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As the world’s sixth largest economy, Brazil oﬀers great opportunities and lifestyle
The leading international think tank of the insurance industry opens its doors
Actuaries working overseas report on the challenges and experiences encountered
JULY 2013 theactuary.com
The magazine of the actuarial profession
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Take ﬂight A world of opportunities opens up for actuaries
February 2012 • THE ACTUARY
The International Supplement Contents
A more worldly actuary Derek Cribb considers the global spread of the actuarial profession
Feature: Israel Ofer Brandt describes how he is creating a better future for actuaries in Israel
Q&A: Brazil David Beatham discusses his reasons for moving to São Paulo
Feature: Brazil Brazil’s rapid growth and the opportunities it has created
Q&A: Switzerland Sonal Shah and an oﬀer that was just too good to refuse
10 Proﬁle: Geneva Association Sonal Shah and John Fitzpatrick discuss the association’s aims
14 Q&A: Dubai How moving to Dubai opened doors for Francesca Mills
15 Q&A: Singapore Mark Godson on grasping opportunities and broadening your horizons
Welcome In our international supplement we have a selection of articles from actuaries across the world. Each article has its own individual discovery, providing a bite-sized view of the challenges of living and working in a ‘foreign’ country. The geographical choice for actuaries appears to be growing as markets develop across the globe. This oﬀers great opportunities for actuaries wanting to broaden their experiences. There is a clear demand for experienced actuaries in developed markets to share best practice in new and developing markets; I am sure the traﬃc goes in the opposite direction too. While experiencing life abroad may have been diﬃcult a decade ago, it now seems far more accessible. As I read the last of the printed articles I was eager for more and I’m glad to report that we have a number of others online. I am sure that in years to come there will be a growing number of transfers across the actuarial globe. It really is a small world after all! Deepak Jobanputra firstname.lastname@example.org
16 Q&A Tokyo Yosuke Fujisawa believes Japan can become a pioneer in the ﬁeld of risk management
ONLINE Q&A: Australia James Claxton
Q&A: South Africa Watson Teo
Q&A: Switzerland Julian Tse
Q& A: Hong Kong Philip Bundy
Q&A: Germany Rob Lynch
Proﬁle: Brazil Dinarte Bonetti
Proﬁle: Brazil Ronald Poon Aﬀat
Editor Deepak Jobanputra email@example.com International features editor Sarah Bennett firstname.lastname@example.org Managing editor Sharon Maguire email@example.com +44 (0)20 7880 6246 Display / recruitment sales Katy Eggleton firstname.lastname@example.org +44 (0)20 7324 2762 Design / pictures Gene Cornelius / Akin Falope Sub-editors Caroline Taylor Henry Manners Production manager Jane Easterman +44 (0)20 7880 6248 Editor, Redactive finance division Mike Thatcher Publishing director Joanna Marsh
Published by the Staple Inn Actuarial Society. The editor, The Institute and Faculty of Actuaries and Staple Inn Actuarial Society are not responsible for the opinions put forward in The Actuary. No part of this publication may be reproduced, stored or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission of the copyright owners. While every effort is made to ensure the accuracy of the content, the publisher and its contributors accept no responsibility for any material contained herein. © SIAS July 2013 All rights reserved Redactive Media Group 17-18 Britton Street, London EC1M 5TP +44 (0)20 7880 6200 Internet The Actuary website: www.theactuary.com SIAS website: www.sias.org.uk IFoA website: www.actuaries.org.uk
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The International Supplement Derek Cribb Derek Cribb considers the future for actuaries in terms of global spread and the opportunity that could oﬀer to expand the scope of actuarial sciences. He also introduces Wen Li, lead representative of the Institute and Faculty of Actuaries in China and south-east Asia
A global future
COVER: BEN THE ILLUSTRATOR
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actuaries. And if we plot the changing practice areas of our membership against Australia, for example, we can see a clear trend (see Figure 1). Although there are still lots of roles in traditional areas, one might look to investment banking and investment management as obvious growth opportunities. With more actuaries embedded in these wider ﬁelds, the profession has exemplars for new candidates who are targeting careers outside pensions and insurance, creating a virtuous circle. We must help address the mind-set of employers and candidates in mature markets. It is a challenging task but
with an increasingly globalised market we should look to build on advances into wider ﬁelds made by actuaries around the world. To pick up the ﬁnal point that Dr Avrahampour made at the Pensions conference, new qualiﬁcations should help actuarial science to develop. With this in mind, I remain excited about the Certiﬁed Actuarial Analyst qualiﬁcation. If this is approved by our membership, then its broad nature will allow actuaries to cross sector boundaries and ensure that we continue to advance the scope of actuarial science in accordance with our Royal Charter.
Figure 1: Changing practice areas for actuaries in Australia 45% 40% 35% 30% 25%
Feb 2003 Feb 2008 Feb 2013 Aus
20% 15% 10% 5%
plo Pen ye sio e b ns en an e d Lif ﬁts ei He ns alt ur ha an nd ce ca re ins o u Ge r ad ranc ne vic e ral e ins ur an ce ma Inv na est ge me m n ba nk I ent t ing nv (ad est vis me ory nt ) Ed uc Inf ati orm on ati on tec hn olo gy Ot he ra ctu ari Ot he al rn on -ac tu ari al En t ma erp na ris ge e r me isk nt
Recognising the geographic diversity of our members and fostering a global community of actuaries is at the core of the IFoA’s international strategy, so I am extremely pleased to welcome you to this year’s international supplement. At June’s IFoA Pensions conference, I was delighted to present a session with Dr Yally Avrahampour from the London School of Economics, which reviewed the development of the actuarial profession and also looked to the future. Many opportunities seem to be emerging outside the UK for actuaries. But the term ‘actuary’ seems to mean slightly diﬀerent things in diﬀerent locations, depending on the maturity and regulatory cultures of diﬀerent markets. His thorough analysis of historical growth periods of actuarial science showed that in more permissive governance regimes, there was more scope for actuaries to work outside their traditional ﬁelds. The stringent regulatory system in the UK means that opportunities could be more restricted, so opportunities for developing a broader profession are likely to be located overseas. In developing countries, the move from agriculture to manufacture and services brings improved longevity and increased assets, contributing to a marked growth in insurance premiums. As these countries take a greater share of global insurance business, the demand for actuaries can be expected to grow. The BRIC countries of Brazil, Russia, India and China tell a similar story. In Brazil, there are now almost 100 reinsurers; in 2007, there was only one. Similarly, the number of life insurers in India (including joint ventures) has shown steady growth from three in 2000 to over 20 in 2010. These new markets are an enticing opportunity for those willing to take advantage of them. However, this is not to say that there are not opportunities closer to home – we often talk about actuaries moving into ‘wider ﬁelds’. In the UK, the convergence of the insurance and banking markets will continue to lead to a greater demand for actuaries in banking. In South Africa and Australia, other opportunities have opened up. In South Africa, employers view banking as a core activity for
The Institute in China and SE Asia, by Wen Li When I took up the role of lead representative of the Institute and Faculty of Actuaries (IFoA) in China and south-east Asia three months ago, I realised it was going to be diﬀerent from any actuarial roles I had undertaken in the past. In the capacity of this role, I am looking after the IFoA’s interests in China, Hong Kong, Singapore and Malaysia. My priorities include developing links with universities; encouraging a vibrant member community as well as building links with employers, local associations and regulators. I would like to ensure that members in the region feel a part of our global community and that our expertise can inﬂuence and boost the local markets. We are currently organising quarterly member events in Beijing and Shanghai and have set up a mentoring system for our student actuaries. I’m also trying to help Fellows in the region to build technical links with Fellows in the UK. Please get in touch to discuss any ideas: email@example.com or (0086) 138 1098 1647.
