Actuary September 2012

SEPTEMBER 2012 theactuary.com

Bottom of the barrel?

The magazine of the actuarial profession

What to expect in a future of dwindling oil supplies

The elephant in the room Accepting model error

Turn in tide for disaster plans

The Actuary

Lessons to be learnt from a Dutch rethink of flood management

Arts

Why Joanne Segars is upbeat about the challenges facing the pensions industry

On a journey with Edvard Munch

REASONS TO BE CHEERFUL September 2012

February 2012 • THE ACTUARY

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SEPTEMBER 2012

Contents COVER: PETER SEARLE

22

26 “There ought to be scope to populate the middle ground between DB and DC”

18 UP FRONT 10 14 16 21

Profession news Industry news People/society news SIAS events

OPINION 5

Editorial Embracing risk can bring us the opportunities to define solutions, argues Deepak Jobanputra

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Letters In which actuaries debate definitions and the importance of scepticism

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President’s comment Philip Scott casts a weather eye on risk strategy

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Soapbox Philip Ellis and Eamonn McMurrough say it is time for the industry to wake up to the frequency of catastrophe risk

35 Book reviews Energy and the Wealth of Nations by Charles AS Hall and Kent A Klitgaard

MORE CONTENT ONLINE Additional content can be found at www.theactuary.com

FEATURES

AT THE BACK

18 Environment: Turn in tide for

34 Arts

disaster plans Wouter Botzen looks at how the Netherlands is rethinking its flood-risk management strategy and how other countries could learn from their discussions

22 Environment: Bottom of the barrel?

Gail Tverborg discusses the difficulties facing the oil industry and how the impact will be felt far beyond just fuel and manufacturing

30 Reinsurance: Dynamic duo Jane Cheng considers the defining features and prospects of the UK and Ireland reinsurance market

32 Modelling: The elephant in the room Dr Andreas Tsanakas examines the use of internal models and how solvency regulation should approach them

Richard Elliott revisits Edvard Munch

36 Puzzles Win a £50 Amazon voucher

38 Student page Matthew Welsh on a fairytale journey

39 Actuary of the future Adrian Stamp of Towers Watson

40 Appointments

ONLINE Software Alan Chalk uses R to visualise data in Google Earth Environment Oliver Bettis reports from the Planet Under Pressure conference Therese Kieve considers actuarial efforts in planetary preservation Modelling Peter Ulrich and Chris Ordowich examine models of extreme loss Aditi Parekh, Andy Crichton and Marc Fakkel look at testing during model development www.theactuary.com/features/2012/09

WRITER OF THE MONTH Andreas Tsanakas wins a £50 book token for his article on accepting model error, courtesy of the Staple Inn Actuarial Society

September 2012 • THE ACTUARY www.theactuary.com

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Editorial DEEPAK JOBANPUTRA Redactive Media Group 17-18 Britton Street, London EC1M 5TP +44 (0)20 7880 6200 Editor, Redactive finance division Mike Thatcher Publishing director Joanna Marsh Chief sub-editor Caroline Taylor +44 (0)20 7880 7663 caroline.taylor@redactive.co.uk Sub-editor Clare Cronin News editor Nick Mann +44 (0)20 7324 2794 nick.mann@theactuary.com Recruitment sales Katy Eggleton +44 (0)20 7324 2762 katy.eggleton@redactive.co.uk Display sales Raquel Climent +44 (0)20 7324 2761 raquel.climent@redactive.co.uk

Managing editor Sharon Maguire +44 (0)20 7880 6246 sharon.maguire@redactive.co.uk Editor Deepak Jobanputra editor@theactuary.com

Opinion

Senior features editor Dan Georgescu features@theactuary.com Editorial team Sarah Bennett health, international Sonal Shah GI, reinsurance, environment Alex English life, SII and modelling Jeremy Lee pensions, investment, ERM, banking Terren Friend working groups Profession news editor Alison Jiggins +44 (0)20 7632 2172 alison.jiggins@actuaries.org.uk

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Internet The Actuary website: www.theactuary.com

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Actuarial Profession website: www.actuaries.org.uk

Editorial advisory panel Peter Tompkins (chairman), David Campbell, Margaret de Valois, Matthew Edwards, Martin Lunnon, Marjorie Ngwenya, Sherdin Omar, Richard Purcell, Andrew Smith, Nick Silver

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We should see risk as a potential opportunity to define a solution, suggests Deepak Jobanputra

Is it time to embrace risk?

The concept of the ‘black swan’ has become almost a fashionable icon in debates on risk management. The focus on identifying, mitigating and managing risk is an important part of an actuary’s role, and one that must not be compromised. Our education and training has a strong bias towards identifying what can ‘go wrong’ from different angles. Does this bias, however, lead to actuaries being a risk-adverse population?

I have come across actuaries who base every decision on some form of probability value, and others who are avid thrill-seekers – though the latter are in the minority, within my small sample size.

My challenge to the actuarial community is that, as well as being risk specialists, we must become as well known for our ability to innovate and develop inspired solutions to the array of challenges global society faces. As an optimist, I take the view that risk also presents opportunity – the opportunity to define a solution. I see an opportunity for actuaries to contribute to wider issues well beyond our traditional areas. Risk has no prejudices, and resides across all industries and geographies.

In the same way that accountants and lawyers operate across all sectors, actuaries can take leading positions in providing a unique blend of skills and experience. It would be great to hear from some of you who work in wider fields, to allow us to share your experiences and inspire others. I am not suggesting that we abandon our traditional roles, merely that we expand our horizons and contribute more widely to the changing world.

By the time you read this, we will have witnessed the most spectacular sporting display to have taken place on these shores. The Olympics has been a resounding success, and yet there is more to enjoy with the Paralympic Games, which run from 29 August to 9 September.

Each sport at the Paralympic Games requires different skills and competencies, combined with the impact of impairment. Yet the stories behind these athletes and their accomplishments can be just as inspirational as those we have witnessed during these past few weeks.

I wish everyone at the Paralympic Games the best of luck.

‘We must become known for our ability to innovate and develop inspired solutions’

Deepak Jobanputra editor@theactuary.com

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September 2012 • THE ACTUARY www.theactuary.com

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letters@theactuary.com

›

Opinion Letters

LETTER OF THE MONTH

— ER RIT THE WLETTER E H T TH F O E MON OF TH EIVES A REC AZON M £25 A CHER VOU —

High barrier for entry to Australia Recent Australian immigration changes are quite beneficial for people associated with the actuarial profession in many ways, but the only concern I have is the occupation ceiling, which is 420 places for actuaries.

I assume these would be taken up very quickly, and subsequently the points required to get an invitation to apply through SkillSelect can be as high as 75 – because only the top ones would get into the 420 places available.

I hope I am wrong, though.

Irfan Chaudry 19 July

Uncertainty guru Definition of an actuary: ‘a professional manager of the financial implications of uncertainty’.

Iain Walker 3 August

From actors to owls I was glad to hear that others also struggle to explain the role of an actuary (‘Opinion’, August issue). For me, responses range from the standard “You’re an actor?” through to “Is that like investment banking?”

My favourite, however, was from a friend who said “That sounds like it has something to do with owls.” He was much gratified to see that the Institute and Faculty’s crest confirmed his suspicions – although I’d suggest that the word ‘ratio’ in the motto is far more indicative.

Jessica Elkin 9 August

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Scepticism and responsibility I recently attended the excellent Risk and Investment Conference. Set in the conference’s theme of communication were a good range of quantitative and qualitative talks. The thought-provoking keynote speech on applying anthropological techniques to studies of the markets was particularly mindopening. In hindsight this seems elegantly obvious. After all, markets are just collections of people, not physical processes purely definable with equations.

However, for me the stand-out message from the conference came unexpectedly at 22.00, after the gala dinner.

I doubt many people were expecting Johnny Ball (pictured) – a former television presenter specialising in science – to be quite so striking a speaker.

The topics of climate change and morality in investing were always going to polarise the audience. However, I believe that his key messages were far wider reaching, and were positive opportunities. Here is my take on his speech. ● Challenge rhetoric with fact. Scepticism is healthy; it needs to be fact-based, though. (Ball highlighted many holes in the carbon dioxidecauses-climate-change argument. His main point however, was the ease with which ‘everyone’ has accepted these apparently flawed arguments).

Perhaps a more topical example for us may be the blind acceptance of rating and copulas in collateralised debt obligations pricing. There are lessons to be learnt, certainly. ● The opportunity of influence. I overheard a fellow delegate describe another part of the speech as “a rant about asset allocation”. My take on it was that Ball was paraphrasing Spiderman’s uncle: “with great power comes great responsibility”. We all have influence – some more than others. Some of us influence the flows of other people’s money. We need to consider our actions, their morality and their implications, beyond our own bottom line. He was challenging us to use our influence to make positive changes. It’s too easy to say “it’s not my problem”, or “if I don’t do this, someone else will”.

I think Ball’s message was an simple and important one, worth transmitting beyond the conference. Overall, I believe this speech was about decisions and opportunity. We should make decisions based on core values, facts – and healthy challenging of those facts – and an attempt to make the world a better place. It may be a hard thing to try to do in the real world with many conflicting agendas.

But I hope this sort of message has a future in our industry.

Russell Bowdrey 25 July

October Published 4 October ● Careers: graduate ● Risk management ● Mortality/longevity November Published 1 November ● Solvency II ● Pensions ● Careers: new fields December Published 29 November ● General insurance ● ERM ● Investment

MORE LETTERS ONLINE More letters are available online at www.theactuary.com/opinion

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The editorial team welcomes readers’ letters but reserves the right to edit them for publication. Please email letters@theactuary.com. The deadline for receiving letters for the October issue is 14 September.

THE ACTUARY • September 2012 www.theactuary.com

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Philip Scott is the president of the Institute and Faculty of Actuaries

›

Opinion President’s comment

PHILIP SCOTT

A weather eye on risk strategy As I write, we are just emerging from an extremely wet summer. It has been depressing for most of us to live through. But for others, extreme weather conditions can have devastating consequences – in damaged crops, floods and disrupted businesses.

Climate change affects all our lives, and the member interest group for environmental issues has been gathering strength and is one of the largest in the Profession. There is now a resource and environmental panel reporting to the management board to develop strategy in this area. The panel has involved people from other international groups with similar interests and those outside the Profession, such as Professor Sir Brian Hoskins from Imperial College, who recently lectured at Staple Inn Hall on the challenge of climate change.

As actuaries, we need to consider the influences that climate change has on actuarial disciplines, and where the Profession can help to understand the risks posed.

Risk management is a new element of strategy that the Profession is proposing to develop this year. As businesses and organisations redevelop their approach to risk – limiting downside risk while making the most of upside potential, actuaries are ideally placed to consult on the optimum strategies.

Risk management is one of the growth areas of business, and actuaries – who are skilled in insurance, investment and pensions – can contribute much. We need to demonstrate to the public that our skill sets can add value to senior positions in risk management.

To meet this challenge, the Actuarial Profession appointed a risk working group in 2011 to develop and oversee implementation of a strategy to help members develop careers in wider risk management. The group has identified three key areas to build upon: ● Education and training: We have played a key part in developing internationally accredited risk management qualifications in the Chartered Enterprise Risk Analyst (CERA) and the ST9 examination module. In addition, we shall continue to provide opportunities for actuaries to develop risk-management skills through continuing professional development learning, work opportunities and events such as the Risk and Investment Conference.

Climate change’s influence on actuarial disciplines can help us to understand risk, suggests Philip Scott

● Sharing knowledge: We shall support members through enabling them to share and experience the knowledge of senior professionals already in key positions in risk management. By taking a fresh approach to areas such as risk modelling and risk analysis, we can challenge existing assumptions and decision processes. ● Branding: We shall develop the actuarial brand so that employers, policymakers, regulators and students see actuaries as credible risk managers and business leaders.

Where actuaries are already established in core roles, we can use their influence to raise our profile.

Much of the success of this initiative will be down to the hard work and ambition of individual members, who can spot opportunities to use their core actuarial skills to branch out into the emerging area of risk management.

Besides the weather, the other news story still prominent in the headlines is public confidence in the banking sector. As a non-executive director of one of the major banks, it is a matter close to my heart. Under the glare of the media, banking and financial institutions have to account for their actions to Parliament, their shareholders

and the general public. What I fear is that all those who work in banking are tarred with the same brush. This would be wrong – most bank employees are good people doing a worthwhile job. It is a shame that such organisations are let down by the actions of a few.

As actuaries, our training and experience give us a good understanding of how to analyse the past to see where faults may have occurred. We can then work on preventing any recurrence, and rebuild confidence in these institutions. It is a mark of our profession that we can stand up for the public interest, and assist in finding a better path for the future.

Beyond banking, there are many other businesses where we should ask: “Can we usefully apply our skills to help out?” For example, returning to my original theme, climate change is an area that has captured the imagination of the profession. We are comfortable with assimilating complexity – bringing together demographic influences, finance and economics – and projecting it into the future.

If we can see a way in which to harness this interest and spot opportunities for actuaries to contribute, then we should push forward with energy into these new disciplines. a

“We are comfortable with assimilating complexity – bringing together demographics, finance and economics – and projecting it”

September 2012 • THE ACTUARY www.theactuary.com

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Opinion Soapbox

Alert to black swan-song?

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Philip Ellis and Eamonn McMurrough say it is time for the industry to wake up to the frequency of catastrophe risk Companies believe that business-asusual financial instruments will work in not business-as-usual circumstances. But banks usually head for the hills when a client is in trouble, making lines of credit not fit-for-purpose. Investors do not like to see companies go further into debt or deplete balance-sheet cash reserves during a crisis. Risk transfer would be better.

As most of the risks causing these problems are so far uninsurable, risk managers are left in a difficult position.

Yet they are increasingly being challenged by management about what they’re doing to make their organisations resilient to extreme shocks.

Although all catastrophes have an initial negative impact on value, they can offer an opportunity for companies to demonstrate their talent in dealing with difficult circumstances. As studies by Rory Knight and Deborah Pretty have shown, if a company deals with a crisis well, its shareholder value can actually increase.

To meet these challenges, Willis has been working with clients and the wider risk transfer industry to devise a suitable solution that could help support a company when it faces a severe reversal of fortune.

A suitable product would need to pay out immediately, because it’s no good having a lengthy claims dispute in the middle of a crisis.

The perils and root causes can’t necessarily be predicted, so the product should cover ‘all risks’ and have no – or very few – exclusions.

Protection has to be below a company’s cost of capital, because if it’s cheaper for a company to keep cash on its balance sheet, that’s what it will do. So the product has to be relatively inexpensive.

And high limits are required – at least $1 billion – because responding to a severe crisis is expensive.

Resilience is about having deep pockets.

Despite all these challenges, based on our modelling of the risks, we believe products that have these features are possible, and we are working on such solutions Very bad, very big surprises happen often.

We need to be prepared. And against a volatile economic backdrop, risk management is more important than ever. The insurance industry has a key role to play in helping business to navigate a path through these tough times. a

“High limits are required because responding to a severe crisis is expensive – resilience is about having deep pockets”

Philip Ellis is CEO and Eamonn McMurrough is head of analytics at Willis Global Solutions (Consulting Group)

SHUTTERSTOCK

The traditional view of a ‘black swan’ risk is an extreme catastrophe that comes out of the blue every couple of hundred years or so. Attempting to mitigate these risks is futile because they cannot be predicted and probably won’t happen in our lifetimes.

In a recent survey at Airmic by Willis Global Solutions, more than a third of the companies in the audience had no explicit financial protection from black swan events. But this is not a sensible way of managing our exposure to extreme events.

Extreme catastrophes are not the rare risks they once seemed. Population density, urbanisation, globalisation and climate change make the world increasingly interconnected.

A catastrophe in a far-off locale is no longer a remote risk – it is likely to have an immediate impact on a company’s operations.

The huge Tohoku earthquake in March 2011 is a notable example. The tsunami caused massive destruction locally but triggered nuclear and supply chain crises that had global reverberations. Japan’s crucial role in the world economy meant that many businesses around the world were affected.

Since 1970, on average every four years a natural event occurs that kills more than 50,000 people. In fact, a sequence of devastating earthquakes and many weatherrelated catastrophes made 2011 the costliest year ever in terms of natural catastrophe losses. At about US$380bn (£242.5bn), global economic losses were almost two-thirds higher than in 2005, the previous record year with losses of US$220bn, according to Munich Re. While these losses are huge, corporate catastrophes that result in a plummeting share price are almost never caused by ‘natural’ events. Moreover, they are caused by insurable events less than 10% of the time, according to Willis’s research on the performance over the past 20 years of more than 600 big companies.

About 95% of these companies have suffered at least one extreme reversal of fortune in that time period. Yet many major companies do not make any provision for these events.

THE ACTUARY • September 2012 www.theactuary.com

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News Profession NEWS UPDATES FROM THE ACTUARIAL PROFESSION

Upfront Opinion CEO’s comment

Flaws and effect

Derek Cribb explains why touring our regions can enrich the quality of service we provide

Professor John Kay’s review UK Equity Markets and Long-Term Decision Making was published on 23 July.

In his analysis, Kay was critical of ‘shorttermism’ in UK equity markets which he claimed had led to “the erosion of trust and the misalignment of incentives”. He also criticised the practice of basing remuneration on immediate results rather than on absolute performance of funds.

Kay made several recommendations, including increased disclosure of costs and income accumulated through asset management. He also suggested that “regulators should avoid the implicit or explicit prescription of a specific model in valuation or risk assessment and instead encourage the exercise of informed judgment”.

Business minister Vince Cable described the review as “insightful and powerful” and will look to respond to it later this year.

The Finance and Investment practice executive committee will discuss these issues at its next meeting and will consider the Kay Review’s potential impact on the work of actuaries.

Regional activity Derek Cribb is the chief executive of the Institute and Faculty of Actuaries

stealing the headlines over the past few months, we have not been complacent in the UK – far from it. Our regions leader, Beth Montgomery, has been touring the country meeting regional societies and associations to understand how we as a Profession can best support them. These groups are key as they provide continuous professional development (CPD), networking and social opportunities for members in local areas, creating inclusive communities of actuaries from Exeter to Glasgow.

As a concrete step in supporting these geographic groups, Beth has redesigned the dedicated website pages: visit www.actuaries.org.uk/ members/pages/regional-actuarial-activity. Here you will find sections promoting the activities of the region, key contacts and a history of each group. I hope that this will encourage members to join their local actuarial society and provide an opportunity for those new to the area (or even visiting) to get involved.

As president, Jane Curtis recently supported the launch of the Society of Northern Ireland Actuaries (SONIA) in Belfast, and also spoke at events in Bristol, York and the Channel Islands. At these events, Jane and members of the executive presented the progress in delivering the strategy, and heard about issues of concern. Another initiative to integrate our activities with those outside Edinburgh and London has been to invite local societies to key events. John Lister, president of the Yorkshire Society, and Nigel Jones, president of the North West Society, were both invited to the gala dinners of the Risk and Investment Conference in Leeds and the Health and Care Conference in Manchester.

As mentioned in the June edition of The Actuary, the membership team are happy to visit groups of actuaries, either as part of their societies meetings or in their offices. I hope that these informal briefings will enable members to engage with the executive and provide feedback on how we can improve member services.

To find about more, contact beth.montgomery@actuaries. org.uk. It is important to reconnect – bringing the Institute and Faculty of Actuaries to its members as well as providing a platform for the regions to get involved. a

DEREK CRIBB

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While our international activity may have been

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EIOPA focuses on market development EIOPA released its 2012 Report on Market Developments on 25 July illustrating numbers of cross-border institutions for occupational retirement provision (IORPs).

It follows an invitation to member states to update on activity between June 2011 and June 2012. While caveats were given owing to differing approaches in identifying such activity, EIOPA stressed the value of tracking these cases.

During the reporting period, six new crossborder IORPs were identified. Six existing cases ceased activity, however, showing no net growth in cases for the period. Of the new IORPs reported, three were listed as providing definedcontribution type benefits in the home state and three as providing defined benefits. EIOPA stressed its continued interest in understanding market developments in this area.

THE ACTUARY • September 2012 www.theactuary.com

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Boardroom blitz: the door’s ajar

FO RT H C O M I N G EV EN TS Sessional research meetings

Are the doors of Britain’s boardrooms coming off their hinges? These once very private proceedings, both in financial services and more generally, now seem to be under the spotlights of continuous media and regulatory attention. Directors’ accountability for standards of corporate governance is being scrutinised in individual cases such as RBS and Barclays and more generally in relation to vexed issues such as remuneration policies and practices and board and employee diversity.

Actuaries are expected to comply with high ethical and technical standards, and the experience of doing so makes actuaries good candidates for non-executive director roles in a wide range of contexts.

Our member interest group has now been in operation for just over a year, with 160-plus members divided squarely between those already on boards of financial services firms and other businesses, and those aspiring to such roles in the future. It is hardly surprising that with all the scrutiny of boards our members show a great appetite for discussion on the challenges facing non-executive directors.

The group is currently working to deliver these ongoing priorities: ● With the encouragement of recruitment firms, working to launch a register of actuaries willing to be considered for non-executive director roles ● Considering suggestions for possible changes to the Profession’s CPD scheme to enhance relevance to non-executive roles

A review of the use of complex systems applied to risk appetite and emerging risks in ERM practice 17 September, 17.00, Edinburgh N Allan, N Cantle, P Godfrey and Y Yin apply new thinking and techniques from complex systems science to two key areas for risk management and governance identified in the Walker report.

Visit tinyurl.com/bpcauaf Mortality improvement by socio-economic circumstances in England (1982 to 2006) 24 September, 5pm, London A paper by Joseph Lu, Wun Wong and Madhavi Bajekal analysing mortality trends by socioeconomic circumstances, to assess how mortality rates have changed.

Visit tinyurl.com/cosdevn Improving the group’s private discussion forum to enhance better debate on nonexecutive director issues and allow members to post comments and ideas. Join the discussions at: www.actuaries.org.uk/ communities/communities/non-executivedirectors-interest-group ● With the success of two stimulating events sponsored by Norman Broadbent and Milliman, a third event is planned for 12 November.

