+ NEW QUALIFIERS’ LIST
FIRST WOMEN
The female Fellows who made history 100 years ago
KALPANA SHAH
Interview with the new IFoA president
RUGBY HEROES
Champions of the game from our profession
Saluting actuaries who blazed a trail, in the field or on the field
Risk management and regulatory compliance require efficient, trustworthy economic scenario generation.
Milliman’s Economic Scenario Generator uses the computing power of the cloud to quickly deliver robust scenarios. Our consultants are here to help you navigate internal and external reviews, simplifying the process from start to finish
Benefit from unparalleled experience with the Milliman Economic Scenario Generator.
Visit milliman.com/economicscenariogenerator
4 Editorial Yiannis Parizas stresses the power we all have to make a difference
5 CEO comment Stephen Mann on building a warm and welcoming profession
6 IFoA news
The latest IFoA updates and events
12 Interview: Kalpana Shah
The new IFoA president on the importance of soft skills, diversity and challenging the status quo
16 Talent: Model players
To mark the Rugby World Cup, Kenneth Bogle salutes a squad of actuaries who excelled on the pitch
19 Environment: Tipping the balance
Our climate may be reaching a tipping point – but so is public demand for change, says Alex Martin
20 Environment: Storming the capital
When factoring climate risk into capital requirements, why is there so much uncertainty and inconsistency, asks Jérôme Crugnola-Humbert?
24 Health: Better than cure
We already have the knowledge to cut cancer rates, say Tobias Schiergens and Debbie Smith
27 Pensions: Dynamic handling
Gareth Connolly and Phil Hardingham explore the pros and cons of a dynamic discount rate
28 General insurance: Business interrupted
How did insurers fare with the mass of Covid business interruption claims? Jeremy Keating investigates
30 Talent: City surprised
Liz Bowsher tells the story of the first female qualifiers, 100 years ago
32 Data science: Auto pilot
Darius Sabas and Maximilian Hudlberger consider an individual loss development approach
You can read The Actuary magazine on any Apple or Android device. Get the app and explore to read more online, download resources, or share content on social media. It’s an exclusive free benefit for our members. Download for Apple at: www.theactuary.com/ipad Download for Android at: www.play.google.com
37 Modelling: Walk the line
How can we balance accuracy and transparency? Mikołaj Skraburski and Dawid Kopczyk discuss
41 Extra-curricular Musicals conductor Adrian Portell takes us behind the scenes
42 Soft skills: The F-word
Don’t fear failure, says Alexia Panayiotou – it’s essential to success
44 Puzzles
45 People and society news News from the actuarial community
46 Student
Impostor syndrome comes for us all at some point, admits Vrishti Goel
Bank crises: a risk too far?
Darshan Purmessur uses the collapse of Silicon Valley Bank in March to stress the importance of enterprise risk management. And have you seen our first podcast yet? www.theactuary.com
See additional content, including actuarial news, at www.theactuary.com
Sign up for our weekly email newsletter at bit.ly/1MN3bXK
The Actuary: theactuary.com
IFoA: actuaries.org.uk
PUBLISHER
Redactive Publishing Ltd
9 Dallington Street, London EC1V 0LN
PUBLISHING DIRECTOR
Anthony Moran
MANAGING EDITOR
Melissa Walton +44 (0)20 7880 6246 melissa.walton@redactive.co.uk
SUB-EDITOR
Kate Bennett
DISPLAY SALES
theactuary-sales@redactive.co.uk
+44 (0)20 7324 2753
RECRUITMENT SALES theactuaryjobs@redactive.co.uk
+44 (0)20 7880 6234
ART EDITOR
Sarah Auld
PICTURE EDITOR
Akin Falope
SENIOR PRODUCTION EXECUTIVE
Rachel Young +44 (0)20 7880 6209 rachel.young@redactive.co.uk
PRINT PCP
SUBSCRIPTIONS
EDITOR Yiannis Parizas editor@theactuary.com
FEATURES EDITORS
● Travis Elsum:
Environment and sustainability
● Alex Martin:
Environment and sustainability
● Sachal Gandotra: General insurance
● Rajeshwarie VS: General insurance
● Blessing Mbukude: Life
● Aqib Merchant:
Pensions and investments
● Ruolin Wang: Pensions and investments
STUDENT EDITOR Adeetya Tantia student@theactuary.com
IFOA EDITOR
Kate Pearce +44 (0)20 7632 2118 kate.pearce@actuaries.org.uk
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: UK: £110 per annum. Europe: £145 per annum. Rest of the world: £175 per annum.
Contact: The Institute and Faculty of Actuaries, 7th floor, Holborn Gate, 326-330 High Holborn, London WC1V 7PP. +44 (0)20 7632 2100 kate.pearce@actuaries.org.uk.
Changes of address: please notify the membership department membership@actuaries.org.uk
Delivery queries: contact Rachel Young rachel.young@redactive.co.uk
Published by the Institute and Faculty of Actuaries (IFoA).
The editor and the IFoA are not responsible for the opinions put forward in The Actuary. No part of this publication may be reproduced, stored or transmitted in any form, or by any means, without prior written permission of the copyright owners.
While every effort is made to ensure the accuracy of the content, the publisher and its contributors accept no responsibility for any material contained herein.
© Institute and Faculty of Actuaries, Sept 2023
All rights reserved ISSN 0960-457X
Last month, Fitch downgraded the creditworthiness of the US, lowering its rating from AAA to AA+. This was prompted by what it saw as the country’s substantial and escalating general government debt. As a result, higher borrowing expenses are expected, with the increased perception of default risk. At the same time, interest rates are still marching upward, hiked in the UK for a 14th time in a row.
The only solution to all our problems, of course – whether fixing the global financial situation or avoiding catastrophic climate change or beating ill health – is people. All of us contribute in our own way; it’s not just about Earth’s leaders. It pays to remember that they’re human too (or perhaps you think we’re constantly reminded of that fact?). They fail, as academic Alexia Panayiotou stresses on page 42. In fact, she points out, people aren’t good leaders if they don’t.
Two ‘ordinary’ women had an impact on the world a century ago, when they decided to pursue the new opportunity for women to enrol for exams to become actuaries (p30). They rocked the City in doing this, the first women to become Fellows of the Institute of Actuaries in 1923. On page 16 we celebrate another group of actuaries – those who played rugby in their spare time. They may have been amateurs but they were superstars on the field, often gaining international glory.
This issue, we also meet new IFoA president Kalpana Shah (p12), who has plenty of positive plans for change. Plus, we look at how people have helped businesses through their Covid interruption claims (p28); how they are using machine learning for a more bespoke approach to estimating insurance loss (p32); and how they are contributing to cancer prevention (p24). Go do your thing.
YIANNIS PARIZAS EDITOR
editor@theactuary.com
With our AGM and presidential address taking place this month, I want to begin by saying congratulations to our new president, Kalpana Shah, as well as to president-elect Kartina Tahir Thomson and our new Council members. You can find out more at actuaries.org.uk/ifoa-council-elections
I also want to say a huge personal thank you to Louise Pryor, our outgoing immediate past president. Louise was part of the selection panel when I was interviewed for the IFoA back in 2019, and the opportunity to work with her was one of the reasons I was keen to join as CEO. When you are asked to lead the implementation of Council’s major and ambitious transformational strategy, involving a lot of catching up and aggressive timelines, as well as having to make our way through the immediate and later impacts of the Covid pandemic, some things will go well and others will be more challenging. That is inevitable and Louise has always been one of my ‘go to’ people for counsel and general sense-checking. I have valued that, as well as her appreciation for the work my colleagues are doing to bring Council’s vision for the IFoA and the wider profession to life.
This year, as well as celebrating our 175th anniversary since the founding of the Institute of Actuaries, we are also marking 100 years since the first women qualified as actuaries, following votes by the Faculty of Actuaries and the Institute of Actuaries to permit them to enter the profession – you can read more about these remarkable women on page 30 of this issue. The actuarial profession has certainly progressed since then, as our changes in leadership show.
As a small profession, we need to be a warm and welcoming community if we are to be sustainable. As a result, Council has agreed that the IFoA needs to be committed to championing and embodying the benefits of a globally diverse and inclusive profession. As part of our Diversity, Equity and Inclusion strategy (bit.ly/IFoA_DEIStrat), we are supporting the actuarial profession to become a natural attractor of diverse talent. Leadership and culture play a key role in
this. People want to see role models with whom they can identify and aspire to be like.
At the beginning of my career as a young lawyer working at a big City law firm, I got to work closely with the organisation’s first ever female partner and saw first-hand the hurdles she had to overcome, sometimes on a daily basis, due to her sex. While progress has been made in terms of gender diversity, the data from our UK members –collected from a City of London Socio-Economic Diversity Taskforce survey earlier this year – suggests that the UK actuarial profession performs less well from a socio-economic diversity perspective than the wider financial and professional services sector, in terms of membership and senior leadership. This wider sector is still substantially drawn from people whose backgrounds are already professional ones. What is especially important is whether the members who responded to that survey felt that their social background had been a hindrance to their careers. Those who were at early and senior stages felt much less strongly about this than those who were a few years into their careers. This suggests that competing on core actuarial skills may be a leveller and that members are more confident in handling situations once they have reached a senior level. However, when actuaries start moving into management, supervisory roles or using their skills more widely, those from lower socio-economic backgrounds find the profession to be less accessible and inclusive.
This has a negative impact on those individuals and is bad for the profession – especially as embracing diversity of thought and perspective is essential to an actuary’s role. Many of our member firms are undertaking some great initiatives to change this, complemented by work that the IFoA is doing. We may not see the benefits immediately but I am glad that the work is starting now to build a more representative future for the profession, from which everyone will surely benefit.
STEPHEN MANN is the chief executive of the Institute and Faculty of Actuaries
As a small profession, we need to be a warm and welcoming community to be sustainable
We were delighted to welcome more than 50 first and second-year students to our first actuarial careers showcase, More than Just Maths, in June.
The event was part of our flagship IFoA Conference and brought representatives from nine of the largest actuarial employers together with students studying maths-based degrees across the UK and Ireland.
The students learnt about a wide range of actuarial careers, graduate scheme opportunities and how to stand out from the competition when applying for a graduate role.
The showcase included structured networking sessions, informative presentations and interactive discussions, enabling employers to show the range of actuarial science career paths and the growing demand for actuaries across various sectors.
Employers valued the opportunity to encourage students from a diverse range of backgrounds into the actuarial profession. Andy Rogan, interim head of capital and commercial at Lloyds Banking Group,
emphasised how IFoA careers events support graduate recruitment. “The IFoA’s actuarial careers showcase is an important, engaging and innovative way of attracting high-quality graduates to our profession,” he said. “It is a privilege to support it.”
Facilitated networking with employers helped to connect students to potential internship, placement and employment opportunities. Yidan Zhang, a second-year student at the University of Bath, appreciated the chance to meet employers and fellow students: “The event was a fantastic opportunity to connect with a diverse group of individuals and employers.”
By hosting More than Just Maths during our June conference, we were proud to provide a new platform for the IFoA and the actuarial industry to support the next generation of talent. We and the industry are committed to empowering students and shaping the profession’s future.
If you are an actuarial employer and would like to be involved in future careers showcase events, please contact employers@actuaries.org.uk
At the AGM on 6 September, Matt Saker handed over the IFoA presidency to Kalpana Shah. She will be making her inaugural presidential address at 11am BST on 14 September at Staple Inn Hall, London. You can book a free place to attend in person, or to have access online.
Book your place at bit.ly/IFoA_pres_ address_2023 The Council election results were also announced at the AGM on 6 September and are available at actuaries.org. uk/ifoa-council-elections
Would you like to help the IFoA grow an inclusive culture within the actuarial profession? The Diversity Action Group is looking for proactive, engaged and passionate volunteers to join its managing committee. Could you encourage individuals and organisations to embrace diversity of thought and create a profession in which all members feel they belong and can succeed?
This is an exciting opportunity for interested volunteers to develop their diversity, equity and inclusion (DEI) knowledge, raise awareness of key topics and contribute to long-term cultural change in the profession. Applications close 17 September.
Find out more and apply at bit.ly/IFoA_DAG
‘The careers showcase is an engaging and innovative way of attracting high-quality graduates to our profession. It is a privilege to support it’
Andy Rogan, Lloyds Banking Group
During the past year, the IFoA Foundation funded two innovative approaches to mentoring recent graduates, kick-starting their careers and increasing diversity in the actuarial profession.
Initially, 10 mentee places were offered on the Actuarial Mentoring Programme, delivered by Moving Ahead. For the first time, the scheme was opened to recent graduates from all backgrounds, anywhere in the world.
The Foundation was inundated with applications, with the scale of the demand fuelling curiosity about this group’s needs. Once mentees had been selected, a questionnaire was sent to the other applicants, revealing many common themes.
This in turn led the trustees to create an additional, group-based mentoring pilot project to expand the available support.
Working with Protagion Active Career Management, a six-month scheme was set up at pace and launched in January, with more than 50 individuals keen to take part.
Mentees from both programmes report significant positive impacts on their personal and professional development. They have grown in skills and confidence, they say, found direction and new motivation, broadened their understanding of professional opportunities and built up their professional networks.
Rymon, Zimbabwe
“A transformative experience, connecting with actuaries from a wide range of industries and backgrounds, giving a broader perspective on the profession and the diverse career paths available”
Sripriya, India
“It helped me to become a better version of myself and understand the real impact I could have as an actuary”
Benyapa, Australia
“An invaluable chance to connect with like-minded individuals who share a passion for actuarial science. It inspired me and strengthened my aspiration to pursue a career in the industry”
Refilwe, UK
“It’s given me a new network, new opportunities and knowledge and tips to help me navigate a successful career”
Several participants describe the experience as “life-changing”. Some of the relationships formed are so strong that there are plans to continue meeting and supporting each other.
Delighted with the evidence that mentoring
is making a difference to aspiring actuaries’ career trajectories around the world, the Foundation is working on a new programme to launch this year.
“We are inspired by the commitment of this international group of bright graduates, who seized the opportunity of mentoring to give themselves the best possible start to their careers,” said trustee Chantal Bond. “Their active engagement and constructive feedback helps us to develop more ways to support yet more aspiring actuaries from all backgrounds, globally.”
IFoA members are invited to sponsor a mentee. We hope that the personal backing of established actuaries will further motivate mentees, welcome them into the IFoA’s vibrant global community and help them to foster their networks. Sponsors will receive progress reports and have the option to connect with mentees.
Your donations ensure that targeted early-career support is available to recent graduates who are striving to succeed and play an active part in the profession.
As Kesha from Mauritius puts it: “The actuarial journey is a tough one but it can definitely get better if we are guided and supported.”
Interested in sponsoring a mentee? Go to bit.ly/IFoA_Found_donate
We have recently launched two new thematic reviews and would welcome submissions in the following areas:
With data science’s influence and public profile growing rapidly, we want to make sure we have the right resources in place to support our members and serve the public interest.
If you are one of an increasing number of members whose work involves data science, we want to understand how you and your organisation are using it –including artificial intelligence and machine learning.
Pensions on divorce Actuaries directly advise members of the public on pensions sharing in divorce cases,
making this a significant area of work in terms of the public interest and upholding the profession’s reputation.
If you are a member whose work involves advising on and calculating pensions sharing in divorce cases, we want to hear from you on current actuarial practice in this area. This review will become part of our Actuaries as Experts series.
Do get in touch to give us your invaluable insights on both these important topics.