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The International Supplement Israel Ofer Brandt arrived at City University in London with just a suitcase to his name. Twelve years later, he returned home to Israel with his family and a freight container following closely behind. Now, to give back to the profession, he is championing the education of actuaries in Israel and beyond
Teaching the actuaries of tomorrow Having completed the one-year postgraduate diploma course in actuarial sciences at City University in London, I thought I would stay for just one more year before returning to Israel and ﬁnishing my actuarial exams. But, 12 years later, I received a phone call early on a Sunday morning. On the other end of the line was the CEO of Clal Insurance Company in Israel. It was the opportunity I’d been waiting for, a senior position with the largest insurance company in Israel. In November 2000, I found myself on the aeroplane to Tel Aviv, amused by the thought that 12 years earlier I had arrived in the UK with my then girlfriend and one suitcase, and here I was with my three little children and wife sitting next to me, knowing that a full freight container was following. There is no doubt that my work in the UK provided me with the solid actuarial experience that I needed to develop my A new continuous career. Working with Liberty Life, a mediumeducational size unit-linked company, exposed me to a programme variety of essential technical actuarial work. means the future After ﬁve years with the company, I moved on is bright for and joined Tillinghast Towers Perrin, now Israel’s actuaries known as Towers Watson. There I worked with bright colleagues and actuarial friends, and developed a holistic approach to actuarial and management issues. Coming home Relocating to Israel called for all the actuarial experience I had gained in the UK. Not long after my arrival, a change of shareholder ownership required me to calculate the embedded value of the company. This was a great opportunity to work closely with my reporting staﬀ, learning the company’s business activities, and on a wider scale, familiarising myself with local actuarial practices, local regulatory framework and the structure of the local insurance market. In recent years, the Israeli commissioner of insurance adopted and stated that he would continue to adopt international regulatory frameworks and practices, such as the IFRS accounting practice; European Solvency II and Market Consistent Embedded Value reporting. For a period of six years from 2005, I served as president of the Israel Association of Actuaries (ILAA). This was my way of contributing back to the profession, which I continue to do now by chairing the association’s education committee. I started with what I regarded as the most important issue, education – the raison d’être of any actuarial association. Being a small profession (with a total of about 300 members), the ILAA lacks the ﬁnancial resources and manpower needed to sustain a
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continuous educational programme. This was when the tight partnership with the Institute and Faculty of Actuaries (IFoA) began. With the support of the UK Actuarial Profession, a memorandum of understanding between the two bodies was signed in 2008, allowing ILAA’s students access to the UK education and examination system. Now, ILAA’s students sit the UK exams, but with one twist – they are allowed to write their answers in Hebrew. This agreement has been a great success and, to my knowledge, was the ﬁrst of its kind between the Institute and Faculty of Actuaries and a non-English-speaking association. In 2009, the ILAA joined the Chartered Enterprise Risk Analyst (CERA) global initiative, marked by a multilateral treaty, signed in Hyderabad, India, during meetings of the International Actuarial Association (IAA). The treaty was backed by 14 IAA member associations, based in 12 countries around the world. Last month, the ILAA was formally approved to award the new CERA qualiﬁcation for actuaries with unanimous support from the CERA treaty board. Amidst all this activity, an ongoing project that the ILAA is working on together with the IFoA is the mutual recognition agreement between the two associations. I truly hope it will be signed by the end of this year. I am convinced that the solid educational infrastructure we put in place will ensure that the highest standards of the actuarial profession in Israel are kept into the future and will develop generations of actuaries to come. Ofer Brandt is a Fellow of the Institute and Faculty of Actuaries, a Fellow of the Israel Association of Actuaries and a chartered enterprise risk analyst of the Society of Actuaries. He holds a BSc from Tel Aviv University and an MBA from both the Kellogg School of Management in Chicago and Tel Aviv Recanati Business School.