You are welcome to contact any of the managing committee members; Seamus Creedon, Pauline Armitage, Ashok Gupta or David Lamb. For more information, please email Craig Ajimuda at craig.ajimuda@actuaries.org.uk ●

ISTOCK

FSA gives Solvency II guidance

On 24 July, Julian Adams (pictured), director of insurance at the FSA, wrote to firms and membership organisations with an update on Solvency II progress and IMAP feedback.

He acknowledged the tightening timescale for implementation and pointed to the vote on Omnibus II and the related Level 2

implementing measures in October, vital in providing the clarity sought. He reiterated the FSA’s commitment to identifying ways in which firms’ Solvency II work may contribute to ICAS requirements.

The FSA was pleased with pre-application responses received so far and Adams confirmed that they should form a preliminary view based on these within six months. He also said they had identified two areas of initial feedback required on IMAP – expert judgment and data risk. They are also planning data collection exercises to inform their assessment of internal model calibrations.

He encouraged further communication between his office and firms on all issues of preparation.

The full letter can be found on the FSA’s website at www.fsa.gov.uk/static/pubs/ international/sol2-imap-letter-24-07-12.pdf

Life Taxation workshop 19 September, London 09.00-17.15 The purpose of the workshop is to discuss the major area of UK life insurer taxation, including: ● ‘I-E’ taxation ● Shareholder tax ● Tax modelling and planning ● Current life insurance tax developments, including Solvency II. For further information, visit: tinyurl.com/8aa9glc

Highlights of the Pensions Conference The programme will include key speakers and sessions from this year’s Pensions Conference For further information visit: 17 September, Barbican, London tinyurl.com/bpdzy94 28 September, Palace Hotel, Manchester tinyurl.com/ceun9m3 1 October, Hilton Grosvenor, Edinburgh tinyurl.com/bu637db

NEWS IN BRIEF Subscription and practising certificate fees frozen The Profession is pleased to announce there will be no increase in subscription and practising certificate fees this year. For information on the subscription rates and practising certificate fees due from 1 October 2012, visit tinyurl.com/cdm4kuc Information on partial regulation can be found online (tinyurl.com/c9c7hox).

Are your contact details up-to-date?

We urge our members to check that their contact details are up-to-date.

Simply login to the members section of the Profession’s website: tinyurl.com/blzvaf7

September 2012 • THE ACTUARY 11 www.theactuary.com

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News Profession NEWS UPDATES FROM THE ACTUARIAL PROFESSION

Focus on Scotland David Martin, leader of the Scottish Board, reports back on a year of accomplishments and how better to support its members in the future

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Government. The ARC is an exciting collaboration between the Scottish Financial Risk Academy (SFRA) and the Profession which aims to create a centre of excellence for actuarial science over the coming years. We are especially pleased that two PhD candidates have been selected as inaugural students to the ARC and expect their work to begin in the autumn. While the endowment fund will support this initiative, it is expected that there will also be substantial corporate sponsorship from the outset.

In order to deliver more targeted benefits to members based in Scotland, we plan to initiate project hubs around our three strategic aims: ● To build a sense of community in Scotland: developing and delivering CPD events locally and creating networking opportunities for members. ● To raise the profile of the Profession in Scotland: to speak up on matters of public interest and public policy and promote the value actuaries add to society; we will continue to engage with members of the Scottish Parliament by working with the Public Affairs directorate. ● To advance academic developments in Scotland: through our support of the ARC project, local student societies and prizes for academic achievements.

For those with a Scottish connection, we encourage you to sign up to our regular newsletter and join our Scottish Actuarial Community (tinyurl.com/9kkfvf3).

Ringside seat for London fireworks The Worshipful Company of Actuaries is inviting members of the Profession and their friends and family to watch the Lord Mayor’s show, and associated firework display on the Thames, on 10 November.

Although the procession can be viewed from the streets, there will be a limited number of places available to watch it in the Barnett Waddingham offices, at 138 Cheapside, from 10.30am. The new Lord Mayor will launch the evening firework display from a barge moored between Blackfriars and Waterloo Bridges.

The full programme for the event is: ● 10.30am – procession, to be watched from Barnett Waddingham’s offices; ● 3pm – lunch, Doggetts Coat and Badge, South Bank (£20 per person); ● 5pm – firework display.

Capacity is limited, so book early to avoid disappointment. For an application form, please email Roger Bevan: roger.bevan@btinternet.com

FSA confirms KFI changes for pensions The Financial Services Authority (FSA) has confirmed that mortality projection rules in pension key features illustrations (KFIs) will be changed as proposed in a consultation published earlier this year.

The new rules set out the mortality assumptions firms may use when illustrating future annuity values in KFIs. It is believed these guidelines will “reduce the risk of detriment associated with under-provision for retirement by ensuring that projections using mortality assumptions are prepared on a suitable basis”.

The new mortality basis will maintain a blended 50:50 ratio for males and females, with the need to keep this ratio under review. The FSA has decided to keep the implementation date of 21 December, for consistency with the effective date of the European Court of Justice ruling and Technical Memorandum 1 rule changes.

ALAMY

While it is helpful to look back at what has been accomplished over the last year, the new direction and momentum of the Profession requires me to think of ways we can move forward and improve. Our recent survey completed by 603 members endorsed many of our activities and also provided constructive feedback on how the Board can better support our members in Scotland.

Board members are those elected to Council by the Scottish Constituency and include co-opted members. Council is responsible for matters for members everywhere, and the Board looks after the interests of the Scottish Community – members and stakeholders alike.

Highlights from autumn 2011 include: a remarkable lecture by Sir Harry Burns, Scotland’s chief medical officer, and several sessional, or research-based events covering topics from risk classification to the financial management of the PPF. The Autumn Lecture is now a permanent fixture in the Scottish Diary and we in collaboration with the public affairs team have secured Jeremy Peat, director of the David Hume Institute, to speak on 8 October in Edinburgh (see story on facing page). This event will be recorded and made freely available on the Profession’s website so that all can benefit from such an illustrious speaker.

In response to feedback, we are reviewing our regular events and the first step is to introduce an enhanced networking on these occasions. One of the objectives is increasing the engagement with technical content and serving to break down any barriers between groups of actuaries. Working with the research team, we are considering new-style events to match different levels of technical capability.

The Board also works closely with organisations aimed at students and younger members: the Faculty of Actuaries Students’ Society (FASS), the Glasgow Actuarial Students’ Society (GASS), the Students’ Actuarial Society at Heriot-Watt University and Our Changing Future (OCF). These are lively organisations that not only promote and discuss technical and topical issues but have a social purpose as well.

We are looking forward to publicising the new Actuarial Research Centre (ARC) on 11 September at the Scottish Parliament, and hope to welcome to this event John Swinney MSP, cabinet secretary for finance, employment and sustainable growth in the Scottish

THE ACTUARY • September 2012 www.theactuary.com

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14/8/12 08:21:43

Support our goals by volunteering

Economist maps out long-term prospects for UK

The Institute and Faculty of Actuaries Autumn Lecture The Institute and Faculty of Actuaries is privileged to welcome Jeremy Peat as the guest speaker for this year’s Autumn Lecture in Edinburgh. Peat is the director of the David Hume Institute, a non-partisan public policy organisation that delivers research and insight on economic and social matters. As well as being the former group chief economist at RBS, Peat has previously been senior economic adviser at the Scottish Office and a member of the BBC Trust.

Peat’s lecture will consider longer-term expectations for the UK economy in the context of global and domestic changes, and attempt to give thought to the implications for businesses, individuals and society. As and when we emerge from recession, it will not be to the ‘nice’

(non-inflationary consistent expansion) world of the first years of this century but to a more complex and problematic, post-credit crunch, new economic and social world. In this ‘new normal’, we must learn to live in a truly sustainable economy rather than one boosted by excess credit and inflated expectations. We must also face the challenges of demographic change and the costs of reducing greenhouse gas emissions, against the backdrop of much slower growth of output and continuing severe constraints on the public finances – where tough choices will abound.

This thought-provoking lecture will be held at the Hub, Castlehill, on Monday 8 October, from 18.00 to 20.00 (registration 17.30). Book your place now at: tinyurl.com/dy2qy9t

If you have not already done so, take a moment to visit the volunteer vacancies web page.

You can find this resource, which contains details of our current vacancies, at www.actuaries.org.uk/members/pages/ volunteer-vacancies Volunteer vacancies offer an opportunity for members of the Institute and Faculty of Actuaries to support and help to develop and achieve our strategic objectives.

On the web page, click on any of the headings to find out more. If there is nothing on the web page at present that appeals, then subscribe via the RSS feed and this will allow us to keep you up-to-date as new opportunities arise.

For more information on volunteer vacancies, please contact Debbie Atkins, volunteer engagement manager: debbie.atkins@actuaries.org.uk

Boo rece k befor ive £ e 100 4 Septe off t mbe he c onfe r and renc e fee

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September 2012 • THE ACTUARY www.theactuary.com

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14/8/12 08:21:58

News Industry news@theactuary.com

Act now to avoid pensions double whammy, says CBI The government should introduce a more accurate way of calculating pension liabilities to address the impact that soaring deficits are having on schemes’ ability to invest and create jobs, the CBI has said.

It should also halt an increase of up to 25% planned for next year in the levy companies pay towards the Pension Protection Fund which, together with artificially high deficits, would represent a ‘double whammy’ for firms running defined benefit pension schemes.

John Cridland, CBI director general, warned that high deficits were creating new demands for funding from scheme trustees that were holding businesses back from investing and creating new jobs. “A move of the gilt yield by just 0.4%, can add up to £100bn in costs to business, despite nothing about the scheme or the employer having changed.

This makes no sense,” he said.

The CBI called on the government to use a more long-term method to calculate the pension liabilities that companies must fund.

For more on this story, visit bit.ly/O7LO3M

Insurers facing perfect storm, says Ernst & Young Low interest rates, higher hedging costs, lower business volumes and the impact of Solvency II will combine to hit insurers hard this year and next, warn Ernst & Young.

In its summer 2012 ITEM Club financial services forecast, the consultancy highlighted the ‘challenging’ macroeconomic environment facing insurers and warned that their profits look set to decline for the second year running.

Non-life premiums are expected to grow by just 0.3% this year before increasing by between 4% and 6% between 2013 and 2016 as economic growth gains traction.

New life business growth will be limited this year as a result of weak gross domestic product, employment and income growth. Premiums are expected to grow by just 3% this year, compared to 4.1% in 2011.

Carl Astorri, senior economic adviser to the Ernst & Young ITEM Club, said: “Insurers need to plan their businesses on the assumption that the low interest rate environment is here to stay for some time.”

For more on this story, visit bit.ly/O3QHuI

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Failure to save for retirement Almost 11 million workingage Britons are facing inadequate retirement incomes, according to Department for Work and Pensions figures.

Pensions minister Steve Webb said: “This is a very large group of people who will face a big drop in their living standards on retirement if they do not take action now.’ bit.ly/T4FLg4

Incentive notes streamlined The Pensions Regulator has published revised guidance on how employers should reduce their liabilities by offering incentives to members to remove benefits or leave their pension scheme.

The statement on incentive transfers has been abbreviated to avoid confusion with a best practice code for transfers issued in June. bit.ly/MtNweu

Pension deficits reach £587bn The combined deficit of the UK’s defined benefit pension schemes rose to £587bn last month as record low corporate bond yields hit schemes’ funding positions, Xafinity Corporate Solutions has said. bit.ly/Qs46MH

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EU pension legislation review ‘is being rushed’ The revision of European Union pensions legislation that could lead to new capital requirement rules being placed on UK funds is being rushed through to stick to a political timetable, the National Association of Pension Funds has claimed.

Responding to a consultation launched by European regulators that will feed into the revision of the Institutions for Occupational Retirement Provision Directive, the NAPF said it was “astonishing” that it had been given only six weeks to address “very complex and technical issues”.

NAPF policy director Darren Philp said: “We are concerned that policy-making is being driven by the political timetable rather than by a commitment to getting it right. These are long-term issues and the EC should take the time to address them properly.”

For more on this story, visit bit.ly/N1AoM0

Mesothelioma support scheme unveiled A £300m support scheme for people who develop mesothelioma after being exposed to asbestos at work but are unable to claim compensation because they cannot trace a liable employer or insurer has been announced by the Department for Work and Pensions.

The majority of people who developed the cancer are able to claim compensation through their employers’ liability insurance. However, more than 300 mesothelioma sufferers a year miss out because they cannot trace a liable employer or liability insurer.

The new scheme aims to support those people and will be funded by a levy on current employers’ liability insurers at an estimated cost of £25m-35m a year.

Welfare minister Lord Freud said: “For the first time, sufferers of diffuse mesothelioma will have access to extra payments.”

For more on this story, visit bit.ly/MGmpwP

Parvinder Matharu

Newton Recruitment t e

+44(0)1689 862937

parvinder@newtonrecruitment.com w

www.newtonrecruitment.com

THE ACTUARY • September 2012 www.theactuary.com

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› GENERAL INSURANCE

NEWS ROUND-UP

Willis report shows seven new catastrophe bonds in Q2 2012 Willis Capital Markets & Advisory (WCMA) produced its latest report on the insurance-linked securities (ILS) market towards the end of July. The report showed that there were seven new catastrophe bonds totalling US$2.1bn (£1.3bn) issued in the second quarter of 2012, compared with four deals worth $600m in the same period a year earlier. The largest transaction of the quarter was Everglades Re for Florida Citizens at US$750m, this two-year deal being the largest single-tranche cat bond ever placed.

This brought the outstanding on-risk capacity as of 30 June to $14bn, an increase of more than $700m in the quarter – 73% of the current outstanding is exposed to US hurricane risk. WCMA said that, in the absence of a significant catastrophe, it expected the total issuance for 2012 to be in the $5.5bn-$6bn range, and that the catastrophe reinsurance market might be on the cusp of a strategic shift, with third-party capital providers set to take on increasing amounts of peak catastrophe risk in the future.

EIOPA report highlights role of ORSA as risk management tool

LARGE LOSSES

The European Insurance and Occupational Pensions Authority (EIOPA) published its final report on the consultation on guidelines on Own Risk and Solvency Assessment (ORSA) on 9 July – this was described as a top-down process owned by the undertaking’s board.

The report underlines the purposes of the ORSA as an essential tool to help boards in their core responsibility not to take on more risks than their capital base allows, and provides additional details on how the ORSA is to be interpreted. EIOPA points out that one key feature of the ORSA is proportionality, and that insurers should develop their own ORSA processes that are tailored to fit into their organisational structure and risk management system. Insurance undertakings should express their overall solvency needs in quantitative and qualitative terms, and complement the quantification by a qualitative description of the risks. Insurers will also be required to submit a forward-looking assessment of their overall solvency needs, indicating medium-term trends and developments. EIOPA strongly encouraged the industry to use the current report in their early implementation of the ORSA.

Further pressure on Solvency II The trialogue negotiations on the Omnibus II directive broke down in mid-July over the package of measures to support long-term guarantee products, putting fresh pressure on the Solvency II implementation timetable, with some member states calling for a further delay to the 1 January 2014 implementation date. Negotiations are due to resume in September with a view to agreeing a final text for the European parliament to vote on in October, but there are fears that the deadlock will continue. A possible outcome is a soft launch of the Solvency II regime in 2014, but with many of its requirements delayed through the use of transitional measures. Rob Stavrou, commercial director for integrated solutions at IT consultancy Northdoor, believes that British insurers should take comfort in the fact that the UK remains ahead of its European counterparts, with the London market leading the way for meeting the current deadline and having a technological advantage.

PA /GETTY

Lloyds TSB provides extra funds for PPI mis-selling compensation Lloyds TSB Banking Group announced the provision of £700m additional funds to compensate victims of PPI mis-selling towards the end of July, bringing the total they have set aside to £4.25bn. A few days later, HSBC increased its provisions for PPI mis-selling by £1.06bn to just over £1.75bn, and subsequently RBS also increased their provision by £135m to over £1.3bn. The provision made by Barclays remains unchanged at £1.3bn. It is widely believed that the total cost of PPI mis-selling compensation will exceed £10bn.

Floods in the UK

£319.3m Estimated cost of UK floods

The UK government announced in the middle of July that councils would receive reimbursement for clearing up flood damage. At around the same time as this announcement, the Association of British Insurers estimated that these floods, which were caused by the wettest June on record, had resulted in 68,000 claims which would cost insurers a total of around $500m (£319.3m).

Flood and landslides in China

US$2.73bn Initial estimate of total economic losses in China

This disaster was caused by heavy rains in late June, and affected northern, central, eastern and southern sections, especially Guizhou, Hubei and Jiangxi. At least 50 people were killed, and homes, businesses, agriculture and infrastructure were damaged. It is reported that 123,000 homes were damaged or destroyed and 828,000 hectares of cropland submerged. Total economic losses were initially put at US$2.73bn (£1.7bn).

It is believed that only a relatively small part of this total was insured.

Quinn administrators raise total required to meet claims and costs The joint administrators appointed to Quinn Insurance by the Irish Financial Regulator in 2010 have submitted their latest report to the High Court – this revealed that the sum required from the Insurance Compensation Fund (ICF) to meet claims and costs arising from the administration has increased to a figure expected to be between €1.1bn (£872.6m) and €1.3bn, with a ceiling of €1.65bn. This contrasts with the original statement that no funds would be required from the ICF, with subsequent estimates of €738m and €775m. The administrators referred to a culture in Quinn Insurance, particularly in the UK, of under-provisioning the reserves needed for claims. The impact is that the 2% government levy imposed on policyholders other than health policyholders will last ‘in perpetuity’ and not for the anticipated 12 years.

MORE GI NEWS ONLINE For further GI news, visit www.theactuary.com/news/

September 2012 • THE ACTUARY 15 www.theactuary.com

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News People & Society

MGM Advantage breakss tandem parachute record

The team achieved a record 160 people tandem-jumping in 24 hours at Hinton Airfield

MGM Advantage has entered the Guinness World Records by achieving the most tandem parachute jumps in 24 hours, in aid of Alzheimer’s Society. The previous world record stood at 130 tandem jumps, while the company tandem-jumped 160 people.

The challenge was held on 5 July at Hinton Airfield, near Oxford, with the help of Skyline, a company that specialises in beginners and parachute jumping. The world record attempt was overseen by an official Guinness World Records adjudicator on the day alongside friends and family of the participants.

The first tandem jumper of the day was Chris Evans, chief executive of MGM Advantage. The skydivers were waved off by actress and Alzheimer’s Society supporter, Sue Holderness.

It is not too late to support the cause. You can donate here: www.virginmoneygiving.com/team/mgmadvantage

Former actuary Martin Harris has swapped the office for an unusual business venture – making cider and perry.

Martin retired from Barnett Waddingham in 1999, having set up its Leeds office when the firm was established, and he and his partner, Janet, moved to rural Herefordshire to fulfil a long-held ambition of organic selfsufficiency. The intention was for Martin to farm while Janet continued as a GP. However, the reality of weeding 16 acres, milking twice a day and chasing pigs around a muddy field while bringing up two young children did not match the idyllic descriptions in literature.

So Janet and Martin decided to use their smallholding to develop an artisan cider and perry business while maintaining self-sufficiency on a more manageable scale.

Cider and apples have been central to Herefordshire’s economy for around 500 years. The days when almost every farm in Herefordshire made cider and perry

and paid their workers in kind are long gone, but the county is steeped in cider tradition, and orchards abound.

Perry production, in particular, is challenging and interesting. A full-sized perry pear tree can take up to 30 years to come into full production and can live for 300 years – just the sort of period which lends itself to the actuarial method – although it is unlikely that Janet and Martin will see the final fruits of the 250 perry pear trees they have planted.

Cider-making might seem a relaxing way of life, but there are pressures – though perhaps not on the scale of meeting clients’ pension-scheme valuation deadlines. One of the most important elements of the process is the tasting and blending. Tasting sessions to determine the best blend can often last long into the night.

Martin would be pleased to help quench the thirst of any passing actuary.

For more information about the Harris’s farm, go to www.butfordorganics.co.uk

SHUTTERSTOCK

From actuary to rural cider-maker

Competition and camaraderie mark SIAS bowling tournament More than 20 teams were welcomed on 21 June to the annual SIAS bowling tournament at Elephant and Castle Superbowl.

There was some excellent bowling on show, and even the less talented competitors compensated with camaraderie.

The race for first place were close, with ‘I Can’t Believe it’s not

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Gutter’ from Ageas Protect pipping ‘Ramps and Barriers’ from Aon Hewitt to the title by just two points.

They attained a total of 738 over two games, to edge out their rivals by the finest of margins. Not far behind, on 716 points, were ‘Krishy’s Crew’, also from Aon Hewitt.

Competition for the best team name prize was equally fierce.

Amongst the cheesiest were ‘Bowl-Nomially Distributed’ and ‘Great Balls Sophia’, with the former ending up with the accolade.

Meanwhile, the most apt name was undoubtedly ‘Les Misera-Bowls’, given that its bearers ended up with the consolation prize for last place.

We look forward to a repeat of the tournament next year.

THE ACTUARY • September 2012 www.theactuary.com

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Milliman staff get in Olympic spirit with five-marathon push

By Lisa Morgan Around 50 Milliman staff in London aimed to collectively complete the distance of five marathons in one day on 6 July, by running, cycling and rowing their way to the target. The challenge has so far raised £4,500 in online donations for charity.

The event was part of the corporate social responsibility initiative that Milliman has recently set up, with the goal of supporting a charity each year through fundraising and awareness.

This year – and next – the selected charity is the Every Child a Chance Trust, which helps needy children in the UK with mathematics through its Every Child Counts programme.

As well as the marathon event, Milliman’s London office also aims to support some of the inner-city schools

nearby by getting involved in one of the programmes run by the charity, which focuses on improving numeracy through playing maths-based games.

For the five-marathon challenge, running took place on the streets of London while others simultaneously participated in a cycling and rowing relay in the office. Virgin Active gyms kindly lent two stationary bicycles and a rowing machine for the event.

