The Actuary August 2013 by Redactive Media Group

AUGUST 2013 theactuary.com

Interview: John Lockyer

The magazine of the actuarial profession

Introduces the Worshipful Company of Actuaries

Modelling The dangers of focusing on ‘biting scenarios’

Soft skills Making an impact with successful presentations The Actuary

Arts Is propaganda a thing of the past?

August 2013

Turning up the volume on deafness compensation claims p01_aug_cover3•gc.indd 1

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Appointments

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AUGUST 2013

Contents SHUTTERSTOCK

26 “With claims rocketing over the past few years, particularly in 2012, deafness has been described by some as ‘the new whiplash’.”

UP FRONT 9

SIAS events

10 IFoA news 14 Industry news 16 People/society news

FEATURES

AT THE BACK

18 Interview: John Lockyer

34 Arts

John Lockyer, past Master of the Worshipful Company of Actuaries, remains immensely proud of its charitable endeavours. Natasha Rademeyer reports

22 Health: Back to the future

OPINION 5

Editorial Being an actuary can be a force for good. But it can also be fashionable, suggests Deepak Jobanputra

President’s comment Volunteer roles can be immensely rewarding for the individual and are the lifeblood of the profession, says David Hare

Soapbox Sally-Anne Etienne says consumers must be encouraged to engage in their own personal welfare

Thomas Kenny explores how long-term care legislation has evolved in the UK and what may be on the horizon

24 Health: Filling the cracks Alex Isted explains why actuaries need to involve claims professionals to price and develop products properly

Matthew Edwards casts an eye over the best books now appearing on screen

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

37 Puzzles Try the latest crossword and Mensa puzzles for a chance to win Amazon vouchers

39 Actuary of the future Holly Hook of Towers Watson

40 Student Jessica Elkin weighs up the options of studying in both hot and cold weather

26 Health: Hear today, gone tomorrow? Work-related deafness compensation reached an all-time high in the 1990s and is on the rise. Avital Kaye explains why

28 Soft skills: Communication Most presentations are dull and ineﬀective, but they don’t have to be. Andy Bounds shows how to keep your audience awake and interested

31 Life: A bark worse than its bite 36 Book review

Sharon Maguire sees propaganda in action at a thought-provoking exhibition

Chris Hursey explores insurance capital modelling, and warns of the dangers of focusing too heavily on ‘biting scenarios’

ONLINE Football crazy! An apt description for how much Premier League teams and their insurers pay to have players stuck in the treatment room. Paul Moorshead and Aron Bor oﬀer insights into applying actuarial models to the injury risks that could oﬀer a predictive solution.

Managing your own moving risk Pauline Davis oﬀers important pre-departure advice to actuaries who are planning to relocate abroad.

WRITER OF THE MONTH Andy Bounds wins a £50 book token for his article on communication, courtesy of the Staple Inn Actuarial Society

August 2013 • THE ACTUARY www.theactuary.com

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Appointments

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THE ACTUARY • May 2013 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

Opinion

Chief sub-editor Caroline Taylor

Managing editor Sharon Maguire +44 (0)20 7880 6246 sharon.maguire@redactive.co.uk

News editor Vivienne Russell +44 (0)20 7324 2788 vivienne.russell@redactive.co.uk

Editor Deepak Jobanputra editor@theactuary.com

Recruitment and display manager Katy Eggleton +44 (0)20 7324 2762 katy.eggleton@redactive.co.uk

Editorial team Sarah Bennett health, international Jeremy Lee pensions, investment, ERM, banking

Recruitment sales Gill Rock +44 (0)20 7880 6234 gill.rock@redactive.co.uk

Richard Purcell Richard Schneider, life, Solvency II, mortality/longevity, modelling and software

Digital sales Leila Serlin +44 (0)20 7324 2787 leila.serlin@redactive.co.uk

Sonal Shah, GI, reinsurance, environment, careers (UK)

Art editor Gene Cornelius

Production manager Jane Easterman +44 (0)20 7880 6248 jane.easterman@redactive.co.uk Print Southernprint Ltd Internet The Actuary website: www.theactuary.com

Profession news editor Alison Jiggins +44 (0)20 7632 2172 alison.jiggins@actuaries.org.uk People/society news editor Yvonne Wan social@theactuary.com Student page editor Jessica Elkin student@theactuary.com Arts page editor arts@theactuary.com

SIAS website: www.sias.org.uk Actuarial Profession website: www.actuaries.org.uk

Circulation 22,733 (July 2011 to June 2012)

Geek chic and whiplash

Helen Lau, GI, reinsurance, environment, careers Aoife Martin, GI, reinsurance, ERM, Solvency II

Picture editor Akin Falope

Being an actuary can be a force for good. But it can also be fashionable, suggests Deepak Jobanputra

SIAS representative Alvin Kissoon Editorial advisory panel Peter Tompkins (chairman), David Campbell, Matthew Edwards, Martin Lunnon, Marjorie Ngwenya, Sherdin Omar, Richard Purcell, Andrew Smith, Nick Silver

Subscriptions For subscriptions from outside the actuarial profession: UK, Eire and Europe: £55 a year/£5 a copy. For the rest of the world: £80 a year/£7.50 a copy. Please contact: Alison Jiggins, The Actuarial Profession, Staple Inn, High Holborn, London WC1V 7QT T +44 (0)20 7632 2100 E alison.jiggins@actuaries.org.uk Students on actuarial science courses at universities may join the Staple Inn Actuarial Society for £6 a year. They will receive The Actuary as part of their membership. Apply to: Membership Department, The Actuarial Profession, Maclaurin House, 18 Dublin Street, Edinburgh EH1 3PP. T +44 (0)131 240 1325 E membership@actuaries.org.uk Changes of address should be made known to the membership department as above. For delivery queries, please contact: Jane Easterman E jane.easterman@ redactive.co.uk 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. Important information for contributors to The Actuary By submitting content for publication you confirm that: (a) You (and/or other named contributors) are the sole author(s) of the content submitted; (b) The content you submit is original and has not previously been published (unless you specifically advise us to the contrary); (c) You haven’t previously licensed the use of the content you submit; (d) So far as you are aware, the content submitted will not infringe any third-party rights, be defamatory or in any way illegal.

The actuarial profession, I’m sure most, if not all, of you will agree, is special and perhaps even unique. Not only is an actuarial career deemed to be an aspiring choice but it is also one that can make a genuine difference to society. It is frequently cited as being complex and ‘geeky’. Although, I understand from the next generation that the label represented by ‘geek’ nowadays is rather fashionable. I am, however, still surprised at the variety of explanations of what it is an actuary does. We have an article this month on soft skills with a focus on communication, and my take on the advice from this is that we should not just say ‘I’m an actuary’ when asked what we do. This is likely to impress and raise an eyebrow, but may not accurately convey the reality of the role. The impact that actuaries have on society is positive. Personally, I am pleased to be able to say that I work in health insurance and I strongly promote the benefits of leading a healthy life, with support in achieving this. The effect of this, through my employer, is far-reaching and I am sure that many of you will have stories of how you and your employer make a beneficial contribution to the lives of many people. Our lead article on industrial deafness is another great example of how actuaries look to provide support to an individual’s wellbeing, in this case those whose hearing has been affected through their working lives. It is a topic that is receiving considerable attention, given the rise in the number of claims, and is cited in the article as being the new ‘whiplash’. I believe it is very important that we portray our profession as one that really has a positive effect on people and society in general as we extend our reach into industries beyond our traditional fields. In years to come we may even see ‘trendy’ T-shirts with an iconic actuary logo – that’s if they don’t already exist.

‘It is important that we portray our profession as one that has a positive eﬀect’

Deepak Jobanputra editor@theactuary.com

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August 2013 • THE ACTUARY 5 www.theactuary.com

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www.cassknowledge.com/consulting May 2013 • THE ACTUARY 9 www.theactuary.com

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›

Opinion President’s comment

David Hare is the president of the Institute and Faculty of Actuaries

DAVID HARE

Valuing our volunteers The world we live in does not stand still and the way we live and work is always changing. Technology continues to advance and to influence how we work as we rely on it so much more. We all, especially as we get older, have an unspoken fear that who we are and what we are doing may become irrelevant. As I outlined in my presidential address, during my time as president I want to ensure that the relevance of our profession is evident throughout the world. In June, I celebrated the achievement of becoming an actuary with some of our newly-qualified actuaries, their friends and families. They are just starting their careers and have the promise of a bright future ahead of them. By grasping opportunities at every stage of our working life we can remain pivotal in the industries that we support and we can shape and direct the actuarial profession to ensure that what we do is always relevant. A job can provide income, security and recognition – but doing something that helps further your personal development and at the same time gives something back to your profession can be rewarding too. IFoA volunteers have a significant effect on the lifeblood of our organisation and the actuarial profession’s impact and influence. They hail from across the membership and from all over the world. They bring fresh ideas to the topics that we research and how we present our findings to decision-makers, in the public and private sectors, and to the wider public. The IFoA cannot operate without them. They help to ensure that the actuarial profession does not stand still as the world moves on. As I get closer to the heart of the IFoA and see at first hand the work that volunteers undertake, I have the utmost admiration for their dedication and endeavour. The feedback that I get from talking to volunteers is universally positive. Their roles are interesting and varied and they gain much from participating. Picking out just one volunteer from many is difficult, but David Brown, and the Third Party Working Party for General Insurance that he chairs, is well worth mentioning. They have delivered research at the GIRO conference for the past four years, looking at third-party injury and damage claims for motor insurance in England and Wales. This year he presented the

Volunteer roles can be immensely rewarding for the individual and are the lifeblood of the profession, says David Hare findings to the House of Commons Transport Select Committee, which held an inquiry into whiplash claims. The report has also received wide publicity in the media. Well done, guys. Another volunteer is Clare Whitelam, without whom these columns in The Actuary wouldn’t happen. Many thanks, Clare. Currently, there are a number of new working parties in ERM, pensions, finance and investment seeking volunteers to get involved in topics such as: ● designing investment vehicles to mitigate agency risk; ● ‘disintermediation’: the likely rise of peer-to-peer investing and alternative financing models; ● how and why to get actuaries into the wider fields – particularly that of education; ● social finance and impact investing – measuring non-financial returns; ● defined ambition pensions; ● inflation and pensions; ● state pension age; ● why retire? Alternative models to pensions. There are also some important leadership roles that need to be filled, such as a new chair for the GI Professional Standards Committee (GIPSC), and a deputy chair for the 2014 Pensions Conference Programme Committee, who would become chair of the conference in 2015.

We are always keen to hear from our members all over the world. Would you like to act as career ambassadors promoting the actuarial profession to the next generation? Why not join our online feedback groups such as the 400 Club, the digital volunteer group and the international feedback groups for regions such as China, South East Asia and India? Volunteering can adapt to suit an individual’s needs, with the roles taking up as much time as you wish to give. Don’t forget other volunteers and staﬀ at the IFoA will be on hand to oﬀer support and encouragement. If the areas outlined above do not appeal to you but you have an idea that you think is worth further investigation, or there is an area that is lacking activity, please talk to us. Whether or not you wish to be engaged in undertaking the research personally, the IFoA can provide information, resources and connections with other members who may also be interested in your topic – you do not have to work alone. All roles open to members are advertised on the volunteer vacancies section of the website. Why not get in touch with Debbie Atkins at the IFoA to discuss volunteering and your ideas with her? I look forward to meeting you at a future volunteer recognition evening. a

“As I get closer to the heart of the IFoA, I have the utmost admiration for the dedication and endeavours of our volunteers”

August 2013 • THE ACTUARY www.theactuary.com

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›

Opinion Soapbox

SALLY-ANNE ETIENNE

Sharing the load Insurance companies have a responsibility to our shareholders/members to transact economically viable business. Yet do they have a social responsibility? I believe they do, and we should be very proud of what we do. Sometimes it is easy to forget that our industry was called into existence to fulfil a social responsibility, namely to provide financial protection against perils beyond our control. In the UK, recent data for the group and individual protection markets is encouraging. In 2012, employee death benefit premiums topped the £1bn mark for the first time, according to Swiss Re Group Watch 2013. In the same year, new sums assured for death benefit cover rose by almost 6% and for critical illness cover by 13%. New long-term disability income benefits in-force increased by 10%. Furthermore, the number of people enjoying peace of mind under group risk arrangements increased by 300,000. This is fantastic news at a time when the economic outlook is still a big concern. Almost 8.4 million lives are insured under group death benefit arrangements and there are almost 2 million long-term disability income schemes. A further 339,000 people have critical illness cover under schemes facilitated or purchased by their employer. On an insured basis alone, there are more than 10 million policies as well as a number of arrangements self-funded by employers. More people are also taking up flexible voluntary arrangements. This highlights the fact that simple, well-presented propositions for ‘people like me’ engage staff and may influence peers to ‘join the club’. Trust in employers is relatively high and opportunities will continue to open up as technology offers more cost-effective propositions. In the insurance industry, we are well placed to embrace this flexibility to offer choices that match individual life stages. The future could range from simple signposting, providing access to products, to flexible benefits, limited-term payment income protection cover and/or sharing the cost of cover with employees. This flexibility might suit many business models, better reflecting a workplace where it is common to move from employer to employer

Sally-Anne Etienne says consumers must be encouraged to engage in their own personal welfare and helping individuals to purchase some ‘entry level’ or portable cover. Auto-enrolment might also grow the group life market, where entitlement to benefits is linked to pension scheme membership. We could see around half a million people enrolled into death benefit arrangements for the first time. Considering the individual protection market, the balance between how much responsibility should be shared between the state and the individual has been one of the hot topics in the UK. Personal responsibility is not straightforward. For example, if we look at the issue of obesity, almost all of us are aware that as a nation we are getting fatter. We are also well aware of the need to lead healthier lives. But this does not necessarily translate into exercising more or eating less. Neither does it mean that we are behaving irresponsibly. It might simply mean that the motivation and incentive to actively do something is just not strong enough. The individual protection market has not yet seen a large benefit from the greater awareness of personal responsibility – but it has not suffered drastically either. Swiss Re’s Term & Health Watch 2013 report highlights that new market sales of individual policies have generally remained stable year on year – although in the early part of this century new

sales peaked at around 50% higher than now. In 2012, income protection sales increased by 9% over 2011, driven by a move towards limited benefit payment policies, which accounted for 25% of new sales. This was a welcome, if modest, increase, reversing the negative trend of the past four years. But we can do much more to engage consumers – and what better time than now? As an industry, we have two options. We can continue to focus inwardly on the challenges and problems we face, such as meeting the demands of new regulators – there will always be regulatory requirements. Alternatively, we can generate interest and opportunity by emotionally engaging people, promoting the benefits of protection and what it means for ‘someone like me’. Respondents to our market surveys recognise the need to communicate more effectively with consumers, particularly those who are not engaging with the market through an adviser. Better-informed consumers can only be a good thing. Does our social responsibility extend that far? Small steps.