The International Supplement Brazil Q&A David Beatham is chief pricing actuary, general insurance, at Zurich, Brazil. After spending three months working on a consultancy project in Rio de Janeiro, he decided to make the move permanent and switch oﬃces from the UK to São Paulo. Here, he provides an insight into his work in the emerging Brazilian market
Sunning it up in São Paulo Explain what motivated you to seek employment overseas I wanted the opportunity to work in a diﬀerent culture, getting experience outside the UK market. What attracted you to Brazil? Swapping the freezing cold UK climate for a tropical climate is obviously a great beneﬁt. Brazil is so large – it would take years to fully explore the whole country. Between the magniﬁcent Iguassu Falls, the Amazon rainforest, the sun-soaked beaches of Rio de Janeiro and the fantastic resorts in the north-east, there really is an almost unlimited scope to your travel options. What were the main challenges you faced moving overseas? Learning Portuguese is critical as English is not widely spoken. The vast cultural diﬀerences between Brazil and England take a bit of time getting used to as well. What are the main diﬀerences you have found working overseas compared with working in the UK? Lunch is a very important part of the day. All Brazilians eat out for lunch in restaurants. What is the most topical industry issue facing pricing actuaries in Brazil? Pricing actuaries are relatively new within the Brazilian market. There has been a strong drive in recent years to focus on solid, technical-based pricing and more sophisticated rating tariﬀs. This is particularly important in the personal lines motor insurance market, where new entrants and increased competition have put increased pressure on bottom-line results. What is the best thing about where you work? The opportunity to chill out in the swimming pool or go to the beach at the weekend all year round. And the worst? São Paulo is world-renowned for having some of the worst traﬃc jams in the world. Most
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people use cars to get around the city of 20 million people because of the poor-quality local transport system. A heavy tropical rain storm during Friday night rush hour can bring the whole city to almost gridlock. Living near the oﬃce is an absolute must. Tell us an unusual fact about São Paulo . Over 300,000 Japanese people live there, mostly in the Liberdade neighbourhood. This is the largest Japanese population in the world outside Japan. Do you have any advice for others looking for overseas work? I think it’s important to visit the country ﬁrst, either on holiday or, ideally, working as part of a project. Getting a work visa for Brazil is not a trivial process, so it’s best to try to get an internal transfer within a company or arrange the job before you decide to make the move. Would you describe yourself as a global actuary and why? I don’t think I can claim global status at this stage of my career. Before I do, I’d really need to have worked in at least three diﬀerent continents.
The World Cup and upcoming Olympics have accelerated growth in São Paulo
What future opportunities exist in the Brazilian insurance market? Next year is World Cup, and the 2016 Olympics in Rio de Janeiro have accelerated both the rate of investment in infrastructure and the interest of multinationals to enter in the Brazilian market. The level of penetration of insurance is still low, with only 25% of Brazilians buying motor insurance and even fewer buying household insurance. The theory is that this will grow during the next decade as the middle class develops, creating more jobs and more opportunities. Have you noticed anything diﬀerent to the UK from an insurance perspective? Three of the diﬀerences I have noticed in the personal lines prices area are that there is no legal requirement to purchase motor third-party liability insurance. In fact, the primary focus for most customers is physical damage cover. Also, selling directly via internet or telephone is virtually impossible as there is an extremely powerful labour union for brokers. And, lastly, the motor insurance market is highly concentrated, with only three or four major players controlling the majority of the market.
Have you learnt a new language? I’ve learnt Portuguese, which is a very important part of adapting to the Brazilian way of life. Spanish is next on my list. Have you taken up a new sport/pastime? I’ve been educating the Brazilians about the English style of football (or lack of it). São Paulo has a large amount of bicycle routes and the warm weather makes it great for cycling every weekend.
July 2013 • A SUPPLEMENT TO THE ACTUARY 5 www.theactuary.com
The International Supplement Brazil
Cocktail of growth factors As Brazil’s economy grows, its insurance market is also changing: an increasingly competitive marketplace is emerging within personal lines and companies are embracing the global trend of implementing a more rigorous enterprise risk management (ERM) framework. Direct insurance in Brazil At present, customers across Brazil have had little exposure to direct insurance and have yet to experience the deluge of advertising that has driven the US and European markets. There is only a limited culture of self service and a general expectation that a sales agent will be available to help customers. However, Brazil is experiencing some of the fastest rates of GDP growth, and internet penetration across the region is growing rapidly. As the reach of the internet expands, so does the potential of internet-direct sales for personal lines insurance. Naturally, the incumbent insurers and brokers are reluctant to cede their market share and have taken steps to strengthen their relationships against this potential change in distribution channels. This has left the door wide open for exploration of the direct channel to be led mainly by smaller players (which are typically part of larger multinationals) and other new entrants, all of which are keen to conquer a sizeable share of the market as ﬁrst movers and capitalise on changing consumer trends. In a similar fashion, Direct Line stormed the UK market back in the 1980s, when its domestic market was dominated by brokers, as Brazil is now.
Rapid GDP growth and fast-increasing internet penetration across the region leave the door wide open for direct sales to take the Brazilian insurance market by storm. Sherdin Omar, James Littlewood and Nuno Vieira take a closer look at the market that is oﬀering opportunities for beleaguered multinationals and start-ups alike The growth of Brazil’s economically active population could spark customer expansion
These same multinationals face stagnant growth and intense competition in their domestic markets, leading to signiﬁcant pressure to maintain proﬁtability, and they see Brazil as a chance to achieve global growth and proﬁtability. During the next 20 years, Brazil’s economically active population is expected to exceed the dependent population (children and seniors), which provides huge potential for customer expansion. This cocktail of growth in internet usage, aggregators and economically active population could lead to a signiﬁcant shake-up.
Could the landscape change? Direct insurance is still at an embryonic stage, accounting for as little as 1 per cent of sales. However, a dramatic shift could be on the way, with four new price comparison websites being launched in the past year and the entrance of many new insurers that are backed by multinationals. Used to selling insurance direct to their customers, they will undoubtedly look to leverage their existing knowledge and systems to establish a signiﬁcant market share.
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signals change for Brazil Beneﬁts of enterprise risk management There is a growing interest in ERM among larger Brazilian ﬁrms, which have embraced measures ranging from explicit and clear risk appetite statements emanating from the top of the organisation to the reinforcement of internal audit, actuarial and risk management functions. One of the main reasons for this trend is the competitive landscape. With new entrants and price comparison websites burgeoning, the incumbent insurers are operating defensive strategies to halt the
“Direct insurance is still at an embryonic stage, accounting for as little as 1 per cent of sales. However, a dramatic shift could be on the way” commoditisation of their products. Their approach is to deploy strategies orientated towards product diversiﬁcation, innovation and sustainable yields, where the assumption of taking riskier positions in search of higher proﬁts is secured by a solid risk management framework. Another reason for embracing ERM is the historical drop of interest rates in Brazil, which is forcing insurers to sustain lower combined ratios and to move to alternative investments, such as equity and real estate, to seek higher ﬁnancial returns. This means new approaches to underwriting, claims management processes, asset and liability management, and riskreturn optimisation of the portfolio. For example, the automobile insurance market is characterised by strong players, ﬁerce competition and a trend towards high combined ratios, exacerbated by the high frequency of fraud and litigation claims. Hence insurers need a constant improvement in data governance, combined with wellinformed, risk-evaluating intelligence and technology throughout the processes of underwriting, risk classiﬁcation, pricing, reserving and investment management. Regulation The other reason for an increased interest in ERM is regulation. In 2013, Brazil’s supervisory authority, SUSEP, updated the 2008 risk-based capital framework. It issued several items of regulation to quantify capital standards for underwriting, credit and operational risk and allowing the introduction of internal models as an alternative framework to the current standard formula. SUSEP is currently reviewing the market risk framework and a new framework is expected to be released by the end of 2013.