The event was an immense success.

A massive total of 789.6 kilometres was run, cycled and rowed – the equivalent of almost 19 marathons.

In true Olympic spirit, medals were awarded to those who ran, cycled and rowed the furthest distance. Carl Gaffney won a gold, Ian Humphries a silver and Tom Bulpitt a bronze medal.

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Obituary David Michael Randall Died 6 July, aged 27 David was born on 23 February 1985 in Maldon, Essex. He gained a degree in mathematics and its applications from Cardiff University and subsequently embarked on an actuarial career, becoming a student member of the Institute in 2008. Throughout his career, David worked for HCL in Romford where he was a highly valued and popular member of the team. He is remembered by friends and colleagues for his easy-going nature and sense of humour. He was a caring, helpful person who could be depended on.

One of David’s passions was cricket, representing Essex at junior level and being Age-Group Batsman of the Year for the county five years in a row. Alastair Cook, now England One Day International Captain, was a regular batting partner of David’s at this time. He recently dedicated an England Test victory over the West Indies to David. As a senior player, David went on to score more than 4,300 runs for his local club, Maldon, where he also became a coach. He was also a keen musician and a talented pianist.

David was diagnosed with bowel cancer in the summer of 2011 and his prognosis became terminal early this year. The dignified and courageous way that he dealt with his illness was remarkable, and an inspiration to everyone who knew him. He packed a lot of living into his final few months and had many fantastic experiences with his family, girlfriend Hayley, and numerous friends.

A charitable foundation is being set up in David’s name. For details, see the Maldon Cricket Club website (www.maldoncc.co.uk).

Other deaths John Thornton Ball died on 12 March, aged 97. He became a Fellow of the Institute in 1955.

Cycling and rowing for the five-marathon challenge: Tracey Newman, Tom Bulpitt and Sharon Vital

Gardner’s Commando spirit Robert Gardner (pictured, right) will be abseiling down London’s tallest skyscraper for charity on 3 September.

Robert is taking part in ‘Descent of The Shard’, the latest challenge run by the Commando Spirit Appeal, which aims to raise £1m for the Royal Marines Charitable Trust Fund (RMCTF) by 2014.

The event will raise a serious sum for the RMCTF, with participants each pledging to raise a minimum of £15,000 for the cause.

For more information on the Commando Spirit Series, please visit www.commandospirit.com To donate to Robert, please visit his Just Giving page at www.justgiving.com/Rob-Gardner6

Colin Berman died on 2 July, aged 73. He became a Fellow of the Institute in 1965. An obituary will follow in the October issue.

David Walter Hammond died on 2 July, aged 78. He became a Fellow of the Institute in 1967.

Geoffrey Philip Mann died on 19 July, aged 66. He became a Fellow of the Institute in 1975.

We would be delighted to hear from you if you have any newsworthy items for these pages. Please contact Yvonne Wan at social@theactuary.com

September 2012 • THE ACTUARY www.theactuary.com

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Insurance Climate change features@theactuary.com

Turn in tide for disaster plans As climate change affects the frequency and intensity of extreme weather events, the increase in the damage caused by natural disasters is concentrating insurers’ minds on ways to deal with the trend. Wouter Botzen looks at how the Netherlands is rethinking its flood-risk management strategy, and how other countries could learn from these discussions 18

Damage from natural disasters has increased considerably worldwide in the past few decades, as data collected by Munich Re shows. Figure 1 (overleaf) shows an upward trend in overall and insured losses caused by great natural disasters since 1950. Natural hazards, such as major storms and floods, have devastating consequences for societies around the globe. Their impacts on developing countries are particularly large, while the effects on insurers are mainly concentrated in developed countries.

A major part of the increase in damage can be explained by socio-economic developments, such as population growth and a concentration of wealth in hazard-prone areas. These developments are expected to continue. In addition, climate change may increase the intensity and severity of extreme

THE ACTUARY • September 2012 www.theactuary.com

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WJ Wouter Botzen is assistant professor, Department of Environmental Economics, VU University Amsterdam

› WOUTER BOTZEN

High water in Dordrecht.

The survival of the Netherlands depends on its flood-protection infrastructure may increase the ‘fat tails’ of natural disaster loss distributions which are the extreme risks that are, in general, difficult or expensive to insure. Climate change may also pose problems for insurers if it increases correlations between extreme risks. The best strategy for insurers would be to incorporate changes in the risks of extreme weather events in assessing exposure to, and pricing and management of, natural disaster risks – which, in practice, is challenging.

Spreading the risk

AFP/GETTY

weather events, and contribute to an increasing loss burden of natural disasters in the future. Climate change is expected to increase the frequency and/or severity of heat waves, extreme precipitation, and storms in various areas, while rising sea levels may increase the likelihood and impact of storm surge flooding, according to the Intergovernmental Panel on Climate Change.

The overall science of climate change is firmly established, but the exact regional effects that it will have on local risks are still unknown.

Implications for insurers Climate change and the insurance sector affect each other in two main ways.

First, the insurance industry itself is likely to experience heightened risks of extreme weather events. In particular, climate change

Second, insurance arrangements can play a useful societal function in spreading natural disaster risk and promoting adaptation to possible increases in the risk of extreme weather due to climate change. Insurance can spread the risks of extreme weather events, which may be beyond the individual to carry.

In addition, insurance arrangements may contribute to limiting damage caused by natural disasters by acting as a price signal of risk, and by promoting the undertaking of risk mitigation measures. Risk-based insurance premiums could act as a price signal of settling in an area, and thus stimulate development in less risky areas and restrain development in hazard-prone areas, since premiums would be higher in the latter. Moreover, insurance can provide incentives, such as premium discounts, to homeowners to invest in measures that mitigate natural disaster risk.

The projected increase in the risks of natural disasters has raised concerns about whether current natural disaster risk management practices and compensation arrangements are sustainable. For example, in the UK, insurers have repeatedly pressured the government to increase investments in flood-protection infrastructure. In the US, the Senate passed a bill in July to reform the National Flood Insurance Program, and thereby improve incentives and policies for flood risk mitigation. In the Netherlands, which is vulnerable to flooding and sea level rise, the focus on prevention of floods, and ad hoc government compensation of flood damage, has been questioned as an effective flood-risk management strategy for the future.

The Netherlands is vulnerable to climate change impacts, notably to flooding, owing to its low-lying delta in which several main

European rivers discharge into the North Sea. Flood risk in the Netherlands is characterised as a low-probability, high-impact risk. Dutch expertise in water management has a long history and is high because the survival of the country – which for a large part lies below sea level – depends on its floodprotection infrastructure.

Nevertheless, climate change poses challenges for Dutch water management, and innovative climate-change adaptation programmes are needed to maintain flood risks at acceptable levels. The country needs to increase investment in flood-protection infrastructure, and may complement this with measures that limit the damage in case this infrastructure fails, such as land-use planning and building codes. A future flood-risk management strategy could also include a flood-insurance programme.

Government compensation for disaster losses is arranged in the Netherlands with the Calamities and Compensation Act (WTS in Dutch). The WTS operates as an ex post damage compensation arrangement for which no funds have been established, and no premiums or other kind of contributions are charged before a flood occurs. Currently, private insurance coverage against flood damage is not generally available. Therefore, most of the risks of flooding are carried by the public sector, or by households and businesses in cases where the former decides not to grant compensation.

A disadvantage of the current WTS system is that it is not clear in which cases flood damage will be compensated. The decision whether WTS compensation is provided, as well as the determination of the extent of the compensation provided, lies with the government that is in office when the disaster takes place. A major drawback of the public compensation scheme is that incentives to limit or reduce losses for individuals are suboptimal. For example, individuals who locate in high-risk areas do not have to pay higher flood insurance premiums, and likewise safe construction is not rewarded by lower premiums. The WTS is financed out of general taxes. This implies that individuals who enjoy the amenities of water, and settle in areas with a higher flood risk, do not contribute more for the compensation of flood damage than individuals who live in areas

September 2012 • THE ACTUARY www.theactuary.com

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14/8/12 08:31:44

Insurance Climate change

“Insurance with risk-based premiums can act as a price signal of risks which provides economic incentives for making informed trade-offs”

features@theactuary.com

Figure 1: Overall and insured losses caused by great natural disasters 1950-2011 (in 2011 values) 300

US ( $ bn )

250

200

150

100

50 0 1950

1955

1960

1965

1970

1975

Overall losses (in 2011 values) Trend overall losses

1980

1985

1990

1995

2000

2005

2010

Insured losses (in 2011 values) Trend insured losses

Source: Munich Re NatCatService (2012)

with a low flood risk, or who face no flood risk at all. In this way, the WTS results in a governmentally subsidised incentive to take on risk and increase aggregate flood losses for Dutch society.

Opportunities and challenges To overcome the shortcomings of the current compensation arrangement, and because of the projected increase in risk due to climate change, there have been discussions in the Netherlands about introducing a new flood insurance system. Research at VU University has examined the opportunities for, and challenges with, flood insurance. A purely private flood insurance, with broad coverage, is complicated by issues that include accumulating risks, low capacity of insurers to pay for catastrophic damage, and problems with asymmetric information.

A viable solution could be a public-private ‘three-layered’ flood insurance system.

In such a programme, a first layer of small losses would be paid by households through deductibles in insurance contracts. In the second layer, private insurance companies would cover larger losses, using risk-based premiums. The government would cover a third layer of very large losses to prevent problems with the insurability of highly correlated risks and the limited financial capacity of the Dutch insurance sector, and to

20

keep the insurance affordable for consumers.

A maximum ‘cap’ could be specified that would be paid by the insurance sector, while the government would compensate for the difference if actual flood damage exceeded this cap – for instance, through providing public reinsurance at premiums equal to the expected value of the loss.

Such a public-private system has several advantages compared with the current ad hoc government compensation for damage.

Uncertainty for individuals concerning the compensation for flood damage is less when insurance is available, since insurance provides a contractual right for compensation according to the conditions of an insurance policy. A survey of more than 1,000 homeowners in the river delta revealed that individuals place a substantial value on the financial security that flood insurance could provide. This study showed that about half of the homeowners are willing to purchase insurance if premiums are close to the actuarially fair value, and that average willingness-to-pay for flood insurance is about €20 (£15.60) per month. Another survey that was recently conducted among more than 1,200 households in Rotterdam shows that many individuals were uncomfortable with living in a flood-prone area without adequate insurance. Demand for flood insurance is especially high if an area is unprotected by

strong dyke infrastructure, which applies to about 250,000 people in the Netherlands.

Another advantage is that a public-private flood insurance can result in a more optimal spreading of risk. If flood risks are partly covered by the insurance sector and further spread on international reinsurance and capital markets, then the government is no longer the sole bearer of the risks, which results in less pressure on public budgets in the long term.

Moreover, involving the insurance sector in covering flood risks brings on board their expertise in assessing and managing risks and processing claims, in which insurers are likely to be more efficient than the public sector.

Last but not least, given the projections of increasing flood risks, insurance with risk-based premiums can act as a price signal of risks which provides economic incentives for making more informed trade-offs about the benefits and risks of locating in hazardprone areas. Insurance may provide financial incentives, such as premium discounts, that encourage policyholders to implement risk mitigation measures. Such a price signal of risk can be beneficial, since studies on flood risk perceptions in the Netherlands have shown that these are generally low, even in high-risk areas, which results in an inadequate level of flood preparedness.

Outlook Natural disaster losses have been increasing sharply around the globe. It can be expected that future natural disaster risks will increase as a result of a combination of climate change and socio-economic developments, such as increased economic activities in hazard-prone areas. These trends require new strategies for managing natural disaster risks, and will initiate discussions about the sustainability of current insurance arrangements.

Once natural disasters have revealed the potential inefficiencies of existing insurance arrangements, discussions are likely to arise in other countries similar to those the Netherlands has had on the opportunities for a new insurance arrangement to compensate flood losses. The actuarial profession has an important role to play in guiding such discussions, and in helping design sustainable arrangements for the compensation of natural disaster damage. a

THE ACTUARY • September 2012 www.theactuary.com

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14/8/12 08:31:55

SIAS Events

TUESDAY 13 NOVEMBER

Jubilee lecture followed by SIAS AGM Staple Inn, High Holborn, London WC1V 7QJ

SIAS JUBILEE LECTURE AND AGM

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SAVE THE DATE

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This year, the SIAS jubilee lecture immediately precedes the AGM. The jubilee lecture is our signature programme event. Previous speakers have been Paul Wilmott and Roger Bootle. Please keep the date free and you will not be disappointed with this year’s speaker.

Further details will become available shortly on the website; visit www.sias.org.uk

WEDNESDAY 10 OCTOBER

SOCIAL EVENT

Welcome drinks

SIAS welcomes new members of the Actuarial Profession to evening drinks. This is an ideal opportunity to meet fellow new joiners and to learn about SIAS and the Profession. There will be talks from the Profession about becoming an actuary and what life is like as a student actuary. This will be followed by a wine and cheese tasting event, allowing you to chat to other new members.

Staple Inn, High Holborn, London WC1V 7QJ 6pm

For those of you not so new to the Profession, please encourage the new joiners in your company to attend. This is an excellent opportunity for them to learn about the road to becoming an actuary, as well as gaining a bit of knowledge about wine and cheese.

MONDAY 15 OCTOBER

PROGRAMME EVENT

The developing buy-out market – inspiring a generation

Transitioning closed DB schemes to buy-out will be a generation-long task for the profession. It requires the full skillset of our young and talented actuaries. This talk looks at recent innovations in buy-outs, client motivations, and the wide-ranging toolkit necessary for success. The presenters will use real-life examples and case studies, and give their views on managing this transition process. Refreshments will be served at 5.30pm, with the talk starting at 6pm. The speakers will be:

Staple Inn, High Holborn, London WC1V 7QJ 5.30pm THURSDAY 18 OCTOBER

● Jay Shah, co-head of origination at Pension Insurance Corporation ● Clive Wellsteed, partner at Lane Clark & Peacock, head of buy-out practice SOCIAL EVENT

Time to take your cue and show us your skills. Could you be a SIAS pool champion? This year’s competition looks set to be better than ever.

SIAS pool tournament Location: TBC 6.30pm

● A team of two members is £10 ● A team of one member and one

non-member is £15 ● A team of two non-members is £20

SHUTTERSTOCK

To enter, please email social@sias.org.uk with your team name and members. We will then provide details for payment. Places are limited so reserve your team early to avoid disappointment.

Refreshments will be provided.

MORE EVENTS ONLINE For details of events, visit www.sias.org.uk

SIAS IS ON TWITTER! Follow us on @SIAScommittee for latest news on meetings, socials and more!

SIAS IS ON FACEBOOK! Check out the SIAS Facebook page for photos from the latest social events

September 2012 • THE ACTUARY www.theactuary.com

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14/8/12 08:32:16

Environment Oil supply features@theactuary.com

BOTTOM OF THE BARREL? As oil becomes scarce or harder to extract, the impact will be felt far beyond just fuel and manufacturing – government finance, insurance and pensions will all be affected, too, warns Gail Tverborg cars to helping grow food, and from lubrication for machinery to acting as a feedstock for products including fabrics, plastics and medicines. We use a huge amount of oil each year – more than other fossil fuels, and far more than wind or solar electric energy.

There is a finite amount of oil in the world.

What if we find, at some point, that we can’t extract oil as quickly as we would like? After all, the economies of China and India and many other developing countries are growing rapidly, and would like to have the products we do. There needs to be enough supply for everyone to have a share.

When oil supply is a problem, prices tend to rise. We have run into high oil prices twice – first in the 1970s and early 1980s, and the second time starting about 2004 and

22

continuing to the present (see Figure 1). The first time, we solved our oil supply problem by switching away from oil where it was easy to do so – especially in electrical generation – and by changing to more fuel-efficient cars.

But this time, the easy solutions have already been taken. In addition, there are more buyers in the world: the ‘developing world’ would like to have cars and motorcycles, just as we do.

If we fit trend lines to oil supply – broadly defined, including biofuels – we find that the growth rate in oil supply has been flattening since the 1970s (see Figure 2, overleaf).

Real GDP growth has also been dropping in the same period, for the world, the US and the 27 countries of the European Union (EU) (see Table 1, overleaf).

There are theoretical reasons why the real GDP of oil importing nations1 might fall, if there is a shortfall in world oil supply, and oil

prices begin to rise. When the price of oil rises, the cost of many other goods tends to rise as well, because of oil’s widespread use in the economy, both for transport and for manufacturing. The kinds of goods that rise in price include petrol, diesel, food and, to a lesser extent, most manufactured goods.

Cutting back A major difficulty is that citizen’s salaries don’t rise at the same time as oil prices. Faced with salaries that are flat and a rising cost of goods, consumers cut back on non-essential items. This means that demand for many types of non-essential goods and services drops, including holiday travel, restaurant meals, new cars, new computers and more expensive homes.

Businesses selling discretionary goods and services cut back. Workers in these industries

ISTOCK /GETTY ISTOCK/

Petroleum has many uses, from powering

THE ACTUARY • September 2012 www.theactuary.com

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Gail Tverborg FCAS is author of OurFiniteWorld.com

Supply

Price

3000

80

2500 60

2000 1500

40

Price per barrel in US 2011 $

Millions metric tons

120 100

3500

Extraction problems

1000 20

500 0

0 1965 ‘69 ‘73 ‘77

‘81

‘85 ‘89 ‘93 ‘97 2001 ’05 2009

Source: BP Statistical Review of World Energy 2012

are laid off. These laid-off workers pay fewer taxes to the government, so tax revenues decline. At the same time, the laid-off workers require unemployment benefits, thereby increasing the government’s outlay.

So rising oil prices give rise to financial repercussions, besides their impact on GDP. If taxes are down and their expenditures are higher, governments are likely to find themselves in financial difficulty.

Manufacturers may find profit margins reduced, because they cannot pass on the entire oil-based cost increase.

Individual citizens, especially those laid off from work, may default on some of their debts. People whose income is adversely affected by higher food and oil prices are likely to put off buying more expensive houses or holiday homes, so resale prices may fall. Defaults on loans of all types,

GAIL TVERBORG

Some economists argue that there is nothing to worry about if oil availability drops, because factors such as these will completely offset the declining oil supply.

But Figure 2 indicates that a decline in GDP growth has been widespread since the 1970s, during the time when oil supply growth was slowing. Logic would suggest that this pattern may worsen, if oil supply tightens further.

Figure 1: World oil trends Supply and price 4500 4000

›

“Part of our problem is that most of the ‘easy oil’ is gone. Much of what we have left is slow and expensive to extract”

including houses with falling value, may create problems for banks.

James Hamilton, professor of economics at the University of California, San Diego, has shown that 10 of the previous 11 recessions in the US were associated with oil price spikes.

He has also published a paper linking the 2007-08 recession with stagnating world oil production and the resulting oil price spike.

While there is a connection between GDP growth and oil supply growth, the two growth rates wouldn’t necessarily be the same. The GDP growth rate would likely be higher than the oil growth rate, because the oil growth rate is theoretically depressed for several reasons: continued switching from oil to cheaper fuel, often electricity; improvements in energy efficiency; and a gradual change to more of a service economy. (Services use less energy per unit of GDP than manufacturing.)

Oil is not uniform in its quality or its ease of extraction. Some comes out with virtually no effort – think of pictures of oil-well ‘gushers’ in years past. Other oil is very viscous and needs to be melted with steam first. Some is trapped in very fine pores and needs to be ‘fracked’, or located deep beneath a salt layer in the ocean, or not yet fully ‘cooked’. Each needs its own special type of more expensive, usually very slow, extraction.

When companies started extracting oil, they started first with the oil that was easiest to get at and cheapest to extract. It could be sold profitably at a low price. Then they moved on to oil that was more expensive and slower to extract.

Part of our problem now is that most of the ‘easy oil’ is gone. Much of what we have left is slow and expensive to extract. Oil prices tend to be high for two reasons now. They need to be high to cover the higher cost of extraction, while production can’t keep up with the rise in demand if prices stay flat. A high oil price is needed to damp down demand to stay in line with actual production.

One reason why oil supply is not rising very quickly is because the amount of oil extracted in a given area tends to decline about midway through the extraction process. If oil price rises high enough, perhaps different extraction techniques can provide some more oil, but the additional oil tends to be slower to extract and higher-priced.

As examples of these issues, see Figure 3 (overleaf). While crude oil production in the US-48 States (excluding Alaska and Federal Offshore) has shown a 25% increase since 2006, this production is still only 39% of the 1970 amount, and about equal to 1942 production. Oil production in Canada –

September 2012 • THE ACTUARY 23 www.theactuary.com

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Environment Oil supply features@theactuary.com Table 1: Real GDP growth is falling with the decline in oil supply growth Trend for oil Growth 7.2% 3.4% 2.0% 1.6% 0.4%

Period 1969-73 1975-79 1983-90 1993-2007 2007-11

Trend for real GDP growth US 3.8% 4.7% 3.8% 3.2% 0.1%

World 4.7% 4.2% 3.7% 3.1% 1.3%

EU-27 4.6% 3.4% 3.1% 2.5% -0.4%

Real GDP fitted percentages based on USDA Economic Research Service data

24

Figure 2: World oil supply With fitted trend lines

Figure 3 – Crude oil production: selected areas The US-48 States excludes Alaska and Federal Offshore

4500 4000

12 US-48 States

Million barrels a day

3000 2500 2000 1500 1000 500 0

Europe

Canada

10

3500 Millions metric tons

which includes the oil sands – is rising, but not very rapidly, from a low base. It is hard for small increases such as those of Canada and the US-48 States to make up for major declines in production occurring in Europe and elsewhere.

The issue of declining oil supply is to some extent one of consumers not being able to pay an unlimited amount for oil supply. If oil prices could rise indefinitely high, there is no doubt that even the poorest-quality oil could be extracted. One such limit on price, as discussed, is the fact that salaries don’t rise to compensate for higher oil prices.

