trip could be just what you need.

Bleisure trips won’t suit everyone. We are all at different life stages, with different values, capacities, responsibilities and goals, and these change throughout our lives. I wouldn’t say a bleisure trip is essential for everyone, but it can be a neat solution if you find yourself needing a change of scenery and are unable to take pure leave. Mine definitely helped me to figure out my “what next?”.

The house in Australia’s Blue Mountains where Julia stayed during her trip

JULIA LESSING is an actuary and coach who helps actuaries improve their communication and leadership skills

MEMBER NEWS

BOOSTING INTAKE WITH DATA DRIVEN FUTURES

In partnership with the EY Foundation, the IFoA has completed its ﬁrst ‘Actuaries: Data Driven Futures’ initiative, aimed at young people who may face barriers to employment and at widening access to the actuarial profession.

The programme ran for two weeks in August and provided work experience and mentoring to 22 young people. It was delivered by a team of IFoA volunteers, IFoA members, the EY Foundation, the IFoA itself and six actuarial employers: APR, Barnett Waddingham, GAD, Isio, Just and Legal & General.

During the ﬁrst week, participants developed

their professional skills through interactive activities, including a Dragons’ Den-style challenge. Then, in the second week, they applied what they had learned to real-world work scenarios at their matched employer.

A graduation ceremony was held on 22 August to celebrate the participants’ hard work, with awards recognising different aspects of the programme.

The Data Driven Futures initiative will play an important role in widening access to the profession and supporting the IFoA’s diversity, equity and inclusion strategy.

Use

DEATHS

It is with great regret and our condolences that we announce the death of the following members: Mr Alan Scott joined the IFoA in 1967

Mr Donald Steel joined the IFoA in 1948 and became a Fellow in 1960

Mr Jacob Matthew Wooderson joined the IFoA in 2019 as a Student member and passed away on 23/08/2024

Charles M Stern Award reaches quarter-century

This year marks the 25th anniversary of the IFoA’s Charles M Stern Award, awarded biannually to a student from outside the UK and Ireland who shows special merit in completing all exams and becomes eligible for Fellowship.

Named after Charles M Stern, who died at the age of 90 in 1993, the award comprises cash and bursary. At the time of his death, Stern had been an actuarial student for more than 70 years, having enrolled with the Institute of Actuaries and passed its Part 1 exam in 1922. He never sat another exam, but retained membership while spending much of his life in the US as a translator, and bequeathed 15% of his estate to the Institute to

establish a memorial prize in his name. The 2024 winner is Tyler Bond, 28, of Auckland, New Zealand. He will use his bursary to attend the 2026 International Congress of Actuaries in Tokyo.

Other 2024 IFoA examination prize winners

The International Underwriting Prize for the best-performing student in General Insurance (SA3): Aditya Singhal. The Worshipful Company of Actuaries prizes for the best-performing students in Fellowship subjects on SA series papers: SA1 – Harward Dhliwayo

SA2 – Rebecca O’Mahoney

SA4 – Lauren Branney

SA7 – Philip Lasseter.

£5,000 FOR YOUR CHARITY?

Each year, the Worshipful Company of Actuaries presents the Phiatus Award to an actuary who has made signiﬁcant charitable efforts during the previous 12 months (or longer). Alongside the award is a donation of £5,000 to the winner’s selected charity. If you, or someone you know, is closely involved with a charity that would welcome such a donation, please email rosschiswick@gmail.com

Did you grow up speaking Scottish Gaelic?

I grew up on the Isle of Lewis, but most Gaelic speakers were outside Stornoway, where I lived, and I had virtually no Gaelic when I moved to Glasgow for university. My Gaelic is still fairly ropoch (ropey), but I’m always learning.

What is the language’s status in Scotland?

It is an oﬃcial language and there are around 70,000 ﬂuent speakers. There’s been a revival driven by Gaelicmedium education and fèis – gatherings where youngsters can learn singing, drama, music and dancing.

Tell us about the Glasgow Gaelic Choir…

It is the oldest such choir in Scotland, dating back to the 1800s. Meeting every Monday night, we rehearse for an annual spring concert and the Royal National Mod, a festival held each October where we compete against other Gaelic choirs – it is sometimes known as the Whisky Olympics. Our members are largely from the Hebridean diaspora, but we have people from around the world. A former member was

CHOIR IS A FAMILY –WE EXPERIENCE THE HIGHS AND LOWS TOGETHER

Have there been any particularly memorable moments?