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Since 2004, SUSEP has required each insurance company to produce detailed monthly policy and claims data and an annual actuarial valuation report demonstrating the adequacy of all technical provisions as of the ﬁnancial closing date. This includes making statements about data quality, methodological approaches and historical consistency of best estimates. The eﬀect of this requirement was to reinforce the actuarial function within the governance structure in insurance companies. Overall, the agenda for SUSEP in the next few years appears to be consistent with risk-based supervision and with the core insurance principles from the International Association of Insurance Supervisors and the International Actuarial Association. Opportunities for actuaries in Brazil Brazil is a market that is becoming increasingly competitive and has a population that is still growing. Changes in the market, led by competition and regulation, oﬀer a wealth of challenges and hence exciting opportunities for actuaries, spanning product design (general insurance and life), technical pricing, risk and investments. In summary, sound and eﬀective risk management may be the best strategy for Brazilian insurers to maintain their competitive edge. Sherdin Omar is a senior manager in Ernst & Young’s ﬁnancial services team and is based in the UK. James Littlewood is a director in Ernst & Young’s Global Insurance Centre and has a strategic business development role covering all of Latin America. Nuno Vieira is a senior manager in Ernst & Young’s ﬁnancial services team and is based in Brazil.
July 2013 • A SUPPLEMENT TO THE ACTUARY 7 www.theactuary.com
What is driving the demand for Actuaries in Asia? At the recent General Insurance Conference (GIC) in Singapore a key challenge facing by Insurers in Asia is the forthcoming â€œRegulatory Tsunamiâ€?. Each country is experiencing a wave of new risk based capital regulations and enterprise risk management related initiatives. In Singapore you have RBC2 and the ORSA both anticipated for the end of the year, ICAAP is new in Malaysia, Indonesian Financial Condition Report (FCR) was effective from June 2013 and the China Insurance Regulatory Commission (CIRC) intend to implement a 3 pillar structure, Thailand adopted RBC regulations this year and Hong Kong is in consultation regarding what they need to put in place. Combined with the huge appetite to purchase insurance products as GDP per capita rises especially in the Big Emerging Markets (BEM) of China, Indonesia and South Korea. This volume of market activity and sector growth creates excellent opportunities for Actuaries. Key skills needed by (Re) Insurers and Consultancies include: Â…"DUVBSJBM.PEFMMJOHÂ°1SPQIFU .P4FT "'. *HMPPBOE3FNFUSJDB Â…'JOBODJBM3FQPSUJOHÂ°.$&7 &7&&7 *'34 Â…3JTL.BOBHFNFOUÂ°'JOBODJBM.BSLFU$SFEJU*OTVSBODF3JTL Â…$BQJUBM.BOBHFNFOU&DPOPNJD$BQJUBM.PEFMMJOH &4( 4PMWFODZ** Â…*OWFTUNFOU.BOBHFNFOUBOE"TTFU-JBCJMJUZ.BOBHFNFOU "-.
Â…1SJDJOH1SPEVDU%FWFMPQNFOU To discover the energy, excitement and entrepreneurialism of working in Asia first hand please contact the International team at High Finance Group:
Jason Sykes Director
Clare Bethell Senior Consultant
Collette Edwards Consultant
Hallie Chin Researcher
THE ACTUARY â€˘ May 2013 www.theactuary.com
The International Supplement Switzerland Q&A Sonal Shah had just completed a Solvency II contract in London and was thinking of getting away for the British winter. Although she may have had somewhere warmer in mind, when an opportunity to work in Switzerland for four months presented itself, it was too good to say no to.
A winter escape? as the client needed me to start working as soon as possible. Given the contract nature of my role, I had to make all travel and accommodation arrangements myself. One of my main challenges was ﬁnding accommodation at very short notice, which is diﬃcult enough in Zurich, and even more so for short-term tenancies.
How did you ﬁnd the contract role overseas? I had completed a Solvency II documentation contract in London, and was contemplating a few weeks oﬀ to travel to sunnier climes to escape the British winter. It just so happened that a recruitment consultant got in touch with me around that time to gauge whether I would be interested in working on a project in Zurich for a few months. I decided to apply for the role. What attracted you to the particular country that you were working in? Despite Switzerland not conforming to my hopes of ‘sunnier climes’ at that time of year, I was keen to revisit Zurich. It was a city I was familiar with, having previously worked there for three months a few years ago. I suppose spending winter in Switzerland compared with the UK wasn’t too diﬃcult to weigh up! What were the main challenges you faced when moving overseas? As is often the case with contracting, an urgent need for a suitable resource means that the turnaround time from applying for a role to being hired can be very short. I had under a week to sort out my move
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What are the main diﬀerences you have found working as a contractor overseas compared with contracting in the UK? In only a couple A popular approach to of hours, one can be on a mountain, contracting in the UK is to do it via one’s own amidst the limited company. I found wonderful Swiss that contracting is far countryside more complicated for foreigners in Switzerland whose company is not registered there. This was made worse by lack of time to overcome the mountain of Swiss bureaucracy. So the recruitment agency put me in touch with a company specialising in global payroll and contract management. For a not insubstantial monthly fee, given the cost of living in Switzerland, the management company arranged my work permit/registration, payroll, tax, social security, pension and professional indemnity insurance. Eﬀectively, the set-up was such that I was on the management company’s payroll as a consultant to the client. This meant that the contract was in my name. Such a set-up may not be favoured by some UK contractors, who carefully plan the structure of their limited companies around both personal and corporation tax eﬃciency. Depending on local rules, contractors may be allowed a certain personal tax-free expense allowance.