In theory, there is another limit on the rise in oil price. It does not make economic sense to pay more for a barrel of oil than the services that barrel of oil provides. This can be seen easily if the only inputs to extracting a barrel of oil are previously extracted barrels of oil – then no one would use more than one barrel of oil to extract a barrel of oil. In the real world, we need roads and educational systems and pipelines and healthcare systems to be able to maintain a system where we can extract oil.

If the extraction cost becomes too high relative to the cost of maintaining the system as a whole, then society can’t afford the higher price. Given the adverse response of people’s incomes to high oil prices – and high prices for substitutes, such as biofuels – we may be reaching that point now.

Actuaries like to think that the past is a good predictor of the future. But if there is a very real change over time, and a person isn’t looking for it, the change can be easy to miss.

Here we have a situation in which the world’s real GDP growth rate has been slowing for decades, along with the decline in the growth in oil supply. This decline in real GDP growth is most marked in oil importers, such as the US and EU-27. The UK was an oil exporter for a time, but has been an oil importer since 2006. The UK’s shift from exporter to importer can be expected to have an adverse impact on GDP growth.

Economists have convinced us that leverage is good. But borrowing from the future on a large scale makes sense only in

Actual

7.8%

3.4%

2%

1.6%

0.4%

1965 ‘68 ‘73 ‘74 ‘77 ‘80 ‘83 ‘86 ‘89 ‘92 ’95 ‘98 2001 ‘04 ’07 2010

8 6 4 2 0 1940 ‘45 ‘50 ‘55 ‘60 ‘65 ‘70 ‘75 ‘80 ‘85 ’90 ‘95 2000 ‘05 2010

Source: US Energy Information Administration

a growing economy. If oil importers are really at the edge of having shrinking economies, basic changes to our financial structure are needed. Such a change would likely greatly reduce the amount of debt available for insurance and pension company investments.

A low-growth future If growth can continue, but at a very low rate, then it would seem that interest rates need to be low, if there is to be a reasonable likelihood that the borrower can repay the debt with interest. Thus the current low interest rates are, perhaps, not an aberration. The lower GDP growth rate will probably mean that the growth rate of stock values can be expected to be lower as well.

With lower – or even negative – real economic growth rates, the maximum amount of debt that governments can pay back will decline. This may cause some governments not currently in financial difficulty to cross over to the ‘financially troubled’ category.

Corporations may encounter similar difficulties. The result for insurers and pensions may be more defaults than currently anticipated on bonds held on balance sheets.

If GDP growth rates decline, unemployment levels are likely to rise. If this happens, civil disturbances resulting in property

damage are likely to become more common.

Families suffering from unemployment may move in with extended family, so as to be able to afford basic services. This may leave some housing units unoccupied, and more subject to theft or damage.

It is quite possible that, at some point, world oil supply will stop growing and start shrinking. If this should happen, there would seem to be the possibility of serious dislocations to the world economy, and even worse declines in GDP growth.

To compensate for these problems, insurance premiums and funding for pensions will, in many instances, need to be higher.

There may be some bright spots, though.

Accident rates for cars are likely to fall, if people are less financially able to drive.

Attempts to find substitutes for oil may add new types of insurance. And insurers and pension plans may need the services of actuaries to try to straighten out the problems that arise from continued low economic growth rates and debt defaults. a

NOTES 1 Oil-exporting nations tend to be less affected because they have the benefit of a large influx of funds from buyers, and because they are often able to keep oil prices down for their own population.

THE ACTUARY • September 2012 www.theactuary.com

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14/8/12 08:33:36

SIAS Annual Dinner Friday 23 November 2012 The 2012 SIAS dinner will be held at the luxurious Honourable Artillery Garden. The theme of the night is The Midas Touch, giving everybody a golden opportunity to dig out their treasured and most glamorous attire, and celebrate with style and panache.

This evening will include: + Sparkling wine and cocktail reception + Three-course seated dinner and coffee + All-inclusive house wine, beer and soft drinks + DJ and disco + Jazz band throughout the reception and dinner + Casino tables and a photo booth

Attire: Black tie The Artillery Garden, Chiswell Street, London, EC1Y 4TW Ticket details will be available from the SIAS website www.sias.org.uk

Getting ahead in Actuarial Science Our expertise in flexible and accessible education and your passion to succeed in Actuarial Science will enable you to get ahead.

Study with a top-20 department that provides the support you are looking for, on a course that’s accredited by the Faculty and the Institute of Actuaries and offers close links with industry.

A world-class research university, Leicester offers flexible, innovative courses because we understand that you’ve got other responsibilities. In fact, we’re committed to making sure that everyone in our vibrant community gets the very best experience at Leicester, whether you’re on campus or on the other side of the world.

Get ahead, get in touch www.le.ac.uk/goto/actuary +44(0) 116 252 actSCIADMIN@le.ac.uk

Distance Learning Department of Mathematics Postgraduate Diploma/MSc Actuarial Science 25

ACT.09.12.025.indd 25

14/8/12 08:45:20

On my agenda features@theactuary.com

JOANNE SEGARS With auto-enrolment arriving soon and plans for a simplified state pension, it’s a busy time for the National Association of Pension Funds, but its chief executive is upbeat about opportunities and challenges, finds Nick Mann This is shaping up to be a pivotal year for UK pensions. Already, 2012 has seen plans announced for a simplified state pension that better takes into account the ageing population, while workplace pension schemes have been forced to face up to record deficits caused by the economic crisis. But those events could be put in the shade by the advent of auto-enrolment in October – bringing up to 10 million people into workplace retirement saving at a time when pensions participation has otherwise been falling for years.

The National Association of Pension Funds (NAPF) is on the frontline when it comes to facing up to those issues and, having been chief executive of the body since 2006,

Joanne Segars is ideally placed to pinpoint what is needed to create a sustainable, popular system of retirement saving. The percentage of people saving into a workplace pension fell from 46% to 38% between 1999/2000 and 2009/10 and it’s this decline that, arguably, presents both the biggest challenge and the biggest opportunity for the pensions sector.

Segars, who received an OBE for services to the pensions industry in 2003, is in no doubt about the reasons for the drop in participation levels. “One factor is a lack of confidence in financial services generally and pensions in particular,” she says. ‘We’re also seeing, in some quarters, a declining appetite from employers for providing pensions as the cost of

PETER SEARLE

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THE ACTUARY • September 2012 www.theactuary.com

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14/8/12 08:34:46

providing pensions has increased but also as the shape of the labour market has changed.”

But, as befits someone who takes a ‘glass half full’ approach to the current pensions situation, Segars sees auto-enrolment as the chance to reverse this decline. Sitting in the NAPF’s headquarters in the heart of the City of London just weeks before the UK’s biggest employers begin to auto-enrol their workforces, she enthuses about her organisation’s strong support for the change, and the “big, big benefits” it could bring.

Getting auto-enrolment up and running isn’t the end of the task, however. The staged approach to the system means that the UK’s smallest employers won’t be brought under its auspices until 2017. It’s those small members that are a particular focus for the NAPF, not least because they’re being expected to implement a system that is, Segars says, less than straightforward.

Close work between stakeholders means the system is less complicated than it could be, but she acknowledges that it is still complex.

“That’s why employers and trustees will need some guidance. But it also needs good communication, to help individuals and employers through the process.”

Fundamentally interlinked with autoenrolment is, Segars says, state pension

September 2012 • THE ACTUARY 27 www.theactuary.com

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On my agenda features@theactuary.com

PETER SEARLE

reform. Plans to introduce a single-tier pension of £140 a week, as well as automatically linking the state pension age to increases in longevity, were announced in the March Budget. Hopes that a white paper on the proposals would be published this summer were dashed in July, when pensions minister Steve Webb revealed it would be delayed until the autumn owing to the “scale, complexity and importance” of the proposals.

Segars hopes the proposals will be published soon after Parliament’s summer recess, saying “they’ve got to get a move on”.

The single-tier state pension, which the NAPF prefers to call the foundation pension, is “essential to make workplace pensions – defined benefit (DB) or defined contribution (DC) – successful”, she says. “It gives people a clear foundation: this is how much you’re going to get from the state, £140 a week. What you get to save on top of that is yours. That way, it’s much easier to say to people who are about to be auto-enrolled into a workplace pension ‘it pays to save, you’re not going to lose out, you’re not going to find it’s all going to be means-tested away’.”

Equally key to the success of workplace pensions is schemes’ ability to fund the benefits their members expect on retirement.

Workplace pension schemes are under pressure, as the challenging economic situation contributes to record deficits.

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Among the factors regularly cited as a key influence on those escalating deficits is the Bank of England’s asset purchase programme, better known as quantitative easing.

To date, the Bank has purchased £375bn of gilts in a bid to revitalise the UK economy by increasing banks’ liquidity and lowering the cost of borrowing. However, even before July’s latest £50bn bout of QE, the NAPF estimated the initiative had added well over £200bn to the cost of funding DB pension schemes by reducing yields on the gilts that pension funds have traditionally invested so heavily in.

“Quantitative easing has added to the cost of running pension schemes,” says Segars, but stresses that “we’re not saying ‘stop QE’”.

“Some of our comments on the impact of QE on pensions have been interpreted as us picking a fight with the Bank of England,” she says. “That isn’t the case: we’ve said all along that if the purpose of QE is to get the economy back on its feet, then that’s good for pensions.”

“For us, the question is: ‘what’s the short-term impact on pensions?’ Does the Bank just have to buy gilts that pension funds are desperate for? Are there other assets the Bank could buy? It’s an asset purchase scheme, not a gilt purchase scheme.”

Given Segars’ keenness to stress the NAPF’s commitment to economic recovery, it’s no surprise the organisation is playing a key role in plans to get UK pension funds investing in

much-needed infrastructure development.

The plans were originally announced in George Osborne’s Autumn Statement last November, soon after which the NAPF began working with the Treasury, its agency Infrastructure UK and the Pension Protection Fund to create a platform through which funds can make that investment.

Infrastructure fund Segars says that, since then, “what we’ve been doing along with the PPF is to put some flesh on the bones of those words and to try to turn them into reality. The aim is to create a £2bn infrastructure fund, for pension funds, by pension funds, which meets or overcomes many of the concerns pension funds have with infrastructure investment currently, and which deter pension funds from investing in infrastructure.”

There are many reasons why infrastructure should be a natural investment option for pension funds, says Segars, not least its low-risk, long-term nature, while it should also offer inflation-linked returns. The NAPF and its partners are focusing on assets that aren’t linked to gross domestic product – infrastructure such as regulated utilities and roads that don’t rely on usage in the same way as, for example, ports do.

The formal launch of the investment platform is some way off yet, but Segars is

THE ACTUARY • September 2012 www.theactuary.com

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14/8/12 08:35:08

“There ought to be scope to populate some of that middle ground between DB and DC” She is cautious about comments from the European Commissioner responsible for the Directive, Michel Barnier, that the revision won’t involve a ‘straight lift’ of the Solvency II rules faced by insurers. “What he’s also said, and what’s clear from consultations from the European Insurance and Occupational Pensions Authority and others, is that Solvency II is the starting point,” she says.

“So while he’s saying there will be no ‘copy-paste’ – as they say in Europe – there’s a sort of copy-paste, and it borrows heavily from Solvency II.”

Getting the Directive right

positive about progress. ‘We’ve been having discussions with pension funds. They have all said ‘this is the sort of thing we need’. We’re talking to them with a view to encouraging them to become founding investors, so we can put the infrastructure platform together. We hope to launch early next year.’

Infrastructure isn’t the only issue where the NAPF is working closely with government. It’s not often a trade association is in so much agreement with those running the country as in the NAPF and coalition government’s shared view on the planned revision of the European Institutions for Occupational Retirement Provision Directive. Plans to place more stringent capital requirements on pension schemes have led to concerns that the revised directive will create a ‘Solvency II for pensions’ by mirroring new rules being introduced for the insurance industry.

Together with the CBI and Trades Union Congress (TUC), the NAPF wrote to the president of the European Commission, José Manuel Barroso, in February, warning that taking this approach could add billions to pension deficits and cause DB schemes to close. Then, in July, pensions minister Steve Webb stressed the government’s continued opposition to any such move.

Segars, who previously held the pensions brief at the TUC for 13 years, says the unity of purpose on this issue is “quite remarkable”.

Segars stresses the importance of taking time to consider exactly how the Directive should be revised. “This is a measure that will impact on millions of individuals, working people all across Europe, and employers and trustee bodies,” she says. “So we must get it right, and we’ve been concerned that the Commission wanted to rush this. They’re now taking a slower timetable, which is good, but are still keen to see proposals next year.”

Of particular importance will be the assessment of the macroeconomics of any changes that is set to be carried out as part of the revision process. “Given that the focus in Europe has to be on growth, jobs and economic recovery, it’s important to understand what the economic impact of applying Solvency II-like rules to pensions would be,” she says. “They’d be damaging in terms of investment – if everybody has to come out of equities into gilts then you’re disinvesting from the real economy, so what does that mean for investment opportunities and pension funds? It’s not good.”

In light of this, she remains hopeful that the NAPF’s view will prevail, noting that the unity of opposition isn’t just a UK phenomenon.

Europe-wide business and trade union bodies are also lining up to attack any moves towards Solvency II-like plans. “That strength of opposition, that solidarity of pension groups, employers and social partners was strong enough to make the commission think again,” she says. “But it doesn’t mean we can take our eye off the ball – we’ve got to be vigilant.”

Europe isn’t the only area where the NAPF can claim to have government on its side. The current government’s buzz phrase for the future of workplace pensions is ‘defined ambition’. Sitting somewhere between DB,

which places the risk on the employer, and DC, which places the risk on the employee, this could be seen as ‘the middle way’.

“We’ve got a polarised environment, with pure DB and pure DC, and that’s what the regulatory environment supports,” says Segars. “There’s not a huge amount of activity in that space between pure DB and pure DC. As soon you start to do anything that gives a form of guarantee, you have the full weight of DB legislation sitting on you – Pension Protection Fund levies and everything.”

“We’ve argued for a long time that there ought to be scope to create an environment to populate some of that middle ground,” she says. “It could be DC with guarantees, so you’re at least guaranteed to get your contributions back – you can look at it as what some people call ‘DB-minus’,” she says. “Then you’ve got ‘DC-plus’, and it sort of merges in between. The guarantees thing is in that DC-plus space.”

The NAPF’s support for defined ambition is not unqualified. “We need to be wary about mandating employers to do that, because I think they would be wary if they think ‘we’re being dragged towards DB’ or wary that successive governments could come along and layer things on,” she says.

Based on previous experience, it seems there’s every chance the government will take these concerns into account when it sets out formal plans for defined ambition later this year. Segars says a lot of the NAPF’s success in lobbying for policy change is “about persistence and not giving up”. “I think we are influential and have a good and constructive relationship with government,” she says.

Taking a constructive rather than confrontational approach has paid dividends for the NAPF to date, and Segars is in no doubt that the organisation will continue to succeed in its aims in the future.

As a former journalist herself, she’s aware of the negative news stories surrounding pensions, but she says: “It’s a bit dull if we say the end of the world is nigh and just throw in the towel. It makes good headlines, but it doesn’t get the job done.”

Reeling off a long list of reasons to be positive – auto-enrolment, state pension reform, improving annuities, defined ambition – she adds: “There are lots of reasons to be optimistic and we have to be – the alternative doesn’t bear thinking about.” a

September 2012 • THE ACTUARY 29 www.theactuary.com

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Life reinsurance UK and Ireland features@theactuary.com

DYNAMIC DUO The UK and Ireland (UK&I) is the second

JANE CHENG

Jane Cheng is a senior consultant at NMG Consulting

› Jane Cheng considers the defining features of the life reinsurance market in the UK and Ireland and its prospects

largest market for individual life reinsurance after the US, in terms of both new and in-force reinsurance premiums.

The market’s cession rates for individual business are the highest globally. Cession rates for group business are, paradoxically, among the lowest at just 5%. For 2011, individual new reinsurance premiums were £265m, while group in-force reinsurance premiums were slightly below £100m.

The UK&I also has the largest longevity reinsurance segment of any region globally, including reinsurance solutions for impaired life annuities, which provide enhanced annuity payments for sub-standard lives.

For individual life and health risks, reinsurance premiums have been in decline since 2006 (Figure 1). The key drivers have been a growing preference for risk premium structures by insurers; regular decreases in reinsurance premium rates; and falling sales in the primary market, triggered by the global financial crisis. The fall in reinsurance premiums for mortality risk has been the largest in proportional and absolute terms.

Group in-force reinsurance premiums have also declined to just 3% of total in-force reinsurance premiums. This drop is partly due to the concentrated nature of the primary market, as insurers have made less use of group facilities offered by reinsurers – in contrast to the trend in most other developed markets.

However, it is important to recognise that the reduction in individual new reinsurance premiums has not reduced the relevance of the reinsurance industry in the UK&I. The key

Figure 1: Individual new reinsurance premiums (UK&I, 2006-11, £m)

466 410 368

352 306

£m

265

5 year CAGR: -11 %

2006

2007

Source: NMG’s Reinsurance Premium Monitor – UK&I, 2006-11

30

2008

2009

2010

2011

drivers of reinsurance premium decline, particularly shifts towards risk premium structures and lowered reinsurance rates, implies unchanged volumes of risk transferred, and in recent years the pressure on cession rates has been upwards, not downwards.

So while the growth outlook is more modest than in most of the leading growth economies (Figure 2), there are few markets, if any, where reinsurance is as fundamental to the functioning of insurance as a whole.

Arguably, there is no other market where life reinsurers are as interwoven into the functioning of the insurance industry as in the UK&I: insurer business models outsource most individual biometric risk; (reinsurance) actuaries’ pricing models are granular in their design; and with insurers so heavily dependent on reinsurance pricing, reinsurers focus on working with insurers to find new underwriting and product models in search of differentiation in the primary market.

The tenure of this model is related to a period of innovation in the wholesale risk segment, including mainstream new risk classes, new processes and continually refined pricing models. Many of these innovations are relevant to other markets, so an active operation in the UK&I is an important platform for the global success for any reinsurer.

The UK&I is the most competitive reinsurance market globally. The top six ‘global’ life reinsurers, as well as two other specialist reinsurers, are active and providing services from within the UK&I. Indeed, 70% of individual new cessions arise from the top six largest cedants and 95% from the 10 largest, so reinsurers are required to compete for almost all business. Competing reinsurers are well invested with high-calibre teams, spanning actuarial, underwriting and claims, and often include a specialist annuities area. Insurers are aware of the spectrum of potential reinsurance partners and typically invite all parties to tender on a 12- to 18-month cycle, with independent decisions made for awards for each risk class. The quality of a reinsurance offer is important to the ultimate award, but with many attractive reinsurance partners, it is often easier for insurers to let price govern the decision which to select. With this process having operated for more than a decade, reinsurers generally report low pricing margins and minimal embedded value on new

THE ACTUARY • September 2012 www.theactuary.com

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Figure 2: Global reinsurance premiums (2011)

35%

Gulf Co-operation Council

Combined market share of the leading two reinsures

30%

Median growth outlook ( next 12-month growth rate )

Greater China High ( 60% + ) Medium ( 50 - 65% ) Low ( < 50% )

25% Latin America 20%

Emerging Asia

South Africa

15%

UK&I

Australia & NZ 10%

Con. Europe US

Israel 5%

Canada

Developed Asia

0%

20%

40%

60%

80%

100%

The UK & I has the highest cession rates with ~90% of underlying individual new insurance premiums flowing through to reinsurers.

The median growth outlook for individual new insurance premiums in the UK & I is low but still above peer markets (eg the US and Continental Europe)

Cessions rate ( Cession as a % of insurance premiums ) Source: NMG’s Global Life Reinsurance Insights programmes, and relevant industry statistics by country

business, and in 2011, prices fell once again in several of the large reinsurance tenders.

In contrast to the other large single markets, there are relatively few constraints on the location or form of reinsurance capital, so the barriers to entry are likely to remain low.

For how long will the UK&I market retain its distinct profile with respect to cession rates?

Detractors believe that under Solvency II, cession rates will fall as insurers begin to

favour portfolio diversification over the simplicity of outsourcing risk to reinsurers. In most cases, the view is that cession rates will remain at current levels for the foreseeable future, supported by attractive reinsurance pricing and a level of certainty in respect of risk cost. Also, several insurers have business models premised on ‘locked in’ risk profits, and the lowering of the cost of risk, which is something that reinsurance partnerships and

regular tender processes have achieved.

Changing this may prove difficult.

However, recent falls in industry reinsurance premiums may well continue for a few more years, owing to further rate reductions, and to a probable continuation of shift to risk premium structures.

Perhaps the biggest risk to cession rates might be a material rise in reinsurance premiums for new business, likely triggered by a sustained period of sub-optimal returns for reinsurers. This could affect competitive activity in the primary market, particularly as experience variations are likely to arise from different operating processes among insurers, so rate rises will not affect all insurers equally.

Reinsurers constantly need to re-evaluate the trade-off between expected pricing margins, customer value and ‘staying in the game’. Evidence suggests that, in contrast to non-life markets, reinsurers cannot easily re-enter life markets. Thereafter, they struggle with customer retention and are disadvantaged in understanding trends and the consequent ability to attract new business. a

Don’t let the numbers puzzle you. Fill in the gaps with ReMetrica.

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ReMetrica continues to evolve to enable actuaries to enhance their internal models under Solvency II. Using ReMetrica, our clients are able to deliver an Own Risk and Solvency Assessment that solves business puzzles and generates a return on their Solvency II investment.

For a demo, visit: www.aonbenfield.com/remetrica_demo

aonbenfield.com/empower

September 2012 • THE ACTUARY www.theactuary.com

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Solvency Modelling features@theactuary.com

Dr Andreas Tsanakas examines the use of internal models in insurance, the associated pitfalls, and how solvency regulation should approach them

THE ELEPHANT

IN THE ROOM

“In applying mathematics to subjects such as physics or statistics, we make tentative assumptions about the real world which we know are false but which we believe may be useful, nonetheless.