Both reviews close to submissions on 31 October. Find out more at bit.ly/IFoAreviews or email reviews@actuaries.org.uk
The IFoA Thematic Review Programme is part of the Actuarial Monitoring Scheme. Visit bit.ly/IFoA_AMS
In the past two months, the IFoA has awarded three new Quality Assurance Scheme (QAS) accreditations. Such accreditations show an organisation’s commitment to fostering a working environment that supports actuaries to do their best quality work.
Isio’s Actuarial & Consulting and Investment Advisoryservice lines joined the scheme on 17 July. Isio delivers services to trustee, corporate and public sector clients and provides independent strategic advice to institutional investors such as pension funds.
HS Actuarial, a pensions consultancy providing advice to trustees and sponsors of defined benefit pension schemes, joined on 24 July, and actuarial consultancy KA Pandit of India joined on 12 August – the country’s first QAS accreditation.
The QAS is the IFoA’s outcomes-based accreditation scheme for employers of actuaries. It forms a key part
of our strategy and is a great example of how we work with employers of our members. QAS offers employers an independent review of their policies and procedures, as well as practical support, guidance on good practice, and public recognition of the standards met by accredited organisations.
The QAS outcomes assessed are: Professionalism; Development and Training; and Organisational Culture. Each year, an accredited organisation must show that it continues to meet the outcomes and has taken steps to continually improve – the ethos at the scheme’s heart.
We estimate that 18,500 people worldwide are directly covered by QAS policies and procedures, including approximately 70% of Practising Certificate Holders. There are currently 42 QAS accreditations.
Talk to us about what accreditation could do for your team: qas@actuaries.org.uk
At the IFoA, we want to support our members better by enhancing the services you have told us are most important to you and by continuing to invest in projects that will transform your member experience.
For the past three years, even though prices have been rising overall globally, we have frozen your IFoA subscription fees.
This year, we have undertaken a wide-ranging review of our fees to ensure that they are fair and sustainable, and that they reflect the benefits of IFoA membership.
Our new fees have been designed around these principles, and aim, as always, to continue delivering value for money for you and your employers.
To support members on lower incomes and ensure fairness in our reduced-rate subscriptions, we have introduced a mid-tier reduced rate, simplified the eligibility criteria and raised the threshold at which members qualify.
If your gross taxable income is £8,300 or less, you will be eligible for reduced-rate membership.
If you are a Fellow or Associate and your gross taxable income is between £8,301 and £25,999, you will be eligible for our new mid-tier reduced rate.
Actuarial Analyst......................................................................................£260 Student Actuarial Analyst .......................................................................................£190 Student ..........................................................................................................................£260 Affiliate ..........................................................................................................................£100 Mid-tier reduced subscription ...............................................................................£260 Reduced subscription ................................................................................................£83
Reduced rate – non-practising Fellow .................................................................£375
Reduced rate – non-practising Fellow (for Fellows registered as non-practising before 1 August 2023 and who are eligible to pay the lower reduced rate of £73 for the 2022-23 subscription year) ......................£143
Reduced rate – non-practising Associate ..........................................................£275
Reduced rate – non-practising Associate (for Associates registered as non-practising before 1 August 2023 and who are eligible to pay the lower reduced rate of £73 for the 2022-23 subscription year) .......................£123
Reduced rate – fully retired .......................................................................................£83 Practising certificate fees.....................................................................................£1,040
All subscriptions will be due on 1 October 2023. As we make upgrades online, particularly to the members’ area of our website, you may experience some disruption to services. In recognition of this, we will not be applying surcharge payments for late payment this year. We appreciate your patience during this period.
You can find out more at our 2023-24 membership fees FAQ web page: bit.ly/IFoA_subs
IMAGE: SHUTTERSTOCK/NOUNPROJECT
EMPLOYER HUB
Employers have told us that they want quick, easy access to the full range of IFoA support and resources, so we’ve designed the hub to have everything that they need to support their actuaries, in one place.
GI AWARD
The prize is open to IFoA members and non-members; to be eligible, the paper’s substantive contents should ideally have been presented at an IFoA event in the 12 months up to and including GIRO 2023. Submitted research papers could be technical, in which case we expect to see innovative techniques or new applications of existing techniques; or practical, in which case we expect to see development of evidence-based guidelines or recommendations for good practice.
A literature review that does not advance new techniques might be considered but would have to show a contribution to the research effort. The prize is not generally awarded for content that educates and informs people on pre-existing ideas.
Papers should enable the reader to understand the problem they are addressing, form an initial view on some of the consequences of adopting the approach, and implement the approach independently in the context of their own work. Those that do not satisfy one or more of these requirements, on the grounds that they are addressed in a separate paper or presentation, are unlikely to win.
Find out more about the prize at bit.ly/Brian_Hey_Prize
For queries or to enter, email communities@actuaries.org.uk
Save
14 September (London/webinar): Developments in the alternative risk transfer market for defined benefit schemes –Capital Backed Funding Arrangements Working Party
20 September (London/webinar): Cyber risk within capital models – Cyber Risk Working Party
4 October (London/webinar): Biodiversity and nature related risks for actuaries: an introduction – Biodiversity Working Party
20 October (London/webinar): Validating operational risk models – Operational Risk Working Party
14 November (London/webinar): Consideration of the Proxy Modelling Validation Framework – Proxy Modelling Working Party
27 November (Edinburgh/webinar): Robust mortality forecasting in the presence of outliers – Stephen J. Richards
We wrote it to answer the question, ‘Why is there a disconnect between climate scientists and financial services on climate risk – and who is right?’
Scientists think it will be catastrophic if we fail to limit climate change and to push ourselves out of the ecological niche in which our civilisation developed. This is referred to as a ‘hothouse’ scenario, where we don’t reduce emissions and global temperature increases to 3°C or 4°C of warming.
However, the findings of the Taskforce on Climate-related Financial Disclosures don’t reflect this view. Many of the published results show the economic impact of a hothouse scenario as benign and, indeed, very similar to the impact of transitioning to a low-carbon economy, where global warming is limited.
Our research showed that the climate scientists are right – we are systemically understating climate risk in financialservices scenario modelling.
You are walking through a forest and the bush next to you rustles. How do you react? If it’s a cat, no worries. If it’s a tiger, you react – realistic risk estimation is important.
Climate scenario results differ because a range of assumptions and model methodologies are used. Estimates of global GDP impact by 2100 in a hothouse world range from -73% to a milder -18%, to ongoing GDP growth.
Many climate models assume that because we have so far only
seen cats in the forest, we will only ever see cats, not tigers. They simply exclude many of the risks we expect to face, such as sea level rise and mass migration, because they are based on past data.
Model choice has a big impact too. Russ Bowdrey and János Hidi’s article ‘Under the bonnet’ (bit.ly/Under_the_ bonnet), from The Actuary’s March 2022 edition, shows how wildly results can differ between general equilibrium and nonequilibrium models.
Actuaries need to be clear on assumptions and methodology, and how these contribute to model uncertainty and limitations. It’s criticial that model users are aware of this.
Climate is a difficult game of global averages and local extremes. We can’t model everything precisely and we need to understand the significant uncertainty in physical climate modelling. The Earth system is complex and critical assumptions about how much and how quickly the planet will warm with a given level of greenhouse gases have fat-tailed distributions.
First, we need to explore tail scenarios, rather than treating best-estimate climate inputs to our models as fixed. We may have seriously underestimated how much global warming to expect – it might be a sabre-toothed tiger in the bush.
Second, we propose a reverse stress-testing approach. It is not clear that we could survive higher levels of warming (4°C, 5°C or 6°C) – so assume ruin or close to ruin at 6°C and work backwards from there. The point isn’t that we
lose everything at 6°C of warming – the point is that impacts start to be so severe after 2°C of warming that we should take action to ensure we don’t go past that point. We will never have perfect models for a set of risks we have never faced before. So, third, we recommend firms create shortterm narrative scenarios that are realistic, decision-useful and capture the complex basket of risks we now face.
The implications are profound. Moving from best-estimate climate assumptions to the tails of distributions implies a scenario in which the planet is warming more quickly than we expected. This means carbon budgets are smaller than those we are currently working with.
This reinforces the need to race to zero by reducing emissions, removing greenhouse gases from the atmosphere and repairing broken parts of the climate system. We just need to improve our speed of progress dramatically.
Read The Emperor’s New Climate Scenarios: Limitations and assumptions of commonly used climate-change scenarios in financial services, by the IFoA with Exeter University, at bit.ly/Emperors_ climate_scenarios or scan the QR code
The co-author of the recent IFoA research paper
The Emperor’s New Climate Scenarios explains why we really need to get a move onSANDY TRUST works in financial services on climate change and sustainability
n 10 July at the Mansion House in London, chancellor of the exchequer
Jeremy Hunt set out a collection of reforms targeting the financial services sector that will have significant implications for actuaries. The speech had a particularly strong focus on measures to improve outcomes for pension savers (via the ‘Mansion House Compact’) and reform the UK’s wider pension marketplace. It also featured aims to strengthen the UK as a listing destination, increase the agility and dynamism of the financial services regulatory regime, and respond to new technologies.
The core of the government’s growth strategy is to pursue greater green and infrastructure investment from private capital, so the chancellor announced that he would increase the availability of capital for high-growth companies. He and the wider government regard the pensions marketplace as a key enabler of this ambition.
With this in mind, Hunt announced the Mansion House Compact: a voluntary commitment by a number of the UK’s largest defined contribution (DC) pension providers to allocate a minimum of 5% of their default funds to unlisted equities by 2030. The government expects that the package could boost the average pension pot by around 12% over a career.
On collective DC schemes, Hunt stated that the government would publish a consultation response setting out its intention to consult on new draft regulations. On defined benefit (DB) schemes, he said that the Department for Work and Pensions would issue a call to evidence on the role of the Pension Protection Fund and the part played by DB schemes in productive finance, as well as a consultation response on a permanent superfunds regulatory regime for DB pensions.
The chancellor re-committed the government to publishing a joint consultation response with The Pensions Regulator and the Financial Conduct Authority on a new ‘Value for Money Framework’ for DC schemes. He also re-committed responses to other consultations on small pots and
Describing an objective to make the UK the global ‘capital for capital’, the chancellor announced that the government would establish a new ‘intermittent trading venue’ by the end of 2023 to improve private firms’ access to capital markets before they list. It will also publish draft secondary legislation replacing retained EU Prospectus Legislation, and put in place a new regime for consolidated tape.
In the context of the UK’s exit from the EU, Hunt stated that the government was pursuing a ‘radical’ overhaul of the UK’s existing financial services framework to better tailor its infrastructure to the British economy outside of the bloc’s regulatory orbit.
Significant measures here included offering a delivery plan that builds on the regulatory reform Policy Statement launched as part of the December 2022 Edinburgh Reforms package. Moreover, the government will deliver a response to the consultation that sets out its plans to replace the Packaged Retail and Insurance-based Investment Products Regulation with a bespoke UK regime.
decumulation, which apply additional requirements to DC schemes to support further consolidation.
Debbie Webb, Pensions Board chair at the IFoA, welcomed the measures (see webpage bit.ly/pension_growth_ protect), but cautioned that they ought to be set against the context that ‘the primary purpose’ of a pension fund is to provide retirement income, and that any investment in new assets should take place where longevity is considered and there is an appropriate risk/return ratio.
Finally, the chancellor paid attention to the transformative impact that future technologies would have on UK financial services. The government regards ‘getting ahead’ here as paying dividends in securing London’s position as a global financial centre, both post-Brexit and in a new innovative era. As such, Hunt unveiled a consultation on the ‘Digital Securities Sandbox’, which enables the adoption of digital asset technology. He also launched an independent review into the future of payments to deliver the next generation of retail payments. This will be led by Joe Garner, former chief executive of Nationwide Building Society.
Taking a closer look at the chancellor’s July speech, which covered pensions, regulatory reform and new technology
orn in Bristol, new IFoA president Kalpana Shah (pronounced ‘Kalpnah’) moved to London when she was three years old – and this was just one small part of an epic family journey, which started with her ancestors moving away from Gujarat in India at the beginning of the 20th century. Some of Shah’s grandparents were born in Kenya, as were her parents. While she herself was raised in the UK capital, her family always gave her a strong sense of her cultural history, especially during long holidays spent in Kenya and India, watching Bollywood films and studying Hindi, Gujarati and Indian classical dance.
Shah says attending school in London gave her a strong sense of modern expectations and allowed her to navigate different social norms, teaching her how to harness the best from different cultures while developing an understanding of her own identity and values. This was further heightened when she attended City, University of London: “I met different types of people from all walks of life, with ambition and drive,” she recalls. “I guess this environment gave me a glimpse of different life choices I could make.”
Shah has 30 years’ business experience and is currently a non-executive director (NED) for several organisations – but admits that she didn’t have a career plan after graduating: “I took up different jobs that seemed
interesting and these opened up unexpected opportunities.” Her first ‘real’ job, in the early 1990s, was in data entry at the London Commodity Exchange, where she was quickly encouraged to apply for a role in business development, later becoming head of the statistics department. She remembers it as a fiery environment, working with traders and brokers and delving into the world of institutional investments.
Shah then moved into insurance, working for Groupama subsidiary GAN as deputy to the underwriting director. “My big project was to help underwriters and actuaries work together to build marine pricing models that were simple enough to use on a day-to-day basis,” she explains. “I was also involved in defining the reinsurance strategy and gradually became more interested in the work of actuaries.”
This led her to take on a role as an actuary at Hiscox, during which time she qualified as a Fellow of the IFoA; she was later appointed group chief actuary. In the best part of two decades there, she says, “I saw the company grow from a small UK Lloyd’s managing agency to an international group working on a diverse range of products.” She adds that, over the years, her role became increasingly about providing oversight, advice and judgment.
After this, taking the non-executive route seemed an obvious step. She currently sits on the boards of Riverstone, Markel, Asta and Just Group, having taken on her first NED role in 2016.
Shah became IFoA president-elect in June 2022 and has just started her one-year tenure,
For someone who believes in role models, new IFoA president Kalpana Shah offers much inspiration herself. She tells Yiannis Parizas about her career path, the need to challenge stereotypes, and why upskilling for actuaries may actually involve some unlearning
but she is no stranger to voluntary work. She worked for the NHS in a voluntary capacity at the height of the Covid pandemic, managing a team of actuaries that helped with planning and emergency analytics. Shah is also a liveryman and committee member of the Worshipful Company of Insurers, a court member of the Worshipful Company of Actuaries, a regular judge for the Women in Insurance Awards and a frequent speaker on insurance and diversity-related topics, as well as mentoring women and people who are at career crossroads; in addition, she has in the past served as a trustee for a children’s charity. What drives this urge to give back?
“Like many actuaries, my primary measures of success weren’t money, influence or seniority – although they have been a welcome part of being an actuary,” she observes. “They were initially about being a good daughter and being happy. As a mother, success includes raising children who are happy and contribute to society. In recent years, this has extended to honestly challenging myself about what I want to achieve and, for me, happiness includes contributing more widely, helping to promote causes and organisations.” This process of reflection led Shah to opt for a better work-life balance, stepping out of executive life to become a portfolio NED.
Outside of work, Shah is a mother to two daughters and a son, and enjoys travelling and trying out new things. “I loved backpacking in my youth, although I fear those days are behind me!” she jokes. She enjoys skiing, scuba diving and water rafting, and was once a keen dancer who performed on television and at events, including for the late Diana, Princess of Wales. Another brush with showbiz came when Shah had the opportunity to model Jimmy Choo shoes for the day – something that came about after she was recognised in Cranfield University’s 2019 50 Women to Watch list.
Shah believes in dispelling stereotypes and promoting a more accurate, nuanced understanding of the profession – for example, she notes, while actuaries have a reputation for being analytical and detail oriented, this doesn’t mean they don’t collaborate. “Consensus-building is an essential skill for actuaries, and many actuaries work together in teams to solve
Who do you admire the most?