Despite the increased organisation and costs involved, contracting overseas can provide the opportunity to interact with a diverse group of professionals and to get involved in interesting and possibly more varied work than contracting roles in the UK, which are typically rather speciﬁc in nature. Do you have any advice for others looking for contract roles overseas? Do your research on how contracts are set up, work permit/visa requirements, the cost of living (given that, as a contractor, you will be responsible for all your expenses), tax and other compulsory deductions, local language requirements, lifestyle changes and cultural diﬀerences. Don’t be put oﬀ by the extra administration involved in contracting abroad; the beneﬁts far outweigh this. Taking on a contract role for a few months can be an excellent way to explore a new country while enhancing your actuarial experience. What is the best thing about where you worked? Nature in Switzerland is splendid. The excellent Swiss public transport means that, from Zurich, one can be on the mountains within a couple of hours. And the worst? Perhaps the temperature dipping to below -10 degrees Celsius in the city more than once. Have you learned a new language? I managed to improve a little on my basic German skills, and picked up a smattering of the local language, Schwyzerdütsch (Swiss German). What was your favourite local custom / tradition and did you join in? The Swiss love to make the most of their countryside; in winter months, winter sports in the mountains are very popular. Here, I discovered a new sport: snowshoeing. Not to mention the scrumptious Swiss chocolate and fondue – fortunately suitable fare for a vegetarian!
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The International Supplement Switzerland
Geneva Association: home What are the key objectives of the Geneva Association? The Geneva Association (GA) is the leading international insurance think tank for strategically important insurance and risk management issues. It identiﬁes fundamental trends and strategic issues, where insurance plays a substantial role or which inﬂuence the insurance sector. The Geneva Association membership comprises a statutory maximum of 90 chief executive oﬃcers (CEOs) from the world’s top insurance and reinsurance companies. Its members have total assets of more than US$11.7tn, are headquartered in 27 countries around the world and employ more than 2 million people who serve customers in more than 140 countries.
Sonal Shah meets up with John Fitzpatrick, secretary-general of insurance economics think tank the Geneva Association, to gain a closer understanding of the association, its work and its ambitions for the future
solely Swiss or indeed European organisation. The chairman is from the US, as am I, although I have spent a large part of my career in Europe. What are the three most important research topics for the GA? Financial stability, climate risks and ageing populations. Since the ﬁnancial crisis erupted in 2008, policymakers around the world have been working on improving oversight of ﬁnancial markets. The insurance sector has, rightly, been an area that they have been looking at. We support the G20-led eﬀorts to tackle systemic risk in the ﬁnancial system. However, any regulations imposed on insurance companies must be appropriate to address the risk presented and not aﬀect the balance of insurance markets and the
Please describe the opportunities that the GA oﬀers to its members It’s a very exciting organisation owing to the seniority of its membership. For example, at the annual general assembly (AGM) in London in June 2013, we had 60 chief executives around the table meeting regulators, senior politicians and central bankers for discussions on the economy, legislation and other issues that aﬀect the insurance industry. There are two key aspects of the association that our members seek and enjoy. First, with only CEOs as members, it allows industry leaders of both large and small companies to network and meet one another on equal terms, without distractions. The AGM is the main occasion for this, but others such as our annual Insurance and Finance Seminar also provide opportunities to meet other C-suite industry executives. Second, we organise international expert networks and manage discussion platforms for the senior insurance executives and specialists of our members’ companies and provide an interface with policymakers, regulators and multilateral organisations. Does the GA focus on Switzerland or reach out into the international arena? The Geneva Association is very much a global organisation. As our members come from 27 diﬀerent countries, we are far from being a
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to peak performers business of insurance unnecessarily. Over the past four years, we have produced research and analysis to support regulators in their understanding of the insurance industry and pursued an intensive dialogue with regulators, supervisors, central bankers and the insurance industry. Second, we are interested in natural catastrophe risks, principally climate risks but also disaster risks as a whole. It is a fact that disasters are happening more often and they are causing bigger losses. Populations are growing rapidly and urban areas have grown enormously, concentrating economic risks. The value of the property that we own and the value of our possessions continue to increase rapidly. At our AGM we launched our most recent report, Insurers’ Contributions to Disaster Reduction – a Series of Case Studies, which provides an analysis of the ways in which governments and insurers can and do collaborate in mitigating the eﬀects of catastrophes. The concept was developed as part of our ongoing dialogue with the United Nations International Strategy for Disaster Reduction (UNISDR). Margareta Wahlström, United Nations special representative of the Secretary-General for disaster risk reduction, joined us for the conference. A video of the meeting is now available on our website www. genevaassociation.org/ Although the ﬁnancial impact of a major disaster is clearly noticeable in developed countries, an exceptional economic boom – driven above all by reconstruction – can quickly revive the slump in economic performance. Insurance plays a signiﬁcant part in this resilience. As an example, in Japan, after the 2011 earthquake and tsunami,
“We have made a signiﬁcant diﬀerence to discussions between the insurance industry and the regulators in dealing with systemic risk” some 90% of the US$38.5bn of insured losses was paid within three months of the disaster. By creating an environment in which insurance can work eﬃciently, governments have the opportunity to share risk eﬀectively with the private sector. That takes the potential cost of disasters away from their own economy and spreads it around the world through insurance and reinsurance. We are working hard to raise this issue with our governmental counterparts to aid progress. Lastly, we are looking at the implications of ageing populations. Increasing life expectancy and falling fertility rates are creating a demographic situation that has become one of the greatest economic and societal challenges of the 21st century. Funding these longer lives will become increasingly diﬃcult under current schemes. The sustainability of public and corporate pension schemes is also at risk – the cost of funding state pension beneﬁts is set to rise dramatically – by more than double in some countries. This poses a considerable political and economic dilemma about how to keep the burden on the working population bearable while not sacriﬁcing the standard of living for those drawing pensions. Against this backdrop, governments and employers tend to shift responsibility for oldage security to individuals. The ﬁnancial crisis has accelerated this. Insurers can make a meaningful contribution to old-age security if a conducive legal and regulatory framework is in place, devising innovative solutions for the broadest possible spectrum of society. We aim to foster a better collaboration between insurers and governments on this issue. Tell us about the GA’s conferences We run a series of conferences, approximately 20 per year, on the issues that I’ve just mentioned. They are increasingly seen as a forum for discussion of insurance
issues and challenges. We are ﬁnding it necessary to limit attendance to keep the discussion at an eﬀective level. What would you see as the GA’s greatest achievement or inﬂuence to date? The association has achieved a lot in recent years. In particular, we have made a signiﬁcant diﬀerence to discussions between the insurance industry and the regulators in dealing with systemic risk. The work of regulators has required a broad overview of our industry, tackling misconceptions and educating regulators whose experience is primarily in banking about the role of insurance in the ﬁnancial system at an international level. Our work has been well received by regulators and has helped in a series of areas: to decouple the regulatory process for insurance from that of banking; to encourage acceptance that core insurance activities do not create systemic risks; and to lead regulators to focus on activities rather than on institutions themselves. What are the GA’s main challenges? The global issues faced by the insurance industry – changes in regulation that may unnecessarily aﬀect the way insurers do business, and the dual challenges of ageing populations and climate risks. From an operational perspective we are a relatively small organisation and, like most, could always do with more resources. What are the main diﬀerences you have found between working overseas and in the UK? I’ve worked in Europe, the UK and the US. They each have their own characteristics and merits. I can’t say I have a favourite, but it has been a pleasure to work within a broad range of cultures and styles.