Since all models are wrong, the scientist cannot obtain a ‘correct’ one by excessive elaboration.”1 32

THE ACTUARY • September 2012 www.theactuary.com

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Dr Andreas Tsanakas is a senior lecturer in actuarial science at Cass Business School, London

DR ANDREAS TSANAKAS

In an insurance world preoccupied with Solvency II, internal models have increased in both complexity and business significance. Nonetheless, actuaries are painfully aware of models’ limitations in representing the economic world, not least because of their reliance on often arbitrary assumptions. It is commonplace to say “all models are wrong but some are useful”. But in what sense might an internal model be wrong? If a model is wrong, how can it be useful? Significantly, what incentives does regulation produce for model development and use?

Solvency capital requirements involve calculating the probability of extreme events, as well as the probability that a confluence of such or less extreme events produces a high financial loss. The focus on rare events makes statistical estimates intrinsically unreliable, as they are obtained from analysing limited, sometimes non-existent, data.

Moreover, the complexity of models, mirroring that of insurance enterprises, exacerbates potential errors by increasing the sensitivity of model outputs to assumptions that cannot be supported by empirical evidence. For example, for highly ‘granular’ internal models, changes in correlation parameters that are easily dominated by statistical error lead to swingeing movements in estimated portfolio value at risk (VaR).

Still, such problems do not deter us from quantitatively modelling risks. When technically valid estimates are hard to come by, we are happy to make do with estimates that are socially valid – they are ‘shared by others, are stable, and are believed in with confidence’.2 We may ask: “How much capital should be reasonably allocated to operational risk?” The expert judgment used to answer does not involve a mental calculus of probabilities; instead it considers the social expectations of stakeholders. If ‘12% of the total capital’ happens to be the answer, it is reasonable only because we agree that it is.

When such issues are acknowledged by insurance practitioners, it can be with resignation. But despairing at models’ lack of technical validity is to misunderstand their function. Whether models are importantly wrong depends on the application. While estimating accurately a 1-in-200 years loss is illusory, models may help answer other questions satisfactorily, such as the probabilities of less extreme scenarios or the relative impacts of exposure changes on the total risk profile. More generally, the usefulness of a model is not reducible to the accuracy of its outputs. A model is a metaphor.3 Models can be presented with different inputs and their outputs studied; such interrogations help us make sense of the aspect of reality that is being modelled.4

SHUTTERSTOCK /SPL

Educational process In particular, internal models can be used to educate management in aspects of risk, by illustrating concepts, analysing scenario impacts, studying sensitivities, and showing the range of possible outcomes. We learn from modelling itself, not from summaries of model outputs.

Moreover, models are tools for communicating risk across organisations and informing commercial transactions. For example, model output is often used to demonstrate the value of a reinsurance product to a potential buyer. As the subprime credit crisis has shown, models can be also be used to convince investors in complex products that they are not taking on much risk. But the resulting criticism of models often misses the point: the problem was not that models were wrong, but that enough people were willing to believe otherwise.

So what is the role of regulation? Regulation and rating agency requirements have done much to move the focus of risk modelling to quantities that cannot be reliably quantified, such as extreme percentiles. Regulators are naturally aware of the substantial potential for model error. Such awareness must, at least in part, be behind the increased emphasis that Solvency II places on model validation and documentation, and on embedding models into decision-making. This is sensible but not unproblematic. First, the focus on extreme events of

low probability makes internal model output not only potentially inaccurate, but also hard to validate. After several years, it is possible to judge whether a long-tail liability portfolio was under-priced, but we may never know whether the portfolio had been capitalised consistently with the regulatory standard. Second, embedding the internal model into decision-making processes is seen as evidence of management’s confidence in the model. It would be wrong to let such confidence count as evidence of technical validity.

Non-conformity cost A different sort of problem arises from regulation establishing a causal link between a company’s available assets (an economically driven figure) and internal model outputs (a statistical construct). Under Solvency II, internal model approval is often perceived to confer an economic advantage, by lowering the capital requirement in comparison with the standard formula. Consequently, the substantial investment in internal models may reflect the perceived cost of non-conformity, rather than management’s own desire to be educated in the statistical aspects of risk. If insurance firms perceive that openness about the limitations of their modelling puts model approval at risk, they may try to conceal such limitations. But this has a corrosive effect, as ‘confidence in the model’ rather than ‘learning from modelling’ becomes a key story within the organisation.

As long as regulatory approval of the internal model is businesscritical, modellers are required, along with other professionals, to make approval happen. Experienced modellers are a scarce resource, paid to deliver confidence, not doubt. Some may not risk undermining their role and status within the organisation by being fully open with management about uncertainties. A deeply embedded risk culture is needed to avoid such perverse incentives. Solvency II not only requires, but also necessitates, strong corporate governance.

The regulator’s role is no less challenging. Suppose a firm decides to be candid about the potential for model error, and shows the regulator a sensitivity of capital requirements to unverifiable statistical assumptions. While honesty will be appreciated, once the potential inaccuracy of model output is on the record, it cannot be ignored. To allow for the possibility of even a single internal model being approved, regulators need to be tough in the overall supervisory review, but tactful in explicit enquiries about the accuracy of model outputs.

So what should we do? Breaking the nexus between regulatory capital requirements and statistical risk modelling is not a realistic choice. Problems such as the ones described are the price we pay for principles-based regulation. But a thorough validation process forms primarily evidence on the quality of a firm’s reasoning around risk; assurance over the accuracy of model outputs can be of only secondary importance. In that context, the model-approval process is a platform for having informative conversations about risk. Pretending that model outputs at the 1-in-200 years level can be meaningful may be the premise of such conversations. Even if the pretence is somehow useful, we should question whether it is necessary. a

REFERENCES 1 Box (1976). Science and Statistics. Journal of the American Statistical Association 71 (356), 791-799.

2 March (1994), A primer on decision-making: how decisions happen, New York: Free Press.

3 For models as representations and much more, see Edwards and Hoosain (2012), The philosophy of modelling, www.sias.org.uk/diary/view_ meeting?id=SIASMeetingJune2012 4 Morgan (2001), ‘Models, stories, and the economic world,’ Journal of Economic Methodology 8 (3), 361–384.

September 2012 • THE ACTUARY www.theactuary.com

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At the back Arts arts@theactuary.com

M O DE RN O R M I S E R A B L E? “He remained faithful to the motto of his Bohemian milieu: ‘Thou shalt write thy life’” 34

Arts

In May of this year, a version of Edvard Munch’s The Scream became the most expensive artwork sold at auction, after it was bought for $119.9m (£76.4m) by New York financier Leon Black. The 1895 pastel is the only one of the four versions – the other three are in Oslo museums – to include a poem explaining the inspiration for the work. It reads: “I was walking along a path with two friends – the sun was setting – suddenly the sky turned blood red – I paused, feeling exhausted, and leaned on the fence – there was blood and tongues of fire above the blue-black fjord and the city – my friends walked on, and I stood there trembling with anxiety – and I sensed an infinite scream passing through nature.”

The work has become an icon of existential angst, contributing to the popular image of Munch as a tortured artist, a man heroically mining his inner turmoil to create art. However, Nicholas Cullinan, curator of Edvard Munch: The Modern Eye at Tate Modern in London, argues that Munch’s work is about much more than morbid introspection, and actually reflects a deep engagement with the cultural and technological developments of his era.

The first exhibit called upon by Cullinan in his revisionist argument is Self Portrait (1895). The skeletal arm at the bottom of the picture is

ALAMY

Richard Elliott encounters two rather different versions of Edvard Munch in London and Edinburgh

THE ACTUARY • September 2012 www.theactuary.com

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BOOK REVIEW

Energy and the Wealth of Nations by Charles AS Hall and Kent A Klitgaard PUBLISHER Springer ISBN 1441993975 RRP £72 claimed to reveal not only an early obsession with death, but also an interest in the recent discovery of X-rays. A related field, photography, is shown to have had a profound influence on Munch’s work, and two rooms in the exhibition are dedicated to his photographs. Munch appeared to enjoy the expressive effect of photographic distortions, and later used such effects in his paintings. Some of the photographs contain ghost-like images resulting from multiple exposures, a phenomenon aped in the transparent killer in the foreground of the striking Murder on the Road (1919).

Moving into the 20th century, the advent of film proved an important development for much of Munch’s later work. The static figures of his early paintings are replaced by people in motion, often stepping towards the viewer as if about to emerge into the room, or indeed burst from the canvas, as in the most dramatic of such paintings, Galloping Horse (1912).

In a series of paintings from the 1930s, Munch portrayed a real-life incident from 1905 where an argument with two other artists ended in him aiming a rifle at them. The manner in which he recasts this troubling episode is strongly influenced by slapstick cinema.

In 1908, while living in Berlin, Munch suffered a nervous breakdown, and in 1909 he returned to Norway. Despite living in relative seclusion, he created several works that responded to local, national and international events. Panic in Oslo (1917) depicts unrest over food shortages, while other images chronicle mass executions during the civil war in Finland in the last months of the First World War. In 1930, a haemorrhage in Munch’s right eye caused him to see strange shapes and colours. He documented these distortions in paintings and drawings, some of which are collected in a room as evidence of Munch’s scientific interest in vision.

Early in the exhibition, Cullinan tells us that one of the commandments of Hans Jaeger, leader of Kristiania’s bohemian milieu in the 1880s of which Munch was a part, was: “Thou shalt write thy life”.

Munch, it seems, remained faithful to the motto.

The Scottish National Gallery of Modern Art’s Munch exhibition, Graphic Works from the Gunderson Collection, is a much more modest affair in both scale and narrative. The picture of Munch that emerges from the 60 lithographs and woodcuts is far from the engaged, modern man proposed by Cullinan. Instead, we get the more familiar isolated figure, traumatised by the premature deaths of his mother (aged 30) and sister (aged 15).

If the Edinburgh collection lacks anything as vibrant as The Girls on the Bridge (pictured, left) (1927) or The Yellow Log (1912), it does have some advantages over its London counterpart. There are three wonderful prints of the hypnotically beautiful Madonna (pictured, above) (1895), as well as a rare, hand-coloured lithographic version of The Scream. Moreover, in seeing the images from Munch’s paintings reduced to their simplest terms, we get a clearer picture of Munch the Symbolist (see, for example, Kiss IV (1902) or Two Human Beings. The Lonely Ones. (1899)).

Whether Munch was an engaged modern or a hermetic misery, I came away from these exhibitions certain that I had encountered a special mind. ● Edvard Munch: The Modern Eye continues at Tate Modern, London, until 14 October ● Edvard Munch: Graphic Works from the Gunderson Collection continues at the Scottish National Gallery of Modern Art, Edinburgh, until 23 September

Reviewed by Tony Brooke-Taylor The core themes of this book are the role that energy has played in economic growth and the limit to continued growth given our reliance on fossil fuels.

Having attended a lecture by Professor Charles Hall, I was excited at the prospect of reading this book. Now I have done so, I would recommend other readers be much more selective: the first chapter provides a comprehensive summary of the majority of it, while the most useful new insights come from the chapters with ‘EROI’ in the heading.

EROI (Energy Return on Investment) is a concept developed by Hall to examine how organisms invest energy to obtain additional energy. The concept covers activities ranging from animals hunting for food to human investment in oil extraction.

While linking EROI to David Ricardo’s ‘best first’ economic principle, the authors explain the correlation between the massive economic growth of the past 100 years and the exploitation of oil in particular, along with an extrapolation to the implications of ‘peak oil’ – the point at which the rate of oil extraction reaches its maximum – for what many still hope is only a temporary cessation of real growth in most western economies.

The book covers a history of mankind’s development, particularly economic development, highlighting breakthroughs in technology that have allowed us to exploit energy. The authors review various economic models, with the added ingredient of the way in which energy has allowed us to develop beyond what we would be able to achieve through our own physical labour alone.

There is strong criticism of several flaws that the authors see in most

current economic models, including the treatment of energy as essentially a free resource, the exclusion of detrimental environmental effects of economic activity from the assumed costs, and a loss of realism in favour of mathematical elegance. The authors dedicate a whole chapter to what amounts to an attack on neoclassical economics that would be worthy of more sensational authors such as Naomi Klein.

In summary, this book uses far more words than necessary to make a basic point: improving overall affluence, exacerbated by a booming population, has literally been fuelled by a resource that is becoming increasingly difficult and costly to exploit. This is a far clearer and more immediate concern than, for example, the impact of our activity on the environment and the inequity of the distribution of wealth.

While the book does offer some helpful suggestions as to how individuals, society and policymakers might react to this problem, these are not welldeveloped. Instead, the authors seem to have thrown every argument they can into getting the attention of policymakers and, arguably, the majority of economists, who still choose to assume that technology and substitution will overcome the exhaustion of cheap fuel.

With some aggressive editing, this book could have been more compelling than it is – which is a pity, because it is potentially one of the most important economic treatises of recent times. ● Tony Brooke-Taylor is the general insurance risk director at Aviva and a member of the Actuarial Profession’s resource and environment member interest group

MORE ONLINE Latest reviews at www.theactuary.com/opinion

September 2012 • THE ACTUARY www.theactuary.com

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At the back Coffee break

For a chance to win a £50 Amazon voucher, please email your solutions to prize puzzle 517 to puzzles@theactuary.com by Friday 14 September

puzzles@theactuary.com

Puzzles HAVE YOU GOT WHAT IT TAKES? Membership of Mensa, the High IQ Society, is open to anyone who can demonstrate an IQ in the top 2% of the population, measured by a recognised or approved IQ testing process.

Discovering that you have a high IQ can have a wealth of positive effects: a high IQ looks good on CVs, but it can also provide a significant confidence boost. Mensa members come from all walks of life and almost every job and profession.

Every age group is represented from pre-school children to members in their eighties, nineties and beyond!

For information on IQ testing in your area, please visit www.mensa.org.uk or call 01902 772771, option 1

Car conundrum Prize puzzle 517

Triplet teaser Puzzle 518

At a motor dealership, the cars are numbered. Car number 3 is a red Chrysler, car 10 is a green Jaguar, car number 13 is a turquoise Mitsubishi and car 20 is a yellow Toyota.

What number is the Nissan and is it black or silver?

632 331 842

524 933 919

422

Which number is the odd one out?

Clockwatching Puzzle 519 Clock A was correct at midnight. From that moment it began to lose three-and-a-half minutes per hour. The clock stopped one hour and 15 minutes ago, showing clock B.

What is the correct time now? The clock runs for less than 24 hours.

36

ISTOCK

Clock A: 00.00 Clock B: 16.57

THE ACTUARY • September 2012 www.theactuary.com

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14/8/12 08:40:07

—

ER BUMP E PRIZ E PUZZL

—

Solve the problem in puzzle 517 to win the prize TERMS AND CONDITIONS The prize will be awarded for the first correct entry drawn at random from those received before the closing date. The winner’s name will be announced in the next edition. Please note, the puzzle editor’s decision is final and no correspondence will be entered into. We reserve the right to feature the winner’s name in The Actuary. Your details will not be passed to any third party in connection with this draw.

SOLUTIONS FOR AUGUST 2012

Island hopping Puzzle 520

Mileage allowance Puzzle 513

Quench the flames Puzzle 516

On each row place a three letter word that can be attached to the end of the word to the left and to the beginning of the word to the right to give a longer word in each case. When completed, the initial letters of the added words will give the name of a Caribbean island reading downwards.

What is it?

How many miles should it be to Bali on this signpost? ANSWER: 14. Each vowel is worth two and each consonant five. These are totalled to give the miles.

A fire engine travels 5 miles to a fire at a speed of 55 mph. It started its journey with 500 gallons of water, but its tank has been leaking at a rate of 22.5 gallons per hour throughout the journey.

18 HAWAII

KIT

___

ANT

FALL

___

CLASS

PLUM _ _ _

TIME

BAND _ _ _

LESS

BUD

UP

___

TAKE _ _ _

BALI ?

26 BERMUDA

SINGAPORE 33

If the fire engine requires 496 gallons of water to put out the fire, will it succeed, and if so how many gallons of water will it have to spare?

ANSWER: 1.954545 Congratulations to this month’s winner – Neil Dobson

Knights of the silver screen Puzzle 514

END

A knight is positioned on the shaded square of this chessboard. Move the knight to each square once only, collecting letters to spell out the title of a 1938 film. What is it?

Delays, delays Bridge puzzle 26

Making merry Bridge puzzle 25 You are East. Dummy is North.

Partner leads J♣. As you have 14 points, clearly Partner has no other honour cards.

There is no point ducking, so you take the A♣.

What do you lead? ANSWER:

As usual, you are South.

West leads Q♣. Looking at it from the South hand, there are 4 possible losers – 3 hearts and the Q♠.

How should you play this hand to give yourself the best chance of making the contract? ♠642 ♥953 ♦AK104 ♣AK8

W

E S

♠AKJ73 ♥K62 ♦QJ2 ♣53

SOUTH 1♠ 2♠

R R D 0 V O U F 0 H A H I O T S N E N

ANSWER: The Adventures of Robin Hood

Money makes the world go round Puzzle 515

Bidding

N

D T E E B

NORTH 2♦ 4♠

In your pocket you have £25.83. It is made up of four different denominations of coins and the largest denomination is £1. There is exactly the same number of each coin.

How many of each coin is there and what are their values?

ANSWER: 21 of each of £1, 20p, 2p and 1p

Declarer has AK♥, KQ♣ and QJ♠. If he can make use of his diamonds, he makes the contract easily. You can hold up the A♦ but you need to remove the A♠ entry – so return K♠. This gives Declarer 2 spade tricks – you need to hope he only has 2 diamonds (so you only duck once) – ducking twice gives Declarer 3 spades, 2 hearts, 2 diamonds and 2 clubs = 9. So you give Declarer 2 spade tricks but deny him 3 extra diamond tricks. This manoeuvre of giving up tricks to produce extra tricks for the defence is known as the Merrimac Coup. ♠A5 ♥864 ♦KQJ109 ♣432 ♠7432 ♥75 W ♦862 ♣J1098

N E S

Bidding South North 1♥ 2♣ 3♥ 2NT 3NT ♠K1098 ♥QJ102 ♦A43 ♣A5

♠QJ6 ♥AK93 ♦75 ♣KQ76

Bridge puzzle provided by David Lampert

September 2012 • THE ACTUARY 37 www.theactuary.com

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At the back Student student@theactuary.com

Student Maintaining high standards can depend on a lot of people each making just a small contribution, suggests Matthew Welsh

IT’S STORY TIME That’s right, children, gather round. I have a tale to tell you.

It all happened a long time ago, in a kingdom far, far away…

The princess of this kingdom was, unfortunately, not very attractive. She was so ugly, in fact, that it was an enduring embarrassment to the kingdom and other kingdoms would often taunt them. The king was, of course, worried about his daughter.

So, as the invention of cosmetic surgery was still some way off, he decided to consult a local wizard as to what could be done to make the princess more beautiful.* The wizard explained that he would cast a spell whereby the princess could become beautiful if she spent a night sleeping in a bath of milk. The snag was that every family in the kingdom must provide a jug of milk to be poured into the bath that night, just after sunset. So an edict to this effect was sent out.

However, in those days, milk was expensive. There were no large supermarket chains to drive down the supply cost, so milk was a significant outlay for any poor family.

One particularly desperate farmer was so poor that he decided simply to pour a jug of water into the bath – no one would know, he surmised, as the bath would still look milky white. And anyway, he didn’t really care if the princess was ugly. He had bigger problems.

The farmer followed through with his plan and, in the darkness, the princess slipped into the bath and went to sleep. In the morning she awoke and looked in a mirror close by.

Unfortunately, she was still the same ugly princess as before. In her frustration, she

kicked the bath and it toppled over. What poured out of the bath astonished her. It was simply water. All the people in the kingdom had done the same thing as the farmer. The princess remained ugly, and the poor kingdom was resigned to putting up with international ridicule for ever more.

What’s that got to do with me? you ask And so it is with so much in life – small contributions from a lot of individuals are what we require to maintain the high esteem that I believe the Profession is held in. But, what exactly am I getting at? The answer is, of course, volunteering.

Volunteering for the Profession is something of a no-brainer to me.

It may seem like a thankless task to

volunteer, but ignore it at your peril. The Profession does have a handful of full-time staff, but there is only so much they can do and they must rely on a steady flow of volunteers to ensure that the Profession strengthens its reputation.

A lack of time and effort expended can also have consequences beyond reputation.

Indeed, ask anyone who has sold a home what the benefits of a lick of paint can do to the perceived value.

The Profession, however, cannot get away with just an occasional ‘lick of paint’. It is under constant scrutiny to demonstrate that it is ensuring best practice among its members.

Avoidance in demonstrating this could lead to the Profession becoming irrelevant in the eyes of others, and make businesses question why they are not simply employing statisticians on a significantly lower wage than actuaries would expect, to do some number-crunching.

Just tell me where to sign So I hope I have convinced you that it is in your interest to volunteer for the Profession – not least because you’ll be eligible to receive a volunteer recognition pin.

So, what could you do? Choices range from involving yourself with SIAS, the 400 club or the Student Consultative Forum to the possibility of editing the student page of The Actuary magazine. That’s right, I have decided to pass the baton on – mainly because I am no longer a student.

If you are interested in taking on this most enjoyable of roles, please respond to the email address below. Best of luck, should you decide to do so. *Before I get any letters, these were feudal times and I wasn’t around to voice my disapproval of the prevailing social attitude towards women’s rights. Don’t shoot the messenger. a

Matthew Welsh is due to relinquish his role as Student editor If you are interested in taking on this role, email Deepak Jobanputra at

editor@theactuary.com

ILLUSTRATION: PHIL WRIGGLESWORTH

38

THE ACTUARY • September 2012 www.theactuary.com

p38_sept_students_•GC2.indd 38

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SPONSORED BY

At the back Appointments aotf@theactuary.com Tell us something unusual about yourself I actually knew what an actuary was before meeting one.

ACTUARY OF THE FUTURE

Greatest risk you have ever taken? Either leaving job applications to a month-and-a-half before I ran out of rent money, or appearing in ‘Actuary of the future’. A certain person – whose name begins with ‘N’ and ends in ‘adine’ – is so passionate about this section, and got so excited when I said I was appearing in it, that she has told all her friends to look out for this article.