Carol Vorderman, the former maths genius of the TV programme Countdown. She is good-natured, glamorous and a confident maths maestro – a woman not allowing herself to be defined by stereotypes.
What are you afraid of?
A wasted life – I am trying to make my life as full and meaningful as possible.
What gets you out of bed in the morning?
Nothing – and everything. Sometimes it’s my family, sometimes it’s a project (work or home-related), sometimes it’s the sunshine and the idea of just getting on with things.
What was your best holiday?
Ticking Everest Base Camp off my bucket list (albeit by helicopter) with my family will stay with me forever.
What is your proudest accomplishment?
I believe in cherishing moments and not necessarily big goals, which allows me the joy in everyday achievements. Somehow these moments have added up to a life that has earned my father’s approval!
What do you do to relax?
Long walks, puzzles and time with my family.
What’s your favourite food?
Chinese food and potatoes, whether fried, baked or spiced.
complex problems and to develop new products and services.”
She is a strong believer that the IFoA encourages actuaries to be more than just problem solvers, promoting a learning mindset that encompasses using judgment, empowering creativity and applying professionalism. These qualities add value and give confidence to those relying on their opinion. “Actuaries are good at learning new technical skills and have proven to be highly adaptable in an increasingly regulated and technological world,” she says. “They have been so successful that those working outside
of insurance are recognising that the skills actuaries have could contribute to solving other problems, too.”
The key to adding the greatest value, she remarks, is being able to articulate views in a way that engages the audience and allows actuaries to contribute to the discussion. “This requires what we call ‘soft skills’ but these are not really soft at all.”
According to Shah, by unlearning some of the behaviours that have served us well in our qualifying journeys. For example, we are taught to work hard, be the best and get good
scores, which works for passing exams – “but people don’t like working with people who don’t value their opinion and are competing with them rather than working with them,” Shah warns.
Shah was a member of the IFoA’s Audit and Risk Committee between 2019 and 2021, and has been a member of Council since 2019 and of the management board since 2021. She was motivated to go for the presidency by her vision for an improved profession, which she describes as “a relevant and vibrant actuarial
profession, working in a variety of fields and adding value to society”.
She loves engaging with members and understanding more about what they want, highlighting the importance of actively seeking feedback and input to ensure their needs are being met. “The IFoA provides a wide range of valuable resources and benefits to members, including access to cutting-edge research, professional development opportunities and a supportive community,” she says. “The curriculum is constantly evolving to keep pace with the changing needs of the actuarial profession and ensure that students are well-prepared for their future careers, providing them with the opportunity to pursue a rewarding career in many different countries.”
Shah is also passionate about challenging biases and misconceptions that prevent talented individuals from pursuing actuarial careers. “I believe in the power of role models,” she says. “Seeing people with different life experiences and personalities breaks down stereotypes and makes the profession more inviting to a wider crosssection of society.”
What would she like to see the IFoA do more of? “Deeper collaborations with actuarial organisations around the world –this can help to amplify the voice of the profession and provide a stronger and more unified message to stakeholders,” she says. “The world is more connected than ever, and the IFoA’s international reach helps connect its members with a global network of professionals, opportunities and perspectives.” In working together, Shah adds, we can share knowledge, resources and perspectives, and solve some of the most pressing challenges facing our profession and our society.
‘Those working outside the profession are recognising the skills actuaries have’
t first glance, rugby and actuarial science may not be obvious bedfellows. All that sweating and aggression appears at odds with the contemplative world of mathematical modelling. And yet rugby and the actuarial profession have many connections. Plenty of actuaries have played the game, some at the highest level. Others have given their administrative expertise and financial skills to help run it.
Rugby was originally favoured by educationalists because, in theory, it developed character and resilience, turning young boys into ‘men’. It was also a way to network, being a mostly middle-class pastime. Today, rugby retains close links with the professions.
Several independent rugby-playing schools were established in Edinburgh during the 1800s to meet the growing demand for well-educated, able, professional men. The city was an important financial centre, second only to London, and it is no accident that the Faculty of Actuaries (FoA) was founded there in 1856.
ALEC ROBERTSON
1 Scotland cap
Predictably, many Fellows and students have been involved in rugby. An early example was Alexander (‘Alec’) Weir Robertson (1877-1941). Born into a dynasty of Edinburgh accountants, he enrolled as an FoA student in 1895 and was admitted as a Fellow in 1901. He had a long and successful career in accounting and was director of several leading financial companies, such as the Commercial Bank of Scotland.
In March 1897, he won his only international rugby cap in Scotland’s defeat against England at Fallowfield,
Manchester. Commonly for the time, Robertson was a sporting all-rounder, being captain of the Honourable Company of Edinburgh Golfers.
PHIPPS TURNBULL
6 Scotland caps
Robertson played club rugby for his old school side, Edinburgh
Academicals, where in the 1890s he formed an effective partnership with fellow actuary Phipps Turnbull (1878-1907). Turnbull enrolled as a student of the faculty in 1897 and was admitted as a Fellow in 1902. He played six times for Scotland, in 1901 and 1902. Fast and elusive, he scored a debut try against Wales at Inverleith in February 1901 and was
As the Rugby World Cup kicks off this month, Kenneth Bogle reveals a squad of champions from the actuarial community, which has long had an affinity with the sport
ever-present in the Scottish Championship-winning side of that year. Contemporary Andrew Flett described him as “a star of the first magnitude… Tall and not very robust, he was a fearless tackler and his handling of the ball was unsurpassed, but it was as a runner that he excelled. With a long stride, he seemed to glide through the opposing defence at high speed, apparently without effort.”
Turnbull died in his twenties, and, like several early Fellows, he is buried in the Dean Cemetery, Edinburgh.
Proudly on display in the IFoA’s Edinburgh office is a beautiful war memorial commemorating the FoA’s six Fellows and 37 student members who died in the First World War. Among them is Eric Milroy, who won 12 caps for Scotland between 1908 and 1914, twice as captain. A combative scrum-half, in 1910 he
toured South Africa with the British team – the forerunner of the British & Irish Lions.
Milroy was born in Edinburgh in 1887. An intelligent young man, he was educated at George Watson’s College, Edinburgh, and later played for his school’s old boys’ side, Watsonians – the leading Scottish club of the day. He graduated with honours from the University of Edinburgh in 1910 and took a job with Alec Robertson’s family firm, A&J Robertson. He enrolled as a student with the faculty in 1912.
Shortly after the First World War’s outbreak in August 1914, Milroy joined the 9th Royal Scots, subsequently serving on the Western Front with the 8th Black Watch. Lieutenant Milroy fought at the Battle of the Somme and was declared missing in action during the assault on the village of Longueval on 18 July 1916, aged 28. His body was never found or identified, and he is commemorated on the Thiepval Memorial to the Missing in France.
Rugby takes its name from Rugby School in Warwickshire, where the pupils developed a handling game in the early 19th century.
Knowledge of the new game was spread by old boys and, in the 1850s and 1860s, ‘Rugby rules’ were adopted throughout Britain and Ireland, then the Empire.
Unlike association football, rugby was, historically, an amateur sport and players were not allowed to make money from it. That changed in 1995 when it went professional
Milroy’s mother, Margaret, refused to accept that her son had died and believed that one day he would return. According to family legend, she always kept a light on at night so that he could find his way home safely.
While rugby is a sport of brawn, its Byzantine laws (never ‘rules’) have always appealed to the intellect. The IFoA library holds a scrapbook dedicated to the life of William Alexander Robertson (1877-1940), actuary and international referee.
Described in his Scotsman obituary as “one of the soundest actuaries Scotland ever turned out”, Robertson attained his Fellowship of the faculty in 1900 and was president from 1938-40. In a long financial career, he became manager of the Century Insurance Co in Edinburgh and co-authored Actuarial Theory (1907), a standard textbook for a generation of actuarial students.
In 1920, Robertson officiated two rugby internationals, including Ireland v England at Lansdowne Road, Dublin. This was a highly charged match because of the volatile political situation in Ireland, and Robertson is said to have received death threats if England won. In the event, England were victorious and Robertson was applauded off the field by the sporting Irish supporters.
South of the border, Terence (‘Terry’) Gordon Arthur (1940-2022) was a significant leader among investment actuaries and an England rugby international. Arthur’s actuarial career
was recorded in his obituary in The Actuary in May 2022. Among his many achievements, he served on the Institute’s Council and acted as treasurer. He was a member of the Adam Smith Institute and an Associate Fellow of the Institute of Economic Affairs.
Arthur also contributed to prestigious journals and was in great demand as a speaker at conferences. In 1975, he published 95 Per Cent is Crap: A Plain Man’s Guide to British Politics, an entertaining book in which he took to task those in authority who made illogical or inconsistent statements. He followed this in 2007 with Crap: A Guide to Politics, a devastating exposé of the intellectual confusion and economic ignorance that he felt had come to dominate public pronouncements.
In the 1960s, Arthur, a centre three-quarter, was an outstanding performer with Wasps (who then played at Sudbury, London). He scored 50 tries in 100 appearances and is a ‘Wasps Legend’. In January 1966, he won his first international cap in England’s defeat against Wales at Twickenham and the following month played in a drawn match against Ireland. He also played at county level and for the Barbarians.
In South Africa, Francois ‘Faffa’ Knoetze, born 1963, was educated at the University of Stellenbosch, one of the great rugby nurseries, and played over 100 times for Cape Town-based Western Province – including the side that won South Africa’s premier domestic competition the Currie Cup in 1985 and 1986. In 1989, Knoetze, who played at centre and stand-off, represented his country in two test
DR KENNETH BOGLE is knowledge and publications assistant at the IFoA Library in Edinburgh
matches against a World XV. In a lovely fraternal gesture, fellow actuary and rugby international Terry Arthur sent him a congratulatory letter upon his qualification as an actuary and selection for the South African tour of France and England in 1992.
Knoetze started his actuarial career in the pensions and life divisions of insurer Sanlam before joining consulting firm Alexander Forbes, where he was valuator and consulting actuary to several pension and provident funds. In 2013, he joined investment holding company Remgro to focus on its interests in financial services and sports industries.
After his playing career, Knoetze served for four years as chair of MyPlayers, an organisation for professional rugby players in South Africa, and was on the board of English club Saracens when Remgro was a club shareholder. He is a member of the South Africa Rugby Board and chair of Stellenbosch Football Club, which plays in South Africa’s Premier Soccer League.
In a successful financial career that often intertwined with rugby, Malcolm Murray (born 1938) was president of the FoA from 1994-96. A player with Edinburgh Borderers, Murray used his business acumen and contacts to bring much-needed sponsorship into the Scottish game in the early 1990s.
Following his retirement, he served on various committees with the Scottish Rugby Union, including a charity for injured players, and in 1995 he was awarded a CBE for services to the insurance industry and to public life in Scotland. A former president of Hawick RFC, Murray, then a sprightly 68-year-old, made his only (and brief) appearance for his home club during a tour to Prague in 2006.
Women’s rugby developed in the 1980s and 1990s, and there is now an annual Women’s Six Nations Championship and Rugby World Cup – and some countries have started to award professional contracts to female players. Kathryn (‘Katie’) Helen Ashbridge (1982-2007) was educated at Malvern College, Worcestershire, and after a gap year teaching underprivileged children in Peru she studied at St Edmund Hall, Oxford.
After graduation she moved to London to begin her actuarial career with Watson Wyatt. Popular and outgoing, she was a talented athlete and musician. She loved to play rugby and won a double Blue for women’s rugby at Oxford in 2002 and 2003.
Tragically, Katie passed away in her mid-twenties. She is commemorated by a bronze statue outside the sports hall of her old school, depicting her as a teenage girl playing netball.
magine a glass of water on the table next to you. A toddler races through your house, nudging the table. The glass wobbles, your heart rate soars, and the glass returns to its stable state.
Our planetary systems are like this, with feedback loops that help to balance changes as we knock various systems out of line. We pump carbon into the atmosphere and the forests suck it up. We heat the sea, so it forms clouds to block the sun. The world has an impressive capacity to balance itself… against small perturbations.
Back to our glass of water. As you reach to take a sip, the toddler’s father comes rushing through the house, giving your table a big knock. Water goes everywhere. The glass rolls to a stop, reaching an alternative stable state. A new normal ensues –one in which you continue to be thirsty and your floor is soaked.
This is what we are doing to our planet. By pushing Earth’s capacity to rebalance beyond what is possible, we run the risk of placing it in a new, inhospitable stable state: hotter and more volatile, with higher sea levels and generally a less pleasant place in which to live.
Climate modelling has shown us how close we are to Earth’s tipping points. Once the Greenland ice sheet falls below a certain altitude, its increased exposure to warmer air will begin an irreversible melting process; to refreeze would require a far colder temperature than that of today. Similarly, once the Amazon has been cut down to a small enough size, it may no longer be able to create enough rainfall to sustain a rainforest, and we might be referring to the Amazon Savannah.
population. This brings me to our first positive tipping point: worldwide demand for change
In 2020 and 2021, the UN undertook the largest survey of opinion on climate change ever conducted. It contacted 1.2 million respondents across 50 countries and found that 64% believed climate change was a global emergency. And these results were consistent across all geographies. All over the world, we have moved to a new stable state in which climate is factored into decisionmaking at the highest level. However, public desire alone isn’t sufficient – intervention must also
ALEX MARTIN is sustainability features editor for The Actuary
be affordable. While some might argue that the cost of Earth system collapse is more than a monetary amount, we live in a world in which government spending is scrutinised by the media and the public. Again, tipping points come in: the exponential decrease in costs
All new technology is expensive when first introduced; the first mobile phone cost approximately $3,000 in the Eighties. However, as the technology develops further, demand increases, leading to more investment and development. Today, a mobile phone can be bought for £20.
We are seeing the same trends in renewable energy, with the cost of wind turbines, batteries and solar panels having fallen dramatically during the past decade. Electric cars will soon be as affordable as combustion-engine vehicles (indeed, if we consider the lifetime of the vehicle, they already are). Once cost parity is reached, we will see a tipping point into a new stable state in which electricity is the dominant fuel.
However, this very tipping point behaviour might be our saving grace. The challenges we face are so large that they demand government-driven change. What does it take to make that happen?
For a government to intervene, it must feel that there is sufficient desire for change among the
Cost and desire might not be sufficient to prompt government intervention but they are certainly necessary, and both are moving in the right direction. But are they moving quickly enough? As we improve our climate models, we will get a sense of how various behaviours work against each other. Actuaries are able to see both sides of the coin but we must make our influence felt. We will need to update our risk models to reflect the reality of physical tipping points. We can also influence long-term capital allocation within financial services to accelerate positive socio-economic tipping points.
Whether you are a glass-half-full or a glass-half-empty person, we can all agree that we need to keep the glass on the table.
Bizarre though it sounds, the very thing that’s blighting the Earth could be its saviour, says Alex Martin
here is a growing awareness of the financial sector’s role in climate change and wider sustainability objectives such as the UN’s Sustainable Development Goals. This includes not just the potential consequences for financial companies themselves (outside-in, or financial materiality) but also the external impacts of their activities (inside-out, or double materiality).
Such considerations are increasingly informing financial regulation and supervision, from mandatory ESG (environmental, social and governance) disclosures to climate stress tests. Going further, the potential integration of climate risk into quantitative capital requirements is now being actively researched and debated in global regulatory circles.