Ireland hosts a Pan Celtic Festival each year and we’ve taken part a few times –tremendous craic. A couple of years ago we also attended a choral festival in Salzburg, which was class.

ACTUARY AND…

Gaelic chorister

FOR RECENTLY RETIRED ACTUARY DONALD MACLEOD, MONDAY NIGHTS ARE SPENT SINGING IN SCOTLAN D’S NATIVE TONGUE

Frenchman Jeremy Levif, who was on The Voice.

When did you join?

As students 30 years ago, a pal and I attended the Mod and joined the choir almost immediately afterwards. Despite my terrible Gaelic and not being a great singer, they have allowed me to make a racket ever since.

Do you have to know the language to join?

There’s no requirement – we have a tutor who helps, and everyone is very supportive to anyone struggling to learn the words and the accent.

What’s the set-up?

It’s soprano-alto-tenor-bass, although we also have competitions for female or male voices. We perform virtually all traditional Gaelic songs but have occasionally

done religious songs and translations of English songs.

Where do you perform?

Is there a sense of community?

The choir is a family – we experience the highs and lows together, on and off stage. Many of my greatest friendships have come through it, and the Mod is a brilliant way to catch up with pals in other choirs. I’m convinced it helped people get through lockdown.

What do you get out of it?

We focus on our spring concert and the Mod, but we’ve sung on a Rod Stewart album, performed on stage with Kris Kristofferson, taken part in the Proms and recorded a couple of albums. It even landed me a small part as a singer in Outlander!

What are your favourite songs to sing?

Given my Gaelic ability, my favourite songs are the ones with plenty of humming. My sister invented a helpful cheat – if you don’t know the words, mouth “rhubarb and custard”. This has got me through plenty of Mods!

For 30 years, Monday night has been choir night –an anchor in the week, and a tremendous way to switch off from work. It’s helped me maintain connections with my Hebridean roots, and it’s a great laugh.

You also MC the Tiree Music Festival –what is it, and what does your role involve?

Set on the Hebridean island of Tiree, 2,500 folk spend three days in July enjoying a festival featuring traditional musicians. I keep the crowd pumped, ensure the artists receive a nice welcome to the stage, and do whatever else is necessary. It’s the best job in the world!

LET US KNOW… If you have an interesting pursuit outside work, email social@theactuary.com

Donald (in yellow kilt) with members of the choir; below, MCing the Tiree Music Festival

Down

1 Mellifluous one involved in Perfect Day (6)

2 Candid writer supporting love (4)

MEMBER PUZZLE 42 Across

3 Brand new international group followed by American journalist (6)

4 Racks holding king’s threads (7)

5 What might be used to pluck sweet nothings out of nothing (8)

6 Privileged folk repent, once harassed (3,7)

7 Colonel, an eccentric, lacking energy to become General (3-5)

13 Two rivers surrounding extremely loveable twin in story (10)

16 You Can Call Me Al (US version) (8)

17 Task I’ll fulﬁl in part, using talent from USA (8)

19 Facial hair, mostly copper, black and a little grizzly? (4,3)

21 This shows going rate of swimwear brand (6)

22 A former PM’s lifted out (6)

MENSA PUZZLE 874

The top half and the bottom half are on interlocking rotating systems. When they move round, they will realign so that four associated words are read downwards. What are they?