ADRIAN STAMP

What’s your most treasured possession? My Employer and area of work Towers Watson, retirement.

me, and also dragging me kicking and screaming through my education.

How would your best friend describe you? Wait!

What’s your most ‘actuarial’ habit? I put

Actuaries are allowed to have friends?

everything into a spreadsheet, just for the sake of it.

What motivates you? I hate losing – especially

calculator, of course.

If you ruled the world, what would you change first? I would renegotiate trade agreements to eliminate starvation, with bonus food to anyone who doesn’t think that an actuary uses a bow and arrow.

to Excel.

How do you relax away from the office? Running

What would be your personal motto? When life gives you lemons, grab the tequila and salt.

on an athletics track or jumping in a sandpit – if you can call that relaxation.

Who do you most admire and why? My parents

Alternative career choice? A professional

Do you know an actuary destined for greatness?

for being excellent role models, dedicating their lives to raising my brother, sister and

athlete, preferably training somewhere tropical, with a beach.

aotf@theactuary.com

You can nominate an Actuary of the Future by emailing

Fantasy Premier League Can statistical analysis and predictive modelling techniques be applied to football management?

Does van Persie represent value for money?

Prizes to be won including tickets to see England at Wembley http://highfinancegroup.fantasyleague.com

September 2012 • THE ACTUARY www.theactuary.com

p39_sept_AOT•CC2.indd 39

39

21/8/12 08:07:44

www.theactuaryjobs.com

Appointments

A P PO I N TME N TS To advertise your vacancies in the magazine and online please contact: Katy Eggleton +44 (0) 20 7324 2762 or katy.eggleton@redactive.co.uk

www.highfinancegroup.co.uk

Specialist Recruiters

UK

INTERNATIONAL

Head of Pricing

Head of Product Solutions

£120k - £150k + Bonus + Benefits, London

Up to £115k + Bonus + Benefits, Luxembourg

This leading Lloyd’s player is looking for an experienced Actuary with strong pricing knowledge to help lead, develop and grow their pricing team. The current team is four and with scope for two more hires when the Head of Pricing arrives. You should be very strong commercially, as well as having a strong pricing background with the ability to work closely with the underwriters. The candidate can be from either a personal or commercial lines background but must be commercially astute.

Exceptional opportunity for a Pricing Actuary to join the start up of this FTSE 100 Insurer's operations in Luxembourg. You will be shaping how the business will price their offshore investment products as they create a sustainable platform which will include onshore products further down the track. This role is geared to an entrepreneurial actuary who has an investment pricing background and is confident of developing a new business, reporting directly to the Board.

Head of Reserving

Financial Risk Manager - ERM

£110k - £140k + Bonus + Benefits, London

Up to SGD 150k + Bonus, Singapore

Rapidly expanding Lloyd’s syndicate requires an experienced, business focused reserving Actuary to manage their reserving team whilst reporting to the Chief Actuary. The right candidate will have both the technical reserving knowledge as well as the commerciality and business brain to run the team. You should have the ability to present your results and findings to senior stakeholders and also happy liaising with pricing managers as there is scope to be involved in the pricing work.

An excellent role has arisen to join the enterprise risk management team of this global insurance company in their Singapore office. They are searching for a risk professional with an Actuarial background who has a strong grasp of liabilities and understands insurance risk in the context of a Life company. Your financial acumen and communication skills will be essential as you deliver a range of financial risk initiatives to ensure new regulations are interpreted consistently across their Asian business.

Reserving, Pricing & Capital Actuary

Senior Financial Analyst – ANZ

£85k - £110k + Bonus + Benefits, London

Up to HKD 850k Pkg, Hong Kong

This newly established Lloyd’s syndicate requires a qualified Actuary. You will be required to work across pricing, capital modelling and reserving with an equal split in each area. Working closely with the Head of Actuarial, the role will manage a junior student who is making good exam progress. This is a great opportunity to work across a variety of commercial lines and learn from an experienced Actuary. You should be qualified and with experience in either pricing, reserving or capital.

Join this world renowned Rating Agency as a Senior Financial Analyst.

Using public and confidential information you will prepare analytical reports on General and Life Insurance firms in Australia and New Zealand. You will be familiar with valuation techniques, pricing, embedded values, financial statement analysis. You must be a confident communicator. Ability to speak more than one language and knowledge of Australasian Insurers will be advantageous.

EUROPE Life Manager – Consultancy

Life Actuary - Risk Management

CHF 140k - 175k + Bonus + Benefits, Switzerland

€45k - €60k Basic, Stuttgart

An exciting challenge is available in a pan European Actuarial Consulting team. You will have responsibility to develop the business with Zurich-based clients with the European and Global Actuarial team, covering Solvency II, MCEV and IFRS. You should be ambitious and energetic, with the ability to drive the process as well as develop the competencies of your team. English speaking role.

A highly respected German Life Insurer is looking for a partly qualified Life actuary to join their quantitative risk management team. You will be part of the modelling team and will be developing and implementing the firm’s internal model. This is an ideal opportunity for someone interested in developing strong modelling skills and a deeper knowledge of Solvency II Pillars I & II.

Head of Actuarial - Non-Life

CLARE BETHELL Senior Consultant - Life

RICHARD SENGER European Market Specialist

+44 (0) 207 337 8826 william@highfinancegroup.co.uk

+44 (0) 207 337 8829 clare@highfinancegroup.co.uk

+44 (0) 207 337 8806 | +33 (0) 8 05 11 13 62 richard@highfinancegroup.co.uk

WILLIAM GALLIMORE

+44 (0) 207 337 8800 40

actuarial@highfinancegroup.co.uk

THE ACTUARY • September 2012 www.theactuary.com

ACT.09.12.040.indd 40

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London : Chicago : Hong Kong : Singapore : Shanghai

www.theactuaryjobs.com

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September 2012 â&#x20AC;¢ THE ACTUARY

41

20/8/12 09:52:21

Appointments Darwin Rhodes’ well established UK Actuarial Recruitment Team is based in the heart of the City on Cornhill, and has been helping actuaries find new roles across the globe since 1996. We work across Non-life, Life, Pensions and Investments at all levels providing a range of services including retained search, advertised campaigns, and contingent solutions on a permanent and contract basis.

Part Qualified Ref: ACC6540

Middle East Competitive salary + benefits

Pricing Actuary Ref: AVC6531

London Up to £85K+ bonus + benefits

Supporting the Chief Actuary, this Middle Eastern client is seeking

A property & casualty reinsurer with a strong presence in the

a part qualified actuary to get involved in a number of technical

European market is looking for someone to join them in their

areas including Pricing, Profit testing, maintenance of illustrations,

pricing team of 6. They are looking for someone part qualified

non-traditional investment administration, as well as negotiating with fund managers on terms. The candidate should have some significant relevant actuarial experience already with progression

up to nearly/newly qualified level with a pricing background in commercial lines insurance and preferably P&C reinsurance. The

in the Core Technical exams. Candidates with Arabic and French

ideal candidate would have good communication skills and would

will have an advantage but this is by no means essential.

be keen to progress quickly in this relatively small team.

Senior Manager - Employee Benefits

Thailand Competitive salary

Senior Capital Modelling Actuary (Non-life) Central London Ref: AAH6537 £100K-£140K + bonus + benefits

Our client, a large global insurer are currently seeking a Senior Manager, within Employee Benefits to join their Actuarial team in Thailand. You will lead a team and be responsible to liaise with distribution team to understand the specific needs of their line of business and proactively reviewing actuarial guidelines to ensure best possible quotations are provided to business stakeholders.

The ideal candidate will have obtained a Bachelor Degree or higher in Actuarial Science, with at least 8 years experience and fluent in speaking and writing in English.

A leading player in the London market is seeking experienced capital modelling/SII actuaries to enhance their function.

Roles can involve a broad range of duties from leading model development to validation, documentation and Solvency II implementation as well as ERM and setting business strategy.

Candidates will have strong London market insurance knowledge and ideally have exposure to capital modelling and/or Solvency II regulations. Project or people management would also be very useful.

Protection Pricing Actuary South Ref: AAB6139 £Excellent + competitive benefits & bonus

Director and Manager

Lead a strong team in managing the pricing of the firms market

of the changes facing the Life Insurance market.

Our client is a consultancy in central London who are looking to build their life insurance practice. They have a strong presence in the general insurance, pensions and investments actuarial markets however have limited offering in the life insurance space. They are looking for a senior actuary to lead a small team, continue to build the team, generate business and build the practice. Ideally you will have a consultancy background, good contacts in the market and a desire to move up to Partner level. They are also looking for a technically strong actuary who can fit in at manager level.

Qualified Reserving Actuary

Healthcare opportunity

Ref: AKW888

leading protection product range with responsibilities for evaluating product performance and experience analysis in order to make appropriate pricing change recommendations to the Life Pricing Committee. You will need excellent communication skills as you will be a key interface for stakeholders in the marketing and life products teams. You should possess a solid understanding

Ref: AAH6476

Central London c.£100K + benefits

One of the best known London market insurers is seeking a qualified actuary to join their Reserving function. Deputising for the Head of Reserving, this role will involve daily management of a team of student actuaries working across a variety of large commercial insurance lines underwritten at Lloyd’s and through their insurance company. Prior reserving experience from within industry or consultancy is essential.

Ref: AJW6524

Ref: ACC6542

London Competitive package

London Up to £40K + benefits

Smart trainee actuary sought to support a small team focusing on healthcare work. Your role will include building and running models, analysing large data sets and manipulating data for experience analysis. The successful candidate will have some actuarial exam passes and experience within life, health or gi, ideally with product experience of PMI, CI or IP. You must have confident communication skills, excellent project management ability, expert skills in Excel and SAS and experience of model building.

To be considered for any of these vacancies please telephone the actuarial team or e-mail your curriculum vitae to:

020 7929 7667 actuarial@darwinrhodes.com 42

THE ACTUARY • September 2012

Darwin Rhodes.Sept.indd ACT.09.12.042.indd 42 1

15/8/12 20/8/12 12:11:31 09:53:10

www.pwc.com/uk/jobs/actuarial

www.theactuaryjobs.com

Thereâ&#x20AC;&#x2122;s more to us in Edinburgh than meets the eye London Edinburgh Manchester Bristol

Rebecca â&#x20AC;&#x201C; Consultant, Claire â&#x20AC;&#x201C; Principal Consultant, Jonathan â&#x20AC;&#x201C; Director

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www.pwc.com/uk/jobs/actuarial © 2012 PricewaterhouseCoopers LLP. All rights reserved.

ACT.09.12.043.indd 43

September 2012 â&#x20AC;¢ THE ACTUARY 43

20/8/12 09:53:56

Appointments

Unrivalled contract Unrivalled actuarial opportunities opportunities Hazell Carr is looking for individuals to fill a broad range of contract and permanent opportunities across the UK; from candidates with extensive Superval experience to qualified actuaries looking for flexible work from home opportunities. Permanent roles also available in the life and GI area.

We are Preferred Supplier to many companies, with some of the best opportunities in the market. Uniquely, at Hazell Carr you will be liaising with an actuary who understands not only the investment of putting yourself through the exams, but what it takes to find the best match between clients and contractors whilst building rewarding and long-term relationships.

For more information contact us by phone or email, or come and say hello at the GIRO Conference this month in Brussels!

Pensions Contracting and permanent roles available for senior students with actuarial valuation and Superval experience, in the South East.

Part-time work from home opportunities available for actuaries who want flexibility in their working arrangements – must have actuarial valuation and preferably SIB/Pensions review experience.

We are also looking for people with extensive experience in areas including: manual calculations, systems migration, spreadsheet development and DB/DC redress calculations checking.

Insurance Permanent opportunities for part qualified actuaries with life insurance experience.

Several permanent roles available for part-qualified GI actuaries with capital and reserving experience.

44

Competitive salary and excellent study and benefits package.

THE ACTUARY • September 2012

Hazel Carr FP.Sept.indd ACT.09.12.044.indd 44 1

If you are interested in joining Hazell Carr or would just like to find out more about becoming a contractor, contact us in confidence on 0118 951 3787 or email us at actuarial@hazellcarr.com

16/8/12 20/8/12 10:31:33 09:54:43

www.theactuaryjobs.com

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ACT.09.12.045.indd 45

September 2012 â&#x20AC;¢ THE ACTUARY 45

20/8/12 11:35:36

Appointments High Finance Group Specialist Recruiters

Pick of the crop?

Pricing Actuary

Up to £75k + Bonus, London

This FTSE 250 firm is one of the most well established and reputable within the London Market. You will be focusing on growing the Pricing function of their non- Lloyd’s lines business including SME and High Net Worth. The ideal candidate will have outstanding academics and will be nearly / newly qualified. You will have previous Pricing experience and be seeking to influence pricing decisions based on the technical work you carry out. James@highfinancegroup.co.uk

Reserving & Pricing Actuary

Up to £80k + Bonus, London

Working across a variety of P&C lines for this global insurer you will be responsible for the support and control of underwriting activities for commercial products. The successful candidate will have the opportunity to travel. You will engage in a mix of work and will have the flexibility to focus on your strengths and interests. James@highfinancegroup.co.uk

Mixed Reinsurance Analyst

£40k - £50k + Bonus, London

This is a fantastic opportunity for a part-qualified Actuary to join a successful global reinsurer. Your position will allow exposure to the insurance and reinsurance teams, including daily interaction with Senior Management. The ideal candidate will have previous Reserving experience and will be looking to gain hands on experience in Reserving, as well as Pricing and Capital Modelling.

Chanelle@highfinancegroup.co.uk

Syndicate Actuarial Student

£40k - £50k + Bonus, London

Opportunity for a part-qualified Actuary to join the Reserving team of a green field Lloyd’s syndicate. You will gain first hand London market experience and exposure to senior stakeholders including daily interaction with the Chief Actuary. The ideal candidate will have previous Solvency II and Reserving experience and be interested in assisting in the development of a new Lloyd’s syndicate.

Chanelle@highfinancegroup.co.uk

Student Life Actuary

Up to £40k + Bonus, London

This Life insurer is looking for a Student Actuary to join their Product Development team. With the imminent launch of a new product, this person will be involved in key decisions that will broaden their actuarial development and challenge their knowledge.

Sophia@highfinancegroup.co.uk 46

Management Consultancy

£80k - £120k + Profit Share, London

A unique opportunity to join the Actuarial Risk division of this niche management consultancy. Experienced in Solvency II, Risk and relationship management, you will advise clients on group level solutions from initial consultation through to project implementation.

With a strong network across the Life Insurance industry, you will develop key client relationships and establish yourself as a technical expert within a chosen field. Graeme@highfinancegroup.co.uk

Financial Risk Actuary

£70k - £100k + Bonus, London

A fantastic opportunity to join a leading international insurance business as part of their newly developed risk management function. With excellent in-house training provided, you will work closely with senior management across the business to quickly become a subject matter expert within this area. No specific risk knowledge is required but strong Life Insurance knowledge is essential. Graeme@highfinancegroup.co.uk

Modelling Team Manager

Up to £100k + Bonus, South East

Join this market leading life insurer within a managerial role. Our client is seeking an experienced Actuary to manage the development of their Prophet models and oversee a team of both Actuarial students and qualified Actuaries. In addition to technical requirements, you will work closely with various business units to ensure that effective and efficient systems are provided to the business.

Miranda@highfinancegroup.co.uk

Pricing Manager

Up to £90k + Bonus, South West

Move in to a pivotal role within this highly regarded Life Insurer.

Liaising with senior parties across the business, you will implement pricing strategy whilst ensuring continuous development of processes, governance and individual team members. To be successful, you will be an experienced Pricing Actuary with strong commercial acumen and management skills.

Miranda@highfinancegroup.co.uk

Actuarial Analyst

Up to £40k + Bonus, South England

A leading life insurer is looking for an Actuarial Student to join their Reporting team. Your will be given the scope to progress, working alongside the best in the profession. Previous experience in a Life Insurer and steady progression through the exams is preferred.

Sophia@highfinancegroup.co.uk

THE ACTUARY • September 2012

+44 (0) 207 337 8800 ACT.09.12.046.indd 46

actuarial@highfinancegroup.co.uk

www.highfinancegroup.co.uk 21/08/2012 08:12

www.theactuaryjobs.com

Actuarial Analysts - Pricing, Capital and Reserving Southampton, Hampshire Ageas UK is part of Ageas Group, an international insurance business of significant scale. Ageas Group employs more than 13,000 people. We hold an enviable market position and have grown significantly in recent years culminating in a GWP of over £1 billion in 2011. We were also awarded British Insurance Awards’s General Insurer of the Year 2011 and Insurance Times Award’s Personal Lines Insurer of the Year 2011.

Following this success we are now hoping to recruit three senior analysts / actuaries to take up prominent positions in the team within general insurance subsidiary Ageas Insurance. You will report directly to the Head of department and contribute to the improvement of our sophisticated systems and methodologies to help maximise our returns. The roles can also include man-management duties for suitable applicants as well as offering stimulating technical challenges.

The company is located in Eastleigh, Hampshire. We offer a fantastic working environment, friendly culture and supportive learning and development framework. In addition we offer a highly competitive salary and benefits package.

For a confidential discussion to find out more, please call Paul Francis at Oliver James Associates Paul Francis Head of GI Actuarial, Risk & Compliance (Insurance Division) Tel: +44 (0)207 649 9469

Mobile: +44 ((0)794 ) 969 7223

Email: Paul.Francis@ojassociates.com

@OJAssociates

School of Mathematics, Statistics and Actuarial Science (SMSAS)

the UK’s European University The University of Kent is one of the UK’s most dynamic universities with a strong European and international presence. Our excellent RAE results reflect our worldleading research and, while we are currently increasing our postgraduate activities, our undergraduates continue to rate us one of the top universities in the country according to the National Student Survey.

Lecturer in Actuarial Science

Ref: STM0292

£31,020 - £44,166 p.a.

A market related supplement will also be payable to a qualified Actuary.

Applications are invited for the position of Lecturer in Actuarial Science. This post will be based at our Canterbury Campus on a full-time basis and is available from 1st November 2012 or as soon as possible thereafter.

The successful candidate will join the Centre for Actuarial Science, Risk and Investment (CASRI), which is part of the School of Mathematics, Statistics and Actuarial Science (SMSAS). The Centre is well established and enjoys a good working relationship with the professional bodies. Currently, undergraduate and postgraduate programmes in Actuarial Science and Finance are offered by the Centre. All our Actuarial Science programmes are accredited by the UK Actuarial Profession.

The person appointed will be expected to contribute to the School’s teaching activities in Actuarial Science and Finance. The position will also provide opportunities for research, consultancy and enterprise activities. An excellent package including relocation costs is offered.

Informal enquiries may be made to Professor Malcolm Brown, Head of SMSAS, on + 44 (0)1227 823508 (direct line) or e-mail: M.S.Brown@kent.ac.uk Informal visits to the School are welcomed.

Further information is available from our website http://www.kent.ac.uk/jobs Minicom users please telephone 01227 824145.

Closing date for completed applications: 14th September 2012.

Interviews are expected to be held in early October 2012.

For posts of this nature you will be required to fill in the main details section as well as upload your CV which should include a personal statement and any supporting documents.

We actively promote equal opportunity in education and employment and welcome applicants from all sections of the community.

September 2012 • THE ACTUARY

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Appointments

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THE ACTUARY • September 2012

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www.theactuaryjobs.com

S TA R A C T U A R I A L F U T U RE S Capital & Risk Actuary Edinburgh (with some travel) Up to £165k package

Ref: Star1158

The role is ideally suited to a qualified actuary, with experience of capital management including Solvency II, and with particular expertise in relation to market risk.

We are working closely with a leading UK insurer to help fill a key role within its insurance financial risk team.

This role requires an experienced actuary to provide independent oversight of the development, maintenance and operation of the risk, capital and performance management framework.

The successful candidate will provide financial risk management advice in relation to significant corporate programmes and projects. You will also review and challenge existing financial risk policies, ensuring they are in line with risk appetite, Group policies and regulatory standards.

You will have proven history of delivery and organisational awareness in a complex environment. You will also be self-aware with a strong desire to exceed expectations and the ability to influence key stakeholders in the business.

#riskactuary

Please contact Irene Paterson FFA +44 7545 424 206 or irene.paterson@staractuarial.com for an informal discussion regarding this opportunity.

“I'm personally very grateful for your efforts and even more grateful for your success in bringing to us such a talented group of people.”

www.staractuarial.com Global Speciality & London Market Financial Reporting Actuary up to £120k + bonus + benefits

In this role you will support business on a global basis, and have additional responsibilities in respect of the business written in the Lloyds syndicate.

You will work with Underwriters whilst maintaining strong relationships with other departments including Claims, Financial Controllers, reinsurance and IT. You will be involved with actuarial valuations of the business group, support the budget process, and assist in global insurance wide projects. You will deal with US GAAP, SEC financial requirements and UK GAAP regulatory frameworks.

You’ll manage a small team in London and work with an overseas team. Naturally your ability to communicate at all levels (internally and externally) in this role is absolutely key.

You will also become responsible for the completion of the quarterly reserving process and claims liabilities recommendations for specific lines of business across Lloyds and non-Lloyds business.

Suitable candidates will be qualified (or experienced nearly qualified).

Parvinder Matharu Newton Recruitment t +44(0)1689 862937 e parvinder@newtonrecruitment.com w www.newtonrecruitment.com Contact

September 2012 • THE ACTUARY

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Appointments

High Finance Group - International www.highfinancegroup.co.uk

ARE YOU AN ACTUARY CONSIDERING A MOVE TO ASIA IN 2013?

Given the high demand for qualified Actuaries and Risk professionals in Asia, High Finance Group will be travelling to Hong Kong, Singapore, Malaysia and China in October 2012. We partner with multinational Insurers, Reinsurers and Consultancies in the region and are keen to hear from you to discuss opportunities across Risk, Financial Reporting, Pricing, Product Development and Solvency II. From the breathtaking Twin Towers of Kuala Lumpur to the local cuisine of Shanghai you can experience the dynamism and excitement first hand in a range of roles where you can apply your international expertise to develop local actuarial & risk techniques.