‘ In the insurance industry, we are well placed to provide choices that match individual life stages’

Sally-Anne Etienne is market head for Swiss Re’s life and health business for UK and Ireland and her responsibilities include Swiss Re’s annual Term & Health Watch and Group Watch

THE ACTUARY • August 2013 www.theactuary.com

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SIAS Events

TUESDAY 20 AUGUST 2013

Talk Staple Inn Cause and Eﬀect – Dependency Deconstructed Paul O’Connor (Lane Clark & Peacock)

5.30pm

SATURDAY 31 AUGUST 2013 AT 12:00

SIAS ﬁve-a-side tournament Goals Soccer Centres, Beverley Way, New Malden, KT3 4PH (short walk from Raynes Park train station)

SOCIAL EVENT

This talk will discuss some ways in which causal approaches to dependency modelling could be used alongside more traditional statistical methods in the context of capital modelling. In particular, a series of case studies will be shown to help examine the relative merits of such an approach and the extent to which it could feasibly be implemented. Although this topic is predominantly aimed at those with some degree of experience in capital modelling, the talk will build on material covered in subjects ST7, ST9 and SA3. It is an opportunity to see how these subjects are applied even for students earlier in the examinations. The audience will be given an introduction to some basic concepts within dependency modelling, along with some examples of causal approaches in action. The talk will also examine the pros and cons of various approaches to dependency modelling within.

SOCIAL EVENT

Do you aspire to one day be a professional footballer? Then join the 2013 SIAS five-a-side tournament – the Premier League scouts are bound to be there. The format of the tournament is as follows. - Sixteen teams split into four groups. - Each team plays three group stage matches. Winners and runners-up progress to quarter finals with semi-finals and finals to follow. - Winners and runners-up receive a trophy (as well as the immense satisfaction of receiving a citation in a format to be confirmed in The Actuary). - In response to feedback last year, no food or drink will be provided – please ensure you are fed and watered before the tournament! Places are limited and will be offered on a first come, first served basis. Email Mark at social@sias.org.uk to register your team with the following information: (a) Main contact person name. (b) Main contact person email address. (c) Main contact person mobile number. (d) For each other player: name and SIAS membership status. (e) Team name (if known yet) If you do not have enough players to form a team, please email Mark at social@sias.org.uk and we will try to match people up. Entry is £50 per team (minimum five players) plus £5 per non-SIAS team member. Once your place has been confirmed, payments need to be received into the SIAS bank account within five working days. If you have any questions on any of above, please email Mark at social@sias.org.uk.

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

ISTOCK

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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

August 2013 • THE ACTUARY www.theactuary.com

23/07/2013 10:32

News IFoA NEWS UPDATES FROM THE ACTUARIAL PROFESSION

Upfront Opinion CEO’s comment

Peer review consultation

Derek Cribb reports on the Quality Assurance Scheme, which will boost conﬁdence in the industry

We plan to consult on proposals to introduce a cross-practice standard on peer review (APS X2: Actuarial Quality and Peer Review) along with a Peer Review Guide for members. Peer review is one of a number of measures that professionals use to maintain the quality of their work. It is an effective method of managing risk and ensuring that work has been carried out to appropriate technical and ethical standards. The proposed standard (APS X2) introduces a high-level requirement to consider the appropriateness of peer review and apply it if suitable. The standard is intended to be sufficiently flexible to allow members to determine how peer review is best undertaken, and will be supported by the Peer Review Guide. This will be the first cross-practice standard applicable to all members regardless of practice area or location. We would therefore encourage you to read the proposals and give us your views. Members and interested stakeholders are also invited to attend consultation meetings in London and Edinburgh. Further updates and the consultation package will be available at bit.ly/14Ioy2v For details of the consultation meetings, please see the IFoA’s website or email Karen Cross at karen.cross@actuaries.org.uk

Building public trust Derek Cribb is the chief executive of the Institute and Faculty of Actuaries

Let’s be honest: public faith in the ﬁnancial

services industry is low. But trust in the work of actuaries is crucial to the profession and its clients; so how can the Institute and Faculty of Actuaries (IFoA) help to ensure that actuaries continue to be viewed as trusted experts? Our Professional Regulation Executive Committee (PREC) is exploring an innovative approach to actuarial regulation that aims to give the wider assurance the public expects and deserves: the Quality Assurance Scheme for Organisations. At present, we regulate on an individual basis. We want to develop a stronger relationship with employers of actuaries, in recognition of their impact – through their cultures and working practices – on the professional lives of our members. We intend to do this by setting high-level principles for organisations in key areas such as peer review, conflicts of interest and client engagement. These will be of wide relevance, as will the accompanying guidance. The voluntary scheme will give those organisations that apply and satisfy the criteria a quality assurance stamp, enabling them to demonstrate and promote their commitment to producing highquality actuarial work. It will also give organisations the opportunity to work more closely with us in shaping the future of actuarial regulation. We are keen to ensure that the proposals reinforce quality without adding to the regulatory burden. Indeed, by working more closely with employers, we can streamline our regulatory provision and ensure its relevance. We hope it will provide a real opportunity for participants to differentiate themselves in the market and benefit from knowledgesharing. It is up to us as a profession to make this work. On that note, I would like to thank Sir Philip Mawer for his outstanding contribution as chair of PREC, and to welcome new chair, Desmond Hudson. The initial proposals have been informed by discussions with members, employers and stakeholders – you may even have responded to PREC’s recent consultation. We will publish the post-consultation report in the autumn, but are always keen to hear further comments. If you have any ideas or suggestions, please get in touch at QAS@actuaries.org.uk

Financial advisers’ MIG The IFoA is looking to reinvigorate the Independent Financial Advisers Member Interest Group (IFA MIG) and would like members to get involved. The group would be of interest to actuaries providing advice, whether in a regulated capacity or non-regulated capacity. A kick-oﬀ meeting is being planned for September to discuss the scope and potential future activities of the group. To join the group or to participate in an open meeting, email craig.ajimuda@actuaries.

org.uk DEREK CRIBB

ACCESS THE PROFESSION’S ANNUAL REPORT

To ﬁnd out more about member interest groups, please visit bit.ly/YYYxcf

THE ACTUARY • August 2013 www.theactuary.com

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Prize presentations The Sir Joseph Burn prize was awarded to Emma Laithwaite (KPMG), Edward Oliver (Friends Life), and Daniel Kendrick (Deloitte) for their overall performance in the examination process, completing in the April (Emma and Edward) and September (Daniel) 2012 sittings. The Watson Wyatt prize for Financial Economics went to Jonathan Read (NFU Mutual), as the best-performing student in the CT8 ﬁnancial economics paper for the September 2012 exams. The Peter Clark Prize for Best Paper was awarded to Neil Cantle, Neil Allan, Patrick Godfrey and Yun Yin for their paper ‘A review of the use of complex systems applied to risk appetite and emerging risks in ERM practice’, funded by a research grant from the IFoA and presented at sessional research meetings in London on 28 November 2011 and Edinburgh on 17 September 2012.

David Hare (centre) with (L-R) Edward Oliver, Daniel Kendrick, Emma Laithwaite and Jonathan Read

EIOPA needs holistic balance sheet

Increased visibility gets results: TPI/TPD update The Third Party Working Party, chaired by David Brown, has produced an annual research report on third party injury (TPI) and damage (TPD) motor insurance claims since 2009. On 1 July, the IFoA released the headlines of the latest round of research to the media. The research looked at private car comprehensive (PCC), commercial fleet vehicles and commercial non-fleet vehicles. Key findings included the following: ● 90% of claims were small (under £20,000); ● the average claim size for PCC was £9,512; ● there was a 5% increase in the proportion of accidents involving TPI claims; ● there was evidence of unprecedented historical claims farming; ● case estimates may be weakening for private car comprehensive TPD business, which could lead to future reserving issues. Within two days of the release of the research, there were more than 250 media reports. As a result of this, there were requests

ALAMY

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for the report from members, employers and a number of external stakeholders – including an MP and the Ministry of Justice. The media coverage also prompted a question in parliament quoting the research and a request was made for the IFoA to talk to the Cabinet Oﬃce on this subject. This is the second year that IFoA PR specialists have worked in partnership with the Third Party Working Party to roll out their research to an external audience. The aim is to raise the IFoA’s proﬁle with key audiences, including members, the media, employers, the government and other interested bodies, and to publicise the excellent work of the authors. The results highlight how the work of members on behalf of the IFoA can be used to demonstrate the relevance of actuarial activities and the expertise of IFoA members. An update on the report will be presented at GIRO’s 40th anniversary event in October. View the full report at bit.ly/13LRbxI

The final report from The European Insurance and Occupational Pensions Authority (EIOPA) following the quantitative impact study that was conducted into the proposals for updating the Institutions for Occupational Retirement Provision (IORP) directive in line with Solvency II left a number of questions unanswered. However, it highlighted the importance that EIOPA attaches to something resembling a holistic balance sheet for Europe’s pension schemes. In describing the way forward, EIOPA said: “It is clear that a methodology like the holistic balance sheet is needed [to allow] for the specificities of occupational pension provision… The European Commission has announced that its forthcoming legislative proposal for a revised IORP directive will not cover solvency rules for IORPs and that further technical work in this area is necessary. In the coming months, EIOPA will set out a programme of work to better assess and compare IORP solvency, and to contribute to future decisions on European initiatives regarding the treatment of pension funds that appropriately address the issues of sustainability, adequacy and the security of pensions for present and future generations.” As a first step, a discussion paper has been published on sponsor support asking EIOPA’s stakeholders 36 new questions about how best to put a financial value on the support available to IORPs from their sponsors. While this paper already references the work sponsored by the IFoA and presented at sessional meetings earlier in the year, the Pensions Board together with members of the executive staff will be working together to ensure the views of actuaries are fed into EIOPA by the 30 October deadline.

August 2013 • THE ACTUARY www.theactuary.com

23/07/2013 08:40

News IFoA NEWS UPDATES FROM THE ACTUARIAL PROFESSION

Systemic risk policy measures under review By Nick Dexter and Rob Curtis

NEWS IN BRIE F Parties and pins As a thank you to all our active volunteers, we hosted the ﬁrst of our 2013 volunteer recognition parties in Edinburgh on 27 June. It was held in the iconic Signet Library. The next volunteer thank you party will be held in London on 25 September. For details on the party and information about our silver volunteer recognition pins, please visit bit.ly/188hfpI or contact debbie.atkins@actuaries.org.uk

Subscription and practising certiﬁcate fees 2013/2014 Following agreement by Council for the sixth year in a row, there will be no general increase in subscription rates or practising certiﬁcates in 2013. The one exception is the subscription rate for overseas students, which will increase this year from £192 to £222. For information on fees due from 1 October, visit bit.ly/1dhSGUf. Information on partial regulation can be found at bit.ly/18xetu2

An introduction to the Mathematics of Finance McCutcheon and Scott’s familiar textbook, An Introduction to the Mathematics of Finance, has recently been revised and published in a second edition. Authored by Stephen Garrett, the text continues to support actuarial students at the early stages of their examinations and is speciﬁcally written to support CT1. Backed up with practical applications and sample questions from CT1 and the Chartered Financial Analyst exams, this book remains a valuable resource. For further information visit: bit.ly/1b7gIWi

Save the date: NEDs MIG A Non-Executive Directors’ Member Interest Group open forum on board eﬀectiveness is planned for 11 November at 17.00. For details and to sign up, email craig.ajimuda@actuaries.org.uk

The International Association of Insurance Supervisors (IAIS) is participating in a global initiative along with other standard setters under the auspices of the Financial Stability Board (FSB) and the G20 group of finance ministers and central bank governors. It aims to identify global systemically important financial institutions (G-SIFIs) and global systemically important insurers (G-SIIs). The FSB has reviewed the assessment methodology and policy measures for G-SIIs, developed by the IAIS. The FSB and national authorities, in consultation with the IAIS, will designate an initial list of G-SIIs this month, although the G-SII status of major reinsurers, and appropriate risk-mitigating measures for them, will be determined in July 2014. The policy measures that will apply to G-SIIs include the recovery and resolution planning requirements under the FSB’s key attributes: enhanced group-wide supervision and higher loss absorbency requirements. As a foundation, the IAIS will develop straightforward backstop capital requirements to apply to all group activities, finalised by the time of the G20 Summit in summer 2014. Over time, regulators may wish to extend such requirements to insurance groups that they consider to be domestically significant. Effective resolution The FSB’s Key Attributes of Effective Resolution Regimes for Financial Institutions would be the basis for improved resolvability and would help reduce the effect of a G-SII failing. For G-SIIs, effective resolution will take account of the specificities of insurance, including: ● plans required to separate non-traditional, non-insurance (NTNI) activities from traditional insurance activities; ● possible use of portfolio transfers and

run-off arrangements as part of the resolution of entities conducting traditional insurance activities; and ● the existence of policyholder protection and guarantee schemes in many jurisdictions. What are the implications for insurers? Insurers will probably be expected to: ● develop a map of critical functions that would be essential in the event of the insurer experiencing a systemic event; ● assess their ability to maintain and fund operations of critical functions and to conserve or restore the firm’s own funds; ● examine the sufficiency of funding arrangements and ensure adequate access to contingency funding sources; ● have relevant data on group structure, intra-group exposures and exposures to counterparties, other intra-group interdependencies and service-level agreements; ● reduce risk and leverage if necessary – for example, the extent of engaging in stock lending to invest proceeds in higheryielding paper; ● explore the need to restructure liabilities, business lines and asset transformation; ● maintain access and continued functioning of IT services and other infrastructure; ● determine trigger and stress scenarios; and ● ensure adequate, robust risk management systems, capable of measuring the impact that severe stresses may have on the firm’s business model. It will be interesting how the PRA develops its own approach to this over the coming months and how it then applies it to the domestically significant UK insurers. ● Nick Dexter is a partner at KPMG and Rob Curtis is a director at KPMG. Both are members of the Life Practice Executive Committee’s Recovery and Resolutions Plan Working Party

Adjudication Panel At a hearing of the IFoA’s Adjudication Panel on 29 May, the respondent, Mr Nishanthan Gunasingam, FIA, faced allegations of misconduct following a conviction at Westminster Magistrates’ Court for outraging public decency. The Panel also considered a second allegation of failing to disclose the conviction to the IFoA. The Panel determined that the respondent’s conviction and the facts of that conviction as well as his failure to notify the IFoA of his conviction amounted to a prima facie case of misconduct and accordingly invited the respondent to accept that there had been misconduct and the following sanctions: a reprimand and a ﬁne of £1,000. A copy of the panel’s full determination, including the reasons for its decision, can be found on the IFoA’s website at bit.ly/12DFST2

THE ACTUARY • August 2013 www.theactuary.com

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Keep your details Exposure draft ushers in a new up to date era in insurance accounting The IFoA issues regular communications to keep members informed of news, views and updates. To ensure that you receive these and that we don’t lose contact with you, we urge you to take ﬁve minutes to check that your contact details are up to date via the members’ section of the website (www.actuaries.org.uk). Sometimes the IFoA does lose contact with members, so if you know the whereabouts of the following members, please ask them to contact the membership team (membership@ actuaries.org.uk) to update their details: ● Miss Nitharsha Vanatheva; ● Miss Yujing Wang; ● Mr Rajesh Dalmia; ● Mr Biju Raj Bordoloi; ● Mr Chetan Harishkumar Patel; ● Miss Lu Ping Wong; ● Miss Dibabatso Nontokozo Masooa; ● Mr Michael Thompson; ● Miss Mao Zeng; ● Mr Michael John Rowe; ● Miss Anne Maria Madden.