Insurance companies, banks and pension funds are increasingly exposed to a variety of climate-related risks, which can be classified along several axes: Physical risks (such as floods, wildfires and heatwaves) and transition risks (such as asset repricing, technological changes and climate litigation) Asset risks (depreciation of carbon-intensive
JÉRÔME CRUGNOLAHUMBERT is director, sustainability services at Deloitte Switzerland, and Actuarial Association of Europe chairperson, sustainability and climate-related risks
Climate risk has marched into all areas of finance but many questions remain unanswered. Jérôme Crugnola-Humbert discusses the issues around incorporating it into prudential capital requirements
investments) and liability risks (increases in climate-related payouts)
Acute risks (such as tropical storms) and chronic risks (such as sea-level elevation) Risks related to existing books of business and to future sales
Micro-prudential risk specific to individual companies and macro-prudential risks impacting the whole financial system.
There are two main conceptual approaches to incorporating such climate risks into prudential capital frameworks:
Green-supporting factors – rewarding behaviour and strategies that promote positive action on or adaptation to climate change through lower capital requirements
Brown-penalising factors – imposing higher capital requirements on entities that invest in or undertake actions that are adverse to the climate.
However, this assumes that definitions for ‘green’ or ‘brown’ are available and generally agreed on, and that there is clarity around the objectives for including climate risk in prudential capital frameworks: is it meant only to reflect risk-based principles (financial materiality) or also to mobilise the financial sector in the fight against climate change (double materiality)?
On the issue of definitions, sustainable taxonomies such as the EU taxonomy for sustainable activities can create a level playing field. However, only a few jurisdictions have launched such initiatives (and their lists of sectors and criteria do not always agree), and no taxonomy of harm has yet been adopted (except for some proposals from NGOs such as the World Wide Fund for Nature).
On the issue of objectives, there is a risk that these will be politicised rather than follow a science-based approach, as well as fears that they could lead to ‘green bubbles’. We also note that in the fight against climate
change, marginal change in capital treatment is likely to provide a weaker incentive than tax reform or direct subsidies such as the US’s Inflation Reduction Act (unless these capital changes are massive, as in the One for One campaign’s proposal that banks and insurers hold one dollar of capital in reserve to cover themselves for the potential future loss of every dollar invested in fossil fuels).
Beyond these general principles, there are numerous additional obstacles to the inclusion of climate risk in capital requirements, such as:
Climate is an emerging risk with limited historic data and requires a forwardlooking assessment
It is a systemic risk that is potentially hard to hedge or from which to diversify There is not always a direct link between climate change mitigation and actuarial risks. For instance, rewarding carbon emissions reduction may have an effect in the long-term without immediately reducing the risk
Climate risk has a long-term component that is not a natural fit for the typical one-year risk horizon of many capital frameworks.
In addition, climate change does not just increase risk (in other words, variability around the best estimate). It also has a trend component that should inform the bestestimate valuation itself. For instance, the concept of ‘stranded assets’ is at odds with conventional market consistency, as it assumes that some investments (such as fossil fuel companies or real estate exposed to physical risks) are likely to suffer from a major loss in value at some future point and are thus incorrectly priced by the supplydemand dynamics of current markets.
As such, assessing and managing climate risk requires a new methodological paradigm, shown in Table 1.
In addition, the incorporation of climate change into prudential risk frameworks follows a ‘reverse journey’. Financial transformation projects such as Solvency II usually unfold naturally from ‘Pillar 1’ (quantitative requirements) to ‘Pillar 2’ (risk management, governance and strategy) and ultimately to ‘Pillar 3’ (reporting and disclosures). Due to the urgency around the environment, climate (and sustainability in general) is proceeding in reverse order: ESG reporting is already required for large companies, while risk strategies are still works-in-progress and quantitative capital requirements lie further along the horizon.
There is no international framework for incorporating climate risk into prudential capital requirements. The International Association of Insurance Supervisors recently launched a series of consultations on climate risk supervision, building on its 2021 Application Paper on the Supervision of Climate-related Risks in the Insurance Sector and following similar work carried out by the Basel Committee for Banking Supervision. However, capital requirements (ICP 17) are not currently in scope.
While we lack a global framework, thoughtpieces and climate scenario initiatives have been published in several jurisdictions. Some regulators and financial supervisors (such as the Bank of England and Japan’s Financial Services Agency) have expressed interest in the idea but haven’t yet implemented concrete steps. An increasing number of jurisdictions have introduced climate stress testing but without any links to capital requirements; it seeks to illustrate plausible alternatives rather than assign actual probabilities. This has been the case in places such as the Netherlands, the UK, France, Canada, Australia, the EU and New Zealand.
Financial supervisors are increasingly issuing climate risk guidance and asking that
climate be considered within enterprise risk management frameworks such as the Internal Capital Adequacy Assessment Process or Own Risk and Solvency Assessment. This may be reflected in direct regulation or supervisory expectations (such as in the EU, New York State or Bermuda) or indirectly through the mandating of climate reporting standards that themselves include climate scenario analysis, such as the Taskforce for Climate-related Financial Disclosures or the International Sustainability Standards Board.
lending in 2020. It initially allowed for a capital discount for lending on housing with a sufficient energy efficiency rating, and now applies to green bonds, solar power plants, sustainable agriculture, energy efficiency and e-mobility.
Meanwhile, Guernsey introduced a green factor for life insurers’ fixed income assets in 2021, applied through a discount on the spread risk capital. Eligible assets must be determined in line with the Guernsey Green Fund rules, and the discount notably requires amendment to investment and risk policies, prior supervisory approval and disclosure to policyholders.
The EU has already introduced general climate and sustainability considerations into Solvency II, with capital requirements to be impacted in the future. This includes a planned update of the natural catastrophe module in the Standard Formula (the need to recalibrate due to increasing physical risks has been acted on, but the new parameters have not yet been set).
Modelling climate change scenarios entails new challenges, such as incorporating long-term business projections, climate tipping points and non-linearities. However, no financial company needs to perform such analyses from scratch. Open-source material from the International Panel on Climate Change (IPCC) and the Network for Greening the Financial System (NGFS) can be used, assuming they are properly evaluated and adapted to fit the institution’s risk profile. An increasing body of literature is being published, and additional supervisory guidance is being developed in jurisdictions such as the EU and New Zealand.
Actual changes in capital requirements are still rare, but there have been a couple of European examples (in both cases through a supporting factor on assets). Hungary introduced a green factor for sustainable
In addition, the European Insurance and Occupational Pensions Authority published an initial consultation in 2023, Prudential Treatment of Sustainability Risks: Discussion Paper; this sought feedback on the potential inclusion of new climate transition risk considerations for asset risk, and of climate adaptation strategies for insurance underwriting risk.
Finance is clearly a key part of the climate transition, and the potential introduction of climate-related capital requirements is an important area where actuaries, risk managers, economists, climate scientists and other professionals should come together and develop new ways of collaborating in order to contribute to the necessary effort.
This article is adapted from a talk given at the 2023 International Congress of Actuaries in Sydney, Australia
An increasing number of jurisdictions have introduced climate stress testing but without any links to capital requirementsSource: Crugnola-HumbertJetal.Climatescenariotesting–whatfinancialcompaniesneedtoknow.Deloitte,2023 FIGURE 1: Leveraging the work of the IPCC and NGFS Financial institution Economic framework (NGFS) Climate trajectories (IPCC) Climateandeconomy feedback
Discussions around the pros and cons of different climate models and scenario sources focus more on the differences than the commonalities. Sustainability and environmentalism are factionalised.
Unfortunately, normative divisions also lead to a tendency for climate modelling and scenario analysis to be explained or presented badly – if not outright dismissed. For experienced users of quantitative risk models, the maxim ‘all models are wrong, some are useful’ is a good guide. Looking for the perfect model is not the aim. The first step in choosing a climate model is to try to avoid being drawn into a ‘Which side are you on?’ debate.
One way to do this is to start with a focus on the end goal of your analysis. Most actuaries and risk managers working for insurers employ one of the three approaches shown in the figure below. What defines an appropriate choice of climate model is if you are able to use and interpret it to suit your needs.
To date, most climate risk asset modelling has focused on the bottom-up approach; to model real asset and credit risk. Typically, this is achieved by using either publicly available climate modelling – such as those provided by the Network for Greening the Financial System (NGFS) or Principles for Responsible Investment (PRI)– or proprietary commercial modelling capabilities. Often, bottom-up modelling will miss some key strategic risks; for example, it may assume that
yield curves and credit spread levels are held constant.
The top-down approach to modelling climate risk can be used to fill that gap by applying either macroeconomic modelling capabilities or financial risk modelling (using scenario generators). For general insurers, liability modelling will leverage physical climate and natural catastrophe modelling to understand how claims frequency/severity and underwriting could be impacted.
For many risk managers and actuaries, moving away from thinking about short-term risks to longer-term uncertainties is the biggest mindset change required. Most models that explore climate change have been developed with the latter in mind. Ideally, the right choice of climate model leads to a comprehensive view of the uncertainties faced by insurers. It should be able to be run on a consistent basis to understand how the entire business might be impacted. Basing models on a consistent set of underlying scenarios that leverage the
broader SSP-RCP framework (Shared Socio-economic Pathway – Representative Concentration Pathway), such as NGFS, can help to ensure comparability. Many insurers may go further and customise scenarios to reflect their own risk exposures or management views.
Unlike risk or economic capital models, it is important to recognise that most climate models have not been developed to produce worst-case outcomes or case studies. Most climate scenario exercises have focused on ‘exploratory’ analysis of possible future outcomes. These analyses focus on understanding the impact of climate change on expected business outcomes, rather than stress testing or tail risk analysis.
To generate climate stress tests in the traditional sense, it is likely that the actuarial and insurance sectors will need to switch to focusing on existing catastrophe risk, economic capital and stochastic scenario-modelling capabilities.
Top-down: climate pathways
Climate scenarios translated into macroeconomic variables for your asset liability management models
Meets regulatory requirements
Quantifies financial impact
Bottom-up: climate asset modelling
Climate-adjusted probability of default for each security in your portfolio for granular climate risk quantification
Meets regulatory requirements
Quantifies credit risk impact
Consistent customised comprehensive
Climate scenario: physical risk modelling
Climate-conditioned nat-cat models for individual perils, based on representative concentration pathways at a range of time horizons
Supports pricing decisions
Informs capital allocation
In the third in a series of six articles on climate risk for insurers, Nick Jessop, senior director – research at Moody’s Analytics, advises on selecting an appropriate approach for your needs
(Table 2). A study published in 2018 concluded that 38% of cancer cases in the UK were attributable to known risk factors, with smoking and obesity identified as top contributors.
TABLE 2: Proportion of risk-attributable cancer deaths over total cancer risk-attributable deaths of seven cancer types
CANCER TYPE RISK-ATTRIBUTABLE CANCER DEATHS OVER TOTAL CANCER RISK-ATTRIBUTABLE
Cancer is one of the leading causes of morbidity and mortality worldwide. There were more than 23m estimated new cancer cases and 10m cancer-related deaths globally in 2019 – and the burden is growing. Cancer-related claims impact multiple product lines, including critical illness, term life and disability.
Besides treatment improvements, measures that lower incidence and accelerate detection may improve morbidity and mortality. According to a 2022 analysis published in The Lancet, almost half of cancers and cancer-related deaths could be prevented if we applied knowledge that we already have – but despite this, the proportion of tumours attributable to modifiable risks is still significant.
Cancer risk factors may be modifiable or not (Table 1). Behaviours such as smoking, alcohol consumption, suboptimal nutrition and physical inactivity, as well as their combination, prompt higher risks. Modifying these behaviours may have significant potential to decrease the likelihood of certain cancers. The analysis in The Lancet assessed the global cancer burden attributable to modifiable risks (such as behavioural, environmental, occupational and metabolic factors) and estimated these accounted for 4.46m deaths globally (2.88m in males, 1.58m in females) in 2019, representing 44% of cancer-related deaths.
(POTENTIALLY) MODIFIABLE FACTORS THAT IMPACT CANCER RISK
Cigarette smoking and tobacco use
Alcohol
Nutrition and diet (eg ultraprocessed foods)
Physical inactivity
Obesity
Diabetes
Infections, eg human papillomavirus, hepatitis B and C
Radiation, eg sunlight, ionising radiation
Pollution and environmental risk factors, eg exposure to certain chemicals
NON-MODIFIABLE FACTORS THAT IMPACT CANCER RISK
Family history and genetics, including random genetic errors
Hormonal factors
Sex
Age
Race/ethnicity
The top three factors in regions with a high socio-economic index were smoking, alcohol and metabolic risks such as high body mass index (BMI) or obesity. Further factors included air pollution, occupational risks and unsafe sex. The leading cancer type regarding risk-attributable cancer deaths for both males and females was lung cancer (36.9%), followed by colorectal, oesophageal and stomach cancer in men, and cervical, colorectal and breast cancer in women
Source: The global burden of cancer attributable to risk factors, 2010-19: a systematic analysis for the Global Burden of Disease Study 2019. The Lancet. August 2022; (400)10352: 563-91.
Prevention includes measures that lower the risk of cancer occurring, or primary prevention (such as lifestyle changes), and those that detect it earlier, or secondary prevention (such as cancer screening).
Most countries underinvest in primary prevention, which requires political will and co-ordination, as well as improved dissemination and implementation of research. Given the high costs of cancer treatment, cost effectiveness has been demonstrated for primary prevention measures. Crucial elements include orchestrated policies regarding smoking, alcohol, and metabolic risks such as unhealthy foods. Examples of successful prevention of specific cancers include vaccination against human papillomavirus and screening programmes to remove cancer precursors.
Tobacco use increases the risk of many cancers, predominantly of the lung. Many countries have made substantial progress in reducing tobacco exposure during the past few decades, for example through taxation and advertisement bans. Smoking cessation and non-initiation has resulted in a decline in lung cancer rates and deaths in men. They have been increasing in women, although lung cancer mortality among women has stopped rising in Europe. Still, smoking continues to be the leading cancer risk globally, and 10%-15% of UK insurance applicants continue to smoke.
With a dose-dependent association, alcohol also increases the risks of cancers including liver, oesophageal, colorectal and breast. During the pandemic, several European countries saw increased alcohol consumption in combination with smoking, with a bias towards females.
Metabolic risks comprise being overweight or obese, poor diet and nutrition, physical
We already know how to prevent a high proportion of cancers. With work in this area, life insurers will see the impact, say doctors Tobias Schiergens and Debbie Smith
inactivity and diabetes. This group is currently experiencing the largest relative increase among modifiable cancer risks and is associated with cancer types including breast, colorectal, uterine, ovarian, kidney and liver, as well as difficult-to-treat tumours such as those of the pancreas, oesophagus and gallbladder.
The main drivers are thought to be inflammation, metabolic changes (including insulin resistance), hormonal factors (growth or sex hormones), and changes in the gut microbiome. Adults under the age of 50 appear to be particularly at risk. Studies show that obesityrelated cancers are on the rise among younger individuals, specifically for colorectal, breast, kidney, pancreas and uterine cancer; lung, laryngeal and bladder cancer rates are decreasing. It is estimated that early-onset colorectal cancer will become the leading cause of cancer-related death in those aged 20-49.
While multiple causes of these metabolic risks are preventable and reversible, the average BMI is rising in most countries; none have reversed this trend. Obesity strategies will be crucial. In the UK, data indicates that the soft drink sugar levy may help to reduce obesity among students, but broader efforts will be needed to improve nutrition and increase physical activity. For insurers, supporting customers’ metabolic health improvements should be mutually beneficial. Health or lifestyle apps and incentives regarding premiums look promising – but compliance and adherence are a challenge.