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From Jamaica to Joburg Kadene Clarke shares her experience on coming to South Africa after starting off her career in the Caribbean. WHAT IS YOUR BACKGROUND KADENE?
I spent two years working in pension consulting for Towers Watson in the US and ﬁve years working in life insurance in Jamaica and Barbados. I now work with Hannover Re Africa in the Corporate Actuarial department. WHAT WERE YOUR REASONS FOR COMING TO SOUTH AFRICA?
HOW DO THE SALARIES AND COST OF LIVING IN SA COMPARE TO THAT OF THE CARIBBEAN?
Salaries are lower in SA than in the Caribbean but so is cost of living. Perhaps the biggest differential I see is with food. It is certainly cheaper here to go to a high-end restaurant and enjoy a three course meal than it is to do the same back in Jamaica or Barbados. WHAT DO YOU DO IN YOUR SPARE TIME?
My ﬁancé and I teach Math to grade 4 and 5 kids on Saturdays in Soweto, which we absolutely love! Outside of that, we both enjoy hiking and travelling.
At the time that I was thinking of moving to SA, I was at a professional crossroads. I was not quite sure that I wanted to be an actuary but the thought of having to abandon the many years spent studying and start anew were quite daunting. SA was attractive, not only because of its developed life insurance market, but also because of the many non-traditional roles that actuaries play. The move presented the possibility of exploring something new while making use of my actuarial training and experience.
TRICKY QUESTION: BEING A “FOREIGN NATIONAL”, HOW DO YOU SEE BLACK ECONOMIC EMPOWERMENT IMPACTING THE JOB MARKET?
WHAT WERE THE CHALLENGES OF GETTING A JOB IN SOUTH AFRICA? ANY RESTRICTIONS?
Quite honestly, the job hunting process wasn’t as difﬁcult as I thought it would be. Fortunately, the SA government has a special permit in place, which allows qualiﬁed non-South African actuaries to come to SA and explore opportunities. I believe employers were more willing to meet with me because I already had a work permit. Sure, I encountered the challenge of not being a BEE candidate but the SA3 team was quite determined in their effort to ﬁnd me a job that was in line with my expectations. I’ve now been with Hannover Re Africa for a year and I’ve never been happier!
There are a number of things that impress me with working in South Africa. Firstly, the level of actuarial knowledge and expertise here is quite impressive. I attended ASSA’s convention last year and was amazed by the depth and breadth of the topics covered. Secondly, it is very encouraging to see so many young people in very senior roles in organizations, from CEO’s to senior partners at big ﬁrms. The youth have a lot to offer, and I don’t believe this is fully appreciated everywhere. I also love the fact that actuaries here take on a lot of non-traditional roles. This certainly raises the proﬁle and marketability of the profession and discards the common notion of what an actuary should be.
WHERE ARE YOU SEEING THE GREATEST DEMAND FOR ACTUARIES?
ANYTHING ELSE YOU WANT TO SHARE?
The Life Insurance industry has quite a number of opportunities for actuaries. With the work that is being done with the government’s national health insurance scheme, I think you will see an increase in the demand for health actuaries in the public sector.
My experience in SA has been nothing short of amazing both on a professional and personal level. The country continues to face a number of challenges, but it seems to me that everyone is committed and willing to work together for the good of each other and the country.
HOW DOES THE SOUTH AFRICAN CULTURE DIFFER FROM CARIBBEAN / AMERICAN CULTURE IN THE WORKPLACE (AND IN EVERYDAY LIFE)?
The SA job culture is very different from what you would see in the Caribbean/America, although to be fair, my view of the SA workplace is based mainly on my experience at Hannover Re Africa, so I’m not sure how representative my view is, but there is deﬁnitely a greater work life balance here than in the
Caribbean/America. Outside of the workplace, I would say SA is very similar to the Caribbean. Folks here are so warm and friendly. That, in itself, is the deﬁnition of the islands!
BEE will deﬁnitely play an important role in the job market. However, I believe there are a lot of underdeveloped sectors such as education and health, which will beneﬁt from the expertise of qualiﬁed actuaries, regardless of their ethnicity. WHAT IS THE BEST THING ABOUT WORKING IN SOUTH AFRICA?
THE ACTUARY • May 2013 www.theactuary.com
South African Actuaries Abroad
SA3 is a dedicated actuarial recruitment company, run by actuaries. We pride ourselves in exceptional service and have numerous satisﬁed clients and candidates in South Africa and abroad. Our aim is to make the job searching process as easy and discreet as possible for the candidate and the ﬁlling of vacancies quickly and effective for the employer. Whether you are looking for a new challenge in South Africa, the UK, Australia or the rest of the world, we offer a dedicated and service focused recruitment solution unmatched by anyone else in South Africa. Henda (FIA, FASSA) qualiﬁed in 2001 and has 12 years of industry experience. She has worked in life and health insurance in South Africa and Australia before she joined the team in 2009. Her hobbies include running, tennis, camping, herb gardening and 4x4 trips with her husband and children.
firstname.lastname@example.org Cell: +27 (0)82 823 9978
email@example.com Cell: +27 (0)83 603 2961
LIFE PRODUCT DEVELOPMENT SPECIALIST
Wilhelm (FIA, FASSA) qualiﬁed as an actuary in 2004 and co-founded SA3 (South African Actuaries Abroad) in 2005 with his wife Helena. He worked in the Life Insurance Industry in both the South African and UK markets and gained his experience at some of the major insurers in both countries. His 3 kids take up most of his spare time, but besides that, he is a keen traveller. His hobbies include any sport that’s played with a ball.