The International Accounting Standards Board (IASB) published a revised Insurance Contracts Exposure Draft on 20 June 2013 in response to the comments it received concerning the 2010 draft. The proposed standard will replace IFRS 4, which currently permits a wide variety of practices in accounting for insurance contracts across the globe. The proposals present a signiﬁcant change from current practice in the UK and will aﬀect both life and non-life insurers. The Financial Reporting Group (FRG) of the IFoA will host an open forum on 12 September

to discuss the draft. Andrea Pryde, insurance contracts project leader at the IASB, will provide an overview of the draft at this event, with particular focus on areas of re-exposure. The FRG is developing the response of the IFoA, and members of this group will provide initial views on the draft for discussion at the meeting. The open forum will take place at Staple Inn Hall, London WC1V 7Q on 12 September from 5pm to 8pm. For more information on this event and how to sign-up, go to bit.ly/10MxaUZ To view the draft, see bit.ly/15vSu2O

Collaboration programme A pilot programme linking MSc dissertations with industry questions is under way. Much headway has been made in classical collective risk models since Lundberg 1903. Joseph Lo (Aspen) and Corina Constantinescu (Institute for Financial and Actuarial Mathematics, University of Liverpool) are leading a team of students to explore whether these models can answer general insurance risk management questions. The ﬁndings will be discussed at an open workshop on 16 September. Readers are invited to join the event in Liverpool. To ﬁnd out more, visit bit.ly/13LSmx9

EVENTS AND CONFERENCES 2013 Pensions And The Law 17 September, Staple Inn Hall Pensions law never stands still and 2013 is again proving to be a year of major change. This seminar gives insights and updates on legal developments, and includes sessions on professional negligence, case law, Beckmann rights, guaranteed minimum pension conversion and the legal aspects of longevity risk transfers. Presentations will be delivered by speakers from Pitmans and Linklaters – companies that are at the sharp end of advising clients in these areas. For more information, visit: bit.ly/1aDsR1r

Highlights Of Health And Care – Understanding The Fundamentals Aﬀecting Our Products 24 September, London Programme available soon. To ﬁnd out more and to book, visit: bit.ly/15ZHwAX

Save the date: CILA II 3 October, Royal College of Physicians, London Programme available soon. For details, visit: bit.ly/12GOFUy

Life Conference 2013 10-12 November, EICC, Edinburgh

Save the date: Momentum 13 4-6 December, Celtic Manor, Wales

Bookings now open. The Life Conference is the premier event for professionals interested in life insurance. Oﬀering a wide range of workshops and plenary sessions, it’s the perfect opportunity to discover what’s hot and current in life. From professional responsibility with Paul Moore through to Alistair Darling’s thoughts on being chancellor of the exchequer and the current economy, the conference oﬀers a varied programme. Book now to avoid disappointment: bit.ly/12XVLYw

Bookings open shortly. The Momentum Conference is aimed at newly qualiﬁed actuaries from all practice areas and will cover a range of technical sessions, debates and business skills, with great networking opportunities. Nick Hewer will be sharing insights into the making of The Apprentice in his after-dinner speech. For details, visit: bit.ly/1dPk1xk

August 2013 • THE ACTUARY www.theactuary.com

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News Industry news@theactuary.com

Cost of ageing population to government set to soar, warns watchdog Increased spending on pensions and health services ‘key’ reason for hike, says Office for Budget Responsibility Government spending on pensions and other age-related public services is set to increase over the next 50 years, the Office for Budget Responsibility has warned. Its annual examination of the long-term health of the government finances found that increased spending on pensions and health services was the ‘key’ reason for the hike. Among the projections, the report stated that the cost of the state pension would increase from 5.8% of gross domestic product currently to 8.4% in 2062/63 as the population ages. This is despite the government’s plans to bring down costs by introducing the single-tier state pension, which merges the two existing state payments. Public-sector pension costs will also go up, the report found, owing to the ageing population, and long-term social care costs will increase from 1.3% of GDP in 2017/18 to 2.4%, as a result of both the ageing population and the introduction of a lifetime cap on certain long-term care expenses incurred by individuals. The cap, to be put in place by 2016/17, will increase spending by 0.3% of GDP by 2062/63, according to the projections. For more on this story, visit bit.ly/1bvi3W1

Government proposes insurance market to protect against costs of long-term care Local authorities obliged to provide information on care costs, support available and financial products A market for insurance to pay social care bills has been put forward by care minister Norman Lamb as he published detailed plans for how the £72,000 lifetime cap on care costs might work. There will also be access to independent financial advice to help everyone understand their needs and plan for the future. The Department for Health said the sweeping reforms would give more peace of mind over the costs of old age or living with a disability and end the unfairness of unlimited care costs, identified by the independent Commission on Funding of Care and Support, which was chaired by Sir Andrew Dilnot and reported in 2011. In a consultation paper, published in July, the Liberal Democrat minister said new products might be developed by the financial services sector, which was looking at how pensions and expanded life or health insurance could help people plan for their old age. The department said fewer than 50% of people were aware they might need to pay for their care and support. So the Care Bill set out legal duties for authorities to provide local people with information on the costs of care and the financial support available, on financial products and other options, and on practical arrangements such as appointing a lasting power of attorney. The consultation is also looking at how councils can arrange access to independent financial advice, and what the lower cap might be for those who have eligible needs and who are below state pension age. For more on this story, visit bit.ly/15ZIjBN

MORE BREAKING NEWS ONLINE Visit www.theactuary.com for breaking news and to register for weekly news alerts

Regulation tops poll of concerns Changes to the regulation of the insurance industry, including the introduction of the new Solvency II rules in Europe, represent the biggest current risk to ﬁrms, a survey by accountants PricewaterhouseCoopers has revealed. The 600 insurance practitioners and industry observers polled warned that proposed changes could ‘swamp’ the industry with costs and compliance problems. Fears about regulation also topped the list in the last poll in 2011. bit.ly/16LﬁsC

Pension tax relief ineﬀective The current regime of pension tax reliefs is ‘not very eﬀective’ at motivating people to save for their retirement, a report by the Pensions Policy Institute has found. Tax relief for pension saving in the UK found there was ‘limited evidence’ that the £23.7bn paid in reliefs in the 2010/11 tax year had encouraged people to save. bit.ly/1bviu2z

Car premiums below £700 Average quoted comprehensive motor insurance premiums fell by nearly 8% in the second quarter of 2013, according to the Confused. com/Towers Watson Car Insurance Price Index. That took the average comprehensive premium in the UK to under £700 for the ﬁrst time since 2010. This was the sixth consecutive quarter in which prices have fallen, resulting in a 14.9% reduction in the past year. bit.ly/114107I

Occupational pension saving at six-decade low Fewer people are saving for their retirement through occupational pension schemes than at any time since the 1950s, said an Oﬃce for National Statistics (ONS) report. The ONS said there were 8.2 million active members of occupational schemes, according to the latest ﬁgures for 2011. This is one of the lowest levels since it began counting pension scheme members in 1953. An update to the Pensions Trends 2013 report revealed there had been a collapse in private-sector membership to 2.9 million, from a peak of 8.1 million in 1967. By contrast, the public sector has moved in the opposite direction, increasing from 3.1 million in 1953 to over 5 million in 2011. It also reported that 46% of self-employed men had never belonged to a personal pension scheme, the highest percentage since the statistical series began monitoring the group in 1991/92. Only 34% of self-employed men had a personal pension plan in 2011, the lowest percentage since 1991/92. For more on this story, visit bit.ly/149IAVZ

This time it’s different, says FCA chief Wheatley The first 100 days of the Financial Conduct Authority (FCA) have shown that the new regulator “is a very different animal” to the Financial Services Authority, chief executive Martin Wheatley has said. Wheatley told the biennial conference of the Association of British Insurers in July: “We’re not just asking ‘Is this product compliant?’ or ‘Does it tick every legal box?’ but ‘Is the outcome good?’, ‘Is the market competitive?’ and ‘Is fair treatment of consumers designed into products and culture?’. On the FCA’s 100th day of operations, Wheatley said he understood why people had reserved judgment before the FCA took over supervision of all regulated financial firms on 1 April. The FSA had needed to change, he said. His vision for successful regulation was a vision of a successful, competitive market. The best firms and products would thrive, with the worst exiting the market. Wheatley said: ‘A market that works well for consumers and for firms will be of benefit to everyone and to the UK economy. We want consumers to be in a position to drive healthy competitive markets so that they become the new normal.’ The regulator’s first market study is into insurance add-ons, often sold with purchases such as holidays, cars and gadgets. For more on this story, visit bit.ly/12Ba4yB

THE ACTUARY • August 2013 www.theactuary.com

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› GENERAL INSURANCE

NEWS ROUND-UP

Far-reaching move on ﬂooding

Surge in Gulf insurance growth

The Association of British Insurers (ABI) and the UK government have signed a memorandum of understanding having agreed to work towards creating Flood Re, a not-for-profit pool designed to fund one-in-200 year flooding events. The government will take primary responsibility for the distribution of available resources should claims exceed the one-in-200 year estimate. The target launch date for Flood Re is summer 2015 and it will be run and financed by insurers. Around 200,000 homes are expected to be passed to Flood Re with premiums based on the council tax banding. Homes built after 1 January 2009 will not be covered by the scheme. This is intended to “avoid incentivising unwise building in flood risk areas” according to the ABI. An average levy of £10.50 on annual household premiums should generate £180m of annual premiums to the pool. ABI director-general Otto Thoresen said that “getting to this stage has required compromise by both sides and there remain issues that need to be overcome. Flood Re would be a major undertaking for UK insurers and the work insurers have undertaken to get here reflects the industry’s desire to cover flood risk at an affordable price in the face of the increasing flood threat in the UK”.

Insurance in the Arabian Gulf is likely to grow at a compound annual rate of 18.1% between now and 2017 according to a report from Alpen Capital. Non-life already has an 87% share of the total insurance sector in the Gulf and is likely to grow by 20% a year, increasing to nearly $35bn (£23bn) in annual premiums. Non-life insurance penetration is expected to grow from 0.9% of GDP to 1.9% of GDP in the ﬁve years to 2017. Alpen Capital managing director Sameena Ahmad said that “low insurance penetration, despite strong underlying growth drivers, continues to oﬀer ample opportunities to insurers in the Gulf.” The UAE and Saudi Arabia remain the largest markets in absolute terms, with growth in Saudi Arabia expected to be at an above-average 26.5% compound annual rate. That could see Saudi Arabia eclipse the UAE as the largest market in the region.

LARGE LOSSES

FCA to probe ‘unfair’ renewals The Financial Conduct Authority (FCA) has launched an investigation into claims that consumers are overcharged when they renew their house or car insurance. The FCA is concerned that automatic renewal can lead to consumers being treated unfairly. The chairman of the Commons’ Treasury committee, Andrew Tyrie, wrote to the FCA and the Association of British Insurers raising concerns that older people in particular could suﬀer as they are less likely to shop around on the internet for the best deals. In a statement released on 5 July, Tyrie stated that: “The previous regulatory regime failed to protect customers. The FCA can do a lot to help vulnerable consumers. The committee will scrutinise closely the information gathered by the FCA.”

Warning system woes There is growing concern among London market insurers regarding the Prudential Regulation Authority’s (PRA) proposed early warning indication (EWI) system. Under the proposal outlined by the PRA, EWIs would be triggered for general insurers if capital levels fell below 175% of their pre-corridor minimum capital requirement. According to several observers, in many cases this ‘crude measure’ would produce an individual capital guidance (ICG) in excess of that output by companies’ own Solvency II-sanctioned internal models. Concerns grow that the system might eﬀectively make Solvency II-compliant internal model calculations redundant. The PRA has acknowledged that the EWI thresholds had been set at a level where 10% of ﬁrms would fall below them. Lloyd’s general counsel, Sean McGovern, warned that the plans would set the UK at a competitive disadvantage compared with other jurisdictions. The International Underwriting Association is to set up a working party to examine in more detail the PRA’s proposed EWI system.

Biggest euro storm bond The largest-ever European windstorm-focused cat bond closed at €280m (£241m). The contract gives Swiss Re per-occurrence protection against windstorm losses in France using an index from Switzerlandbased Perils AG. Swiss Re has in turn reinsured Groupama against losses from European windstorm events in France. Swiss Re Capital Markets’ head of ILS Europe Jean-Louis Monnier said that “as the largest Europe windstorm transaction and largest euro-denominated deal to date, this issuance further demonstrates the depth of the ILS market and its ability to complement reinsurance for European perils”.

REUTERS

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US$3bn

Economic losses from the ﬂooding that hit Canada in June, displacing 100,000 people

Canadian ﬂoods – June Heavy rain in Canada led to ﬂooding that has been described as the worst in Alberta’s history. More than 100,000 people were displaced throughout the region. Four people were killed, there was more than $3bn (£1.9bn) in economic losses and insured losses are estimated to be greater than $1bn (£0.6bn).

European ﬂoods – May-June Flooding in central Europe emerged after heavy rain at the end of May and in early June. Germany, the Czech Republic and Austria have all seen

severe flooding, with several other countries, including Hungary, Poland, Slovakia and Switzerland, affected to a lesser extent. Economic losses are estimated to be in excess of $16bn (£10.5bn), with insured losses of $3.9bn (£2.5bn). For German insurers, the loss is expected to be greater than that experienced by insurers after the floods of 2002. Some 32% of affected homes are now insured against flooding, up from 19% in 2002. It is estimated that there will be up to 180,000 property-related claims, compared with 150,000 in 2002.

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

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News People & Society

If you have any newsworthy items for these pages please email social@theactuary.com

Marathon: land of Andrew O’Brien hopes to run 12 marathons in 12 months to raise money for the Isis Foundation. He gives The Actuary an update on progress so far What a fantastic setting for my ﬁrst marathon. Tromsø – the gateway to the Arctic – surrounded by spectacular mountains and fjords, 200 miles inside the Arctic Circle and billed as the world’s northernmost point. And from the middle of May to the middle of July, it’s broad daylight 24 hours a day. Situated in the heart of Tromsø, my hotel is fondly described as the town’s oldest, dating back to 1832, and I’m not

disappointed. My room is comfortable and pleasant; small but genuinely cosy. The marathon breakfast is phenomenal but, attempting to show some self-restraint, I tuck into a large bowl of salty oats (hopefully, some kind of porridge), hard boiled eggs with smoked salmon, high-ﬁbre brown rolls and a banana. And, of course, copious amounts of freshly brewed coﬀee. The rest of the day seems to drag by; apart from a trip to the Polar Museum, I spend most of the time with my feet up, anxiously contemplating the night’s events. As evening approaches, I compulsively recheck my running gear. With the start line just 500m from the hotel, I’m a heady mix of nervous

KPMG on the ball in fiery five-a-side football final By Oliver Smith The 2013 annual North West Actuarial Society (NWAS) five-a-side tournament proved to be an eventful evening, full of brilliant football and heated exchanges. The event featured eight teams, representing all the big names from the region, and was held at Powerleague’s state-of-the-art five-a-side complex in Manchester city centre. The teams were divided into two groups, with the top two of each group progressing to the semifinal. Group A saw Towers Watson on top, with some superlative displays of quality football to humble 2012 champion PwC. The battle for the remaining qualification place was fought out by Mercer, PwC and Co-op. After a sluggish start, Mercer battled hard. However, in a key match against

Thomas Bond Sprague Prize: winners share ﬁrst place The 2013 Thomas Bond Sprague Prize has been awarded jointly to P Parmar of Trinity College and S E Penington of Clare College for distinguished performance in the University of Cambridge’s 2013 Master of Mathematics/ Master of Advanced Studies in Mathematics examinations, in the areas of probability, statistics and ﬁnance. The prize commemorates Thomas Bond Sprague (1830-1920), the only person to have been president of

Co-op, Co op a dubious goal awarded to Co-op baffled the Mercer team, team who argued that it did not cross the line. The referee stood firm and Mercer was knocked out in a 1-0 loss. The remaining qualification place was decided in a head-to-head between PwC and Co-op, with PwC requiring a win and Co-op just a draw. PwC held onto a 1-0 win, thanks to a brilliant save by goalkeeper Paul Brunger. 2012 runner-up Health Shield was the run-away winner of Group B. Royal London started the tournament slowly, but turned its fortunes around and found itself in a deciding fixture for second position with KPMG. The heated match resulted in a 3-0 win for KPMG,

both the Institute of Actuaries in London and the Faculty of Actuaries in Edinburgh. Sprague was senior wrangler and Smith’s prizewinner at the University of Cambridge in 1853. He had a most distinguished career in the actuarial profession, becoming actuary to the Equity and Law life insurance company and chief executive of the Scottish Equitable Life Assurance Society. The prize, which is awarded annually, covers the subjects of actuarial science, ﬁnance, insurance, mathematics of operational research, probability, risk and statistics.