A growing body of evidence indicates that metabolic health is impacted heavily by not only diet but also negative psychological relationships with food. Any interventions must therefore be holistic and tailored or cohorted to drivers of poor metabolic health. The main drivers in changing public health hold true: education, access to quality nutrition, motivation and time. Insurers could compare this moment to the moment at which aggregate rates moved to smoker/ non-smoker – a portfolio that is managed for optimising metabolic health may be the non-smoker cohort of tomorrow.
Analysis of claims data from UK and Ireland portfolios show that cancer was the leading cause of claims in critical illness (59%; females: 73%, males: 46%) and term life (43%; females: 49%; males: 39%) from 2019 to 2022 – see Figure 1
As Figure 2 shows, in women, breast cancer was the leading cause of loss for both critical illness (53%) and term life (18%), followed by colorectal cancer (4%) in critical illness and lung cancer (15%) in term life. In men, the leading cancer types in critical illness were prostate (26%), colorectal (10%), kidney (4%), lung (4%) and melanoma (4%), while cancers of the lung (16%), colorectal (9%), pancreas (7%) and brain (7%) were the leading cancers in term life.
These results indicate the predominance of cancers showing high proportions of cases and deaths attributable to modifiable risks such as smoking and metabolic illness – underlining the potential for primary prevention measures to have a significant positive business impact.
Primary prevention cannot eliminate cancer development altogether, so screening is important to help detect it early. Traditional strategies detect
References for this article are available at bit.ly/Better_ than_cure or by scanning the QR code below
Cancer type/group
BladderBreastBreast,insituCervicalCervical,insitu ColorectalEndometrialOthergastrointestinalGenito-urinaryOtherhaematologicalHeadandneckHodgkin'slymphomaKidneyLeukaemiaLiverLung Brain(malignant)MalignantmelanomaMultiplemyelomaMyeloproliferativedisorders Non-coded/otherNon-HodgkinlymphomaOesophagusNon-melanomaskincancerOvarianPancreasProstateSarcomaSkin,insituStomachTesticular ThyroidUnknownprimaryUterine,unspecified
single cancers, for example via mammography or colonoscopy. Such screening programmes were significantly impacted during the pandemic, often recovering quickly following lockdowns but remaining below the pre-pandemic baseline level. This may result in delayed cancer detection and higher severity.
New technologies are emerging. New multi-cancer early detection (MCED) tests, in which multiple cancers can be detected using a single blood test, may shift the paradigm, particularly when available direct to consumer. The UK NHS-Galleri MCED trial has enrolled 140,000 individuals aged 50-77 and is awaiting results. In a modelling study, this test was able to reduce late-stage cancer incidence by 78%, with a five-year cancer mortality reduction of 39% in those intercepted.
For the life and health insurance industry, there is an enormous potential in supporting both primary and secondary measures. Medical expertise is needed when specifically providing customers with secondary prevention measures such as new screening tests.
There are many ways to value defined benefit (DB) pension liabilities. The IFoA Dynamic Discount Rates Working Party has been exploring the benefits of using a dynamic discount rate (DDR), whereby the discount rate used for funding moves in sympathy with the asset portfolio backing the liabilities.
This is not a new idea but now is a good time to discuss it in light of the government’s plans to update the rules around pension funding via the draft Occupational Pension Schemes (Funding and Investment Strategy and Amendment) Regulations, feedback on which is currently being considered. We believe it can work well in cases where the assets consist of investments with a high degree of contractual cashflows that are similar to the expected benefit outgo.
The benefits of a DDR include:
A more consistent strategy
If the discount rate better captures changes in the yield on the assets, the funding level will exhibit less volatility. Some volatility is still to be expected, which trustees will need to monitor and manage; however, they can govern more effectively by spending their time dealing with residual volatility rather than ‘noise’ caused by model error in the discount rate
Wider opportunities for investment
Given the focus on finding assets that provide a stable funding level, discount rates expressed as gilts plus a fixed margin lead to a smaller pool of potential assets. A DDR approach should make it easier for schemes to hold assets that may have wider societal benefits, such as infrastructure.
The drawbacks include:
It’s harder to follow
A fixed, rather than dynamic, margin for the discount rate is arguably simpler to grasp and not unreasonable to adopt in
certain situations (for example, schemes where the sponsor is much larger and any inherent funding volatility is therefore relatively immaterial)
It’s harder to model DDR needs more detailed, regular flows of asset information, resulting in additional costs for analysis and modelling.
The working party modelled a possible nine-step implementation of a DDR approach to help us think about what it might look like
in practice (see Figure 1). This also helped us to identify various considerations.
One thing to note is that this way of setting discount rates may be unfamiliar to some scheme actuaries. Rather than the actuary advising a discount rate and asking the investment consultant to select assets that achieve an expected return that is greater than this assumption, this approach implies that the investment consultant finds appropriate assets and the discount rate can be derived from them collectively. The actuary and investment consultant can then work together to optimise the outcome – in other words, the desired level of matching and the resulting funding level. As such, the DDR method puts greater weight on the risk controls and mandate limits within the investment strategy, more so than a traditional discount method.
In addition, a DDR approach could be framed as using a discount rate of gilts plus a variable margin plus a buffer to cover mismatch risks, for example, so that the target to aim for is above 100% funded on this basis. The legislation is such that there might be a need to express this as 100% funded on a gilts plus (smaller) variable margin, as per step 9 in Figure 1. This buffer approach is an alternative way of thinking about prudence, more akin to that of insurers, and is more explicit. In other words, steps 1 to 8 are sufficient.
Another consideration is that, as the discount rate is explicitly linked to assets, there may be more data dependencies (primarily reliable, timely asset data). Navigating this so that the framework aids helpful and timely decision making, for example when an asset may default, should be an important consideration.
Later in the year, the working party will share a paper on DDRs and how they can support schemes in fulfilling benefit promises.
Gareth Connolly and Phil Hardingham explore the pros and cons driving a dynamic discount rates approach, and what it means in practice
Business interruption policies are a subset of property insurance and, in general, are for insuring losses suffered by businesses due to damages that prevent them from trading. However, a number of these policies also provide cover for non-damage business interruption – leading to confusion over whether losses due to the Covid pandemic were covered by such policies. How did this play out?
March 2020
The Association of British Insurers issued a statement saying, correctly, that most policies would not provide compensation for losses due to Covid, but a minority of policies with clauses covering infectious diseases “could help [policyholders] make a claim”,
and that policyholders should “check with their insurer or broker”. Many claims were notified but it was unclear if they would be accepted and paid.
April 2020
The FCA (Financial Conduct Authority) sent a ‘Dear CEO’ letter that urged insurers to make assessments and payments quickly to covered customers. It also mentioned that, if firms were unable to comply, they would have to explain how that would be a good outcome for customers. The letter also noted that the Financial Ombudsman Service has jurisdiction over many business customers and that they should use this as a mechanism to settle disputes.
June 2020
The FCA became further concerned about the outcomes for business customers caused by insurers’ wavering over whether claims were valid, and announced
proposals for a court declaration on policy wordings. This would provide a blanket ruling and prevent uncertainty and delays for business customers.
The body identified a representative sample of 21 policy wordings that captured key variations in cover, chosen from a pool of 700 different policy wordings. It listed 16 insurers that used at least one of these sets of wordings; of those 16, eight agreed to take part in the court action. The FCA asked all firms to notify their customers if they had a policy that was one of the variations identified. Of the 21 policy wordings considered, seven were found to provide no cover, while 14 provided partial or full cover.
At the High Court, many of the issues were resolved but, because the FCA and insurers could not reach agreement, both made ‘leapfrog’ appeals to the Supreme Court (without going to the Court of Appeal first).
January 2021
The Supreme Court delivered its ruling. It found that insurers would have to pay claims that had previously been in limbo. The FCA, wanting to ensure swift settlement, began collecting and publishing data from insurers on their handling of these claims.
There was one year between the issue of the first statement and the court decision, and the FCA wanted to ensure that claims were paid swiftly, so it started collecting data from insurers on claims settlement.
The Supreme Court ruling did not result in a flood of new claims to most insurers. There was a falling trend in notifications, with most claims already notified at the time of the ruling. Although one of the top 10 insurers did report a surge in volume,
One outcome of the Covid pandemic was the unprecedented volume of business interruption claims faced by insurers. How did they do? Jeremy Keating assesses the figures
resulting in its figures tripling between month one and month two, the rest held steady. We can probably assume that this is related to how the claims were counted, rather than a genuine ‘opening of the floodgates’.
Five of the top 10 insurers by claims volume recorded a reduction in the number of accepted claims over the period. From the information provided, it is not clear if this was due to some form of data recounting or whether these claims genuinely were repudiated after acceptance.
The FCA’s first data point in March 2021 showed £472m of
claims settled against Covid business interruption claims; as of March 2023, the amount stood at £1.7bn. Using all the monthly data points, a smooth increasing settlement pattern is seen at an overall level (Figure 1).
The total number of ‘settled and closed’ claims from the pandemic stands at 37,000, or 10% of the total business interruption policies issued by UK insurers. The amount paid on these claims adds up to £1.4bn, with an average settled claim of £38,000.
Slightly more than 1,000 claims are open and have had some payment made on them. The average payment on these
FIGURE 1: Cumulative Covid business interruption claims settlement (£m)
claims is £295,000, indicating that bigger claims are taking a longer time to settle.
About 300 claims are open and under investigation to determine their validity before any payments are made.
Of the 38,000 claims accepted, 26% were from Hiscox and 27% were from AXIS, Covéa, MS Amlin and AXA UK combined. The other 47% were spread across 46 insurers.
MS Amlin, AXA, Canopius and Argenta stand out among the top 10 by volume as the quickest firms to make decisions on claims validity. After the Supreme Court’s ruling, MS Amlin decided on more than 3,000 claims in just over a month.
Most of the insurers took a couple of months to decide on the validity of claims, but some larger providers had longer turnaround time, with a significant portion of decisions pending after the one-year mark.
For almost all the top 10 insurers in the business interruption Covid claims list,
there is a high correlation between calculation of total value of claims and an offer of final settlement being made, accepted or paid in full. This indicates that insurers are swift to move to resolution once they have the necessary information to quantify the claim payment.
Some insurers, namely Canopius, Allianz, Axis and Covéa, had already accepted a significant number of claims at the time of the Supreme Court ruling.
FCA data shows that insurers acted in customers’ best interests and settled claims as they got the required information. Some insurers were settling claims before the ruling, and several moved quickly once the Supreme Court ruling was received –a very positive finding.
From analysis of the claims data published by the FCA, it is reasonable to conclude that claims were paid by insurers in a timely manner. The bulk do seem to have been settled, and those that remain open appear to be the large and complex claims that take time to analyse.
It was deemed so newsworthy that the Daily Mirror announced it in its pages, using staccato headings more suited to an urgent telegram: “FIRST WOMEN AS ACTUARIES. Two London Girl Pioneers in New Profession. CITY SURPRISED. An ExTeacher and a Cambridge ’Varsity Graduate.” at was 1923.
Profes Teach
That w Unl wom culmi wome Rathe ackno as, for Qualifi
Unlike accountancy and law, the admission of women into the actuarial field was not the culmination of a drawn-out battle between women and a male-dominated profession. Rather, during the First World War, it was acknowledged that women were already doing the work – they had entered the arena as, for example, life assurance clerks. Qualification was a natural evolution.
In a 1918 address, Institute of Actuaries president Geoffrey Marks spoke in favour of admitting women: “...the war has given [women] the opportunity to prove their precise worth [...] In the past, the refusal so to admit them was due to want of knowledge which has now been supplied, or to prejudice on the part of men, which amounted to a denial of social justice. I do not see therefore why the Institute should affect to be deaf, or should bar its doors when women begin to knock at them.”
e two women were Dorothy Davis (1897-1977), and Gladys Gregory (1899-1981). While Davis, a Cambridge mathematician with the Guardian Insurance Company, is the one whom history remembers as the first woman actuary, it’s clear that they supported each
In a presid admit [wom precis admit which on the denial th should Prof e tw (1897 (1899 mathe Insura histor actuar
A hundred years ago, two women caused a stir… by becoming actuaries. Researcher Liz Bowsher marks the centenary of the first female Fellows
other. They crammed and did their ‘very hard swotting’ together, both passing Part 1 in 1920 and qualifying in October 1923 after less than the ‘usual four years’.
In 1923, Gregory was perhaps the more prominent of the pair: at 24, she was two years younger than Davis, and her final examination was said to have been ‘faultless’; she would have come overall first if the results had been ranked. Writing in Good Housekeeping magazine in October of that year, she commended the actuarial profession to well-educated girls who were prepared to work hard and give up their evenings to study. However, she also made the point that many insurance offices were overstaffed, and opportunities for girls were limited.
In fact, her story is perhaps the more remarkable, given that Davis had a maths degree from Cambridge, while Gregory had a school-leaving certificate. She came from a relatively modest background as the daughter of a shoemaker, and attended a local council school in Clapham, where she also taught. In 1917, at the age of 18, she joined Prudential Assurance; the 1921 Census describes her as an “insurance clerk (actuarial)”.
Between the First and Second World Wars, most employers operated a ‘marriage bar’ –women were expected to stop work when they got married. Thus, in April 1927, shortly
before her wedding, Gregory resigned from Prudential a decade after starting there. Her marriage certificate describes her as an “insurance company actuary”. In the 1939 Register, commissioned by the government to give an overview of the population of England and Wales, she is listed, like most women, as being occupied in “household duties, unpaid”.
Davis had been determined to continue her actuarial career and held out against marriage for many years, her resolve only crumbling after she was overlooked for a promotion. She married in 1931, leaving the profession until the mid-1950s. The 1939 Register features her as “actuary FIA”.
Even as late as 1971, Monica Allanach (1921-2013) who, like Gregory, joined Prudential straight from school, said her career had been smoothed because she remained single – although she also said she thought it was reasonable that employers take women’s marital status into account.
In October 1925, the Institute had four women Fellows, three women associates and several women probationers. By the time Allanach qualified in 1951, there were still only 11 women Fellows.
By 1960, the Faculty of Actuaries in Scotland – which had admitted women a few months sooner, in 1919 – had only four women Fellows. Its first woman to qualify, Jessie Ruthven Carmichael (known as Ruth), enrolled in 1924 and qualified in 1933.
Of course, during the past century, the number of women actuaries has grown enormously. Women comprised 35% of the IFoA’s global membership in 2021, although they remain under-represented in senior management. As Allanach wrote in 1982: “There must surely come a time when [women] are not only ‘accepted’ but ‘unnewsworthy’ too!”
Our thanks to the family of Gladys Gregory for their help and sources supporting this article. LIZ BOWSHER is a professional researcher and genealogist
Claims are at the heart of insurance. A business must be able to predict how losses will develop over time – it immediately impacts reserving and allows for informed risk selection, underwriting, pricing and claims handling. Actuaries traditionally estimate reserve requirements with portfolio-level calculations, using triangulation methods such as Chain-Ladder and BornhuetterFerguson. These provide an aggregate view of loss development across a portfolio, which is necessary for financial and regulatory reporting. The advantages of aggregate methods include ubiquity, transparency of assumptions and easy implementation. However, there are some risks.
First, estimating loss development solely through an aggregated lens could cause inaccurate loss reserving in underlying segments if key characteristics are overlooked. Second, aggregate methods provide a static view, and recreating triangles and analysing reserve changes and underlying patterns can be time intensive. Third, they may not provide actionable insights –different, overlapping trends are hard to distinguish and quantify individually.
Here, we discuss the individual loss development (ILD) approach, the purpose of which is to predict loss development on every individual claim, based on its unique attributes.