Cape Town Our client is searching for a Senior Actuarial Student or Newly Qualiﬁed Actuary to join their young and innovative new venture. The incumbent must be able to work independently and take initiative. Responsibilities will include research, development, pricing and implementation of life products.
BUSINESS DEVELOPMENT ACTUARY
Johannesburg We have a role for an outgoing and energetic newly qualiﬁed actuary with previous life experience to join our client’s business development team. The incumbent will be responsible to build and maintain client relationships.
GI ACTUARIAL SPECIALIST
Johannesburg A position for an Actuarial Student has become available within our client’s short term business. We are looking for a candidate with relevant experience and good technical skills to be involved in reserving, capital modelling and reporting.
Cape Town Our client is searching for a senior resource with previous health, life or EB experience to expand the actuarial capacity within their company. Key responsibilities will include the pricing, design, reporting on and management of health products.
LIFE CAPITAL MODELLING SPECIALIST
Johannesburg We have a role for a suitably experience candidate (Newly Qualiﬁed Actuary) to join our market leading client’s capital modeling team. The successful candidate needs excellent exam progress and previous life valuations or capital modeling experience.
NEW INITIATIVES ACTUARY
Cape Town Our client is searching for a Nearly/Newly Qualiﬁed Actuary for a new exciting role in their Employee Beneﬁt Business. The incumbent should be able to work independently and be able to work with various stake holders. Previous EB experience will be beneﬁcial.
LIFE CONSULTING ACTUARY
Cape Town or Johannesburg Our client is searching for a Nearly/Newly Qualiﬁed Actuary to take a senior role in their Cape Town or Johannesburg ofﬁce. Responsibilities will include the full spectrum of actuarial services across a range of companies, including exposure to leading industry and technical developments. Previous valuations or technical life insurance background is required.
LIFE VALUATIONS SPECIALIST
Johannesburg We have various roles for candidates of all levels with previous life valuations experience. Roles range from valuations actuary to actuarial analyst and involves delivery of all corporate actuarial functions of the company.
www.sa3.co.za May 2013 • THE ACTUARY 47 www.theactuary.com
The International Supplement Dubai Q&A Francesca Mills followed her husband to Dubai for his work. Although she didn’t have a job prepared, she was happy to trade her British lifestyle for sunnier climes. However, the move gave her the chance to work in sectors that would not have been open to her and, two years later, she’s still not regretting it
A land of opportunity issue in a Muslim country, but that hasn’t been a challenge. There are diﬀerences across the region, but I’ve not found the UAE to be discernibly diﬀerent from the UK.
Explain what motivated you to seek employment overseas. My husband and I relocated for his job. How did you ﬁnd the role you are doing? I moved over without a job and spent two or three months exploring my options. At the last minute, just as I was about to join a diﬀerent company as a life actuary (my area of practice in the UK), a recruitment ﬁrm called to tell me about the Munich Health role. From our ﬁrst meeting it seemed like the right ﬁt. What attracted you to the particular country that you are working in? Having spent three decades in Britain, the sunshine was a big draw! For nine months of the year, Dubai enjoys a perfect climate and the lifestyle that goes with that. What were the main challenges you faced when moving overseas? This has to be one of the easiest countries to relocate to – it is set up to welcome expatriates. The major frustrations arose from arriving under my husband’s sponsorship. It meant I needed his formal permission to do absolutely everything. He even received a notiﬁcation every time I made a purchase from our joint account! Thankfully, I’m on my own visa now. In a work sense, I expected being female to be more of an
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What are the main diﬀerences working overseas compared with working in the actuarial profession in the UK? Dubai’s population is over 90% expatriate and the mix of nationalities is immense. One has to be respectful and understanding of diﬀerent cultures. The working day Dubai is ‘set begins at 8am and can be up to welcome long, but my work-life expatriates’ – if balance is far better than in you can handle the UK. It helps that my the scorching ‘commute’ takes 5 minutes heat, of course and that the beach is right on the doorstep! From my own experience, there is more opportunity to prove yourself in a completely new role. What is the most topical industry issue facing actuaries in the country where you work? In my ﬁeld, I think it is the ever-changing regulatory landscape. Each country in the region has its own regulatory regime. We see huge diﬀerences between Abu Dhabi’s forward-thinking Health Authority and Dubai’s less proactive equivalent, creating two very diﬀerent health insurance markets in geographically adjacent Emirates. We know that Dubai will aim to catch up and that big changes could be right around the corner! What is the best thing about where you work? Variety. I get involved in almost all aspects of the business, from underwriting, through medical research and disease management, to ﬁnancial forecasting. I like that I’m applying
the range of actuarial skills to diﬀerent scenarios every day. And the worst? I’ll never get used to starting the working week on a Sunday! Give an unusual fact about the city in which you work. Dubai’s ultra-rapid expansion has left a few glaring omissions, such as the absence of street addresses! What are the key attributes an actuary or actuarial student would need to work in your role / country? Excellent communication skills. I’ve found my ability to phrase complicated things in a simple way has really been tested. Where do you call ‘home’? Home will always be York. What is your favourite local custom / tradition and do you join in? Whilst Dubai is very tolerant of non-Muslim cultures, Ramadan is strictly observed and it deﬁnitely changes. I like that the more spiritual atmosphere lends itself to reﬂection. I have attempted to fast for a few day to show support for my colleagues. Have you learned a new language? Not yet. English is spoken everywhere and appears on all signs, but some Arabic would be useful and show a commitment to the region, which expats in Dubai sometimes struggle to convey. Have you taken up a new sport / pastime? I’ve qualiﬁed as a ﬁtness instructor. I meet amazing new people every day in my classes. How often do you read The Actuary magazine? Do you read it online or in print? Do your colleagues read it? I read it every month – it is a welcome break from the computer. It is important for me to keep up with the latest actuarial developments from the outside world.