THE ACTUARY • August 2013 www.theactuary.com

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the Midnight Sun excitement and fear as it’s finally time to make my way down there. After a quick warm-up, we’re off. With a fast pace from the outset, there is much jostling for position early on before the throng of runners gradually disperses, but there is a great sense of camaraderie. The course is hilly, but, with a stunning mountain backdrop, the first 24km flies by. The route winds alongside the blue waters of the fjords and among 19th-century wooden houses. The views as we come back across the bridge from the mainland are simply breathtaking – one of the highlights of the race, despite the gradient! Then, with another 18km to go, it starts raining. The weather does eventually

meaning the NWAS stalwart was through to the semifinal for the third year running. And so to the knock-out stages of the tournament. The semifinal line-up saw a rematch of the 2012 final, with PwC pitted against Health Shield. The match quickly turned into a rout for Health Shield, registering a record 8-2 win. The second semifinal was similarly one-sided, with KPMG beating Towers Watson 4-0. The final line-up saw KPMG v Health Shield. Health Shield was a heavy favourite. However, the 2012 runner-up began hesitantly and invited pressure. KPMG talisman Kevin Nicholson put in a superb Berbatov-esque performance, retaining possession with quick footwork and without breaking beyond a swift walk throughout. In the end, his single goal proved to be the difference between the two teams, as Health Shield lacked the creative spark that had seen the team dominate the majority of games throughout the tournament. Congratulations to KPMG.

break, but the final 10km is still absolutely brutal. Stopping at the last water station for a drink, I find my legs have turned to concrete. Through gritted teeth I get moving again, motivated by the cheering from local families and volunteers. On the verge of tears, I finally stumble across the finish line just before 12am – quite literally, under the Midnight Sun – completing what has probably been one of the most amazing and emotional experiences of my life so far. For more details of Andrew’s gruelling challenge and to show your support, visit www.12in12forISIS.com. You can also enter his running vest competition there by liking his Facebook page.

Dare to bare for charity Simon St Leger-Harris and wife Elizabeth Treherne recently completed a fundraising skinny dip in aid of Marie Curie Cancer Care. They joined over 400 brave people who took the plunge, braved the elements and dared to bare all in Dorset for Skinny Dip 2013. This is the third time the husband and wife team have taken part in this event. Over £21,000 has been raised so far – enough to provide 1,050 hours of Marie Curie nursing care to terminally ill people in their own homes. For more information about the work that Marie Curie Cancer Care does, please visit http://www.mariecurie.org.uk/

Reminder about The Actuary and WCA charity campaign The Actuary, in conjunction with the Worshipful Company of Actuaries, has been running a campaign to target £1m through the fundraising activities of actuaries and we would be delighted to hear from you if you have been or are involved in any charitable work or activities. Email Yvonne Wan at social@theactuary.com or Charles Cowling at charles_cowling@jltpcs.com

SHUTTERSTOCK / ISTOCK

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Deaths Christopher George IDE, aged 62, Fellow of Institute, granted in 1975. George Charles PHILIP, aged 94, Fellow of Faculty, granted in 1950.

Ironman completes Three Peaks Well done to Ironman David Bor (The Actuary, November 2012) for completing the Three Peaks Challenge twice in the same month. The challenge sees participants scaling the UK’s three largest mountains – Ben Nevis in Scotland, Scafell Pike in England and Snowdon in Wales – in 24 hours or less, including driving time. The overall distance walked is estimated at 42km (26 miles) with a total ascent of 3,000m (9,800ft). The ﬁrst time, David took a team including his daughter Rebecca and six of her university friends. However, sore limbs and a wrong turn at the top of Scafell Pike ultimately led to only two of the team continuing onto Snowdon and completing the challenge with David. The second time, David went by himself and completed the challenge in 17 hours, 52 minutes. It went much more smoothly this time, although there was heavy sleet and strong winds at the top of Ben Nevis. Despite a lack of clothing, David coped and made it down in very good time. David is raising money for The Fed, which looks after disabled and elderly members of the Jewish community in north Manchester, and Israeli charity Eshel, which provides food and help to some of the country’s poorest children. If you wish to support David, you can donate at www.thefed.org.uk/davidbor/ For more information on the two charities, please visit www.thefed.org.uk and www.colelchabad.org

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

August 2013 • THE ACTUARY www.theactuary.com

22/07/2013 12:52

On my agenda features@theactuary.com

CHARIT Y OF AN

ACTUARY John Lockyer was elected Master of the Worshipful Company of Actuaries in July 2011. He has since handed on that role, but remains immensely proud of the livery company and fully supports its charitable endeavours. Natasha Rademeyer reports

THE ACTUARY • August 2013 www.theactuary.com

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As a student actuary, it was an honour to be asked to interview John Lockyer, the former Master of the Worshipful Company of Actuaries (WCA). Our discussion covered the history of the company and its commitment to charitable causes. It’s an inspiring tale, and one that shows both qualiﬁed and nonqualiﬁed actuaries what the profession can give back to the community and wider world.

Tell us about your background and how you came to be Master of the Worshipful Company of Actuaries (WCA). After completing my degree I headed to London to follow a career in mathematics. I’ve always loved mathematics and a career as an actuary sounded interesting. I qualiﬁed and worked in a mixture of pensions and insurance areas during my career. My involvement with livery companies started well before the WCA. My grandfather had friends in livery companies in the 1930s. They encouraged him to join the Worshipful Company of Plumbers. Subsequently, my father became a liveryman and then I became a liveryman of that company by right of patrimony. In due course, I joined the court of the company and then became Master of the company in 2005/6. After I ﬁnished my term as Master of the Worshipful Company of Plumbers, I was asked to join the court of the

WCA. I worked on various committees, which is part of serving on the court, and later became Master in July 2011.

What is a livery company and what does the Worshipful Company of Actuaries do? Livery companies date back to medieval times and are associated to local crafts in the City. The first livery company was established in 1155, while the Worship Company of Plumbers was founded in 1365, which makes the WCA, founded in 1979, modern by comparison. The companies were a mixture of guardians of standards of each trade and a bit of a trade union. Each one of the trades was historically concentrated in a specific area of the City. As a liveryman, you were entitled to work within the borders of the City in the specific craft of the company to which you belonged. If you weren’t a liveryman and if you didn’t fulfil the standards set by the company you couldn’t practise the trade within the City of London. A number of companies have their own halls within the City of London. A good example is Goldsmith’s Hall, where gold is still hallmarked today. Apart from looking after the craft of each profession, the livery companies historically looked after families of liverymen who fell on hard times. Now the livery companies give large amounts of money to various charities

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“I incorporated my love of music to raise money and assist four opera students to help fund their studies. It’s nice to help education on a wider platform than just actuarial” each year. Last year, the livery companies gave over £40m to various charities. The WCA raised over £170,000 from its 250 members for charity last year.

What did your role as Master of the WCA involve? To be the Master of a company means you give up your year in service to the company. As Master you have the right to be on all committees and we have 10 committees in the WCA. You are also seen by others as the face of the actuarial profession and you represent the company when you meet other Masters of livery companies. For my year as Master, we have been involved in various charity events. I incorporated my love of music to raise money for four opera students over a five-year period to help fund their studies. It is nice to help education on a wider platform than just actuarial. We are also funding a five-year research project with the Royal Society on mathematics in Britain’s schools, which can influence government policy. On the actuarial side, we give bursaries to mathematics students who would otherwise struggle financially, and awards for students in their penultimate year at university in order for them to continue their studies. We also use our contacts to assist students with placements for gap years after university. We give talks at various universities around the UK to promote the profession, where several liverymen are usually on hand to answer questions the students might have. The WCA assists the profession as well. The Institute and Faculty of Actuaries (IFoA) runs the profession, its standards and its disciplinary procedures, but we help the profession in areas such as the work we do

THE ACTUARY • August 2013 www.theactuary.com

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with the universities. We can also assist members of the council with introductions to people within the City because of the contacts we have. The current Lord Mayor, who acts as the financial ambassador for the UK financial services industry, is very interested in the international work the IFoA is doing. With the help of our contacts, we can feed information onto his office and team, which they can take up when they are visiting other countries.

What do you see as your greatest achievement, both within the livery company and more widely? While Master, it is what you achieve for the company that is important. One of the highlights for me was the highly enjoyable dinner for 250 people at Drapers Hall. This raised £38,000 for three worthy causes. Another event that stands out in my mind was the lunch at Westminster Hall. The lunch was held during the Diamond Jubilee celebrations with Her Majesty the Queen. The livery companies invited people involved with the charities they supported and those who devote their lives to charity. The WCA invited: Ella Spencer, a WCA award-winner, as the member of the actuarial profession who had done most for charity in the previous year; an opera student who we are helping with funds; one of the people involved in the research for the Royal Society; and the commanding oﬃcer of the Edmonton sea cadets. Other events that stand out would be the Lord Mayor’s event for the Masters of livery companies and the invitation to the garden party at Buckingham Palace. It is also really good to see young university students and qualiﬁers embarking on their careers.

How does someone join the Worshipful Company of Actuaries? To join the company you have to be a Fellow of the IFoA. An actuary wishing to become a member should visit the website (www. actuariescompany.co.uk). The person has to be proposed and seconded and has to be approved for membership. You then become a freeman and receive the Freedom of the City of London. Once you have the Freedom of the City you then become a liveryman.

What are the greatest challenges the actuarial profession is facing? Our profession has a very good reputation for integrity. However, maintaining that is very difficult. The banking profession over the past few years has needed a body with the same level of monitoring and support to professionals in difficult positions as the actuarial profession. We must also stay relevant to the financial services industry, adapting new skills sets such as risk management.

What advice would you give young actuaries? Be true to your principles. Enjoy your work, work hard – I’ve heard that actuaries work very long hours now. The most important thing is to treat your colleagues and people who work for you the way you would like to be treated. So be challenging and stand up for what you believe is right.

How do you spend your free time? I’ve been retired for seven years. During this time, I’ve spent two years in service to the livery company of which I was a Master. As hobbies, I like to play bridge, go to the theatre and opera, spend time in the garden and attend events for past Masters. a

SAM KESTEVEN

23/07/2013 08:42

www.theactuaryjobs.com

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? That’s why The Actuary’s weekly email alert brings you a handy round-up of only the most relevant news stories and comment, straight to your inbox, every Thursday.

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22/07/2013 10:19

Health Long-term care features@theactuary.com

Thomas Kenny explores how long-term care legislation has evolved in the UK and what may be on the horizon During the past few years, it has been hard to read a newspaper without being told not only about the ageing population but the impact this will have on the UK’s health and social care structure. So what is the issue facing the country and what is government doing about it? The UK and other major economies, including Germany, Japan and the US, are experiencing rapidly ageing populations. Currently, 17% of the UK population is over 65 and this is projected by Laing & Buisson to increase to 22% by 2030. In 2009/2010, the state spent around £140bn on older people in England1, of which 6% went on social care, 35% on the NHS and 59% on social security benefits (including state pensions). The existing social care system is based on a range of different statutes, making it complex and difficult to understand. Planned new legislation has been designed to simplify the system and proposes a new financial model to

build a more sustainable system of adult social care in England. Other key benefits are expected to be greater public awareness and understanding of social care costs as well as a much improved process for giving information and advice. One in five men and one in three of women over 65 will need residential care during their lifetime. However, there is widespread misunderstanding of the level of state support provided, possibly because the NHS is seen mistakenly as a safety net and possibly because of an element of denial. Indeed, 37% of people think the state will pay for care and 35% think they can meet these costs out of their pension income. Average weekly care home fees in England are £750 for nursing care and £532 for residential care. There is a wide variation in fees geographically, so with the mean pension income in the UK2 sitting at £265 per week, this is not likely to be an option for many. There have been various changes to social care provision over the past 10 or so years, culminating in the Care Bill now before Parliament. But the process really got started in June 2010, when the government appointed economist Andrew Dilnot to chair the Commission on Funding of Care and Support. At the same time, the Law Commission was working on its own final proposals for adult social care reform, which it published in May 2011. The Dilnot Commission then published its Fairer Care Funding report in June 2011. Its key

THE ACTUARY • August 2013 www.theactuary.com

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23/07/2013 08:42

THOMAS KENNY

is head of technical pricing at Partnership and chair of the IFoA Pensions and Long-Term Care Working Party’s Products Research Group