Automated machine learning is allowing insurers to take a more individual approach to estimating loss development, say Maximilian Hudlberger and Darius Sabas
Due to claim development’s temporal nature, it can be hard to build ILD models manually – for example using generalised linear models. In addition, feature engineering and parameter estimation is complex as there may be many different features and types. Free text features (often highly predictive of future claim development) is especially challenging to work with because of the lack of widely available natural language processing models.
Most of these hurdles can be bypassed using machine learning methods –particularly automated machine learning (AutoML). This streamlines feature engineering, variable selection and model building, saving time and allowing for quick experimentation. Automated text mining allows us to swiftly extract predictive insights from claim documents.
There are several approaches to deriving predictive variables for loss development. Here, we focus on the ‘distance method’, which involves predicting the loss development period (time to close) for a claim and determining ‘distance variables’ to measure and manage projected costs.
Typically, we consider five types of information:
Initial claim details, such as loss year, development year, initial case estimate and claim description
Claim development, such as adjuster notes, payout progression and claim activities
Policy details, such as policy type, annual premium and tenure
External factors, such as inflation, interest rates and demographic data.
We need to prevent target leakage – the use of information in model training that would not be available at the time of prediction, creating optimistic results. To achieve this, variables are restricted to historical values for each development year, aligning with the prediction time.
Feature sets may depend on what the model will be used for. For early claim development estimation, we could limit predictive features to first notice of loss, policy and customer data. In long-tailed portfolios, claim development data becomes crucial.
There are many things to consider when setting up a model. Do we work with open and closed claims? When is a claim closed? How should outliers be handled? At which claim stages do we predict? What post-processing techniques are needed?
We start with an example of two losses, each with a maximum of four development years. Here, we focus on essential features.
For each loss and its development year, we must predict the remaining distances. For instance, for the first loss in the first development year, we predict distances 1, 2 and 3, so we need a row for each (Figure 1 – loss table per development year).
This can lead to large datasets, particularly for long-tailed liabilities. Sometimes we can use downsampling to manage the dataset’s size. One way to do this is by randomly selecting one or a few distances for each loss ID and development year, maintaining the same (or a predefined) number of rows (Figure 1 – downsampled). This method does result in bias –observations for short-distance values are inflated, those for long forecast distances are reduced. Depending on the business objective, the introduction of weights can mitigate bias towards shortdistance training data rows.
Now we turn to the modelling setup. AutoML allows us to quickly engineer features, select variables, build the model and experiment with different approaches, such as linear and tree-based methods.
When creating the target feature, we can consider:
Loss total – the cumulative incurred loss at development year i + distance j
Loss delta – the cumulative incurred loss at development year i + distance j, subtracted by the cumulative incurred loss at development year i.
We suggest starting with loss delta. The total loss can be derived from it, and it removes collinearity between the current
loss and the target, providing a more realistic model accuracy view as well as less predictive impact from autoregressive features.
The optimisation metric depends on the model’s purpose. If the goal is an unbiased estimate for the total sum of claims (constructing the bottom half of the triangle), consider root-mean-square error (RMSE) or Poisson deviance. The unbiased estimate property is derived from the normal equations, assuming the identical link function for the first and the log link function for the latter case.
If the goal is exploring claims and patterns at a granular level, gamma deviance is likely to reflect the target distribution more accurately. However, it can give a biased estimate when summed across, assuming the log link function when deriving the deviance. It’s crucial to understand the model’s intended implementation and use.
Many rows differ only slightly in the final dataset, as they come from the same loss. Standard partitioning methods such as cross-validation would lead to overfitting, learning the loss ID rather than the underlying behaviour. The group partitioning method ensures that all rows with the same loss ID are in the same training or test set.
Finally, certain dataset features are presumed to exhibit monotonic behaviour related to the target. For instance, the development year: our target (delta) should decrease with each year, indicating negative monotonicity. It could be argued that a good model will catch this, but due to noisy datasets, we typically encounter local non-monotonic relationships when analysing partial dependence plots (PDPs). Ensuring monotonicities is a good way to generalise the model and builds trust when discussing results with stakeholders.
We simulated an aviation loss portfolio with 14,000 claims from two sub-lines of business (SubLoBs): airlines and general aviation. We defined a run-off pattern of 18 years, leading to a dataset with 171,000 rows. Modelling settings:
Model target was delta loss at distance i
Optimisation metric was set at RMSE DevYear feature was restricted to have a monotonically decreasing relationship to the target feature
LossID was set to be the group partition
feature. We used 20% holdout and 80% training with five folds. To achieve the most accurate model we used DataRobot AutoML, testing several model families with various combinations of feature engineering. Here we analyse performance and behaviour through the lens of the best-performing single model: XGBoost with early stopping.
Overall, the model predicted 0.7% (0.6% airlines, 1.3% general aviation) higher than the actual ultimate loss for 2000-18, achieving an out-of-sample accuracy of 17k (RMSE, optimisation metric), 97.1 (Gini norm) and 11k (gamma deviance). We further examined this using lift charts and residual distributions in various segments and years. Model accuracy depends on the data, so a detailed analysis is out of this article’s scope.
As shown in Figure 3 – feature impact, the three most predictive features are:
InitialLoss – This makes sense, as it is the first claim severity indicator
CumIncLoss – Looking at the PDP, we see two main trends. If the current payout is less than expected, we also expect less remaining claim inflation. However, if the current payout is larger than usual, we expect slightly smaller future payouts, as the claim is currently ‘slightly overpaid’ DevYear – This indicates the claim’s maturity and is also expected to be highly predictive (as intuited by the Chain-Ladder method).
The model also found significant signals in Distance and Claim_Description, crucial for capturing each loss’s uniqueness and development pattern.
The PDPs confirm that the monotonicity constraint for DevYear holds. Since this feature is highly ranked in terms of impact, we can validate this business assumption.
Let’s look at the text feature. Claim_ Description impact analysis via the word cloud (Figure 4, overleaf) indicates which human-written note attributes signal highly inflating claims (red) versus low inflating claims (blue). The patterns also indicate intuitive consistency within the model. For instance, ‘catastrophic failures’ and ‘commercial airliner’ claims tend to inflate significantly, whereas ‘private jet’ and ‘engine failure’ have low inflation over time.
Note that the used text pre-processing step is a rather simple technique. More sophisticated methods could potentially yield
Machine learning isn’t likely to replace triangle-based methods soon, but should complement them
FIGURE 2: Blueprint – including model and pre-processing steps
even better results, for example embeddings or even large language models for categorisations of high cardinality features.
Another advantage of ILD models is that you can obtain individual explanations for each prediction, besides global performance explanations (Figure 5). Techniques such as XEMP or SHapley Additive exPlanations allow each prediction to include quantifiable feature effects, enabling us to understand why a claim might be risky. This means we can override predictions if the model overlooks known risk factors.
This can even be leveraged to investigate which claims have the potential to become
large losses, possibly allowing for active intervention in the process of claims management.
ILD offers a granular approach for investigating and projecting claim portfolio inflation, potentially augmenting traditional reserving methods and enriching other business areas – from pricing to claims investigation and even fraud. Using machine learning, insurers can overcome the challenges associated with building ILD models manually – and this has the benefit of saving time and providing actionable insights.
Machine learning isn’t likely to replace triangle-based methods any time soon, but should complement them. Early ILD adopters can use it alongside traditional methods, exploring claim development patterns individually or building clusters.
Sophisticated adopters can use model results to challenge traditional results, allocate tailored reserves to portfolio segments, and identify factors that could enrich pricing models. Reinsurers can use it to construct individual estimates for evaluating portfolios. By embracing ILD and staying up to date with machine learning advances, insurers can gain a competitive edge.
FIGURE 4: Word cloud of Claim_Description feature FIGURE 5: Individual prediction explanation exampleIn December 2021, French slackliner Nathan Paulin crossed from Babilônia Hill to Urca Hill in Rio de Janeiro, Brazil. He covered a distance of 500m at an altitude of 80m, requiring an immense amount of resilience and balance. This stunt serves well as a metaphor for the struggles of an insurance pricing team. As these teams navigate the rapidly evolving financial world, they continuously strive, like Paulin on his slackline, to achieve the golden mean: in the case of pricing, a perfect balance between accuracy and transparency.
Transparency
Pricing transparency is the extent to which insurance companies disclose accessible information on the cost and factors that contribute to insurance products’ final prices. The degree of transparency required varies between countries, lines of business
and sometimes even regions. However, different countries and markets are becoming increasingly closely connected, leading to attempts to unify or standardise the rules.
The FCA’s (Financial Conduct Authority) Treating customers fairly – guide to management information, published in 2007, is a good example to begin with. UK actuaries still follow its main concept, of policyholders’ ‘reasonable expectations’, when designing and pricing insurance products. This concept suggests that policyholders must not be misled or unfairly treated by their insurance policies’ terms and conditions, and that they must understand the coverage they are purchasing.
Treating customers fairly was followed by further international standards, such as the European Commission’s EU rules on gender-neutral pricing in the insurance industry in 2012 or the US’s 2014 Compilation of Patient Protection and Affordable Care
at how actuaries can build pricing processes that carefully balance accuracy and transparency
Act. This shows that regulators are constantly monitoring and reacting to market changes to ensure that policyholders are treated with reasonable care.
The emergence of modern machine learning (ML)-based approaches in insurance pricing has been a significant factor in forcing authorities to consider transparency. The European Insurance and Occupational Pensions Authority’s Supervisory statement on differential pricing practices in non-life insurance lines of business is just one of the recent legal developments.
Regulators need to react because insurance pricing methods constantly evolve, with companies seeking marginal improvements to key performance indicators such as loss ratio, profit margin or market share. This brings us to the importance of pricing accuracy.
Actuaries strive to achieve the highest level of accuracy when predicting the likelihood of risks and the potential costs associated with them. Consistent high accuracy will ensure that profits emerge smoothly, customers can be charged less due to risks being more predictable, and the whole pricing process can be more granular and personalised. This ultimately allows an insurance company to increase its market share or enter new markets. In addition, granular and personalised insurance pricing gives policyholders a greater sense of fairness. By considering each policyholder’s specific risk profile, such as driving habits, health status or property features, insurers can offer premiums that reflect their unique circumstances and needs.
Choice of pricing method depends on several factors, including the size of the available dataset, the pricing team’s expertise and the regulatory environment. In recent years, supported by rapid developments in big data, more and more actuaries have been trying to move towards ML-based methods.
Equipped with the necessary knowledge, the pricing actuary can start to build a better pricing process. It is important to emphasise that we cannot talk about pricing accuracy without also discussing pricing transparency – it is never one or the other. No single model will solve all actuarial problems. The suitability of each approach depends on the task it is intended for. Actuaries currently tend to lean towards one of the following approaches:
1 Generalised linear models (GLMs)
2 GLMs plus artificial intelligence (AI)-assisted functionalities
3 Pure ML
4 Gradient-boosting machines plus explainable AI.
GLMs have long been an insurance industry staple, trusted by actuaries and pricing analysts who have dedicated considerable
time and effort to mastering them. Their outputs can usually be converted easily into rating tables that satisfy regulatory requirements, such as the above-mentioned Treating customers fairly guidance.
However, despite GLMs’ widespread use, building an effective one can be laborious and resource intensive – and there is no guarantee of achieving satisfying accuracy. Moreover, there comes a point at which GLMs can become as complex as ML models, negating their advantage of interpretability.
Given these challenges, it is not surprising that extensive research has been conducted to develop alternative approaches that offer improved performance. GLMs’ limitations have driven the insurance industry to explore new methods in pursuit of better models and more accurate predictions.
Most advanced pricing software and teams now use AI-assisted functionalities when building GLMs. AI can enhance various aspects of the modelling process, including feature selection, binning and mapping of variables, detecting interactions and automated discovery of microsegments. This drastically reduces the burden of tasks involved in building and updating pricing models.
Feature selection methods such as information value, Gini score and GBM importance can be employed to assess variables’ impacts on the target and discard irrelevant ones. Optimal binning and mapping techniques automate the selection of the best grouping of values for variables, optimising differentiation between bins while minimising variance within each bin.
Identifying interactions between variables is crucial for accurate modelling. Techniques such as Friedman’s H-statistic and one-way
charts with segmentation help in identifying and visualising these interactions. Furthermore, micro-segmentation allows for a deeper understanding of customer characteristics and behaviours, enabling tailored marketing strategies and improved customer engagement.
By incorporating AI-assisted functionalities, insurers can reduce the loss ratio of new business and renewals, leading to substantial cost and time savings. The combination of AI and GLMs not only improves the efficiency of the modelling process but also enhances insurance models’ accuracy and effectiveness.
In the world of insurance pricing, pure ML methods are gaining traction, revolutionising the way insurers understand risks and personalise policies. ML empowers insurers to derive valuable insights from extensive datasets, resulting in enhanced accuracy and personalised pricing strategies.
When it comes to ML estimators for insurance pricing, several options stand out. More modern estimators include decision trees, random forests, GBMs and neural networks. These algorithms each have their own unique characteristics and are suitable for different types of tasks.
ML-based insurance pricing has advantages and drawbacks. GBMs, for example, offer higher predictive accuracy but require more computational resources and longer training times. One challenge with ML models is the issue of interpretability – they may be seen as ‘black boxes’. Regulators and authorities demand transparency, which has led to some reluctance to implement ML on a production scale.
While ML methods excel at handling complex relationships and capturing interactions within datasets, they require expertise and may
have longer building times. However, modern tools mean that ML models can now be built with just a few clicks, taking seconds.
Overall, ML-based insurance pricing holds immense potential for insurers, allowing them to leverage data and algorithms to gain a competitive edge. By embracing ML, insurers can enhance their risk assessment capabilities, offer personalised policies and ultimately provide better value to customers.
A toolbox of visual methods and explainable AI techniques has emerged to address the need for transparency. These tools aim to illuminate ML models’ inner workings, enabling analysts to grasp their predictions more profoundly and enhance model accuracy.
Visual tools such as ceteris paribus (CP) plots, partial dependence plots (PDP) and individual conditional expectation (ICE) charts transform data into insightful visualisations. CP plots allow analysts to examine how changing a specific variable impacts the prediction value for a given observation, providing a local understanding of the model’s dynamics. PDP, on the other hand, offers average prediction values for a chosen variable across the dataset, serving as a global explainer that reveals non-linearities and their influence on predictions. ICE charts bridge the gap between CP and PDP, breaking PDP down into individual CP lines to gain deeper insights into feature interactions.
Model-agnostic methods such as Breakdown or SHAP (SHapley Additive exPlanations) quantify the impact of each variable on the model’s output. These visualisations extract conditional responses from black box models, enhancing the understanding of variable contributions. Global explainer techniques, such as variable importance, measure the influence of input variables on the model, while permutation importance helps to prioritise variables by shuffling data within a chosen column and measuring the resulting decrease in prediction accuracy.
senior pricing consultant at Quantee and a nearly-qualified actuary
In situations where plots may be insufficient, the approximation of complex black box models with simpler ones becomes necessary. Rule-based models act as surrogates, approximating the original model’s decision boundaries and logic through explicit rules. They provide clear explanations, particularly when using interpretable models such as decision trees. Global surrogates, also known as proxy models, approximate complex black box models using interpretable counterparts, aiming to maintain interpretability while complying with regulatory requirements.
Balancing pricing transparency and accuracy is difficult but crucial. We expect that GLMs with AI-assisted functionalities and GBMs with explainable AI methods will become the dominant approaches for pricing experts. However, in this dynamic field of business, it is likely that more nuances are still to come.
The emergence of machine learning approaches in insurance pricing has been a factor in forcing authorities to consider transparencyMIKOŁAJ SKRABURSKI is
Suddenly, all other ESGs seem unpolished. GEMS® empowers users to add custom asset classes in minutes.