To qualify you will be an Actuary or Risk professional with relevant industry experience and will be looking to advance your career in the medium to long-term in Asia. Knowledge of the region and local language skills will be highly advantageous but not essential.

To arrange a phone call or a face to face meeting in London, Hong Kong, Singapore, Kuala Lumpur or Shanghai with the Head of our International Practice, Clare Bethell, contact:

clare@highfinancegroup.co.uk +44 (0) 207 337 8829

High Finance Group - Contract Roles General Insurance Igloo/Remetrica Contractors

Life Insurance Nationwide - £600-£1200pd

Solvency II Actuary

A number of FTSE 100 companies require interim resources to join their Capital and Risk teams. You will be involved in the parameterisation, calibration and documentation of the solvency kernel. You will work alongside the business to ensure the timely delivery of Solvency II submissions as well as being at the forefront of carrying this work in to a BAU environment. To be considered, you must be an intermediate or advanced user of either Igloo or Remetrica.

A niche advisory organisation requires an experienced Solvency II Actuary to join their Risk division for 12-18 months. This role offers a chance to evolve with the Solvency II regulation and gain market leading knowledge of specific IMAP and Standard Formula components. This position will also involve BAU regulatory tasks.

Strong knowledge of the UK Life industry is essential, as is an up-to-date knowledge of Solvency II regulation.

Documentation Actuary

Protection Pricing Contract

London - Up to £1250pd

South Coast - £800-£1100pd

This leading Insurance company requires an Actuary to work on the production of the group validation process. You will need to have a good understanding of the Solvency II requirements covering governance, technical methodology and implementation. You must have good knowledge of GI Economic Capital techniques, and prior Solvency II experience would be advantageous.

An evolving Life Insurer requires a Pricing Actuary to support the Head of Pricing for 6 months. You will assist the team in the delivery of key strategic and regulatory initiatives within the Protection business. You must be a Qualified Actuary with recent Pricing experience, ideally within Protection products. Good communication skills are essential.

Validation Actuary

This large UK Life Insurer is offering an exciting opportunity to be part of a growing team in the increasingly profitable Retirement Income sector. The role involves managing, maintaining and developing the appropriate Pricing information to support recommendations to the Pricing Committee. UK Pricing experience is required, and strong communication skills are essential. This role would suit a Pricing Manager within a UK Life Office keen to make an impact on a team.

Pricing Manager London - £600-£1000pd

This prestigious Lloyd’s Insurer, recognised as an outstanding employer, requires a contractor to work within their Solvency II division. Working with senior management you will be involved in the validation for the Reserving and Underwriting divisions, as well as assisting in BAU work covering pricing, reserving and capital areas.

You will be a key in offering advice for management decision making.

Rupa Pithiya

50

South East - Competitive

Contract Specialist - General +44 (0) 207 337 1200 rupa@highfinancegroup.co.uk THE ACTUARY • September 2012

ACT.09.12.050.indd 50

South West - £700-£1100pd

Jack Snape Contract Specialist - Life +44 (0) 207 337 8810 jack.snape@highfinancegroup.co.uk

21/08/2012 08:13

www.theactuaryjobs.com

A name you can trust MoSes Experience

Health Insurance

Contract jobs

Bristol, to £50k

London, to £40,000

My client has a need for two experienced MoSes candidates to work within the development team. These roles are more about your ability to work with the software rather than your exam pass rate and they would consider exam stoppers.

All levels considered.

This role will initially be to support the team in a technical capacity but later develop into being more client focused.

Experience in VBA and SAS is essential along with an excellent exam pass rate. You must have a real interest in working within the healthcare discipline.

GI Contractor Lloyds Syndicate, London Remetrica experience £800 - £1,200 per day

Syndicate Reserving/ Capital Modelling

Investment Actuary

London, to £50,000

Investment actuarial role within the Hampshire office of a well respected consultancy. The role will involve interpreting ALM models, identifying suitable investment strategies and undertaking performance and risk assessment of portfolios.

Progressing well through the exams! This GI provider and re-insurer is seeking a PQ actuary who will come from a strong general insurance background and will have knowledge of ResQ, Igloo or ReMetrica.

300 actuarial jobs online.

Hampshire, to £80,000

Part Qualified GI Actuary Wales Good knowledge of statistical analysis systems and tools such as ResQ £350 per day Prophet Developer Location disclosed on application £500 - £1,000 per day Igloo Modellers Lloyds Syndicates, London £700 - £1,100 per day

10 years in actuarial recruitment.

Solvency II Contractor South East, 6 month contract Developing data and reporting processes Moses Modeller South East, 12 month contract £600 - £800 per day Capital Modelling Contractor UK, 6 month contract £600 - £1,000 per day Documentation Actuary South East, 9 month contract £1,200 per day Please contact mark.keizner@reedglobal.com for permanent enquiries or rowan.mollison@reedglobal.com for contract.

Alternatively call: 020 7220 4774.

Offices in 13 countries.

reed.co.uk/actuarial

Reed Specialist Recruitment Ltd is an employment agency and employment business.

Non-Life Solvency II & Technical Provisions Financial Reporting Actuary up to £120k + bonus + benefits In this role you will manage the Solvency II technical provisions for the legal entities including a Lloyd’s syndicate. This will include:

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• Analysing the technical provisions’ model and evaluating its appropriateness for various legal entities and for the Group.

• Supporting and actively participating in the parameterisations process including the development of stochastic modelling for valuation purposes.

• Providing alternative methodologies and associated technical opinions.

• Assessing and evaluating the parameterisations for reserve volatilities including the development of stochastic modelling for valuation purposes.

• Providing support for regulatory implementation.

• Analysing the governance of the modelling process and embed stakeholders.

• Liaising with the Risk Committees and Risk Management function of each entity and working with teams in the UK and overseas.

• Creating documentation and reports for the risk management committee, legal entity boards and regulators.

In addition you will also work with consultants on various Capital Assessments for other non-European legal entities.

Other roles available include ‘Financial Reporting Analyst’, circa £40k to £70k + bonus and benefits.

Parvinder Matharu Newton Recruitment t +44(0)1689 862937 e parvinder@newtonrecruitment.com w www.newtonrecruitment.com Contact

theactuaryjobs.com

September 2012 • THE ACTUARY

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Appointments

“Client focussed, result driven executive search professionals, with broad experience.

Their drive to go the extra mile to best serve client needs is seldom seen.

Thorough industry knowledge.”

MD of EMEA Reinsurer Eames Consulting Group provides a full range of executive search and interim solutions to the U.K, continental Europe, the US, Middle East and Asia Pacific regions from their London and Singapore offices.

Our reputation has been built through providing clients with the speed and flexibility needed to meet the demands of today’s business environment. This is combined with discretion; market insight and a service offering which is truly market leading. Our ethos is that of Partnering. We work closely to build a solid, long term relationship, developing knowledge about your business and its culture, to help us find the right talent for you.

Pensions & Investments | Non-Life | Life & Health

The Actuarial team has dedicated experienced consultants who are industry specialists covering non-life, life & health, pensions & investments and insurance risk management markets. We are experienced at delivering from board level to nearly/ newly qualified actuaries. As a business we are straight talking and honest with our clients offering a tailored process, for both search and contingent solutions.

Please contact us directly for an informal discussion about your career aspirations and our current assignments or how we can assist your business in the future.

CONTACT Rob Bulpitt Head of Actuarial, Insurance & Pensions Risk Management 020 7092 3237 Rupert Rickard Manager of Actuarial Non-Life and Insurance Risk Management 020 7092 3219 Office Number +44 (0)20 7092 3200 For current opportunities please visit

www.eamesconsulting.com UK | Europe | Asia Pacific

www.eamesconsulting.com

Fresh Thinking The Actuary’s website has a brand new look for 2012.

With high quality content, useful tools and easy navigation, you will find a wealth of actuarial resources at your fingertips.

View regular news and register for weekly alerts Read the latest features and opinion and add your comments Access the 11-year content archive Browse theactuaryjobs.com, the official jobs board of the UK actuarial profession

Visit www.theactuary.com to see how we’ve improved 52

THE ACTUARY • September 2012

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First established in 1987 Sue Hayes Actuarial Recruitment Consultants was the ¿rst ever recruitment consultancy to specialise solely in the actuarial sector NICHE ACTUARIAL CONSULTANCY requires mid- level students who are making good progress with the actuarial exams. Salary negotiable.

NEWLY QUALIFIED ACTUARY required with either a reporting or product development background for a leading life insurer based in Scotland. Candidates who have knowledge of with profits reporting will be looked at more favourably.

LIFE ACTUARIES AND STUDENTS with modelling skills required for UK wide opportunities must have experience of building end to end models within Prophet, Moses or ALGO. Sponsorship available for Non-EU candidates.

EX-STUDENT with a pensions background required for a pensions consultancy based in Yorkshire will be supporting senior actuary, updating funding calculations and working on ad-hoc projects. £30-35k + benefits.

ACTUARIAL AUDIT are you an Actuary looking for a change from traditional actuarial work? Our client is a leading life insurer who has a newly created requirement for an actuarial auditor must have a demonstrable understanding of risk and controls governance. £55-70k + benefits.

LIFE INSURER LONDON requires a mid-level actuarial student who is making good progress with the actuarial exams. Suitable applicants will be making good progress with the CT series of examinations. Those with a pricing background will be looks at more favourably. £30-40k + benefits.

PENSIONS CONSULTANCY BRISTOL My client is a true innovator within the pension consulting arena who has an urgent requirement for a junior pensions student.

You will possess a 2:1 and have two to three years of pensions consulting experience.

Candidates with experience of pensions consulting in a life company will also be considered.

SENIOR LIFE ACTUARY London based life consultancy require a qualified Actuary with a minimum of five years PQE. Candidates must have a proven track record of business development. £££ SIX FIGURE PACKAGE. HOME COUNTIES Pensions student required for a leading pensions consultancy.

Ideally candidates will have 1-4 years’ experience and ideally have come from a pension consulting background. Super Val experience would be highly advantageous.

QUALIFIED LIFE ACTUARY required with ideally with five years + post qualification experience required for a life consultancy based in London. Candidates must possess a mixture of technical and consulting skills. There will also be an expectation to develop new business and nurture existing client relationships. £70-125k + MANCHESTER Nearly/newly qualified pensions Actuary required with a solid pensions consultancy background. Successful candidates will be expected to support the scheme actuary; a Scheme Actuary certificate is not required. £40-55k + Bonus + pension + benefits.

NON LIFE PRICING ANALYST required for a non-life insurer based in the South East. Exciting opportunity to be a part of a small and close knit team. Candidates will have 1-3 years’ experience of working within a non-life pricing environment. Will be responsible for running SAS, model outputs etc. £30-35k + structured study support.

NON-LIFE PRICING ACTUARY required for a general insurer in the South East. You will have experience of building models within Emblem and will be working primarily within Motor pricing. It is essential that candidates have a minimum of three years’ experience of building Emblem models using GLM’s. £50-70k + benefits.

ACTUARIAL STUDENT who has cleared all of the CT series of exams required to work within a small life reporting team this is an excellent opportunity to gain exposure to a number of areas within a life office including reporting, this is an excellent opportunity to gain exposure to a variety of areas within the life discipline. Negotiable salary.

REPORTING MANAGER required for a group reporting role with a life insurance company based in the South East. Ideally candidates will be nearly/newly qualified with a reporting background. You will be expected to manage and develop a team. £50-£65k + benefits.

BUSINESS PLANNING ACTUARY aggressively expanding life insurer has an urgent requirement for a business planning Actuary you will be expected to build relationships with other business areas and motivate more junior team members. It is essential that you are an excellent communicator with the ability to build relationships at all levels across the business. £50-73k + benefits.

PRICING AND REVIEW ACTUARY a qualified Actuary is required to implement the pricing strategy and leading a well-established pricing team of 10. You will be expected to hit the ground running and be able to implement change ensuring buy in from all stakeholders across all layers and levels of the business. £65-83k + benefits.

ACTUARIAL MODELLING MANAGER required for a leading life insurer based in the South East. You will be managing a team of Prophet developers and will have responsibility for the development and management of actuarial models. Candidates must have experience of managing change and have the ability to win hearts and minds. £££ above market rate.

QUALIFIED LIFE ACTUARY LONDON required for a group reporting role. This role will involve some management of a team. Candidates must have experience of reporting metrics such as EV, MCEV, Peak 1, Peak 2, IFRS and ICA. Circa £60k + benefits.

RISK ACTUARY required for a London based life insurer. You will be part of the first line of defence and support financial risk analysis including risk appetite reporting.

Candidates with experience of model validation will be considered in a more favourable light. Circa £60k + benefits.

DUBLIN BASED LIFE INSURER required nearly/newly qualified Actuaries from all backgrounds to work in various functions. Please contact directly for further information. ¤40-65k.

NON-LIFE ACTUARIES from either a capital modelling or pricing background required for UK wide opportunities. Technical knowledge is more important than qualification as we have a number of clients with these requirements. £££competitive.

QUALIFIED ACTUARY WITH SIGNIFICANT EXPERIENCE IN ANNUITIES required for high profile role in Dublin. Ideally a qualified actuary with 3-4 years PQE and variable annuities experience. The greater the number of years PQE the less variable annuities experience required. Must have Solvency II internal model experience along with an understanding of Solvency II on variable annuities and the market. ¤90k.

NEARLY/NEWLY QUALIFIED ACTUARY SOUTH WEST. I am looking for a newly/ newly qualified Actuary with strong communication skills who has made good progress with the exams to join a small Pricing Team. Excellent opportunity. c£55k.

To ¿nd out more about a particular role or if you are considering possible future opportunities, please contact me for a con¿dential discussion Tel: 020 7629 5555 Email: info@suehayesactuarial.com Evening and weekends please feel free to call Sue on 07980 109218 September 2012 • THE ACTUARY www.suehayesactuarial.com

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Appointments

RIS K & W I DERFI E L D SFUT UR ES STRATEGY LEADER

MANAGEMENT CONSULTANCY £ excellent + bonus + benefits

LONDON

Global management consulting firm is seeking exceptional actuaries to join in its success. This practice is recognised worldwide for its innovation, insight, expertise and seeing personal development as paramount. Successful candidates, considered from all actuarial disciplines, will demonstrate and quantify the business impact of projects undertaken. You will also have extensive experience and evidence of influencing key strategic decisions. The ideal candidate will be a qualified actuary or an actuarial subject matter expert.

Ref: Star1061

ENTERPRISE RISK ACTUARY

LIFE INSURANCE up to £150k + bonus + benefits

LONDON

Seeking a qualified actuary with drive and entrepreneurial flair to become part of a new ERM practice.

Core to this role is the ability to both generate proposition ideas and successfully bring the ideas to new clients. You will develop consulting offerings in collaboration with internal actuaries, specialist longevity risk consultants and the quantitative investment risk team. The successful candidate will have experience of capital management, financial reporting and risk management in a Solvency II context.

CERA qualification an advantage. Excellent package and partner track available for the right candidate.

Ref: Star1114

INVESTMENT BANKING SOLUTIONS

WIDER FIELDS up to £80k + bonus + benefits

LONDON

This exciting and diverse role offers a talented actuary the opportunity to focus on investment banking clients, allowing you to cover a wide range of areas including financial/stochastic modelling and asset valuation. You will develop and deliver pragmatic and commercial modelling solutions, and other related products, to a wide variety of clients, playing a pivotal role in client pitches and proposals. The ideal candidate will have experience of coding (e.g. VBA/Visual Basic, C/C++/C#, Matlab), statistical packages (e.g. S-Plus, R, SAS, EViews) and stochastic simulation.

Ref: Star1139

Louis Manson

54

MANAGING DIRECTOR M +44 7595 023 983 E louis.manson@staractuarial.com THE ACTUARY • September 2012

ACT.09.12.054-55.indd 54

Irene Paterson FFA

Joanne Young

PARTNER M +44 7545 424 206 E irene.paterson@staractuarial.com

OPERATIONS DIRECTOR M +44 7739 345 946 E joanne.young@staractuarial.com

20/08/2012 16:27

www.theactuaryjobs.com

N ON - LI FEFUTU RE S PARTNER/DIRECTOR

GLOBAL SPECIALITY & LONDON MARKET ACTUARY

PRICING/RESERVING

LONDON

LONDON

£ excellent package

up to £120k + bonus + benefits

Market-leading global consultancy seeks qualified actuaries to develop its pricing and reserving propositions. The successful candidates will have strong technical skills and a good vision for the future direction of the practice.

Ref: Star1106

Seeking an exceptional actuary to support the strategic business group on a worldwide basis. A unique opportunity to work within diverse areas including Specie & Bloodstock, Political Risks and Product Recall business.

Ref: Star1150

HEAD OF PRICING

CATASTROPHE MODELLING

NON-LIFE up to £120k + bonus + benefits

LOCATION UPON APPLICATION

NON-LIFE

LONDON

up to £110k + bonus + benefits

Our client seeks a part qualified or qualified actuary with experience of catastrophe risk pricing to take an active role in the strategic delivery of its catastrophe modelling solution.

A market leader seeks a qualified non-life actuary to head up the pricing function, driving through change and managing initiatives to improve its competitive position in the market.

Ref: Star1120

RESERVING ACTUARY

Ref: Star929

LONDON MARKET BROKING

NON-LIFE up to €100K + bonus + benefits

DUBLIN

NON-LIFE

LONDON

£ excellent + bonus + benefits

A global Reinsurer is seeking a non-life qualified actuary to be responsible for the reserving of its reinsurance and direct insurance business, ensuring that the process is completed with continuous quality improvement.

Ref: Star1124

Leading London Market Broker has an excellent opportunity for a part qualified actuary to undertake a client-facing pricing role. The successful candidate will have strong relationship management skills.

Ref: Star1116

CATASTROPHE MODELLING SPECIALIST

EUROPEAN CORPORATE ACTUARY

ZURICH, SWITZERLAND

NON-LIFE

CHF excellent + bonus + benefits

LONDON

NON-LIFE

up to £80k + bonus + benefits

Global reinsurer has an excellent opportunity for a candidate with experience in catastrophe reinsurance/insurance modeling and/or technical pricing to provide model based quantitative catastrophe risk analysis.

Ref: Star1125

World leader in insurance has an exciting opportunity for a non-life actuary to support the corporate actuarial team across all lines and countries within Europe, primarily focusing upon Solvency II. Ref: Star1133

REMETRICA EXPERT

CAPITAL REINSURANCE ACTUARY

LONDON

NON-LIFE £ excellent + bonus + benefits

MIDLANDS

NON-LIFE

up to £60k + bonus + benefits

Leading global consultancy is seeking a part or qualified Remetrica expert to provide specialist advice on a wide range of capital modelling projects. A fantastic opportunity to take a lead role on flagship clients.

Ref: Star1081

The successful candidate will support the development of the Group's capital modelling ability to meet Solvency II requirements, assist in the placement of reinsurance protection and maintain relationships with brokers.

Ref: Star1115

MARKET PRICING ANALYST

CAPITAL MODELLING ANALYSTS

SOUTH EAST

NON-LIFE

LONDON AND SOUTH EAST

up to £55k + bonus + benefits

Seeking a part qualified or qualified actuary to develop the market pricing capability and insight for the Group, driving advancement in all areas of pricing decision making.

Cross-overs will be considered.

Ref: Star1154

NON-LIFE up to £50k + bonus + benefits

An exciting opportunity to work beside some of the industry’s top consultants, helping to improve clients’ performance in areas related to their financial risk, product distribution and capital management.

Ref: Star1091

www.staractuarial.com Antony Buxton FIA

Paul Cook

Lance Randles MBA

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

SENIOR CONSULTANT M +44 7740 285 139 E paul.cook@staractuarial.com

SENIOR CONSULTANT M +44 7889 007 861 E lance.randles@staractuarial.com September 2012 • THE ACTUARY

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Star Actuarial Futures Ltd is an employment agency and employment business

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Appointments

P E N S I ONS&I NVE ST MENTFUT UR ES BUILDING TRUST

DIRECTOR LEVEL PENSIONS

LONDON

up to £225K package

A unique opportunity for a pensions actuary with significant business development experience to build a trustee practice for a leading consultancy. Contact us for more information.

Ref: Star1013

CORPORATE COMMERCIAL MANAGER SCOTLAND

PENSIONS

up to £60k + bonus + benefits

Leading provider of corporate pension schemes seeks a qualified actuary to set the commercial terms and pricing for its scheme mandates and to play an essential role in winning and retaining business.

Ref: Star1117

HEAD OF LONDON OFFICE LONDON

PENSIONS £ excellent + bonus + benefits

Our client is looking for a marketing actuary to head up its London office. In this key role you will not only lead and develop a growing team you will actively contribute to the development of the business.

Ref: Star722

RETIREMENT CONSULTANT BRISTOL / BIRMINGHAM

PENSIONS up to £60k + bonus + benefits

The successful candidate will apply consulting, actuarial and project management expertise in the areas of pension plan design, compliance and risk & financial management to organisations ranging from FTSE 100 to SMEs. Ref: Star1059

DE-RISKING ACTUARIES

PENSIONS up to £70k + bonus + benefits

LONDON

Our client has exciting opportunities for part qualified and qualified actuaries or investment professionals to provide a wide range of financial advisory services to trustees and corporate sponsors of pension schemes, including providing investment advice on and project managing the use of derivatives to hedge out interest rate, credit and inflation risks. You will analyse the economic benefit of and project manage the use of solutions, including bulk purchase annuity buy-ins, buy-outs and longevity risk transfer. You will also advise sponsors and trustees on all pension scheme related issues involving corporate restructuring, financing and M&A. Ref: Star1155

ACTUARIAL CONSULTANT LONDON

INVESTMENT up to £60k + bonus + benefits

LONDON

INVESTMENT up to £45k + bonus + benefits

An exciting opportunity has arisen within this global pensions and investment consultancy for a part qualified actuary to work on a variety of client service and manager research projects.