% of assets used to pay for care

The UDPS will be launched in April 2015. It will allow people who recommendations included a lifetime cap on care costs, an increase in meet yet-to-be-determined criteria to use the value of their home to the means-tested threshold and the extension of the deferred payment pay for care without the need to sell the property. offer. Having reviewed these findings, the government published a Details are yet to emerge of how, and if, the means testing regime will white paper on social reform alongside a draft bill and a progress report change other than for the lower and upper limits – for example, how on funding in July 2012. In February 2013, the Department of Health will property assets be treated? Will assets be included in the means published a policy statement on care and support funding before the first testing irrespective of who is living there? Currently, they are excluded reading of the Care Bill took place in May 2013. The following month, the while a partner/spouse or dependent child is resident. Does the government proposed that state-funded care support would generally introduction of UDPS change this? only be available to those assessed as having ‘substantial’ care needs. Both these features raise the question of administrative complexity. The bill is currently progressing through Parliament and it is How often will assets be assessed? What happens if someone moves? expected to become law in April 2014. It is expected that the universal How are shared assets treated? deferred payment scheme (UDPS) will be introduced in April 2015 and the £72,000 cap and extended means test in April 2016. So, who will pay for care? What do the care cap and the UDPS mean in Holistic view practice? How much a person might have to pay depends upon several There are several groups within the IFoA actively looking at social care factors, including the level of care required, the type of care, the cap and funding changes. The Pensions and Long-Term Care Working Party, a means test. Only care costs incurred once a person is deemed to have a which was formed in May, and associated research groups work with care need above the national minimum eligibility criteria (NMEC) are the Department of Health and the Association of British Insurers (ABI) described as ‘eligible’ and will count towards the cap. In addition, only on their review of current or potential products that could be offered the amount that the local authority (LA) would normally pay for care to support consumer needs under the new regime. will accrue towards the cap. An individual will be expected to pay One of the research groups presented its initial findings on potential £12,000 pa towards general living expenses if in residential care. These products to the DH/ABI Pensions and Insurance Working Group on costs will continue even when the capped level has been reached. 5 June. A holistic view of products to support consumer needs is being On top of this, means testing applies, so any person with assets lower taken, as it is clear that no one particular product is optimal for all than the upper limit (£118,000) will start to receive state support even individuals. Initial thoughts have been that a pre-funded protection before the £72,000 cap is hit. For every £250 of assets above the lower product is unlikely to be successful. People don’t generally save enough limit (£17,500), a contribution of £1 per week is required. A metering for retirement, so convincing them to set aside money in case they system will be introduced for accumulating the amounts contributing to need care is unlikely to work. A key feature of any future product will a person’s cap. be flexibility. The intention is that the working party will produce a Figure 1 shows the cap in practice – how it report for publication later in the year. affects an individual from the point when A full range of products is being Figure 1 The cap in practice – how it affects an individual metering starts. The key assumptions are that: considered, including accelerated drawdown, from the point when metering begins equity release and lump-sum protection ● metering commences on going into 160,000 products similar to those related to critical residential care (depends on eligibility criteria); 140,000 illness as well as various types of annuities. ● care costs equal the national average of £532 Cumulative costs Meter 120,000 To assist with product design, research has per week (Laing & Buisson); Cap already been completed on funding models ● the LA rate excluding hotel costs is £300 100,000 from around the world – see the October 2012 per week; 80,000 report from the Long Term Care Working ● no top-up fee (simplification); 60,000 Party, ‘Long-Term Care – A Review Of Global ● hotel costs are £231 per week (£12,000 pa); 40,000 Funding Models’ by S Elliott et al. ● means testing doesn’t bite – ie assets always 20,000 While the information available suggests greater than the upper limit of £118,000; 0 that the draft Care Bill will go a long way to ● no allowance for fee or cap inflation or 0 1 2 3 4 5 Time since metering started (years) rationalising this market, much still needs to investment returns. Based on figures from Care of Elderly People UK Market Survey 2012/13 be clarified, including how people will This shows that a typical person would need navigate a still relatively complex system. to spend £127,000 on care costs (including Figure 2 Current system vs. proposed future system While the new regime has introduced hotel costs or general living expenses) over a opportunities for product innovation, more 4.5-year period (average stay in care is less 100% changes are needed. For example, the than four years ) before the cap would apply 90% Current 80% Government Actuary’s Department limits for and then continue to pay hotel costs (£231 per Future 70% capped drawdown should, we think, vary week). If the care-home fee exceeded the LA 60% according to health and there should be a rate, the individual would also need to pay 50% level playing field for means testing. a the excess. Figure 2 is based on the same 40% assumptions as Figure 1, but allows for the 30% impact of means testing. It shows how the 1 20% Please note, this article uses the data and funding system proposed in the Care Bill 10% legislation as it applies in England. Similar issues 0% leads to a more equitable system, with the affect the other countries of the UK. 0 100k 200k 300k 400k 500k 2 maximum asset depletion at just over 50% Means tested on entering care (£) UK figure is used for illustration as England Based on figures from Dilnot Commission taking into account government proposals rather than just over 80%. figures unavailable.

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August 2013 • THE ACTUARY www.theactuary.com

23/07/2013 10:33

Health Claims features@theactuary.com

Alex Isted explains why actuaries need to involve claims professionals to price and develop products properly

Pricing is key to selling insurance products but the quality of data available to determine the price is variable. These crucial products also need experienced non-actuarial input during their development or unexpected consequences will result. For both pricing and product development, it is important that actuaries use available resources to get the price and the product right. Does this happen? Do actuaries get the most out of their analysis of claims experience. Do they discuss it with the claims professionals? Getting this interaction right is not just central to obtaining new business but it is essential for ensuring proﬁtability. When analysing claims, actuaries working in product development, marketing, pricing

and valuation need to take into account the practical lessons learnt by claims managers. Claims managers have a central role in ensuring the right insurance product is developed, both in terms of the contractual wording and, importantly, the price. Once the business is on the books, claims managers should also be integral to how the emerging experience is analysed so that appropriate reserves are set up. There are a number of questions for actuaries: ● When developing products and considering policy conditions, is suﬃcient weight placed on claims managers’ practical experience? ● Do actuaries realise the impact that areas such as the ABI Code of Practice have on claims experience?

THE ACTUARY • August 2013 www.theactuary.com

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23/07/2013 08:43

‘The customers’ desire for claims to be handled eﬃciently, fairly, transparently and promptly is overwhelming. So why isn’t claims handling at the forefront of the marketing message?’ ● Do actuaries fully understand the potential

impact of the Ombudsman or legislative reform upon eventual claims experience? ● Is there a process that allows feedback from claims managers or for lessons to be learnt in the business? For example, is a process triggered when data shows that the claims experience is different from that expected or when there has been a disproportionate number of early claims? ● Are claims managers aware of the pricing basis? The pricing basis may be a ‘fat’ one that enables a broad view of claims or a ‘finely priced’ one requiring closer claims control. Life and health insurance premiums (both insurer and reinsurer) are so finely priced in the UK that there should be a clear emphasis on appropriate integration of claims experience into the business. This means ensuring claims managers are involved in all business areas within their organisation. For example, they should be feeding back lessons learnt into product development – so that products are fair and also comprehensible; they should be involved in pricing – so that actuaries are able to better understand trends in experience; and they should be involved in underwriting to improve application forms. This is especially relevant with the development and management of health portfolios. Let’s look in more detail at how the skills of the claims managers can help the actuary’s understanding of these portfolios.

Claims management and the product development actuary A product development actuary will want to ensure that the ﬁnal product and associated policy wording meet the concept underlying the product. This should be done by involving all relevant stakeholders, including input from claims professionals. Unfortunately, this is not routine in all companies. What are the possible consequences if this doesn’t happen? Well, lack of involvement probably means we are likely to see greater numbers of customer problems. Conversely, if claims professionals are involved, they can help ensure the policy wording will have an appropriate ‘Treating Customers Fairly’ approach that can be applied to interpreting a policy at the time of claim. From their day-to-day experience in handling claims, assessors can look to remove ambiguities in the wording. This should also help reduce the number of cases where the Ombudsman may otherwise have become involved with disputed claims. Lack of

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involvement in claims is likely to lead to challenges being aired in the public arena, with a consequent adverse impact on the company’s media image.

Claims management and the pricing and valuation actuary We know that the trends underlying past disability claims experience can be seen from CMI data as well as a company’s own experience. The actuarial study of this data and the assumptions resulting can be one-dimensional. Input from experienced claims professionals can help a pricing actuary to better understand the data based on day-to-day experience rather than simply considering raw statistics. This is something that proactive insurers already do. Imagine a pricing actuary with a lot of data suggesting that inception rates and claims durations on a portfolio of IP claims were improving – and, on this basis, pricing a new tranche of business. However, the data is analysed without bringing claims professionals into play. From previous practical experience, they would have been able to advise that an apparently subtle shift in the criteria underlying the definition of disability would lead to greater and longer claims. Examples of where the skill of the experienced claims professional can help the pricing actuary include understanding why: trends with disability claims in certain occupational groups are worse than in others; termination rates have worsened in recent years across some age groups; and the impact of possible future legislative changes on claims experience. Whether a portfolio is properly priced or not can be seen in two simple ways. If the business is under-priced, the insurer might sell a lot of business but run the risk of doing so on an unprofitable basis. If the pricing is too conservative, then not enough business will be sold. Neither is good for an insurer. Claims professionals should also form part of the valuation process. If the valuation assumptions are incorrect, then a disability portfolio can be either under- or overreserved – both of which can prove to be expensive for a business. As an example, when valuing a disability portfolio, is this done on a broad approach, looking at a whole portfolio, or does the valuation take into account the different estimated durations of claim for individual cases?

Claims management and the marketing actuary Claims management is an underplayed factor in the protection industry but one that is constantly emphasised in the advertising of non-life business. It seems strange that this is the case, since the customer’s claims experience with life and health business is perhaps the most important one for anyone with insurance cover. The desire of the customer for claims to be handled eﬃciently, fairly, transparently and promptly is overwhelming. So why aren’t claims handling at the forefront of the marketing message? What examples can we glean from general insurers? The opening paragraph of a major motor insurer’s web page states: ‘Last year, we helped 15,000 people replace what they knocked, smashed, bumped, splashed or cracked with our accidental damage cover. Find out more about our claims statistics.’ A building insurance provider simply states: ‘We like to keep your claims simple.’ What is evident about these general insurers is that neither of these statements is buried within the policy to be discovered only when a claim occurs some years later – they are all highlighted at the outset. Do we make enough of this type of message when selling life and health products?

Looking forward Claims managers may need to do a stronger selling act within their organisations, but actuaries should also be more proactive in engaging with that profession. Lastly, it is interesting to compare the perceived role of claims management in the life and health sector with that in non-life business. In the latter, claims management is fully recognised to be central to the eventual proﬁtability of the portfolio – this is not yet the case in life and health. It is worth asking ‘Why not?’. a

ALEX ISTED is head of

claims management at Munich Re

August 2013 • THE ACTUARY www.theactuary.com

23/07/2013 10:33

General insurance Industrial deafness features@theactuary.com

HEAR TODAY, GONE TOMORROW? Work-related deafness compensation claims reached an all-time high in the 1990s and are still on the rise. Avital Kaye explains why Slight hearing loss will be a phenomenon experienced by most of us with age. Noisy working conditions combined with poor health and safety standards, particularly in large manufacturing plants, have led to an accumulation of people with hearing problems that are very much worse than the norm at any given age. Damage is permanent and can be life-changing, both for suﬀerers and their families, and this has led many individuals to seek employer compensation. Most employers are required by law to insure against liability for injury to their

employees or disease arising from their employment. Large numbers of industrial deafness claims, otherwise known as noise-induced hearing loss claims, have therefore been brought, often successfully, under employers’ liability insurance policies. This has had a signiﬁcant impact on the UK insurance industry. These claims reached an all-time high in the mid-1990s, thought to have been attributable to the introduction of conditional fee arrangements (CFA) and the growth of claims management companies. This article

THE ACTUARY • August 2013 www.theactuary.com

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23/07/2013 08:43

Figure 1

The 1999 Woolf reforms served to drastically reduce the level of claims notified in the early 2000s. However, over a decade later, the Health and Safety Executive (HSE) has stated that industrial hearing loss remains the occupational disease with the highest number of civil claims attributed to it, accounting for three-quarters of all occupational disease claims in the UK. With claims rocketing over the past few years, particularly in 2012, deafness has been described by some as ‘the new whiplash’. There are a number of factors that may help to explain why deafness claims have continued to increase over the past decade: ● a greater awareness of industrial deafness, and an increasing propensity to claim using contingent fee, or ‘no-win, no fee’, arrangements, which reduce the risk that the claimant would be liable for costs should they lose the case; ● recessionary effects – for example, redundancies leading to a loss of employer loyalty in industrial areas; ● the formation of the Employers’ Liability Tracing Office (Elto), which makes the tracing of insurers on older policy years substantially more straightforward; ● claims from industries that are traditionally less associated with noise risk – for example, the HSE identifies energy and water supply among the industries with the largest number of new cases; ● an acceleration of claim notifications caused by the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO), which became law on 1 April 2013 and sought to implement many of the recommendations put forward by Lord Justice Jackson’s review of civil litigation costs. Among these was contingency fees.

Recent developments With the average deafness claim resulting in an increased proportion of third-party costs versus indemnity paid to the claimant (when paid through a CFA), insurers have been hit heavily by third-party fees. The Laspo Act has abolished the recoverability of ‘success fees’ in CFAs, replacing this with a 10% uplift in general damages awarded to a successful claimant. Solicitors’ fees will now be paid out of this award, rather than a losing defendant having

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0 20 40 60 80 250 500

4000

8000Hz

Figure 2

Future uncertainty Some consider that because the general damages portion of a typical industrial deafness claim is small in relation to the third-party legal costs, the Laspo Act may render these types of claims unprofitable for the solicitors involved and hence lead to a reduction in overall claim numbers. It is, however, too early to tell whether this will play out in practice. Looking also to the regulatory climate over the past decade, industrial deafness claims have been shown to be heavily reliant on the prevailing legislation at the time of the claim. In other words, the definition of what constitutes a successful claim in one year could well be revised in the future if, for example, new studies showed that lower decibel levels contribute to hearing loss, or employers are found to have had ‘prior knowledge’ in relation to harmful working conditions. This serves merely to increase the uncertainty that exists around likely future claim numbers. There is also uncertainty over the cost of future settlements. With around 50% of all reported deafness claims settled at zero cost to the insurer, many cases are dismissed before ever reaching court. Despite this trend, success fees have been significant in the past, with solicitors awarded a possible 62.5% uplift on fees for successful claims prior to 1 April 2013. Although solicitors’ fees are now based on the damages awarded to claimants, costs to the insurance industry could still rise if the volume of successful claims or the ultimate settlement costs increased further. The end result of this, however, would depend on insurers’ continued dedication not to settle claims without proper medical checks (for example, the use of the Coles guidelines and audiograms, see right) and due diligence. While the Laspo Act might reduce deafness claim numbers eventually, it is difficult to predict when this might be. Claims handling teams, while already dealing with the surge of claims notified in 2012, are likely to be busy for some time yet. a

1000 2000

Frequency (Hz)

A high-frequency notch in the audiogram, typical of noiseinduced hearing loss Hearing level (db HL)

Claims experience

to fund the solicitor’s fees if the claimant is successful. There was another surge in claims notified prior to the onset of the new regulations over the first few months of 2013. Many industry experts, including Bob Howe, deputy CEO of Axa LM (Axa’s run-off and legacy subsidiary), believe that this was an attempt to notify as many claims as possible while terms regarding CFAs remained favourable.

0 20 40 60 80 250 500

1000 2000

4000

8000Hz

Frequency (Hz)

Figure 3 A bulge downwards and to the left in the audiogram typical of noiseinduced hearing loss plus age-associated loss Hearing level (db HL)

explores the more recent claims trends and explains why the outlook for deafness claims remains uncertain at best.

Hearing level (db HL)

A normal audiogram

0 20 40 60 80 250 500

1000 2000

4000

8000Hz

Frequency (Hz)

Source: Occupational Deafness Report, Department for Work and Pensions Social Security Administration Act 1992

AVITAL KAYE is a

consultant at PwC, specialising in reserving, run-oﬀ and UK latents

August 2013 • THE ACTUARY www.theactuary.com

23/07/2013 08:43

Soft skills Communication features@theactuary.com

Making an

Most presentations are dull and ineﬀective, but they don’t have to be. Andy Bounds shows how to keep your audience awake and interested – and achieve the right result

Presentations are an essential part of an actuary’s life. Whether you are presenting to clients or updating colleagues, the more successfully you do it, the more successful you will be. This begs the question: given how important presentations are, why are most of them so boring? For example, can you remember seeing any of these: ● complex, barely legible slides; ● presenters who just read out their slides and add nothing to them (be honest – how often have you thought ‘please give me a copy of your slides so I can go as I’ll be able to read them more quickly than you’re about to’?); ● minimal/no interaction between a presenter and their audience; ● that feeling you get at the end of the presentation – ‘OK, I understand it, but what am I supposed to do with it?’.