25 Comedian’s unﬁnished take (4) C S A V U C E O T E T P T I A S

8 Alcohol poking out regularly in ﬁsherman’s tie (4,4)

9 Glass snake that hurt me (6)

10 Salons hire badly, for the most part (10)

11 European post (4)

12 Revised ending to movie failed over time (6)

14 What to eat with wealthy actress (8)

15 Woman from Virginia touring a loch (7)

18 Pip loved her Eastern lager (7)

20 Four involved in strange detour that’s better in F1? (8)

21 Motorist’s aid rested by reversing vehicle (6)

23 Naked musical now being performed (4)

24 Doctor agrees with call affecting a wide area (5-5)

26 Gold found after a month in state capital (6)

27 Dunes are breaking submarine (8)

PUZZLE 875

PUZZLE 876

MENSA

Students to Fellows

Mrigank Agarwal - INDIA

Jhalak Aggarwal - INDIA

Leanne Barwick - UK

James Brook - UK

Lu Cai - HONG KONG

Emma Clarke - UK

Gerard Conlon - IRELAND

Constantia Constantinou - UK

Dheer Darbar - UK

Stephanie Doherty - UK

Blaise D’Silva - UK

Patrick Fagan - IRELAND

Edward Firman - UK

Riya Garg - INDIA

Joseph Gillespie - UK

Jack Gosling - UK

Hiteshi Gupta - UK

Thomas Hay - UK

Rahul Hira - INDIA

Shreya Jain - INDIA

Sanau Kantai - KENYA

Cosmas Kipkoech - KENYA

Benjamin Knighton - UK

Lian Kuo - UK

Maxwell Lau-Walker - UK

Matthew Lawrence - UK

Paul Le Blan - UK

Simon Lee - UK

Kaiyan Li - CHINA

Heet Maniar - INDIA

Eoghan McCarthy - IRELAND

Dean McGarr - IRELAND

Matthew McGilloway - UK

Romil Mehta - INDIA

Alexander Miller - UK

Conor Mills - UK

Dilan Mistry - UK

Arushi Modi - INDIA

Conor Murphy - IRELAND

Xinyue Ning - CHINA

Jeremiah Njeru - KENYA

Daniel Oatley - UK

Luke O’Malley - IRELAND

Jayesh Pandit - INDIA

Amar Patel - UK

Thomas Pym - UK

Sanjayan Ravi - UK

Rahul Ravji - UK

Anuj Sachdev - INDIA

Barnabas Savill - UK

Davinder Sembhi - UK

Christopher Shaw - UK

Charlotte Sherwood - UK

Akanasha Singhal - INDIA

Citradeeban Srikandarajah - UK

Hicham Tahiri - SWEDEN

Yashasvi Tak - INDIA

Pei Ting Tan - SINGAPORE

Jack Thorp - UK

Dhriti Vador - INDIA

Daniel Webb - UK

Xinyu Zhang - UK

Students to Associates

Tanishq Agarwal - INDIA

Himani Agrawal - USA

Catherine Aldridge - UK

Harry Alvey - UK

Hannah Amesbury - UK

The following candidates have completed the examinations, and other necessary requirements, for qualiﬁcation as Fellows or Associates of the Institute and Faculty of Actuaries:

Jethro Ang - UK

George Archibald - UK

Garima Arora - INDIA

Renuka Bansal - INDIA

Sakshi Baswal - CANADA

Adam Ben - UK

Syed Mohri Binti - MALAYSIA

Rachael Bomphrey - UK

Joseph Brennan - UK

Lloyd Briggs - ISLE OF MAN

Callum - Brown - UK

Madeleine Brown - UK

Aimee Buchanan - UK

Ivan Campbell-Ferguson UK

Donal Carey - UK

Amanda Chan - MALAYSIA

Lois Chen - UK

Wen Chen - CHINA

Hi Cheung - GIBRALTAR

Dev Chotai - UK

Christopher Churchlow - UK

Sean Coetzee - SOUTH AFRICA

Alexander Colenutt - UK

Henry Cook - UK

Joseph Corrigan - IRELAND

Mark Dal Pozzo - SPAIN

James Daly - IRELAND

Greg Dawson - IRELAND

Oisin Devenish - IRELAND

Connor Devlin - UK

Aditi Dhandhania - INDIA

Quang Do - UK

Nikita Dogra - UK

Sean Donnelly - UK

James Doolan - UK

Yong Du - CHINA

Sarah Duffy - IRELAND

Colin Duffy - IRELAND

Caroline Fernando - UK

Juliette Ferrari-Mccomb - BERMUDA

Sandy Fong - UK

Simeng Fu - UK

Ricardo Fungairino - UK

Peter Galea - UK

Louise Gannon - UK

David Glynn - IRELAND

Jamie Granahan - IRELAND

James Griffin - UK

James Hampson - UK

Yuqi Han - CHINA

Adam Hargreaves - UK

Joshua Hartman - UK

Shiqi He - NZ

Imogen Hirsh - UK

Jennifer Holden - UK

Chia-Chuan Huang - NZ

Emi Ivan - UK

Sinthujan Jeyakumar - UK

Conor Kiely - IRELAND

Sankar Krishna - INDIA

Yee Kuek - MALAYSIA

Muhammad Kurreemun - UK

Teck Chuan Lau - HONG KONG

Rhynee Lee - MALAYSIA

Nahshon Lee - UK

Peter Leonard - UK

Wen Leong - MALAYSIA

Jialin Li - AUSTRALIA

Ewan Lindsay - UK

Chang Liu - CHINA

Susana Lopez Clemente - UK

Weiqian Low - UK

Niamh Loy - UK

Shiran Lu - CHINA

Benjamin Lynock - UK

Conor Lyons - IRELAND

Ella Mackintosh - UK

Jhanani Mahalingam - INDIA

Yuen Mak - UK

Mercy Makau - KENYA

Janahan Manivannan - UK

Eoin McCrossan - IRELAND

Darsh Mehta - INDIA

Holly Millar - UK

Jia Min - UK

Oisin Morgan - IRELAND

Finlay Morrow - UK

Ciara Muirhead - UK

Pauric Mullan - UK

Tiernan Mulligan - IRELAND

Laura Ndayong - FRANCE

Brian Ndung’U - KENYA

Zhe Neoh - MALAYSIA

William Nolan - IRELAND

James Noonan - UK

Thomas Notman - UK

David O’Donnell - GERMANY

Fiona O’Hagan - UK

Roshmi Pal - INDIA

Rajen Patel - UK

Nilang Patel - UK

Joshua Petter - UK

Francis Porathoor - UK

Vaishnavi Rastogi - INDIA

Sophie Robinson - UK

Joanna Rowicki - UK

Luke Ryan - IRELAND

Damon Salmanzadeh - UK

Dhvani Sanghavi - UK

Alexander Scott - USA

Shaylih Setter - UK

Pratima Shah - INDIA

Faizan Shah - UK

Paras Shethia - INDIA

Guillaume Shi - SWITZERLAND

Hrithik Singhal - INDIA

Ronan Smith - IRELAND

Rachael Smith - UK

Jonah Smith - UK

Siddharth Sonthalia - INDIA

Anuj Srivastava - UK

Ailsa - Steedman - UK

Rachel Stewart - UK

Harkaran Taggar - UK

Rory Talbot - UK

Min Tan - MALAYSIA

Keshana Thinakaran - UK

Martina Tombari - UK

Tadhg Treacy - IRELAND

Priyank Umale - BERMUDA

Jordan Unsworth - UK

Ajda Vovk - UK

Tom Wellard - UK

Jessica Wilkes - UK

Elijah Wong - MALAYSIA

Wan Wong - MALAYSIA

Tobias Woods - UK

Yucheng Xue - CHINA

Paige Yallop - UK

Nick Yap - UK

Haritha Yerra - INDIA

Ying Yin - HONG KONG

Li Yu - CHINA

Shufeng Zhang - UK

Associates to Fellows

Adarsh Agrawal - INDIA

Shouzab Ali - USA

Anneliese Bedwell - UK

Nathan Bennett - UK

Eoin Collins - UK

Elaine Culloty - IRELAND

David Cunningham - IRELAND

Ben Davis - IRELAND

Christopher Despy - UK

Cara Dillon - AUSTRALIA

Brian Dunne - IRELAND

Liam Fiddes - UK

Marc Friel - UK

William Gibbs - UK

Louise Gibson - UK

Sylvia Githinji - UK

Robert Givens - UK

Ruo-Yi Goh - MALAYSIA

Bhuwan Gurung - UK

Junaid Hussain - UK

Ciara Izuchukwu - BERMUDA

Parin Kalra - INDIA

Sarah Keenan - IRELAND

Tom Kershaw - AUSTRALIA

Lazeen Koorjee - UK

Imogen Kyle - UK

Jonathan Lavelle - UK

Yee Leung - HONG KONG

Ken Lim - UK

Sam Linehan - IRELAND

Juoli Loo - MALAYSIA

Wendy Low - SINGAPORE

Isabella Maclean-Smith - UK

Audrey Mc Auliffe - IRELAND

Anna Mcdonagh - UK

Emma McDougall - UK

Dimple Mistry - LUXEMBOURG

Benjamin Murtagh - UK

Zen Ng - UK

James Nolan - UK

Alexander Osborne - UK

Daniel Parker-Bates - UK

Nia Powis - IRELAND

Connor Richardson - UK

Fraser Roberts - UK

Scott Rose - UK

Kieran Rowles - UK

Matthew Russell - UK

Annissa - Sandhu - UK

Alexander Scott - USA

John Shannon - IRELAND

Hannah Szluha - UK

Javier Tan - SINGAPORE

Aoife Tiernan - IRELAND

Matthew Toal - UK

Samuel Tose - UK

Anh Tran - VIET NAM

Cornelis Verster - SOUTH AFRICA

Runze Yu - SINGAPORE

Ziqi Zhang - UK

Chong Zhi Yuan - SINGAPORE

Tip of the iceberg

YOU’LL BE FAMILIAR WITH THE 80 /20 P ARETO PRINCIPLE – BUT WHAT ABOUT THE PARETO MINDSET, WHICH YOU CAN APPLY TO YOUR WORK IN A GENERAL SENSE? EDWARD LOVELOCK EXPLAINS

The ideas of Vilfredo Pareto appear frequently within the actuarial world, and the Italian polymath has lent his name to concepts in ﬁelds ranging from economics and maths to sociology and systems analysis. While conducting research in the early 20th century, Pareto found that approximately 80% of Italy’s land was owned by 20% of its population. This wealth distribution can be modelled by a power law now known as the Pareto distribution.