In an uncertain investment environment, you need to be able to explore new ideas. That means risk models need to be ready to incorporate alternative investment strategies, fast. With GEMS® Economic Scenario Generator, users can add new asset classes to the model in a matter of minutes. That’s just one way GEMS ® can help you shine.
Why do you like the piano?
If I’m being honest, as a kid I really enjoyed the accolades and the applause. I started keyboard lessons age 5, then moved to organ, then piano at about 10. I was performing from an early age (in shopping centres) and got up on stage at nearly every chance. These days, I get more enjoyment from performing with a group of talented musicians than playing by myself – I get a real sense of satisfaction from nailing a performance.
Being good at maths and music – any dilemmas there?
I don’t know if I ever seriously considered studying music at a tertiary level – I figured music was one of those things that you got better at by ‘doing it’, so studying something else wasn’t going to preclude my performing.
What gave you the idea to work on cruise ships?
I stumbled into it – there was an ad in the paper that said ‘musicians wanted’. I played an audition, and it solved my issue of not knowing what to do after university. I only did one contract but it was for nearly six months – long enough to realise that doing it wasn’t for me long-term! The experience was a bit of a mixed bag – I got to see some amazing places but it was tough being away from everybody I knew for that long.
Did you go all around the world?
I was pretty lucky – I departed from South Africa on an Antarctic cruise, then went all around South America and the Caribbean, crossed the Atlantic to the north-west coast of Africa, the Mediterranean and finally
western Europe, ending up in London. My highlights are seeing the glaciers in Ushuaia, Argentina, and going up the Amazon in Brazil. And I’ll always remember New Year’s Eve in the Antarctic, where we counted down to midnight and the sun hadn’t even set!
Then you started actuarial work?
I went to Finity as an analyst in 2009, but only stayed six months before I was lured away again by music. I decided that I needed to give music a proper go so I wouldn’t regret ‘the path not taken’.
How did you get into musicals?
It was serendipitous – a friend of mine was auditioning for Mary Poppins and asked if I could play for her. The show’s music team liked me and asked if I would be interested in ‘depping’ – filling in when a musician has a night off. I was chuffed to have that offer but it got better after that. The musical director had to pull out of the show and everybody in the team moved up a position – they asked me if I’d be interested in a full-time job, so I jumped at it. After that, I pretty much went from one show to the next for 10 years.
After Mary Poppins, the main shows I worked on were A Chorus Line, King Kong, Strictly Ballroom, Matilda and most recently
The Book of Mormon. Most of the time I’ve been the assistant musical director – not quite the top job but also no ultimate responsibility! It involves playing in the orchestra most nights, conducting a couple
of shows each week and running rehearsals in between.
What’s life like in the theatre?
The vibe can be different depending on the show. The Book of Mormon was an absolute blast – the show was hilarious and the whole team was great to hang out with. There can be long hours (I remember a lot of long days as we tried to iron out technical kinks with the two-storey-tall King Kong puppet) but once they’re up and running, shows really settle into a good rhythm (no pun intended).
Highest point?
I’ve recently done some moonlighting on the production of Hamilton, performing in Auckland for a few weeks. Getting to conduct it was truly amazing – it can be hair-raising, but the adrenaline is great! I feel very lucky to have been involved in such an awesome show.
As my kids started getting older and were beginning school, being at work in the evenings and weekends was getting harder. I needed something that was closer to a normal nine-to-five. I also missed using the analytical side of my brain, so I was lucky to slot back into my old job at Finity. I’ve been there for nearly five years and am now a consultant. I manage to stay involved in the theatre, at least on the periphery, so I don’t miss it too much. I’m planning to qualify as a Fellow by the end of the year – just one subject to go!
tells us about conducting musicals and loving the limelight
an associate professor of management and organisation studies at the University of Cyprus
Effective leadership consists of two things: resilience in the face of failure, and the courage to deal with that failure
For good leaders, failure is not an option, says Alexia Panayiotou – it’s absolutely essential. You learn to start again
ALEXIA PANAYIOTOU
is
For many, ‘failure’ is a dirty word – an unutterable and inadmissible ‘F-word’. But there is nothing more human than failure. We fail from the day we are born. We fail in order to walk, eat, speak and communicate. We learn all about failure long before we learn about success, simply because nature’s law is that we must fail if we are to succeed.
Despite this, our schooling and socialisation tell us that failure is not only unacceptable and to be avoided at all costs, but also unmentionable. We are led to believe that leaders, in particular, do not fail. They are defined in popular culture and academic case studies in terms of their successes, which are often presented as superhuman or supernatural. Rarely, if ever, do we focus on their failures.
I have been teaching leadership to undergraduate and graduate business students for more than 20 years and have made it my pedagogical mission to put failure at the heart of my lessons. While failure is unavoidable, what we make of it is up to us. What sets leaders apart is not their infallibility but their humanity, humility and willingness to learn from mistakes.
To paraphrase Barbara Kellerman, professor of public leadership at Harvard University’s John F Kennedy School of Government and author of the 2004 book Bad Leadership, never discussing failure in business schools is like never discussing disease in schools of medicine –utterly catastrophic.
Carol Dweck is a Stanford University psychology professor who is known for her work on ‘the growth mindset’, a concept that has gained popularity in educational, organisational and business settings. In her 2006 book Mindset: The New Psychology of Success, she talks about the importance of making mistakes and developing a growth mindset, rather than a ‘fixed’ one.
“A growth mindset is based on the belief that your basic qualities are things you can cultivate through your efforts,” she explains. “Although people may differ in every which way – in their initial talents and aptitudes, interests or temperaments –everyone can change and grow through application and experience.”
If you ever visit Cyprus, my homeland and that of this magazine’s editor, visit the AG Leventis Gallery in Nicosia. Its ground floor is dedicated to the work of one of our most prominent artists, Adamantios Diamantis (1900-94), and particularly his most famous work, The World of Cyprus: a 17.5m-long painting featuring 67 figures.
After you have admired it, turn to the wall that features some of the artist’s preparatory sketches – work that spans several decades. I believe this wall can represent the leadership journey, the process behind accomplishment. This process is often hidden, unknown, unacknowledged and unappreciated. The raw drawings showcase the journey of failing and trying again, the amassing of knowledge for wisdom.
that failure. In her 2018 book Dare to Lead, Brené Brown, a researcher of shame, vulnerability and leadership, says: “If you’re going to dare greatly, you’re going to get your ass kicked at some point. If you choose courage, you will absolutely know failure, disappointment, setback, even heartbreak.”
Instinctively and biologically, we are wired for resilience. As children learning to stand up and walk, we fall repeatedly and yet continue to get up. Musicians and athletes know that they must make mistakes; it is only through failure – and practise – that they can master their instrument or sport. In her 2016 autobiography Courage to Soar, the American gymnast Simone Biles noted: “A lot of good actually came out of my failing to make the national team the first time around.”
A fixed mindset, on the other hand, is rooted in the belief that abilities are innate and fixed from birth. This often translates to accepting narrow boundaries for what we can and cannot do, interpreting criticism as failure rather than feedback that helps us to grow and, ultimately, never trying new things or taking risks. Embracing a growth mindset means that we start to read setbacks as opportunities to learn and try harder, and challenges as reasons to be more persistent.
A growth mindset is inherently tied to another characteristic that sets leaders apart: resilience. As communications specialist Diane Coutu wrote in her 2002 Harvard Business Review article ‘How Resilience Works’: “Confronted with life’s hardships, some people snap and some snap back.” These people have ‘grit’ – they stare reality in the face and bounce back from disappointments. I would say that a growth mindset is the basis for cultivating resilience, which, in turn, helps us to look at failure through the lens of growth rather than in terms of our limited, unchanging abilities.
Effective and successful leadership consists of two main components: resilience in the face of failure, and the courage to deal with
In schools, universities and organisations we become outcome-orientated, focusing on the ‘A’ or the ‘F’ but failing to honour or understand what led us to the grade. We ascribe special traits to those who reach the upper echelons – ‘smart’, ‘genius’, ‘accomplished’ – but rarely do we call someone ‘resilient’. We glorify certain business leaders because it fits with our teleological narrative of the lone hero, the accomplished entrepreneur, the fearless fighter, but we do not see the process, cost or relational aspects of these accomplishments.
To understand effective leadership, we must understand the mechanisms that help a person to bounce back from failure, and change our narrative about leadership so that it encompasses these traits. We need to accept failure in educational systems and organisational cultures, and cultivate resilience in people.
Sometimes, the most courageous act of leadership is getting out of bed in the morning and showing yourself to the world. In my classes I often use a 2012 McKinsey & Co article by Aaron De Smet, Johanne Lavoie and Elizabeth Schwartz Hioe, ‘Developing Better Change Leaders’. It ends with a quote from one of the executives interviewed for the piece: “The hardest part of being at the forefront of change is just putting your shoes on every day.”
There is a lot of wisdom in this, as simple as it sounds. Accepting failure as a necessary component of change enables us to seize the learning moment and move forward.
If you have a mind formaths, logical reasoning, cryptic clues and otherconundrums, send your challenges to us and we will publish the most difficult here. puzzles@theactuary.com
Courtesy of Aktoro Down
1 Numbers ending in 9 can convert data (8)
2 One time, second name included name of Romans (8)
3 Held back in stake – poker money (5)
5 Understanding in a sense (7)
6 Easy decision to investigate the second airborne crash (2,7)
7 See 12 Across
8 Murphy’s swirls (6)
9 Hawk’s really big game (6)
15 Mainly temperate change to start and have another go (9)
Across
17 Start out bright – time for force (8)
18 Program everyone starts to employ definitely made blood run cold (8)
20 25d 7 thinking is music to rock your heart (4,3)
21 Train, half train, in stoical surroundings (6)
22 Heard champagne’s the tops – I love that it eases strain (6)
23 Bring in something as chief worker’s left (6)
25 See 12 Across
1 Doctor fluids to make tea and coffee (6)
4 ‘20 summer on the Riviera made for quite a scene (8)
10 Changing their position could be a game-changer (9)
11 Cheese Aktoro dropped with a touch of Danish that comes from the bakery (5) 12/25D/7 Corrupt thief took hot cross bun
Mensa puzzle 858
– imagine all the ways he did this (5,3,2,3,3)
13 Fix parental position – what a to do! (9)
14 A feature of Lennon & McCartney’s Yesterday covers included new work (7)
16 Fish reported musical engineer? (4)
19 Reported Aktoro’s foot (4)
21 Provide drink to protect unfettered anxiety (5,2)
24 Some humidity is getting hotter – it’s catastrophic and that’s a fact! (4,5)
25 Final game-changer follows lack of goals (5)
26 Attack 6 12 25d 7 (5)
27 Trip deficit (9)
28 Abuses hospitality and hasn’t finished – tut as you get upset (8)
29 Manage after coming from upset (6)
A cyclist rides from one town to another. On the first day, she covers two-fifths of the total distance. On the second day, she covers one-quarter of what is left. On the third day, she covers two-fifths of the remainder. On the fourth day, she does half the remaining distance. The cyclist still has 12 miles left.
How many miles has she travelled?
Are you an actuary who has made an impressive contribution to charity through your active involvement, or who would like to nominate an actuary you know who has done that? If so, we’d love to hear from you.
Each year the Phiatus Award is presented to an actuary who has made an impactful contribution to charity – not simply in fundraising but in all forms of charitable work and activity. The winner will be the actuary who, in the judging panel’s view, has
made the most impressive contribution to charity through their active involvement. The prize is a donation of £5,000 to the winner’s chosen charity.
The winner will be announced towards the end of the year and invited to the Worshipful Company of Actuaries’ (WCA) January dinner. Their name will also be added to the roll of honour on the Phiatus Award silver salver, which will be presented to them at the livery dinner in London.
Our profession’s livery company, the WCA, has three goals at its heart: Charity – funding maths-related and actuary-involved causes City – supporting the functioning of the governance of the City of London Community – a warm and welcoming environment with which to build our professional network and make new friends.
The award is open to actuaries anywhere in the world.
If you are an actuary or know of an actuary who deserves recognition, email Ian Farr, a trustee of the WCA Charity, at ianafarr@gmail.com. He will advise you on the application process. Don’t delay – the deadline for entries is 31 October.
Read about previous award recipients at bit.ly/past_Phiatus
It is with great regret that we announce the death of the following member. We offer our condolences to his family, friends and colleagues.
Stephen Allchin, a Fellow who joined in 1972
Call for your news…
If you have any items for this page, email social@theactuary.com
The IFoA Foundation is delighted to welcome two new volunteer trustees to its board. Chantal Bond, based in Singapore, is a chartered enterprise risk actuary who works as chief reserving actuary for Asia Pacific at SCOR. She believes in the IFoA membership’s power to do good and is perfectly placed to connect the Foundation to members in Asia. “Financial literacy for all and the encouragement of people from diverse backgrounds to enter the profession are key challenges facing our community, and here the IFoA Foundation is making a real difference,” she said.
All three came together on 30 May at our flagship event, the annual Mansion House Banquet, held in that venue’s stunning Egyptian Hall.
With rich ceremony and tradition, Master Keith Jones, Lord Mayor Nicholas Lyons, the Lady Mayoress, the Sheriff and Alderman Alastair King were greeted by the Edmonton Sea Cadets’ guard of honour. The Master was delighted to present Leading Cadet Brown-McGowan with the Robert Thomas Memorial Award, together with a £3,000 donation to the Edmonton Sea Cadets charity. In his speech, the Lord Mayor stressed the vital and improved role to be played by the City’s financial institutions in supporting early-stage companies.
To round things off, we formally welcomed four new members into our vibrant community: liveryman Kalpana Shah, the new IFoA president, and freemen Rob Kerry, Danny Quant and Richard Stock.
If you would like to find out more about joining the WCA, email our clerk, Alex Hayward, at clerk@actuariescompany.co.uk
Simon Dudley has been involved with employee benefits and remuneration throughout his working life. He has served as a trustee of the WCA Charitable Fund and is enthusiastic about making the profession more widely known and encouraging all possible applicants. “This is a wonderful chance to help those students aspiring to become actuaries and to spread awareness of the profession and the exciting opportunities that membership can create,” he said.
When people learn that I am pursuing actuarial science, their immediate reaction is that I must be extremely intelligent. While I do believe that actuaries are very bright, at times I have felt like a fraud whose success is purely down to chance. This feeling has a name, coined in the late 1970s by psychologists Pauline Rose Clance and Suzanne Imes: impostor syndrome. And according to the International Journal of Behavioral Sciences, more than 70% of people are affected by it in the workplace at some point during their lives.
Impostor syndrome typically shows up when someone is starting a new job or experiences a change in responsibilities that they may feel underprepared for. For most people, it goes away once they have settled into the new role.
My first experience with impostor syndrome was when I started a new actuarial modelling role and would spend hours trying to figure out how to debug a code, getting nowhere until an hour before deadline. While I managed to deliver on time, I questioned whether I really understood the logic behind
the code or had just ended up in the right place through trial and error. I had learned invaluable skills along the way but I doubted my capabilities.
My second experience of it is happening right now, as I start a new reporting role. I find it overwhelming how much information is available from different sources, and I struggle to use it effectively for generating results and providing meaningful explanations. Hopefully, by the time this article is published, this will seem like a thing of the past and I will have come out equipped with new skills and greater confidence. And even if things don’t quite go to plan, there is always a lesson to be learned, so it is always worth trying.
Constant stress and feelings of not being good enough can be detrimental to your physical and mental health, with symptoms ranging from anxiety to disordered sleep and eating patterns. Impostor syndrome can also impact you professionally; it may make you worry about asking questions for fear of being judged, overstretch yourself to the extent that it interferes with your personal life, reject growth opportunities, lose interest
and change jobs, or suffer from burnout. It’s essential to identify these feelings and work on an action plan.