Is all of this depressingly familiar? Even though you see these things – and worse – every day, it’s actually very easy to fix. In fact, there are only three steps to preparing a presentation full of impact. The first is to prepare in the right order. People tend to prepare presentations in the order they speak – they prepare the start first; then the content; finally, the end. But, since virtually all presentations are boring, it’s clear that this isn’t the best way to do it. Also, when people prepare in this order, they tend to put their most important points – the ones that took most thought and time – at the end. But audiences lose concentration during a presentation. So this approach means that, when you get to the main points, your audience could well have switched off. Instead, it’s better for you and your audience to prepare in this order.

THE ACTUARY • August 2013 www.theactuary.com

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23/07/2013 08:44

‘Once you know what you want your audience to do after your presentation, the next step is to create content that will give them the ability, motivation and conﬁdence to do it.’

MPACT Step 1: start at the end (identify the ‘do’) Presentations are supposed to generate a reaction. That’s the point of them. So the best way to start your prep is by thinking what response you want, then work backwards to see what your content must be to provoke it. A simple approach is to ask yourself ‘what do I want my audience to DO after I stop speaking?’ For example, do you want them to agree to something, give you some budget, endorse it to somebody else, and so on?

Once you have identified this ‘Do’, put it on a slide, with an action-focused title – like ‘to move things forward’. You will notice that this is very different to most final slides, but most final slides don’t have the desired effect. Some people initially find it strange to prepare by thinking of the ‘do’ first. But, if you don’t, you won’t know what you want them to do. And if you don’t want them to do anything, why are you presenting to them at all? There is a simple rule here: unless you state what the next steps are, there won’t be any.

Start

Content

End

You speak in this order

First

Second

Third

People usually prepare in this order

First

Second

Third

But you should prepare in this order

Second

Third

First

JOHN HOLCROFT

p28_30_aug_boundsFINAL•CT.indd 29

You can do a quick self- test. Ask yourself three questions: What do my presentation’s final slides say? Do I always know what I want the audience to do after I have finished? Do my presentations always have the desired effect?

Step 2: create a compelling start (think ‘afters’) Once you know what you want your audience to do after your presentation, the next step is to create content that will give them the ability, motivation and conﬁdence to do it. And, as the old saying goes, you only get one chance to make a ﬁrst impression. So you must engage them early. This means that your title must be interesting. But most presentations don’t do this. Instead, the title simply describes what’s coming up. I mean, what do you think when you’re invited to a presentation called

August 2013 • THE ACTUARY www.theactuary.com

23/07/2013 08:44

Soft skills Communication features@theactuary.com

‘Q2 overview’, ‘update’, ‘latest figures’… you’re not exactly rushing to attend, are you? To improve titles, think why your audience will be better off after hearing your presentation. So if you are going to update them with the latest figures, their ‘afters’ might be that they will know where to focus next year. You then either state this as: the main title – ‘Focusing on the right things next year’; or a subtitle after a more corporate introduction – ‘Our latest figures: ensuring we focus on the right things next year’. Putting ‘afters’ in titles/subtitles isn’t new. A good example of a book that used ‘afters’ in the title was Dale Carnegie’s How To Win Friends And Influence People. ‘Afters’ don’t only work for presentations and books. For example, when somebody asks what I do, if I say ‘I am a consultant’, they tend to look at me sympathetically and say ‘I am sorry to hear that. Between jobs, are you?’ However, if I focused on the ‘afters’ I would say: ‘I help companies communicate better than they thought possible’. That opens up a lot more possibilities. Again, you can do a self test. Ask yourself these questions: do you always identify the audience’s main benefit of listening to you, and then mention it at the start of your presentations?; do your presentations’ titles/ subtitles make your audience think ‘wow!’, or do they simply describe what you’re about to discuss? How would you describe your job in one sentence? (Not ‘I am an actuary’ please!) You should extend this ‘afters’ concept to other forms of communication – are your email titles interesting? Meeting invites? Workshop titles? Others?

Step 3: build interesting, short content Lastly, it’s time to write your content. There are only two rules to follow here: make it interesting; and keep it short. The good news is that it’s easier to be interesting than you imagine. All you do is identify the types of things that audiences ﬁnd interesting, then make sure you do them.

Audiences ﬁnd these interesting …

So, to be interesting, I must…

Interactivity

Ask questions

Stories

Prepare, practise and ﬁne-tune stories

Silence

Count to four in my head, after I have made a key point, before continuing

Sparse slides

Strip out as many words as possible

Technical content (if they are a nontechnical audience)

Simplify my messages, use analogies etc

When your last slide says…

Your audience…

Resulting actions?

Thank you

Says ‘You’re welcome’

None

Questions?

Asks questions

None

Conclusion

Thinks something’s concluded

None

After I show people the five things they can do to liven up their presentation, they usually say two things to me – ‘that looks easier than I thought’ and ‘how many of them should I do?’ The answer to the second question? It’s up to you. But, if you want to be more interesting, you’ll have to do more than none of them. So what are these five things? Basically, you have to think of what audiences like and how to provide it. They like interactivity, so you need to get them involved. So ask questions. They like stories so prepare, practise and fine-tune stories. They like silence so they can absorb the messages. So, when you have made a key point, pause and count to four in your head before continuing. They don’t like lots of busy slides, so strip out as many words as possible. And finally they do like technical content, but you need to keep it accessible. So simplify your messages and use analogies. You also need to keep things short. The easiest way to do this is an exercise called ‘Keep it/bin it/appendix it’. As the name suggests, you review your content line by line, asking yourself ‘is this bit so important that I need to keep it in? Or could I put it in the bin? Or, if it’s not key but important enough to go somewhere, should I put it in an appendix?’ This technique has two big advantages – it improves your presentation; and it doesn’t take long at all. For instance, I recently showed it to one of my clients. Within five

minutes, she had turned a 30-slide deck into a 12-slide one, with nine slides in an appendix and nine in the bin. In other words, in only ﬁve minutes, we had removed the worst 60% of her presentation. Here’s another self-test. On a scale of one (boring) to 10 (fascinating), how would you grade your presentations? How would your audiences grade them? Are there one or two new techniques you could adopt to make yourself more interesting? Do you think your presentations are generally too long, too short or about right? If they are too long, what could you remove? If you did everything in this article, every time, you would be a much better presenter. But it can be hard to do things perfectly every time. So, how can you make yourself ‘better enough’? Well, if it helps, here’s a quick story you might have heard elsewhere, which makes a good point about presentations. Two explorers in a jungle stumble across a bear. The bear rears up, ready to eat them. One of the explorers drops to his knees and starts rummaging in his rucksack. His friend says ‘What are you doing?’; to which he replies ‘I’m looking for my running shoes’. His friend says ‘But you’ll never outrun a bear’. The man responds with: ‘I don’t have to. I just have to outrun you’. By all means, work on being the best presenter in the world. But you don’t have to be that good. You do, however, have to be better than the other presenters out there. And, as we said at the start of this article, their next presentations will probably be quite dull. What will yours be like? a

ANDY BOUNDS is a corporate communication specialist. He is also the author of The Snowball Eﬀect

THE ACTUARY • August 2013 www.theactuary.com

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23/07/2013 08:44

Life Proxy modelling features@theactuary.com

Chris Hursey explores a surprising result in insurance capital modelling, and warns of the dangers of focusing too heavily on ‘biting scenarios’

AworseBARK than its bite Solvency II has led a number of life and general insurers to develop internal capital models. In these models, thousands of potential scenarios are produced, reflecting a range of possible outcomes for economic and insurance risks. Within each of these scenarios, the insurer revalues its balance sheet. The solvency capital requirement is then set so as to ensure solvency in all but a one-in-a-200-year event. In other words, the ‘tail’ of the capital distribution needs to be covered. While the basic concepts of simulationdriven capital modelling will be familiar to many practitioners, the challenge remains as to how to revalue a balance sheet in thousands of different scenarios within a short space of time. The calculation of liabilities itself is a complicated process, and computing capacity is finite. Proxy modelling seeks to address this with simplified models. The trick is to ensure that the accuracy of the result is not compromised. The Proxy Models Working Group was set up to explore this approach. In the remainder of this article, we share some interesting early findings relating to the proxy modelling of life insurance with-profit liabilities. The primary purpose of producing all these scenario results is to allow us to draw quantile results, in particular, the 99.5th percentile

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August 2013 • THE ACTUARY www.theactuary.com

23/07/2013 08:44

Life Proxy modelling

Figure 2 Cost of guarantee error %, 200 in sample ﬁtting, 20,000 ranked out of sample tests

10 8

5% 4%

2 0 -2 -4

1% 0% -1% -2%

Error

Error %

Figure 1 Cost of guarantee error, 200 in sample ﬁtting, 20,000 ranked out of sample tests Millions

features@theactuary.com

-6 -8 -10

-3%

Rank (Proxy) - Rank (Actual) Rank (Proxy - Actual)

-4% -5%

Scenarios

Figure 3 Single risk error cover

Error

99.5th percentile

Risk Movement

Figure 4 Risk driver combinations giving the same 1-in-200 value 99.5th percentile

0.8

0.6 Risk Driver 2

capital requirement. By ranking the scenarios in order of capital requirement we are able to derive the result at the ‘biting’ scenario, beyond which all scenarios produce a higher required capital than our chosen quantile. One of the problems associated with any proxy model is how to assess accuracy reliably without testing every single scenario. If we could run every scenario then a proxy model would not be required in the first place. As a result, it is common for the proxy-model-derived biting scenario to be analysed, checked and even re-evaluated in the primary model to arrive at the final capital result. As we shall see, however, care should be taken with how this biting scenario is used. Our aim was to compare, across thousands of scenarios, the actual value of with-profit guarantee costs to those approximated by a proxy model. For the actual value, we built a cashflow projection model combined with a Black-Scholes closed form solution for the time value of guarantees. The proxy model took the form of polynomial formulae, calibrated using least-squares regression against 200 random in-sample scenarios and tested against 20,000 out-of-sample scenarios. The product was simple enough to ensure accuracy of the actual valuation approach. This seemed like a sensible starting point, rather than delving straight into complex guarantee structures requiring nested stochastic models for actual capital values. A range of nine market and insurance risks were incorporated and over 1,000 model points of varying term to maturity and ‘moneyness’ of guarantees were chosen. For simplicity, we assumed that the cost of guarantees was backed by a fixed cash amount and also that the asset share liabilities were exactly matched by backing assets, so that the capital result is driven purely by the variation in cost of guarantees.

0.4

0.2

Curve of constant loss Proxy model approximation

A spooky result By most conventional measures – in which actual results are compared with proxy results for individual scenarios – the results

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

Risk Driver 1

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23/07/2013 08:45

‘How can the scenario results be so inaccurate and the quantile results so accurate?’ demonstrated a poor quality of ﬁt. This could have been improved using a variety of methods, but this was not the purpose of the exercise. Surprisingly, though, we found the quantile results to be very accurate across the whole distribution. In particular, the error at the 99.5th percentile was less than 0.3%. This is demonstrated in Figure 1 and Figure 2, which show the errors and error percentages for the ranked results (orange) compared with the ranked errors of the individual scenario results (blue). You will see from the diagrams why we refer to this as a spooky result. The question is, how can the scenario results be so inaccurate and yet the quantile results so accurate?

proxy, based on our polynomial formulae, we find that the scenario numbers in each of the two lists of results do not match. Not only is the biting scenario different, but almost all scenarios are different. In reality, we are unlikely to have the actual quantile result so may wish to check our proxy result by running the implied biting scenario through the actual model and the proxy model. From here on, the inaccuracy at the biting scenario can dominate proceedings if we are not careful. In particular, it may be concluded that the correct result is £404m,

What’s going on? We will try to explain this ghostly outcome, but, ﬁrst, let’s take a step back – or three. It is tempting to assume that proxy model errors increase as scenarios become more extreme. This is perhaps based on our experience of approximations in one risk dimension. Figure 3 shows the error curve resulting from just such an approximation. Beyond a certain point there are no further turning points, and errors continue to increase in magnitude. Drawing quantile results in the tails leads to increasingly large errors as the scenario being considered becomes more extreme. In fact, this occurs not because of the extremity of the event but because of error bias in the region of interest. In this region, all errors are of one sign and for any particular error there is only one corresponding value of the risk. Therefore, the error in the quantile result is dictated by the error in that scenario result. Multiple dimensions and the curve of constant loss sounds like an episode from Dr Who, but really isn’t that strange. In multiple dimensions – in other words, where we have a number of risk variables – the single point is replaced by the ‘curve of constant loss’, representing the combinations of diﬀerent risk variable values that all give the same result. For example, if equity values

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drop by 10% and lapse rates increase by 5%, we might get the same answer as if equity values rise by 5% and lapse rates fall by 10%, and in this case these two scenarios would be on the same curve. If we could plot the errors along the path of a curve of constant loss, we would not expect the errors to be of one sign, with the proxy being greater or less than actual at different points along the path, as Figure 4 illustrates. At specific points, the errors can be large, up to 60% in our example. However, the nature of least-squares regression, which does a good job of minimising average error, removes some of the error bias along the path of constant loss. This is by no means guaranteed though. Our aim now is to minimise error bias along the curve of constant loss. More formally, we wish to have an expectation of error equal to zero, and we believe – while still subject to rigorous proof – that under these circumstances, and a few other conditions, our result about quantile accuracy will hold. Returning to our example, comparing ranked results of actual, based on our cashflow plus Black-Scholes model, versus

Proxy (£m)

Actual (£m)

Error (£m)

Error (%)

440

404

35.7

8.91%

signiﬁcantly understating the actual result of £441m, a result that the proxy has underestimated by a mere 0.3% at £440m. It appears then that using an inaccurate model to determine a ‘biting scenario’ that is then subjected to more detailed analysis might not be appropriate. While we do not have a mathematical proof as yet, the above results certainly indicate that the capital measured by a proxy might be relatively accurate even if the scenario producing it is not. It should also be considered just how much value there is in analysing a single biting scenario. Perhaps the proxy model has already provided the correct capital result and, from a risk management perspective, we should be deriving a range of biting scenarios along the curve of constant loss in our primary models, as individual scenarios might be misleading. The Proxy Models Working Group is on the case... watch this space. a

Chris Hursey is chair of The Proxy Models Working Group of the Institute and Faculty of Actuaries. The group welcomes any comments or suggestions. Please contact Chris by email at chris.hursey@charasys.co.uk

August 2013 • THE ACTUARY www.theactuary.com

23/07/2013 08:45

arts@theactuary.com

Arts

Sharon Maguire sees propaganda in action at a thought-provoking exhibition

TELLING IT LIKE IT Propaganda is all around us, communicating and influencing us, attempting to cajole us to a specific way of thinking, to suit a particular ideology, advantage or call to action, whether religious, political or commercial. Nowadays, it has a particularly negative connotation, but is it really any different from advertising, brand building or public relations? With this and many other questions in mind, I ventured off to The British Library to see Propaganda: Power and Persuasion, hailed as the first exhibition to explore international state propaganda from the 20th and 21st centuries. The exhibition flows from historic moment to moment, broadcasting the message of the time through the media available. Throughout, we are confronted with iconic deities, political regimes, wars, nation building, identity, branding, and health – all culminating in the dawning of the digital era. Among more than 200 exhibits, a few date back as far as Ancient Greece with a coin of Alexander the Great. There are also ceremonial portraits of leaders, and a book of Catholic doctrine put forward by the Congregatio de Propaganda Fide (Congregation for Propagating the Faith) in order to ‘spread the word’. As we meander into the 20th century, the exhibition becomes more sinister in message and tone. This was the era of the development of cinema, radio and television.