EDWARD LOVELOCK is a trainee actuary working in

Later work has shown that the Pareto distribution, with its characteristic long tail, can be used to model a wide variety of phenomena. It describes distributions such as the size of meteorites, the value of oil reserves in oil ﬁelds, the scale of human settlements, and the rate of errors on a hard disk drive.

In an actuarial context, the Pareto distribution plays an important role in the extreme value theory that underpins

life insurance

IN A SITUATION WITH MANY OUTCOMES, ROUGHLY 80% OF CONSEQUENCES COME FROM 20% OF CAUSES

reinsurance arrangements. A small number of very large losses caused by rare events have a disproportionately large effect on insurers’ balance sheets, and these losses can be modelled by the Pareto distribution. For example, catastrophic events such as earthquakes or hurricanes lead to signiﬁcant insurance claims, following a Pareto distribution where a few large claims represent most of the total losses. This modelling allows actuaries to prepare for and mitigate the ﬁnancial impact of such events through reinsurance strategies.

The next stage in the evolution of Pareto’s ideas is the Pareto principle: in a situation with many outcomes, roughly 80% of consequences come from 20% of causes. The principle was named in honour of Pareto by management consultant Joseph M Juran, and translates the raw maths into a useful rule of thumb. It is also known as the 80/20 rule, and encourages concentrating your effort on 20% of your possible actions to yield 80% of the desired results.

But what value does it add to your work to see things in this way? Even for those working in the actuarial profession, this principle seems obscure and abstract rather than practical and applicable. The mathematical formalism of a distribution is logical and tidy; a principle can seem vague and unintuitive. However, rephrase the Pareto principle as the ‘law of the vital few’ and, if you look carefully, you are sure to ﬁnd examples in your day-to-day work.

As a student, a few tricky concepts will likely take up the majority of your study time. As a manager, a handful of meetings can dictate how you

use most of your resources. As a sales representative, a small number of clients will probably contribute the lion’s share of your earnings. The numbers involved do not need to perfectly match the Pareto distribution for the principle to be applicable: it remains valuable as long as a relatively small number of important actions have a disproportionate impact. It could be as simple as noticing that 20% of your emails take up 80% of your time. If this is the case, you can then prioritise the ‘vital few’ senders and their demands. Once you start looking for situations in which there exists a vital few, you may be surprised by how often you can apply the principle. There is no level of seniority or industry at which you can escape the Pareto principle; to deal with this reality, it is worth developing a Pareto mindset. This is an attitude whereby you can identify realms of work that obey the Pareto principle and then make appropriate decisions based on this knowledge. From law to principle to mindset, Pareto’s ideas have lasting value because they are an important reminder of the unequal weighting of the consequences of our actions. Recognising this is a powerful step towards improving your workﬂow, troubleshooting problems, managing your time more effectively and being a more productive actuary. Seek out the vital few and use them to your advantage.

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YOU’VE READ THE ISSUE – NOW TRY THESE MULTI-MEDIA

Cursed podcast

Following the special report on modern slavery on page 22, find out more about the realities of human trafficking. The recently launched 10-part podcast Cursed tells the story of Josephine Iyamu, a British-Nigerian nurse from London – the first person to be convicted under the UK’s Modern Slavery Act. She was jailed in 2018 for trafficking five women from Nigeria to Germany for forced sex work, threatening them with curses and ‘juju’ rituals. Use the QR code to find it on Audible

WOMEN & WORKPLACE CULTURE

Author: Jenny Segal

This is the fourth book in a series on motivation by actuary and motivational speaker Jenny Segal. She says: “I spent three months interviewing some 80 professionals (male and female, junior and senior), to take the temperature of the gender debate. What I found out was often shocking but rarely surprising. My book looks at the daily challenges and many biases that affect women at work.” Use the QR code to ﬁnd it on Amazon