What has worked for me is acknowledging my feelings and talking about them in a safe environment. Even the brilliant actuaries who seem to be on top of things have their own demons –it’s so helpful to know that you aren’t the only one!
We spend most of our life at work. It’s important to be open and to set expectations so that useful changes can be made to help you excel – which is, after all, in the organisation’s interest. Sharing has numerous benefits: as a manager, it can help
felt
an
It’s totally normal, says Vrishti Goel, who outlines her personal experience and her confidence-boosting advice
If you are hired, promoted or trusted to take on more responsibility, it is because someone believes you can
you to foster a connection with your team; as a student, it can help you to get the right support and help from people who have more experience in dealing with such challenges. Another thing I have found helpful is to go back to positive feedback or a trusted colleague or friend when you lack confidence in your abilities. Know that, while there will always be room to grow, you are doing your best! It is not possible for you to be good at everything – that is why teams include people with varying skillsets. You will develop your skills with time and experience, but do remember that knowing everything is impossible.
If you are hired for a role, promoted to a new designation or trusted to take on more responsibility than you feel capable of, it is because someone believes you can. It isn’t pure chance. Approximating career success with a normal distribution, the probability of success due to pure luck is likely to be an extreme event lying on the tail of the distribution. When your head finds it hard to believe people’s words, use actuarial logic instead!
VRISHTI GOEL 27, works at 4most UK. She has been studying for her IFoA exams since 2015 and hopes to qualify next summer
London,upto£110,000
London,£95,000
We'repartneringwitharenownedLloyd'scompanyseekingapricingleadtojoin theiractuarialandanalyticsteam.Areyouafastlearner,comfortableworking withlargedatasetsandcomplexdataanalysisusingPython,orRandiskeento moveintopricing?OurclientisopenforcandidateswithANYGIbackgroundfor thisopportunity.Ouronlyrequirement-interestinanalytics,aproblem-solving andcuriousmindset!IfyouarelookingtojoinatrulyforwardthinkingLloyd's insurer,thisisdefinitelynotonetomiss!
Contact: rafaela.fakhre@eamesconsulting.com|02038465909
London,c.£80,000
Wearelookingforanewlyqualifiedactuary(orsomeonewhodecidedtostop exams).YouwillbeattheforefrontofoptimizingreservingforaleadingMarine Insurancebusinessalsofocusingonfinancialreporting,andenrichingthe company'sgrasponriskandexposure.IfyouhaveLondonMarketand/or commerciallinesreservingexperience,lookingforanewchallengeandexposure tonewareasduringoff-reservingmonths,pleasegetintouch!Inthisrolethereis directcollaborationwithseniormanagementandtheChiefActuary,offering unparalleledgrowthopportunities.
Contact: rafaela.fakhre@eamesconsulting.com|02038465909
London,upto£45,000
AmotorinsurerislookingtohireanAnalysttojointheirpricingfunction.Thisis anexcellentopportunityforthosewhoarefromthepensionsandlifespaceand wanttomovetogeneralinsurance(ifyouhaveRorPythoncoding).Youwillget exposuretoend-to-endpricingandbeinahighlycollaborativeteam.
Contact: hannah.turner@eamesconsulting.com|02070923249
London,£55,000+bonus
I'mcurrentlyworkingwithaleadingP&Cinsurer,who'slookingtogrowits commercialreservingteam.Specificallyseekingacommerciallyastutepart qualifiedactuary,who'scomfortablepresentingtodirectorlevelstakeholders. ThisrolewillcoverallLoB'sundercommercialmotor,primarilyfocusingonthe quarterlyreservingprocess.You'lladditionallysupportad-hocinternalmodelling requirements,includingreservingriskandlossforecasting.Theidealcandidate hasstartedprogressingthroughtheIFoAexams,hasanactuarialbackgroundin generalinsurance,andastrongabilitytoadapttonewareasofthebusiness.
Contact: sam.baker@eamesconsulting.com|02070923230
VariouslocationsacrossUK,upto£80,000+bonus
Ourclient,aleadingUKconsultancy,islookingforanexperiencedactuarytojoin theirgrowingpensionsrisktransferteam.
Thisisanexcitingopportunityforcandidateswithinpensionsrisktransferorfrom apensionsconsultingbackgroundtomoveintoamoreclient-facingpensions role.Candidateswillneedtodisplayastrongdesireandenthusiasmtomoveinto pensionsrisktransfer,alongsidetheabilitytocommunicateatalllevelswithina client-facingenvironment.
Contact: hannah.bainbridge@eamesconsulting.com|02070923282
London,£125,000+bonus
Wehaveafantasticopportunityforanambitious,commercialactuarytoleadon thestrategicgrowthanddevelopmentofanewlyestablishedbulkannuities function.Lookingforanexperiencedactuarywithexpertiseineitherthebulk annuityorrisktransferspacecoupledwithexcellentstakeholdermanagement skillstoworkcloselywithPensionsTrustees,BoardMembersandtheExecutive Committeetodriveandmanageastrongpipelineofbusiness. WiththeBPAindustryseeingoneofitsbusiestperiods,thisisanexcellent opportunitytojointheteamatthestartoftheirjourneyandstepupintoahighly visible,impactfulrole.
Contact: hannah.bainbridge@eamesconsulting.com|02070923282
Edinburgh/London/Bristol,upto£95,000+bonus
Doyouhaveexperienceinmodelriskmanagement?Wouldyoulikearolethat offersthechancetoreviewandchallengemodelmethodologyandassumptions foraleadingUKFinancialServicesgroup?Wearekeentospeakwithqualified actuaries(orqualifiedbyexperience)withasolidunderstandingofcapitaland insuranceriskmodellingwhocanleadanddelivercomplexrisk-basedaudits. Alongwithstrongtechnicalandanalyticalcapabilities,commercialawareness andanappreciationofthewiderbusinesscontextofmodelsisessential.You mustalsobeabletodemonstrateexcellentcommunicationskillsanda collaborativeapproachinordertodrivechangeandimprovement.
Contact: hannah.bainbridge@eamesconsulting.com|02070923282
AninterimpositionhascomeupwithaLloyd’s/LondonMarketInsurerintheir capitalmodellingteamfor12months.Theyarelookingforsomeonetostartin Q3.Theyarekeentospeaktoindividualswhohaveawealthofcapitalmodelling experienceandideallywhohavesomemanagementexperiencealso.
Contact: hannah.turner@eamesconsulting.com|02070923249
London,£95,000+bonus
AleadingLondonMarketinsurerislookingtoexpanditscorporatepricingteam, hiringtwonearly-newlyqualifiedactuarieswithastrongbackgroundinpricing. Thesepositionswillbecasepricingfocused,initiallycoveringP&C,although quicklyexpandingtoEnergyandSpecialtyLoB's.Typicalcaseswillbecrossclass dealsinvolvingmultipleclassesofbusinessandparticipationinmultiplelayersof thetower.CandidatesideallyhaveastrongcommerciallinesorLondonmarket pricingbackground.
Contact: sam.baker@eamesconsulting.com|02070923230
London,upto£45,000
Ahighlyreputableinsurerislookingtomakeadditionalheadcounttotheir actuarialfunction.ThisroleisanexcellentsteppingstoneintotheLloyd’s/London Market,offeringtheopportunitytogainbothpricingandreservingexperience. Theyarekeentospeaktoindividualswhohaveanexcellentacademic backgroundandsomeprioractuarialexperience.
Contact:hannah.turner@eamesconsulting.com|02070923249
London,£135,000+bonus
I'mpartneredwithaleadinghome&motorteam,whohaverecentlyundergonea majortransformationprojectwithintheirreservingteam.Subsequently,they're lookingtohireaqualifiedactuarytosupportarangeofreservingprojects.The purposeofthisroleistoleadasignificantsectionoftheReservingfunction, determiningthestrategicdirectionfortheteam.You'lladviseonactuarialand businessplanning,andwillleadtheimplementationanddeliveryoflargecomplex projects.Theidealcandidateisaqualifiedreservingactuarywithastrong backgroundinsolvencyIIandIFRS17.Strongstakeholderfacingexposureisalso desirable.
Contact: sam.baker@eamesconsulting.com|02070923230
ASSOCIATEDIRECTOR–BULKANNUITIES
Londonbasedwithflexibleworkingarrangements,£competitive AreyouworkinginbulkannuitypricingorDBpensionsde-riskingandwantto stepupintoavisible,keyrolewithinanewlyestablishedteam?Oneofour leadinginsuranceclientsisbuildinganewteamdevelopingbespokerisktransfer solutionsfortheDBmarketandisseekingaQualifiedActuarywithawealthof experiencetooverseethemarketing,originationandexecutionofnewbulk annuityopportunities.Thisisanexcellentchancetoworkinastart-up environmentandgainexposuretotheend-to-endproductionofclient deliverables.
Contact: hannah.bainbridge@eamesconsulting.com|02070923282
London,c.£160,000(withflexibility)
Thispositionrequiresyoutoleadthecalculationofinternalmodelcapital requirementsforthegroup.ReportingtotheinternationalCRO,youwillhavethe supportofaseniorcapitalactuaryandasenioranalyst.Theidealcandidatewill beFIAwithastrongacademicrecord,significantgeneralinsurancecapital modellingexperience,preferablywithintheLloyd’smarket.Strongknowledgeof SolvencyII,Lloyd’s,andfactor-basedmodelswouldbeadvantageous. KnowledgeofReMetricaandPythonwouldbeaplus.Thisistheperfect opportunityforcandidateswhoarelookingtotakeupintoaheadofrole!
Contact: rafaela.fakhre@eamesconsulting.com|02038465909
SouthCoast/London,£95,000+bonus
I'mcurrentlypartneredwithaleadinghealthinsurerwhoarelookingtogrow theirpricingmodelsteam.Thisisaseniorpositionreportingdirectlyintothe DirectorofPricing.You’llmanageateamof2-3focusingonthedevelopmentof technicalpricingmodels.Thiswillinvolvemaintainingahands-ontechnical element,whilstpresentingtoc-suiteindividualsonthestrategyfortheteam.The idealcandidateisaqualifiedactuary(orthroughrelevantexperience),with experiencewithinaPL/CLpricingmanagerrole.
Contact: sam.baker@eamesconsulting.com|02070923230
Are you ready for a new challenge in your career? Join our dynamic and friendly team of actuaries, accountants, and pension administrators based in the North-West of England.
We are a large in-house DB and DC pensions team with a career development opportunity for a part-qualified pensions actuary that’s no longer doing exams (or comparable professional qualifications and experience) who wants to make a difference. With our team of over 30 professionals, you will have the opportunity to work on a variety of exciting projects, including a £3.5bn DB and DC occupational pension scheme. We also provide corporate pensions support to our businesses in relation to several other pension schemes and M&A activity, including the Railways Pension Scheme, Plumbing Industry Pension Scheme, LGPS admitted body arrangements, and other DC pension schemes.
We are looking for someone with strong numeracy, literacy, and IT skills to help us provide a wide range of corporate and trustee pension services. With our recent £1.7bn longevity hedge transaction, the ideal candidate will assist us with new reporting and monitoring responsibilities.
The role involves carrying out technical calculations relating to individual members of our pension schemes and taking a leading role on complex projects such as member option exercises, GMP rectification, GMP equalisation and preparation for dashboards. You will become one of our in-house experts on our pensions administration system, Compendia, helping us to upgrade the system to improve our internal users' experience and to transform our interactions with members by enabling online access and functionality.
We offer flexible employment opportunities, including full-time or part-time positions, with a generous amount of working from home (currently up to 40%).
If you are looking for a challenging and rewarding career, we would love to hear from you! Your skills and pensions experience will be highly valued in our team.
To apply, please visit: https://www.balfourbeattycareers.com/jobdetail?detail=bbuk05907-pensions-technical-manager
Location: London
Salary: Up to £120K + Bonus & Benefits
As an ambitious actuary, you’ll have the opportunity to make a significant impact within a dynamic team. Your insights and expertise will play a pivotal role in shaping the team’s success. You must have experience within the non-life reserving space and enjoy improving and implementing new processes. Get in touch to learn more!
c.wright@gravitasgroup.com |
Location: London
Salary: Up to £150k + Bonus & Benefits
A well renowned Insurer is looking for a qualified Actuary to join as a Risk Actuary and work alongside the Chief Actuary. You will play a key role in decision making on all matters risk and engage with senior stakeholders on a regular basis. For this position you must have a strong ability to take on responsibilities and deliver in a timely manner a.gryson@gravitasgroup.com
Senior Pricing Analyst
Location: London/Hybrid
Salary: Up to £85k + Bonus & Benefits
Brilliant opportunity for a nearly qualified pricing actuary with strong reinsurance experience to join a global organisation. Here you will take a critical position in the team, bridging the gap between juniors and seniors. You will be involved with pricing of Casualty and Finpro account, underwriter support, and interaction with reinsurance teams worldwide. If you are looking for a step up in responsibility and a clear progression path upwards, then please do not hesitate to reach out a.drew-prior@gravitasgroup.com | 07832 937 637
g p p h out 832 937 637
Location: London/Hybrid
Salary: Up to £110k + Bonus & Benefits
Join this global Life Consultancy and get involved in the non-traditional side of actuarial. Be part of a creative team, crafting and executing on bespoke balance sheet solutions for Life Insurers, PE firms and Investment Banks. As Client Manager, you will be responsible for maintaining and developing these relationships. FIA qualified actuary, with 5-7 years’ experience in Life Insurance and strong communication skills.
e.nicholson@gravitasgroup.com
Location: London
Salary: Up to £130k + Bonus & Benefits
One of my favourite clients to work with are looking for a Senior Technical Pricing Actuary to contribute to their actuarial team’s success. In this role, you’ll drive pricing model enhancements, perform profitability studies, and lead the monitoring of key actuarial indicators to shape business strategy. Drop me a message if you are interested m.hartley@gravitasgroup.com | 07747 560 376 7747 560 376 3
Actuarial Analyst
Location: London/Hybrid
Salary: Up to £70K + Bonus & Benefits
Ideal opportunity for an Actuarial Analyst looking to get involved in the non-traditional side of actuarial. At this Life Consultancy you’ll work across the entire life insurance market, from Insurers to PE firms and Investment Banks. Develop skills in Solvency II, IFRS17 and capital modelling whilst working on multi-billion-pound transactions. Actuarial analyst with a minimum of 2 years’ experience in the UK Life Insurance market.
e.nicholson@gravitasgroup.com
Location: Hybrid/Remote
Rate: £750 - £1,600/day, Inside/Outside
FTC: £150k - £250k + Benefits
The demand for interim general insurance actuaries has seen a rise over the years and shows no sign of slowing down. We continuously receive high volume of requests across, actuarial transformation, temporary coverage for paternity/maternity leave, and ongoing support for regular business operations, across Reserving, Pricing, Capital, and Risk functions. If you are nearing the end of your contract or considering transitioning to the interim market, feel free to reach out for a confidential discussion.
rupa@gravitasgroup.com | 07543 176 000
We are an actuarial consultancy providing solutions on a variety of projects. Follow the QR code below to view current opportunities and learn more about our inclusive culture.
Roles available in London, Edinburgh and Dublin. Flexible working available. Competitive salary, bonus, profit share and 5% self-referral bonus for experienced hires.
We cover permanent and interim appointments across Life and General Insurance, Reinsurance, and Pensions & Investments. Whether you’re looking to take the next steps in your career, or are hiring for your team, speak to one of our consultants today. oliverjames.com
Alice & long walks on the beach made possible by .