Propaganda gets a bad name One period explains why propaganda today is associated with lies, misinformation and distrust. This was the First World War, when states needed to maintain the morale of their people, demoralise the enemy and court support from neutral governments. Spurred on by the expertise of the press and the growth of specialist ‘information’ departments, the tactics grew more sophisticated. Once the reality of the war became apparent, the backlash that followed meant the word ‘propaganda’ would continue to be seen as an unfavourable term.

Altered states: one striking image at the exhibition shows Soviet dictator Josef Stalin as a young, handsome man engrossed in a book In one of the videos on display, professor David Welch from the University of Kent says people still associate propaganda with lies and falsehood. But this is to misunderstand its basic concept, which is that it is ethically neutral. The problem occurs when there is a monopoly over the propaganda, as in a dictatorship, where there are no alternative views or sources of information available. John Pilger, documentary ﬁlm-maker and journalist, says we often think in terms of infamous iconography such as Nazi and Stalinist propaganda. But he believes the most powerful propaganda is insidious, something we don’t recognise – as it’s in disguise.

Mao Tse-tung, Joseph Stalin and Adolf Hitler are obvious examples. These heads of state set out to inspire devotion from the masses by presenting themselves as almost mythical men, bound to their nation. Several images depict these murderous dictators as contemplative, benign ﬁgureheads. A romanticised image of Stalin (above) shows him as a handsome youth engrossed in his book, while set against an imposing backdrop of mountain ranges. Hitler was often portrayed as a great leader and ‘father of the nation’ and Mao was depicted as a prophet, with the sole aim of inspiring heightened devotion.

The state as enemy The making of a deity One of the most common uses of propaganda in the 20th century was the deiﬁcation of dictators.

The exhibition devotes a large section to the Second World War, and propaganda at its very worst – the promulgation of Nazi doctrine and

THE ACTUARY • August 2013 www.theactuary.com

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23/07/2013 08:46

At the back Arts

Healthy options: not all propaganda is harmful. Some of the biggest examples are health campaigns, such as this 1950s poster

ISN’T anti-Semitic rhetoric. Looping film reels show the fascist ideology that whipped the masses into a murderous frenzy. States and political movements to this day solicit mass support blaming the ills of a nation on a specific group of people based on race, religion, political beliefs or social class. As Dwight D Eisenhower, president of the US from 1953 to 1961, wrote: “The search for a scapegoat is the easiest of all hunting expeditions”. We move swiftly on to the War in Iraq and George W Bush’s ‘axis of evil’ and ‘war on terror’ – an attempt to unify differing groups into a single enemy to present to the American people. His rhetoric would not have been out of place in a bygone era: the appeal to patriotism; the creation of fear as a technique to play on existing anxieties and prejudices; and the need to create a scapegoat. The role of the media has also come under much scrutiny on this issue. In Bush’s War: Media Bias and Justifications for War in a Terrorist Age, political communication researcher Jim A Kuypers examines ‘how the press failed America in its coverage on the war on terror’. In the months leading up to the invasion of Iraq, the White House indicated that it had information that demonstrated a link between Iraqi dictator Saddam Hussein and Islamist terrorist group Al-Qaeda. Published reports and news stories soon followed to reaffirm those links. In 1999 Newsweek magazine published a story about Saddam and al-Qaeda joining forces to attack US interests in the Gulf region. ABC News ran a similar story soon after. Polls suggested that a majority of Americans believed that Saddam Hussein was linked to the New York attacks on 9/11. The abundance of literature and media coverage that now follows the ‘war on terror’ may well be indicative of a change on the playing fields of propaganda. Each speech, news story and statement put forth by governments is now heavily scrutinised.

ANTHONY D’OFFAY

p34_35_aug_artsFINAL•CT.indd 35

A healthy pursuit One section of the exhibition is allocated to public health. While it might sit uncomfortably as part of the show, it does highlight the main thrust of the exhibition, which is that propaganda is a tool of persuasion that can be used for good or bad intentions. Public information films are used to help governments fulfil their responsibilities and protect people from disease and environmental dangers. Public health campaigns use methods similar to traditional forms of propaganda. Striking posters and slogans and, later, television adverts arouse alarm and fear. The show highlights the campaigns to prevent the spread of Aids and other diseases. While the campaigns offer practical advice on health risks and on safe behaviour, they are often also motivated by the need to reduce the burden on health services and maintain economic productivity.

The cacophony of cyberspace The ﬁrst decade of the 21st century has seen a massive increase in the use of propaganda by governments and protest groups alike. The development of new technology such as the internet has had a massive impact, allowing new routes of communication for both governments to advocate their messages, plans and strategies, and for ordinary people to challenge and criticise them. As Alastair Campbell, who was oﬃcial spokesman for then prime minister Tony Blair between 1997-2003, states: “The news is happening every single second, minute, hour, day in every country in the world. Not just via television screens, radio, and press but also on phones, iPads, in cars, in trains, on planes – all the time the news is unfolding.’

As a result, people have become empowered in a way previous generations have not been, and are increasingly reacting to political, social and other events. One example is the t Arab Spring, where huge groups of ordinary h people were able to p mobilise to subvert state m propaganda. pr The use of social media has allowed people to ha communicate directly with co politicians and made them po more accountable. Trust in mo media opinion has been me replaced by public opinion. rep The power dynamic is now changing dramatically. chan Iain Dale, publisher and Ia broadcaster, says: “People broa don’t join political parties any more. They support pressure more group politics and they are brilliant at handling social media.” He adds that “social media is a very LOUD media. Those that shout loudest can be heard the most”. But he warns that that in itself does not equate to democracy. The pièce de résistance of the exhibition is the huge wall installation built to visualise the volume of responses over a set period of time to three major events: the 2012 Olympics opening ceremony; the Sandy Hook elementary school shootings; and President Barack Obama’s ‘Four more years’ address. Colour-coded and linked to specific moments of each occurrence, it monitors and measures the response via Twitter. Watching it light up at specific moments is awe inspiring, yet also slightly unnerving – probably because we are now living in an undefined era, one where all the barriers have been torn down, and there are no rules or guidelines – or are there? Propaganda still exists today, we probably just call it by a different name: public relations, advertising, branding, spin – it has become insidious and all-powerful. Catch the exhibition while you can – it is a thought-provoking, emotional and disconcerting experience.

Propaganda: Power and Persuasion The exhibition runs until 17 September 2013 at The British Library, London

August 2013 • THE ACTUARY www.theactuary.com

23/07/2013 08:46

BOOK CORNER

Never judge an e-palimpsest by its cover. Matthew Edwards casts an eye over the best books now appearing on a screen near you

KEEP TAKING THE TABLETS

We all, I suspect, have our favourite weird words. One of mine is ‘palimpsest’. A charming word that appears often in Thomas de Quincey’s works, most notably in Suspiria de Profundis, which is roughly translated as ‘sighs from the depths’. De Quincey describes the palimpsest as ‘a membrane or roll cleansed of its manuscripts by reiterated successions’. Before the advent of cheap paper the written word was often conveyed on such re-used parchments. One might have thought that the palimpsest would have disappeared long ago but in fact there has been a remarkable resurgence in the form of e-books. The paper we have taken for granted for hundreds of years has now been replaced by a screen in almost constant ﬂux as one page is erased to make way for another. These devices have advantages and disadvantages. I bought a Kindle mainly to facilitate ‘multi-tome’ reading on long journeys, and also to allow the speedy

THE ACTUARY • August 2013 www.theactuary.com

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acquisition of foreign books that are difficult to acquire in Britain in printed form. I have since found it ideal for my pastime of creating commonplace books which are collections of extracts from books I’d read. This used to require many hours of laborious transcription but can be done now by a quick ‘swipe’ of the finger, transferring extracts into the reader’s ‘clippings’ file. Work documents can also be read on these devices. Many actuaries will have grown used to board and senior management meetings that are now almost devoid of paper. Of particular interest are books that are available only as e-books or are substantially cheaper in that format. This review considers a few such books that might be of interest to actuaries. What Went Wrong With Economics: The Flawed Assumptions That Led Economists Astray by Michael Reiss is an interesting example. Reiss writes at a high level around the areas of money and credit supply, the

banking system and inflation. He finishes with his proposals for a sustainable economic structure based around full reserve banking. His work is only available as an e-book. On a similar subject is George Cooper’s The Origin Of Financial Crises: Central Banks, Credit Bubbles And The Efficient Market Fallacy . This can be purchased in e-format for less than a fifth of the print version’s price. It is one of the best books on the factors underlying financial crises in general, and the most recent ‘crunch’ in particular; a review was published in the July 2010 edition of The Actuary (see bit.ly/175TASk). Another interesting and inexpensive e-book is Are You Smart Enough To Work At Google? by William Poundstone. What I thought would be a slightly irritating collection of weird ‘post-Mensa’ questions turns out to be a fascinating and very engaging history of employee selection processes, moving from standard interviews (largely useless) to tailored questions, and how these have attempted to test intelligence and creativity. Google’s own questions, which seem successfully to test both of these (and so avoid just finding ‘brainy slackers who never achieve much of anything’), have also had the interesting effect of making Google seem an inspirational and cool place to work. This has generated a virtuous circle of plentiful applicants of the right sort to be sifted through, despite a one in 130 chance of remaining in the sieve. Finally, a financially oriented but easy-reading e-book is Barbara Stcherbatcheff ’s light-hearted Confessions of a City Girl. Stcherbatcheff is the former ‘City Girl’ columnist from a couple of London newspapers, whose columns described her life as a woman in the lower ranks of an investment bank. You might describe this book as the empirical counterpart to the more theoretical examinations of banking and economic incompetence noted above; more entertaining, but much less interesting. What are your thoughts about e-books, and interesting reads on them? Write, and let us know. Matthew Edwards is a senior consultant at Towers Watson. He is a former editor of The Actuary

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

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23/07/2013 08:47

Nylﬁa is an actuary who solves and compiles themed cryptic crosswords. Created especially for The Actuary

At the back Coﬀee break puzzles@theactuary.com

Puzzles UNUSUALLY LITERATE?

For a chance to win a £25 Amazon voucher, please email your crossword solution to: puzzles@theactuary.com by Wednesday 19 June

— RD SWO CROS IZE PR E PUZZL —

The shaded cells, in clockwise direction, starting at the mid-point of the left hand edge of the grid, contain the words of the Profession’s sadly departed strapline (definite article excluded) and of FIAs, trainees flunking acumen test (6, 9, 5, 2, 6). Other clues are unnumbered but are listed in alphabetical order of the solutions and these are to be entered in the grid where they will fit. ■ Beast noticed early in chambers, though another seen earlier still? (8)

■ Broadcast as having characteristic of gas (7)

■ Abundant supply of craic upon our ﬁrst jaunt (10)

■ Boxer leads with “I am the King”? (4)

■ Noble with honour pierced through? (7)

■ Engineer to outearn a pilot (8)

■ Complain with roar concerning food (4,4)

■ Most longstanding held established billet (6)

■ A warning shouted out in front (5)

■ Those giving agreement to non-secret second motion (10)

■ FIAs let right design - it’s most unsound (8)

■ Breastplate found by soldier in ebbing ocean (5)

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p37_39_aug_puzzles•gc.indd 37

■ Return then beheaded (4) ■ Last morsel from fridge, for example, was mixed trifles (7) ■ Disgusting newspaperman made money (7) ■ Establish trade foundation (10) ■ Outer parts of triceps torn away but came back for cryotherapy (3,3) ■ Tart played piano gem (5,3) ■ Architect has smoking remnants following nicotine high? (4) ■ Nervous when new currency has sudden movement (8) ■ Concoct a logarithm using an alternative base (5) ■ It’s a solitary dance to progress European legislation from the front (3,4) ■ Stubs toes when gutted following production run upset (8) ■ In the US, accuracy of ship’s mast and sails has a suggestion of choice (5) ■ Fabric with soft touch on prophet’s backside (10) ■ Nylfia concludes standard error of the mean is 50% (4) ■ Kidnap observed in China (8) ■ Literary king managed to fall behind thus violent start..... (6) ■ .....for all found shortly in capture - ready for toasting (7) ■ Kilt seen blowing about behind also is location for apparatus (7) ■ Dizziness caused by cascading Trevi flow (7) ■ It’s hard during game to keep quiet (6)

August 2013 • THE ACTUARY 37 www.theactuary.com

23/07/2013 08:48

At the back Coﬀee break puzzles@theactuary.com

HAVE YOU GOT WHAT IT TAKES? For information on IQ testing in your area, visit www.mensa.org.uk

—

A MENSE PRIZ E PUZZL

Name game Mensa puzzle 555

—

What letter should appear next in this sequence?

Y S H S R N S ? For a chance to win a £25 Amazon voucher, email your solution to puzzle 551 to: puzzles@theactuary.com by Wednesday 17 August 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.

What rights does Dummy have? When playing friendly bridge, you can decide your own rules but in the following, you are Dummy, playing in a club or a competition.

Melody maker Mensa puzzle 556

1. Spades are trumps. A defender leads a heart and Declarer trumps. a) Are you allowed to say ‘having no hearts, Partner?’? b) Before the next trick is played, Declarer realises he does have a heart. What happens?

Rearrange the letters of

‘RUSH LED BY PIANO’ to give the title of an American musical composition.

2. Half-way through a hand, you (as Dummy) notice there has been a revoke. Nobody else notices. Can you: a) Point it out there and then? b) Point it out at the end of the hand? c) Never say anything?

What is it?

Wheel value Mensa puzzle 557 What number should replace the question mark?

Small change Mensa puzzle 558

9 54

Bridge Puzzle 35 Is Dummy Right?

A charity collection has raised £22.27. It is made up of four diﬀerent denominations of coins and the largest denomination is £1. Unusually, the collection contains exactly the same number of each coin. How many of each coin is there and what are their values?

3. Declarer leads from the wrong hand. a) Can you point it out? b) Can either defender accept it? c) A defender points out that Declarer has led from the wrong hand. Does Declarer simply replace the card and lead from the correct hand? 4. The opening lead is made and you have a singleton. Do you play it as you put your cards down or wait until Declarer tells you to? 5. Your hand is due to make the next lead. You hold ♠KQ3. Declarer says ‘play a spade please’. Do you: a) Play the K♠ ? b) Play the 3♠ ? c) Play whichever card you like? 6. Declarer leads a spade and you have to discard from ♥ 752 and ♦Q4. Declarer says ‘Discard anything’. You throw 2♥. A defender says ‘Discard Q♦’. What do you do? Bridge puzzle provided by David Lampert

THE ACTUARY • August 2013 www.theactuary.com

p37_39_aug_puzzles•gc.indd 38

SHUTTERSTOCK

23/07/2013 08:48

SOLUTIONS FOR JULY 2013 Supermarket sweep Mensa puzzle 551

Gridlock? Mensa puzzle 553

At the supermarket, Faith buys DOUGHNUTS, CUSTARD, QUICHE, CARROTS and FENNEL. Who buys ONIONS, SAMOSAS, TOMATOES, FISH and SUGAR?