The Actuary podcast #1 Don’t miss the ﬁrst episode of The Actuary’s new series of videoed podcasts, offering intriguing chat and professional insights from inspiring leaders and fellow actuaries. Join host Jon Watkins for 30 minutes as he meets IFoA president Kartina Tahir Thomson, Polly Cripps of the IFoA’s Pensions Gap Working Party, and sustainability actuary (and quail keeper) Alex Martin. Use the QR code to ﬁnd it at theactuary.com, or go to your favourite podcast platform such as Apple, Amazon or Spotify

THE ART OF UNCERTAINTY

Author: David Spiegelhalter

Publisher: Pelican

In his latest book, statistician, IFoA honorary Fellow and media maths personality David Spiegelhalter discusses, in his usual readable style, the nature of coincidence and the most crucial luck of all, pertinent to every one of us: when, where and to whom we were born. Look out for our interview with him next issue… Use the QR code for more about the book

Rubik’s channel

It’s been 50 years since Hungarian architecture professor Erno Rubik came up with his twisting ‘Magic Cube’, as it was originally known, with its 43 billion billion permutations. It garnered a following that’s still going strong today, thanks to its own brand permutations over the years, such as the snake version and the launch of the Rubik’s Cube World Championship in the Eighties. The cube is responsible for several world records, of course, including the number of people simultaneously solving it (1414, in London in 2012) and for the fastest single-solve time (3.13 seconds, in 2023). Use the QR code to have a play with cult fun on the official Rubik’s YouTube channel

The Actuary video #1 Building on the special report on malaria in the Sept/ Oct issue (see theactuary.com), Malaria: How 2024 Changed the World Risk Picture is a ﬁve-minute watch, giving scope to the story, expanding on details and featuring expert interviews. Use the QR code to watch it at theactuary.com

SCREEN

OUR TEAM

ACTUARIAL OPPORTUNITIES

Pricing Analyst/Data Science

Location: London

Salary: £70 - 90k + Bonus & Benefits

Senior Pricing Actuary

Location: London

Salary: £90-110k + Bonus & Benefits

Pensions

GMP Equalisation Lead

This role sits within the Pricing Team, which plays a pivotal role in driving business growth through advanced analytics. As a leader in technology, the company develops in-house pricing models using cutting-edge data science techniques. We seek a candidate with personal lines actuarial pricing experience and a strong passion for data science. This commercially focused position offers a diverse range of exciting, technically challenging projects, providing an excellent opportunity for someone eager to make a meaningful impact.

d.jackson@gravitasgroup.com | 07901 857410

Reserving Actuary

Location: London

Salary: £95 - 115K + Bonus & Benefits

This role is responsible for providing actuarial analysis to determine reserves for the company’s (re)insurance products and ensuring regulatory compliance. Collaborating with the Reserving Team, Underwriting, and Finance, you will support the Head of Reserving in analysing reserve movements and developing reporting patterns. You will be maintaining reserving processes, monitoring key indices, and preparing statutory schedules. Candidates should be nearly or newly qualified with P&C experience, knowledge of loss reserving techniques, and advanced Excel required.

d.jackson@gravitasgroup.com | 07901 857410

l.van-gelderen@gravitasgroup.com | 0203 640 9870 efits

Location: UK Wide

Join our Pricing Actuary team within our Insurance Division! As a Senior Pricing Actuary, you’ll lead pricing strategy and develop robust pricing models. Your role includes collaborating with underwriters, providing actuarial insights, and driving continuous improvement. The ideal candidate has insurance actuarial experience, strong data analysis skills, and proficiency in programming (SQL, Python, R). We offer a competitive salary, bonuses, flexible benefits, and opportunities for professional development. Flexible, Hybrid working & part-time candidates will be considered

Junior Reserving/Capital Modelling Actuary

Location: London

Salary: £45-60k + Bonus & Benefits

We’re seeking a Junior Reserving/Capital Modelling Actuary to support our actuarial team. In this role, you’ll assist in developing and validating reserve estimates and capital models, analyzing data, and preparing reports. Strong analytical skills and proficiency in programming (e.g., R, Python, or Excel) are essential. This is an excellent opportunity for early-career actuaries looking to grow in a collaborative environment. The client offers competitive compensation and opportunities for professional development.

l.van-gelderen@gravitasgroup.com | 0203 640 9870

Salary: £55-85k + Bonus & Benefits

Our client, a prestigious Consultancy are seeking to recruit a GMP Equalisation Lead to join their team in any of their UK offices. The role will form part of the projects team with the current focus being around delivering GMP Equalisation project to their clients, which can incorporate or lead onto being involved in derisking projects for our clients over time. This is an opportunity to fulfil a fundamental role in providing pension solutions across a wide range of services.