The International Supplement Singapore Q&A Mark Godson had always wanted to live and work overseas, but had never set his heart on anywhere in particular. When an opportunity to work in Singapore presented itself, he said yes and jumped on a plane eight weeks later. Four years on and he would recommend it to anyone
When opportunity knocks Explain what motivated you to seek employment overseas. I had always wanted to work overseas, but without a speciﬁc place in mind. I thought it would be interesting from a professional and personal point of view. How did you ﬁnd the role you are doing? One of the partners in the ﬁrm was asked to move to Singapore to set-up an actuarial oﬃce. He asked me if I would assist him. The opportunity was there and I decided to take him up on the oﬀer. There were only about eight to 10 weeks between accepting the oﬀer, and being on a plane to Singapore. What attracted you to Singapore? There were a number of factors that contributed. There is a huge diﬀerence working in a country with a rapidly developing economy compared to one that has already developed. The role meant that I could experience the full range of this spectrum. I was forced to alter my way of working in each one, and really get to know individual industries rather than thinking of the region as one entire whole. Secondly, it had to be somewhere that both my wife and I would be happy to live. We had previously visited Singapore, and thought that it could be that place. Lastly, English is the main business language spoken in Singapore, meaning the transition would be easier. What were the main challenges you faced when moving overseas? From a professional perspective, the main challenge was that I had zero knowledge of the local life insurance industry in Singapore, or any of its neighbouring countries. My ideas on how things should be done were based on my UK experience, so I needed to adapt my way of thinking. From a personal perspective, it was the fact that we were moving to a country that we had no connection to. While it was easy to meet people, it naturally takes a little while to form close friends. Luckily, we have made some lifelong friends from our time overseas.
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What are the main diﬀerences you have found to working overseas compared with working in the UK? Actually, the main thing I have noticed is that actuarial work is very similar the world over. The fundamental principles do not change, you are just applying them diﬀerently.
Would you describe yourself as a global actuary and why? Yes. Working abroad has made me realise how universal and well thought of the actuarial qualiﬁcation is, and how much of a diﬀerence you can make. I would certainly consider working in other locations in the future.
What is the best thing about where you worked? I have had the pleasure of working with some fantastic people, both internally and with our clients. Working in a small team means that you can generate a strong team spirit and really get to know people.
Where do you call ‘home’? London, and it always will be.
And the worst? Some very long nights working in hotel rooms or project rooms.
Have you learned a new language? Unfortunately not. I have learned a few words of a number of diﬀerent languages, but they are usually food related, or occasionally insults.
Give an unusual fact about the country in which you work. Apart from Monaco, Singapore is the most densely populated country Although one of in the world. However, the most densely because it’s so well populated cities planned, it doesn’t feel at in the world, all claustrophobic. Singapore retains a sense of space
What is your favourite local custom? Singaporeans love to eat out, and it’s easy to see why. Most people will go out to eat lunch, dinner and sometimes a late supper as well.
Have you taken up a new sport / pastime? Being so hot, swimming is ideal. I could swim almost every day in fantastic weather. How often do you read The Actuary magazine? Each month, in print, and back to front like everyone else!
What are the key attributes an actuary or actuarial student would need to work in your country? A willingness to adapt. There are far fewer actuaries in companies here than in the UK and each person needs to take on a broader role. Do you have any advice for others looking for overseas work? Don’t be afraid to try it. The absolute worst outcome is that you don’t like it and move back home again.
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The International Supplement Japan Q&A After working in Japan as a pensions actuary, Yosuke Fujisawa moved to Canada to obtain a masters in actuarial science. He returned to Japan with an interest in risk management and the belief that Japan could become a pioneer in the ﬁeld, compelling him to change his career focus from pensions to risk
Risking it all for a better future
What country and city are you based in? Tokyo, Japan. Explain what motivated you to seek employment overseas. In order not to conform to the stereotype, you should experience a diﬀerent culture from your own. How did you ﬁnd the role you are doing? I am curious about the role of actuaries in risk management. Insurance and pensions have a long history, but risk management doesn’t – it is possible to be a pioneer in the ﬁeld. That’s one of the reasons why I changed from pensions to risk management. What might attract people to work in Japan? Traditional architecture, delicious food and a feeling of hospitality. Not all Japanese can speak English, but we welcome foreigners. You can feel the hospitality. In terms of an actuarial career, we are facing diﬃcult economic and demographic conditions that have never been experienced before, such as low interest rates and prolonged longevity. Some traditional actuarial techniques may not work in Japan. We need to think ‘outside the box’. I believe
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that, in the future, the Japanese experience could be a lesson for other countries. One of my ambitions is to share what we learn from Japanese situations with overseas actuaries at international actuarial conferences.
enjoy Christmas and White Day. Good news for us when exams are held before Christmas!
What is the most topical industry issue facing actuaries in the country where you work? For pension actuaries, protecting deﬁned beneﬁt (DB) plans is the most topical issue. A recent fraud committed Sardines: Tokyo by an investment adviser rush hour is in Japan, similar to notorious for Bernard Madoﬀ ’s Ponzi being one of scheme in the US caused the busiest in some DB plans to lose the world part of their funds. This fraud triggered a debate about whether employee pension funds, traditional DB plans in Japan, should continue. This problem is now under discussion in Japan’s National Diet – similar to the UK Parliament.
Do you have any advice for others looking for overseas work? Go for it. Working overseas will broaden your mental and intellectual horizons.
What is the best thing about where you work? Job security. Japan has only 1,300 Fellows of the Institute of Actuaries of Japan in spite of the large insurance market. That scarcity contributes to our job security. And the worst? We have to take a packed train to and from our workplace in Tokyo. Give an unusual fact about the country in which you work. Actuarial exams are held around Christmas, and the results of the exams are issued around Valentine’s Day (14 February). Our central motivation to pass the exams is to
What are the key attributes an actuary or actuarial student would need to work in your role / country? In the area of risk management, you need to have ‘healthy scepticism’. Unbiased views will prevent management from making mistakes and will lead them to success.
Would you describe yourself as a global actuary and why? So far, I don’t think so, but I will be one day. Where do you call ‘home’? Waterloo in Canada. It’s the place where my foundations as an actuary were built. What is your favourite local custom / tradition? The voluntary spirit like we saw after the 2011 Tōhoku earthquake and tsunami. Many Japanese people volunteered to help the victims. We can see a similar spirit in the actuarial ﬁeld. For example, since Japanese universities don’t have actuarial departments, most actuarial candidates must take the exams while working. To support them, we started an online-based actuarial exam study group, which now consists of more than 600 candidates. They can access study materials for free, and they periodically gather to tutor each other. This voluntary spirit is part of the culture in Japan. How often do you read The Actuary magazine? Do you read it online or in print? Do your colleagues read it? I read the magazine online by seeing links through a Twitter feed that shows new articles – so it’s very convenient to read. I’m not sure my colleagues read it, but my actuarial friends on Twitter deﬁnitely do.