Ref: Star1129

Within this niche provider of risk management solutions, you will work with clients to understand and establish their investment objectives and risk tolerance.

SPECIALIST PENSIONS CONSULTANT

PRODUCT DEVELOPMENT ANALYST

MANCHESTER

EDINBURGH

up to £45k + bonus + benefits

Seeking a part qualified actuary to work with an extensive client base, both corporate and trustee, providing innovative solutions to clients. A client facing role with the opportunity to specialise in a workstream of choice.

Ref: Star1035

Louis Manson

56

BOUTIQUE RISK ADVISORY

MANAGING DIRECTOR M +44 7595 023 983 E louis.manson@staractuarial.com THE ACTUARY • September 2012

ACT.09.12.056-57.indd 56

Ref: Star1090

PENSIONS

up to £40k + bonus + benefits

An exciting opportunity for a part qualified actuary to work with product managers and quantitative analysts to develop technical methods for the modelling of pension liabilities within a stochastic modelling framework.

Ref: Star1119

Irene Paterson FFA

Carolina Emmanuel

PARTNER M +44 7545 424 206 E irene.paterson@staractuarial.com

SENIOR CONSULTANT M +44 7841 872 575 E carolina.emmanuel@staractuarial.com

20/08/2012 16:29

www.theactuaryjobs.com

L IF EFU TURES CHIEF OPERATING OFFICER

LIFE up to £85k + bonus + benefits

SOUTH EAST

A fantastic opportunity for a life actuary who wants to step above pure technical work and take on a management role. Supporting the Chief Actuary in achieving the objectives set for the actuarial department, you will have control over the model office and manage the actuarial team.

The successful candidate will have strong leadership skills and be delivery focused. You will also have significant financial reporting experience. Part-time workers will be considered.

Ref: Star1130

LIFE IS WHAT YOU MAKE IT NATIONWIDE

LIFE up to £120k + bonus + benefits

EUROPEAN CONSULTANT

LIFE up to €150k + bonus + benefits

FRANKFURT OR PARIS

Global consultancy seeks leaders with a strong knowledge of the life insurance industry to work across a range of services.

You will contribute to the growth of the practice playing a significant part in new business.

Ref: Star1034

Leading solutions provider seeks part and qualified actuarial consultants with a passion for software. Prophet knowledge and a European language are essential.

PATH TO PARTNERSHIP

ACTUARIAL MODELLING MANAGER

MILAN, ITALY

MANAGEMENT CONSULTANCY € excellent + bonus + benefits

Ref: Star1159

SOUTH EAST

LIFE

up to £90k + bonus + benefits

International management consulting firm that combines deep industry knowledge with specialised expertise in strategy and risk management seeks extraordinary actuaries with in-depth expertise.

Ref: Star1127

Market-leading life company seeks a qualified actuary to be accountable for the development and operation of the Group's actuarial modelling systems.

RISK MANAGER

ESG MODELLER

MIDLANDS

LIFE up to £75k + bonus + benefits

Ref: Star1082

LIFE

EDINBURGH

Up to £60k + benefits + bonus

A desirable opportunity to specialise in risk. You will lead the design, development, testing, validation and documentation of the ORSA alongside the Integrated Risk Management framework in respect of financial risk.

Ref: Star1089

Leading provider of risk management modelling tools seeks a part or qualified actuary to work closely with the product managers, research consultants and software developers to help develop product propositions.

Ref: Star1132

INTERIM HEAD OF BUSINESS PERFORMANCE

SOLVENCY II PILLAR I ACTUARY

BRISTOL

5 MONTHS

up to £1,000 per day

An interim opportunity for a business lead to oversee the delivery of management information, create business plans and report on and manage operational risks. Understanding of MCEV reporting essential.

Ref: Star1147

DUBLIN, IRELAND

LIFE € excellent + bonus + benefits

You will join our clients' Solvency II technical team and be involved in both Pillar I analysis for reinsurance business and working to consolidate the European businesses of the wider Group.

Ref: Star1131

www.staractuarial.com Antony Buxton FIA

Martine Scott-Gordon AFA

Lance Randles MBA

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

SENIOR CONSULTANT M +44 7900 696 825 E martine.scott-gordon@staractuarial.com

SENIOR CONSULTANT M +44 7889 007 861 E lance.randles@staractuarial.com September 2012 • THE ACTUARY

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Star Actuarial Futures Ltd is an employment agency and employment business

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Appointments

Business Critical As a self-respecting actuarial professional, you’ll no doubt want to keep up with the latest industry developments, people and society updates and professional news.

But you’re also busy being an actuarial professional. Right?

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THE ACTUARY • September 2012

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www.theactuaryjobs.com

September 2012 â&#x20AC;¢ THE ACTUARY

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Appointments

United Kingdom

General Insurance - UK Capital Modelling Actuary Rick Davis

London £150,000 + Bonus + Bens

Head of Pricing Paul Francis

London £120,000 + Bonus + Bens

A highly regarded Lloyd’s syndicate is looking to hire a technically strong capital actuary. You will be required to lead various aspects of the model build / development process while also working with the board as the actuarial expert on various risk management projects.

Extremely prestigious client is seeking an experienced manager to lead SME pricing. You will report to the CUO and work closely with FD and MD to improve on innovative pricing methods to ensure agility and competitiveness.

Reserving & Risk Actuary Rick Davis

Actuarial Manager Sarah Robins

London £120,000 + Bonus + Bens

Bromley / London £85,000 + Bonus + Bens

A leading London Market company requires an experienced GI Actuary to fill a leadership role. Working within the group function you will complete a variety of reserving and risk management duties while managing a small team of analysts and reporting regularly at board level.

A large retail insurer is seeking a nearly / newly qualified actuary to join their motor team. The role involves Managerial responsibility for a small team of actuaries. You must be commercially minded and demonstrate strong technical reserving skills. This would suit an adept senior student or qualified actuary seeking more responsibility.

Reinsurance Pricing Paul Francis

Senior Pricing Analyst Sarah Robins

London £80,000 + Bonus + Bens

This is an exciting role within a large retail insurance group. They are looking for a Senior Analyst to manage the Personal Lines Pricing team. You must be a part qualified / qualified actuary with GI experience and excellent communication skills.

I am seeking a technically adept pricing professional that also enjoys being client / outwards facing. Good technical pricing is a prerequisite ideally gained in the London market arena. Excellent training – would suit newly / nearly qualified.

London £60,000 + Bonus + Bens

Financial Reporting Actuary Ben Pitt

Birmingham £60,000 + Bonus + Bens

Exclusive Pricing Opportunity Ben Pitt

In this highly visible role for a leading London market business you will manage the SII TP provisions for numerous entities, including a Lloyd’s syndicate. Strong communication and management skills are essential.

London £55,000 + Bonus + Bens

Leading London market business seeks pricing actuary to work alongside underwriters on numerous lines of business. Full training will be provided. Would suit someone with a consultancy background looking for pricing experience.

Contracts - General Insurance - UK Capital Modeller Rob Bentham

London Up to £1000/day - 6 - 9 Months

Senior Reserving Actuary Stewart Cherry

A large London Market insurer is looking for an experienced Capital Modeller. Strong Igloo experience essential.

Pricing Actuary Rob Bentham

An international insurer is looking for a qualified Reserving Actuary for a 12 month contract. Retail experience ideal.

Remetrica Capital Actuary Stewart Cherry

London £1000/day - 6 Months

A global insurer is looking for an experienced Pricing Actuary for an initial 6 months. Motor experience is desirable.

Reserving Actuary Rob Bentham

London £1000/day - 9 Months

A Lloyd’s Syndicate is looking to recruit a Capital Actuary with Remetrica experience for 9 month contract.

London £900/day - 6 Months

London £800 -900/day - 6 Months

Solvency II Actuary Stewart Cherry

A London Market insurer is looking for a Reserving Actuary to join their team. Prior London Market experience ideal.

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London £1000/day - 6 Months

An experienced Solvency II actuary is required to join a London Market insurer on an initial 6 month contract.

General Insurance - UK

Contracts - GI - UK

General Contact Details

Ben Pitt 0207 310 8719 Paul Francis 0207 649 9469 RickACTUARY Davis • September 0207 649 9353 THE 2012 Sarah Robins 0207 310 8552

Rob Bentham Stewart Cherry

Email

actuary@ojassociates.com

Web

www.ojassociates.com

ACT.09.12.060-61.indd 60

0207 649 9351 0207 310 8651

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www.theactuaryjobs.com

United Kingdom

Life Insurance - UK London / Scotland £120,000 + Bonus + Bens

London Longevity Projects Actuary £100,000 + Excellent Benefits + Bonus Clare Nash

Key business leadership appointment. My client is looking for an experienced life insurance actuary to play a pivotal role in the expansion of their UK business. Capital/Risk experience desirable but not essential. Excellent career progression.

An unusual appointment within a leading name; qualified actuary sought to lead my client’s innovative longevity project. You will have a solid background in annuities (ideally pricing) and enjoy being a major part in key decision making.

Senior Corporate Lead London Clare Nash £90,000 + Excellent Benefits + Bonus

Protection Pricing Manager Mehwish Raza

EXCLUSIVE APPOINTMENT within a prestigious player. My client seeks a qualified actuary with experience in reporting and capital; this would suit a technical actuary who wants to get more involved in strategic, group level work.

One of UK’s leading Life Insurance businesses is seeking a commercially minded, technically astute pricing actuary to manage a team. You will be working on Pricing Strategy, Experience Investigations and Premium Reviews.

South East £80,000 + Bonus + Bens

London Life- Business Operations Manager £80,000 + Bonus + Bens Rachel Kelly

Highly commercial role within a major insurer. You will be responsible for product development, managing distributor relationships and leading a small team. Opportunity to shape and influence business- annuities experience required.

A global organisation seeks an actuary to act as the liaison between group head office and various business units to streamline and integrate actuarial processes. A varied role with international exposure. Reporting experience required.

Senior Life Consultant David Parker

Annuities Proposition Manager Rachel Kelly

Actuarial Modelling Manager Mehwish Raza

London £70,000 + Bonus + Bens

Project Actuary David Parker

South East £80,000 + Bonus + Bens

South West £90,000 + Bonus + Bens

A global market leading insurer seeks a high calibre actuary for a projects position across; product development; with-profits management and corporate developments. Strong communication skills and regulatory knowledge essential.

A prominent Life Insurance business is seeking a creative, strategically minded, technical modelling actuary. You will work on the development and operation of cutting edge actuarial systems, designing strategy and managing a team.

Contracts - Life - UK South East Reporting Actuary £600 -£950/day - 6 Months Kaylash Kukadia Strong part/newly qualified actuaries with experience across either of the following: IFRS, EEV/MCEV, ICA.

Prophet Modelling Kaylash Kukadia

Actuarial Analyst – UAT Ik Onyiah

Moses Developer IK Onyiah

UK Wide £500 - £950/day - 6 Months

We are looking to fill specific positions within Prophet Modelling.

These are: 1. Stochastic Modelling 2.Production Technician 3.

Assumptions Interface.

South East £650/day - 5 Months

London Up to £700/day - 6 Months

Our client is seeking part qualified actuaries to work on actuarial end user testing based work. The successful candidates would either work on Solvency II or Pricing model testing.

Our client is seeking a moses developer to work on development and testing of our clients Moses model.

Solvency II Actuary Ik Onyiah

Pricing – various Kaylash Kukadia

UK Wide £750/day - 6 Months

Scotland & South Up to £1000/day - 6 Months

We are looking for a number of Pricing Contractors, both PQ & Qual level. Across either of the following areas: Longevity Pricing, Protection Pricing.

Our client is seeking a qualified actuary to work on Solvency II Model validation work. The successful candidates would have experience of working in Solvency II.

Life Insurance - UK

Contracts - Life - UK

General Contact Details

Clare Nash David Parker Rachel Kelly Mehwish Raza

Ik Onyiah Kaylash Kukadia

Email

actuary@ojassociates.com

Web

www.ojassociates.com

ACT.09.12.060-61.indd 61

0207 649 9350 0207 310 8649 0207 310 8579 0207 117 6159

0207 310 8785 0207 310 8581

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Appointments

Europe

Permanent - Europe Senior actuary - Life Niels van Nieuwkerk

Utrecht / Enschede €70,000 - €85,000

Large insurance company in the Netherlands is seeking to recruit an outstanding Senior Life actuary for their funeral insurance label. This is a great opportunity for an actuary who wants to be proactively involved in the business.

Amsterdam Actuarial Analyst €45,000 - €55,000 Niels van Nieuwkerk Large insurance company in Amsterdam is seeking to recruit an actuarial analyst to join the Corporate Clients team. Great chance for a commercial strong communicator to work in a dynamic environment. Requires Pricing skills.

Actuary Group Provisioning Julien Fabius

Senior Actuary P&C Julien Fabius

Amsterdam €100,000 + Benefits

Qualified Reserving Actuary to lead the development of the ‘written report to management body’ required by SII guidance.

Head office role within a global non-life insurance group. Strong provisioning knowledge required together with strong leadership skills.

Senior Valuation Actuary Laurence Baken

Brussels €60,000 - €80,000 year basis

The Hague €80,000 + Benefits

You will be responsible for the implementation and registration of the methodology regarding the valuation of insurance liabilities within the P&C insurance arm of the group together with the mapping of (primarily) non-economic risks in P&C insurance.

Strong P&C Actuarial experience required.

SII Validation Officer Laurence Baken

Brussels €50,000 - €60,000 year basis

Global insurer seeks an actuary with extensive experience with valuation. An exceptional opportunity to influence the development of their internal model of SII and IFRS Phase II, consulting senior management on MCEV calculations.

An excellent opportunity for a validation expert to validate SII capital models and technical provisions of a global European Insurer on a group level, as well as presenting conclusions to the Model board level at Group and local.

Life Insurance Sales Consultant Manuel Lovell

Prophet Actuaries - Dublin Patrick McMahon

Frankfurt Up to €80,000 + Bonus

Dublin €75,000 - €95,000 + Benefits

You will be expected to support European sales teams, develop their business by providing actuarial knowledge and advice between IT professionals and actuaries. You must be a great communicator and follow the trends in Insurance.

I am working with one of Ireland’s largest Life Insurers. My client’s actuarial function has a number of exciting projects coming up which will require a number of actuaries with strong Prophet Modelling and Coding skills.

Senior Actuarial Services Manager Manuel Lovell

Global Pricing Manager (Re) Audrey Dresen

Frankfurt From €100,000 + Bonus

You will be responsible for a small team covering clients across Germany, Switzerland and Austria. You will be an experienced actuary with knowledge of Prophet, IFRS, Solvency II and Valuation Models.

Zurich CHF 150,000 + Bonus

Global Reinsurer creating Pricing team to support Chief Actuaries in their pricing projects worldwide. You will foster consistency, deal with local governance frameworks and provide support on the pricing tool. Strong communication, leadership skills and pragmatism are a must for this role.

Contract - Europe Solvency II Reserving Actuary Benjamin Moses

Mainland Europe €1000 - €1200/day Several lucrative opportunities for GI reserving actuaries with language skills to join some of Europe’s leading insurers for project based work.

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Reinsurance Pricing Actuary Switzerland Benjamin Moses €800 - €1000/day Actuary with life reinsurance pricing experience required for 6-12 month contract with one of Europe’s leading reinsurers. 5 years minimum experience is required.

Permanent - Europe

Permanent - Europe (Continued)

General Contact Details

Julien Fabius +31 (0)20 716 8450 Niels van Nieuwkerk +31 (0)20 716 8327 Laurence Baken +32 (0)2 401 22 49 THE ACTUARY • September 2012 Audrey Dresen +41 (0)43 508 0444 Manuel Lovell +49 (0)89 2206 1003

Patrick McMahon

Email actuary@ojassociates.com

ACT.09.12.062-63.indd 62

+353 (0)1 685 2413

Web

Contract - Europe Benjamin Moses

www.ojassociates.com

+49 (0) 89 2206 1068

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www.theactuaryjobs.com

Asia

Life Insurance - Asia Hong Kong Competitive Package

Strategic Director Jonny Plews

South East Asia Competitive Package

Head of Actuarial Gary Rushton

A unique role for an experienced insurance professional to join one of Asia’s leading insurers. You will start, lead and drive forward major strategic initiatives across multiple disciplines. High level, high pressure & high rewards.

One of the leading names in Asia seeks a relatively experienced actuary to assist them in pioneering life insurance within one of the most recent emerging markets in Asia. Minimum 6 yrs actuarial experience, strong pricing.

Financial Risk Actuary - Life Alex Ince

Senior Products Actuary - Life Jonny Plews

Hong Kong Competitive Package

Hong Kong Competitive Package

A European Insurer seeks a top percentile actuary to join their group office in Hong Kong. This is an excellent opportunity to gain exposure to the most senior actuaries and risk professionals within a highly successful international business. Previous FRM experience is required

Global insurer seeks an experienced products actuary to play an integral role in maximising distribution throughout Asia. You need to show initiative and innovation, and be able to confidently communicate ideas to executive management.

Financial Risk Management Actuary Gary Rushton

Senior Product Development - Life Alex Ince

Hong Kong Competitive Package

A unique opportunity to assist in developing my clients burgeoning financial risk management team. Working closely with business leaders across the Asia operation promoting risk culture and developing financial risk framework.

Valuations Manager - Life Alex Ince

Hong Kong Competitive Package

A key player in the Asian insurance market is seeking an experienced actuary to manage an IFRS valuations team within the Group business. This is an excellent opportunity to join one of the biggest names in Asia in a role which will offer you a variety of different projects.

Thailand Competitive Package

A key player in the insurance market is seeking two actuaries to head up two product lines for them, one of which will be a brand new venture. Excellent communication skills and previous experience with life products is required. These are exciting roles in the one of the largest markets in Asia.

Appointed Actuary Gary Rushton

Hong Kong Competitive Package

My client, a leading European life insurer with a growing presence in Asia, requires a senior actuary to provide advice on key financial matters and fulfil the statutory duties of an Appointed Actuary. Qualified actuary 10yrs PQE.

General Insurance - Asia Hong Kong Competitive Package

Chief Actuary Chris Lee

A global insurer is looking for an experienced actuary to join their Hong Kong team as Chief Actuary. A good communicator with a strong reserving background is crucial as well as having a longterm, commercial focus.

Pricing & Capital Actuary Toby Weston

Singapore Competitive Package

Global re-insurance broker seeks actuary with top class modelling ability and excellent interpersonal skills to join its analytics team. Fantastic opportunity to broaden your skill set and work closely with both brokers and clients.

Asia - Life Alex Ince Gary Rushton

ACT.09.12.062-63.indd 63

My client is looking for an actuary with 2-4 years’ experience to join their regional team based in Singapore. Applicants must have an extensive SAS background and strong interpersonal skills. Fantastic career growth opportunities.

Chris Lee Jonny Plews Toby Weston

Shanghai Competitive Package

Pricing Director Toby Weston

Multi-national P&C JV seeks Pricing Director with overseas experience to build a pricing team from scratch across personal and SME lines. 15+ years’ of experience, fluent Mandarin and proven leadership ability essential.

Asia - General +852 5804 9224 +852 5804 9223

Singapore Competitive Package

Pricing Analyst Chris Lee

General Contact Details +852 5804 9253 +852 5804 9200 +852 5804 9042

Email actuary@ojassociates.com Web

www.ojassociates.com September 2012 • THE ACTUARY 63

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Appointments www.the-arc.co.uk

The Actuarial Recruitment Company

A fresh approach Senior Reserving Actuary Dublin

€100-120K plus bonus

PartnerRe is a provider of risk-assumption solutions for the global insurance and capital markets. PartnerRe provides insurance companies with multiple lines of reinsurance property & casualty, catastrophe, specialty lines, life, and alternative risk transfer - through its offices around the world.

The Role is for the position of Senior Reserving Actuary, which will report into the Chief Reserving Actuary. The role holder will be based in the Dublin office and responsibilities will include: • reserving of PartnerRe Europe written reinsurance business and PartnerRe Europe written direct insurance business • reserving for PartnerRe Global business • development of PartnerRe’s ongoing Solvency II process • actuarial deliverables relating to the quarterly reporting requirements of PartnerRe Europe The successful candidate will be a qualified actuary or near qualified actuary with significant non life reserving experience, gained in a re-insurer or consultancy environment. The individual will be highly motivated and possess excellent communication skills as well as technical skills since the role will operate in a multi-disciplinary environment and involve interaction with external third parties. The role may involve some travel from time to time.

For more detailed information, or a confidential discussion, please contact Chris Cannon, The Actuarial Recruitment Company, Phone +44(0)7711 228 449 or e-mail chris@the-arc.co.uk

Senior ERM Actuary London

General Insurance To £150K

A well respected insurance and reinsurance business is looking for an experienced actuary for a senior role within their ERM team.

Our client is looking for a dynamic and motivated individual with excellent communication skills, both verbal and written. Candidates from a capital or Solvency II background within either a company or consultancy environment would have ideal experience but our client will also consider candidates with a pricing background and a strong commercial awareness. Ref: ARC25580

Broking opportunity London

General Insurance To £125K

This non-traditional actuarial role working for a global reinsurance broking business would provide a motivated and client facing individual the opportunity to gain experience of reinsurance pricing, catastrophe bond and ILS pricing, reinsurance optimisation and design, catastrophe risk modelling as well as a range of other specialised project work. Potential candidates may come from a consulting, company or other broking environment but must have very strong technical and communication skills and a well developed commercial outlook. Ref: ARC25840

Call us anytime including evenings and weekends on 020 7717 9705 or email enquiries@the-arc.co.uk General Insurance Andy Clark BSc FIA GI (New Entrant), Life & Pensions Chris Cannon BA CFI DAT Contracts Roger Massey BSc MBA FIA 64

0781 333 7891 0771 122 8449 0781 398 9016

andy@the-arc.co.uk chris@the-arc.co.uk roger@the-arc.co.uk

THE ACTUARY • September 2012

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