k.newton@gravitasgroup.com | 07842 368 630

Pensions

Senior Risk Transfer Consultant

Location: UK Wide

Salary: £65-95k + Bonus & Benefits

A highly successful global Consultancy is seeking to recruit a Senior Risk Transfer team based out of any of their UK offices on a hybrid basis. A great opportunity, providing clients with advice on their journey to buy-in, broking the market and winding up schemes. Looking for individuals with excellent communication and project management skills, adaptability, business acumen and a desire to be in front of clients, all underpinned by the required consulting skills and experience. k.newton@gravitasgroup.com |

For more opportunites or information, visit our website: www.gravitasinsurance.co.uk

Debbie Jackson

Karen Newton

Leah Van Gelderen

At APR, we provide high-quality actuarial support through our consulting services and via secondment. With our team of 80+ actuarial staff across the UK and Ireland, ranging from students to highly experienced actuaries, we provide tailored and exible solutions designed to alleviate the pressure our clients face.

PRICINGLEAD

London,c.£100,000

IhavepartneredwithaglobalinsurersearchingforaPricingLeadtojointheir Pricing&Analyticsdepartment.Therolewillfocusonamixoffront-facingand technicalelements.Thisisafantasticopportunityfordriven,ambitiousand curiouscandidatesfromanygeneralinsurancebackgroundtomoveintoPricing. Candidateswithaconsultingbackgroundareveryencouragedtoapply.Our clientisalsoindifferentifcandidatesarecompleting/havecompletedexamsorif theyneverstarted/havestopped.Themindset,abilitytocommunicate,andteam fitarethemostimportantfactorstobetakenintoconsideration.

Contact: rafaela.fakhre@eamesconsulting.com|02038465909

HEADOFPRICEOPTIMISATION&DATASCIENCE

London,£150,000

Afastgrowingpersonallinesinsurerislookingtohireapricingprofessionalto leadpricingoptimisation,sophistication,anddatascience.You'llhavethe autonomytoshapethepricingoptimisationfunction,managingateamof3and currentlyhiringforalreadyapprovedheadcount.Thefocusoftheteamwillbe theimprovementofpricingoptimisationapproaches.Thiswillinvolvethe existingmodelsinRadar,whilecreatingapythonbasedapproachintandem withthehomeandmotorteams.Theidealcandidatehasstrongpricing optimisationexperience,abackgroundinpricingsophistication,andthedrive togrowwiththecompany.

Contact: sam.baker@eamesconsulting.com|02070923230

CAPITALACTUARY

London,c.£110,000

WehavepartneredwithagrowingbusinesstofindaCapitalActuary,reporting straightintotheHeadofCapital.Ideallylookingtospeaktocandidateswhoare nearly/newlyqualifiedforthisopportunityfromanygeneralinsurance backgroundandalsoopenforcandidateswithlifeinsurancecapitalmodellingas well.Thisisquiteafront-facingrole,sothereisnopreferenceforanyparticular software/codinglanguageexperience.

Contact: rafaela.fakhre@eamesconsulting.com|02038465909

SENIORINVESTMENT&RISKMANAGEMENTCONSULTANT

London/Hybrid,upto£100,000

InnovativeglobalSAASprovider/consultancyislookingtogrowtheirUK Insurancestrategyteamwithfinancialriskmanagementspecialistswhodevelop solutionstosimplifyclientinvestmentdecisionsandoptimiseenterpriserisk management.Youwillmanageaportfolioofinsuranceclientsandprojects, designingandapplyingALManalyses,ORSAcalculations,investmentadviceand riskmonitoring.Lookingforanactuarialorbroaderquantitativebackgroundwith 5-7+yearsofALM/investmentexperiencegainedineitheraconsultancyor companyenvironment.

Contact: jo.frankham@eamesconsulting.com|02070923263

LEADACTUARY-REINSURANCE

London,£competitive

ALloyd's/LondonMarketinsurerislookingtohireanexperiencedindividualto takeresponsibilityforthereinsurancecasualtytreatyportfolio.Thisisa managerialroleandwouldrequireindividualstohavesuccessfullymanagedin thepast.Thereisanelementofreservingtiedtotherole,howeverpredominantly itisapricingandportfoliomanagementopportunity.

Contact: hannah.turner@eamesconsulting.com|02070923249

OPPORTUNITIESFORPENSIONSACTUARIES

Nationwide,£dependingonexperience

AreyouaPensionsActuarylookingforanewchallenge?Wehaveawiderange ofopportunities,atarangeoflevels,forcandidatesfromapensionsconsulting backgroundlookingtobroadentheirhorizons.ConsideringamovetoanotherDB orDCconsultingteam?Wanttoexpandyourexposureintode-riskingprojects? Keentoapplyyourexperienceininsuranceinabulkannuitiespricingrole?Or switchtogeneralinsurance?Wewouldlovetohearfromyou!Pleasegetintouch foraconfidentialdiscussionaboutcurrentoptionsinthemarket.

Contact: jo.frankham@eamesconsulting.com|02070923263

[EXCLUSIVE]SENIORACTUARY

London,upto£130,000

AboutiquebrokerageislookingtohireaLloyd's/LondonMarketPricing ActuarytojointheirhighperformingteaminLondon.Thisisanexcellentrole foranindividualwhoenjoysbeing'front-facing'andwhoiskeentoutilise theiractuarialskillswithinbrokermeetings.Thisroleisverycommercialand requiresFIAqualificationideally.

Contact: hannah.turner@eamesconsulting.com|02070923249

MOTORRESERVINGLEAD

London,£150,000+bonus

I'mcurrentlylookingtospeakwithqualifiedactuarieswhoextensive experiencewithinthemotorinsurancemarket.You'lljoinamarketleading personal/commerciallinesinsurer.Thepurposeofthisroleistoleadthe motorreservingfunction,determiningthestrategicdirectionfortheteam. You'lladviseonactuarialandbusinessplanning,andwillleadthe implementationanddeliveryoflargecomplexprojects.Theidealcandidateis aqualifiedreservingactuarywithastrongexperienceinmotorreservingand anabilityinchallengingseniorstakeholders.

Contact: sam.baker@eamesconsulting.com|02070923230

RESERVINGACTUARIALANALYST

London,£60,000+bonus

Aleadinghome&motorinsurtechislookingtoexpanditsreservingteam, bringingonboardanexperiencedactuarialanalyst.Thisisabroad opportunity,supportingquarterlyreserving,theintegrationofmachine learningcapabilities,andbespokereservingdeepdives.Youwillalsotake ownershipofyourwork,presentingtoseniormanagersandadvisingon actuarialstrategy.TheidealcandidateismakingprogressthroughtheIFoA examsandhasastrongexperienceinpricing,reserving,orcapitalmodelling.

Contact: sam.baker@eamesconsulting.com|02070923230

HEADOFFINANCEBUSINESSDEVELOPMENT

LondonorScotland,£competitive

RecententranttotheBPAmarketislookingforanexperiencedactuaryand leaderwhocancombineanexcellentknowledgeofregulatoryframeworks (includingIFRSandSolII),BPAmarketbackground,andtheabilitytodrive change.Thisisakeyhireforthebusiness-withtheaimtodeliver coordinatedstrategyacrossFinance,PricingandPropositiontosupporttheir ambitiousgrowthplans.We'veseenlotsofhigh-profileseniorrolesinBPA pricing/originationthisyearbutveryfewontheReporting/Capitalsideso thisisarareopportunity!

Contact: jo.frankham@eamesconsulting.com|02070923263

2XFIXEDTERMCONTRACTS(12MONTHS)

London,£competitive

IamworkingontwofixedtermcontractsintheLloyd's/LondonMarketthatI amkeentospeaktoFIAActuariesaboutwhocanbeavailablewith6weeks. Theserolescannotbeperformedonadayrate,andthereforecandidates mustbeonboardwithacceptingafixedtermsalary(thisincludesaccessto thepermbenefitssuchaspensionandholidayallowance).ForoneroleI requireERMorcapitalexperienceandtheotherLloyd's/LondonMarket pricingexperience,ideallywithpythoncoding.

Contact: hannah.turner@eamesconsulting.com|02070923249

RESERVINGLEADX3

London,£95,000

OurclientisanestablishedLondonMarketinsurerwhoislookingfor3 actuariestojoinastheirreservingteamfocusingonCasualty,Specialtyand Retail.Wearelookingforcandidateswhoareideallynearly/newlyqualified withpriorreservingexperience(opentoLondonMarketandCommercialor Personallinesbackgrounds).Thisisfantasticopportunityforcandidateswho wanttojoinaglobalorganisationwithagreatcareerprogressionopportunity.

Contact: rafaela.fakhre@eamesconsulting.com|02038465909

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