What number should replace the question mark in the grid?

8 5 3 2 ?

ANSWER: Simon. The fifth letter of the first item, then the fourth of the next item, then the third, then the second, and finally the first letter of the last item, gives the name in reverse order. Congratulations to this month’s winner – Brian Cronin of Pacific Life Re

Mix and match Mensa puzzle 552

ANSWER: Afresh and enmesh

SHE

1 7 3 3 0

3 4 9 5 3

6 5 1 4 7

ANSWER: One. Minus each row from the row above to get the row below.

Natural order Mensa puzzle 554

When each of the following words is rearranged, one of them can suﬃx the other two to give two longer words. What are they?

FAR

5 2 2 0 2

MEN

HOLLY HOOK Employer and area of work Towers Watson – pensions.

How would your best friend describe you? Dry, yet robust with an aromatic bouquet.

What would be your personal motto? Failure is not an option (well…until the next exam results!)

Name five dream guests you would invite to your dinner party? Scary, Ginger, Baby, Sporty, John Lennon.

What’s your most ‘actuarial’ habit?

What letter should appear next in this sequence?

ACTUARY OF THE FUTURE

Hedging red against black on the roulette table.

Favourite Excel function? Concatenate – looks more impressive than &.

How do you relax away from the office? With an ActEd-related guilt complex.

Alternative career choice? Horrible Histories illustrator.

ANSWER: D. Starting from L, alternate between going 3 letters forward and going 5 letters back

Tell us something unusual about yourself

Answers to watch out for barrier! Bridge puzzle 34

Greatest risk you have ever taken? Flying

In hands 1, 2 and 3, you are South. You opened the bidding with 1♦ and Partner replied 1♠ . What is your next bid? In hands 4 and 5, you are North after South opened 1♦, you bid 1♠ and South bid 2♥ . What is your next bid? ANSWERS As soon as you open 1 of a suit you create a ‘barrier’ of 2 of that suit. If Partner responds in a new suit, you should only make an unforced bid above the barrier with a strong hand. This is known as a ‘reverse’, bidding a lower ranked suit followed by a higher ranked one. It is strong (usually 16+ points) and shows more cards in the ﬁrst suit. Hand 1 isn’t strong enough to

1 ♠4 ♥AJ72 ♦AKQ86 ♣ 853

South hands 2 3 ♠Q53 ♠4 ♥K986 ♥AK94 ♦ AKQ86 ♦AKQ86 ♣2 ♣ 853

‘reverse’ into the higher ranking suit and you must bid 2♦. Hand 2 isn’t strong enough for a reverse. This is an awkward hand. You could repeat the diamonds. However, 2♦ is too weak and you are not strong enough for 3♦ . I think 2♠ is better even though Partner may only have 4 spades. You do have a singleton club and therefore ruﬃng values. Your hand is worth a bit more

North hands 4 5 ♠ 987642 ♠ A762 ♥2 ♥J32 ♦ 32 ♦ 54 ♣ AQ54 ♣ AJ108 than 2♠ , but you can’t raise to 3♠ with only 3 cards. Bid 2♠ . Hand 3 is a perfect hand for a reverse. Bid 2♥. Hands 4-5. Partner has reversed, so will be strong and have more diamonds than hearts. Hand 4. Just repeat your spades. Bid 2♠ . Hand 5. With the black suits covered and 10 points, bid 3NT

I impersonated a guinea pig on national radio. It was worth it for the concert tickets! with one airline and being told there were no life jackets, but my seat cushion would ﬂoat, it wasn’t the most assuring moment.

What’s your most treasured possession? Hungarian goosedown duvet.

What are the top three things you would like to achieve in your lifetime? Build my own house – Kevin McCloud, eat your heart out. Work in another country, and get my private pilot licence – to avoid having to ﬂy with that airline again.

If you ruled the world, what would you change first? The 70mph speed limit.

Do you know an actuary destined for greatness? You can nominate an Actuary of the Future by emailing

aotf@theactuary.com

Bridge puzzle provided by David Lampert

August 2013 • THE ACTUARY www.theactuary.com

p37_39_aug_puzzles•gc.indd 39

23/07/2013 08:48

At the back Student student@theactuary.com

Student Jessica Elkin weighs up the options of studying in both hot and cold weather

SUM MERTIME AND THE LIVING IS NOT SO EASY As I write this, the weather is warm and sunny, there’s a light breeze, and a nice blue sky. Perfect for outdoor activities. Perhaps it is nice right now, as you read this. You might be sitting on a piazza with a coﬀee, beret and a copy of The Actuary; somewhere fancy like Paris, or maybe even Hackney; or perhaps you are lounging under a tree in a meadow somewhere chewing on a piece of straw with an apple and a stray donkey to hand. Life is good. The problem is that, whatever the weather, exams still loom stubbornly and inconveniently at the end of September, a frown on their grey face. No matter how long and lazy the days, the night must come. And there’s the rub.

… and the livin’ is easy? I suppose there are upsides and downsides to the British summer. The upsides are that sometimes it is sunny, and you can sup on a glass of Pimm’s. Long evenings and brighter mornings certainly improve the spirits when compared with the dreary and dismal winters. The beer gardens are suddenly inviting and invigorating, rather than dank, dark places where outcast smokers huddle and shiver miserably, cigarettes in hand. The downsides are mostly connected to the fact that the weather is not actually very reliable, and, frankly, you can drink Pimm’s at any time. However, rain is at least conducive to getting things done. The columnist Caitlin

THE ACTUARY • August 2013 www.theactuary.com

p40_aug_students_FINAL•CT.indd 40

Moran once wrote that the only reason the British ever achieved anything was because the weather has always been so grim, so people had to ﬁnd ways to pass the time indoors inventing things and building an empire rather than basking in sunshine and happiness. I can see a lot of truth in that. The

empire probably collapsed the day someone invented cheap foreign holidays.

Shall I compare thee to a summer’s day? Of course, the winter sitting is longer than the summer one, despite Christmas falling smack bang in the middle with all its parties, gift shopping and other festive frivolities. While I don’t think that makes a huge diﬀerence – surely it’s the dreary winter evenings that make for good study time. Imagine being curled up by the ﬁre while the wind howls outside the window with a cup of cocoa, a blanket and some study notes. However you play studying in the winter, it certainly feels easier to avoid distraction. Summer invites the weak-willed student away from unappetising ‘thinking’ and towards barbecues, and beaches, and general sunning. Now, now. There’s always the option of studying outside. And why not? You can have your cake and eat it. The bloke who invented the wheel was probably sitting on a grassy hillock or similar, so we know it is possible. There are plenty of parks about if you are not fortunate enough to have a garden, and notes are more portable than ever thanks to e-books.

Unfortunately There always is an ‘unfortunately’, with a wind just strong enough to blow papers away, and a shifty wasp who has other ideas, and too much direct sunlight for you to be able to read (particularly from a screen). Not to mention that reclining in the sunshine is more enjoyable with your eyes closed, and that the ActEd folders are just the right size and height to use as a pillow. On one memorable occasion during my A levels, I fell asleep reading a textbook on the lawn and woke up with my face stuck to it. The textbook, not the lawn. So what’s the solution to this grave injustice? Is summer to be relegated, like Easter, to something we cannot enjoy until qualiﬁcation? The important thing must be to take full advantage of the rainy days to study – and thankfully there are plenty of those. As someone who knows what it is to fail, it seems clear that we must all sacriﬁce a little bit of sun for the greater good. You could still have a glass of Pimm’s though. a

PHIL WRIGGLESWORTH

23/07/2013 08:49

www.theactuaryjobs.com

Appointments

A P PO I N TME N TS To advertise your vacancies in the magazine and online please contact: Gill Rock +44 (0) 20 7880 6234 or gill.rock@redactive.co.uk

Life Insurance Roles Progressive, Ambitious Insurer – Vacancies for Actuaries and Senior Students £35k – 150k base plus package and bonus, South Coast This client is growing quickly and are a market leader within their chosen fields. Following a significant injection of capital the firm are now in a growth phase and looking for commercial, ambitious individuals to join their Actuarial team. As a composite insurer, they are able to offer experience across Life, General and Investments in an entrepreneurial, fast paced environment. Located on the South Coast, all of the above is combined with an unrivalled quality of work life balance. The environment is perfect for all circumstances, providing the motivation to study, rapid career development and ideal for families. Relocation may be available subject to circumstances. Experience requirements include:

Reporting

Reserving

Capital Management

Systems and Modelling

Metholody and Strategy Jack@highfinancegroup.co.uk

Policy Specialist

International Pricing Actuary £80k - £100k Basic, London

£80k - £120k Basic, London

A newly created role within an advisory team tasked with researching and lobbying on public policy affairs across the industry. This is an excellent chance to raise your profile and network across the market, working closely with regulators, industry figures and government bodies. You will be a qualified Life Actuary with in depth product and policy knowledge and excellent communication skills. Graeme@highfinancegroup.co.uk

This leading Life Insurer requires a Senior Pricing and Product Actuary to lead the International and Emerging market team. Focusing on market entry assessment and product implementation you will identify sector trends and exploit opportunities across the Middle East, Latin America and Asia. International knowledge, senior stakeholder management and broad product experience is vital. Graeme@highfinancegroup.co.uk

Tailor Made Consultancy

Risk and Capital Actuary £80k - £120k Basic, London

£90k - £130k Basic, London

Join the Acutarial Risk divison of this a bespoke Management Consultancy specialising in Group level solutions. They are renowned for operating as an integral facilitator for delivery focused, in-house projects. The company is in its early stages of growth, so you will have the opportunity to develop and manage your own key client relationships as well as carving your own area of specialism within the business. Graeme@highfinancegroup.co.uk

An exciting opportunity for an experienced Life Actuary to join this privately backed leading insurer. Working directly with the CRO and Chief Actuary you will take full responsibility for the development and integration of the new reporting methodology frameworks. Exceptional communication skills and demonstrable business acumen are essential along with technical expertise. Graeme@highfinancegroup.co.uk

Investment Pricing Actuary

International Reporting Actuary

£55k - £70k Basic, South Coast

£60k - £80k Basic, South West

This multinational life insurer is looking for a nearly/newly qualified Actuary to help price their international investment products. This position will give you a commercial outlook into both the UK and European markets and products. You will have the opportunity to mentor students and grow into this role. Previous pricing experience is preferred, working with investment or guarantee products. Sophia@highfinancegroup.co.uk

A leading life insurer with a huge presence in the UK and overseas needs a qualified Actuary to manage and lead their international reporting team. Previous managerial experience is preferred and prior knowledge of international reporting would be an advantage. This role will give you the opportunity to liaise with senior stakeholders and shape the team how you see fit. Sophia@highfinancegroup.co.uk

+44 (0) 207 337 8800

www.highfinancegroup.co.uk August 2013 • THE ACTUARY 41 www.theactuary.com

ACT.08.13.041.indd 41

22/07/2013 10:33

Appointments

KhZ >/ Ed^ Z '>K > ͵ E ^K Z t ƐƚĂďůŝƐŚĞĚ ŝŶ ϭϵϵϲ͕ ĂƌǁŝŶ ZŚŽĚĞƐ ŝƐ ĂŶ ĂǁĂƌĚ ǁŝŶŶŝŶŐ ƐƉĞĐŝĂůŝƐƚ ƌĞĐƌƵŝƚĞƌ ŽƉĞƌĂƟ ŶŐ ǁŝƚŚŝŶ ŶŝĐŚĞ areas of the Insurance and Finance sectors and is part of the Dryden Human Capital Group. We appoint ƉƌŽĨĞƐƐŝŽŶĂůƐ ŝŶ ĐƚƵĂƌŝĂů͕ ƌŽŬŝŶŐ Θ hŶĚĞƌǁƌŝƟ ŶŐ͕ ĂƚĂƐƚƌŽƉŚĞ ZŝƐŬ ĂŶĚ ůĂŝŵƐ DĂŶĂŐĞŵĞŶƚ͕ ĨƌŽŵ Ă ŶĞƚǁŽƌŬ ŽĨ Žĸ ĐĞƐ ŝŶĐůƵĚŝŶŐ ŽƵƌ h< ŚĞĂĚƋƵĂƌƚĞƌƐ ŝŶ ƚŚĞ ŝƚǇ ŽĨ >ŽŶĚŽŶ ĂƐ ǁĞůů ĂƐ Žĸ ĐĞƐ ŝŶ ƵƌŝĐŚ͕ DƵŵďĂŝ͕ ,ŽŶŐ <ŽŶŐ͕ ^ŚĂŶŐŚĂŝ͕ ^ǇĚŶĞǇ ĂŶĚ EĞǁ zŽƌŬ͘

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DƵƌŝĞů sŝŶĂƌĚ ^ĞŶŝŽƌ ŽŶƐƵůƚĂŶƚ Ͳ ƵƌŽƉĞ ĐƚƵĂƌŝĂů

E a.hill@darwinrhodes.com +44 (0) 207 621 3792

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THE ACTUARY • August 2013 www.theactuary.com

ACT.08.13.042.indd 42

22/07/2013 10:36

London : Chicago : Hong Kong : Singapore : Shanghai

www.theactuaryjobs.com

Non-Life Reserving Actuary - Germany/Switzerland 6HQLRU 3 & $FWXDU\ *HUPDQ\ $WWUDFWLYH 6DODU\ %HQHÂ¿WV 3DFNDJH $WWUDFWLYH 6DODU\ %HQHÂ¿WV 3DFNDJH This international consultancy is looking to hire an ambitious senior reserving actuary. Your main remit will be quarterly and monthly reserving analysis and reporting. You will be responsible for the development/ improvement of reserving infrastructure and internal models. You will read project teams and act as a mentor to your project WHDP PHPEHUV 7KH LGHDO FDQGLGDWH ZLOO EH D IXOO\ TXDOLÂ¿HG DFWXDU\ ZLWK good experience in Solvency II/ reserving/ risk modelling. Knowledge of Igloo or Remetrica would be advantageous. This role would suit a team player with good communication and technical skills, who can build and maintain good relationships both internally and externally. &RQWDFW SKX QJRF#LSVJURXS FR XN +44 207 481 8686

DC Investment Analyst - London Â&#x2026; Â&#x2026; %RQXV %HQHÂ¿WV A large investment consultancy is looking to expand their DC investment capabilities with the hire of an analyst. You will be supporting the investment consultants in providing a range of investment services including setting the investment objectives, manager selection and performance monitoring. Candidates are likely WR EH ZRUNLQJ ZLWKLQ DQ LQYHVWPHQW RU EHQHÂ¿W FRQVXOWDQF\ '& SHQVLRQ scheme provider or asset manager. You must have knowledge of DC pension schemes and ideally experience of DC investment. Excellent FRPPXQLFDWLRQ VNLOOV DUH HVVHQWLDO DV ZHOO DV D JRRG Â¿UVW GHJUHH DQG FRPPLWPHQW WR HLWKHU WKH ),$ RU &)$ TXDOLÂ¿FDWLRQ

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This leading multinational insurance company is looking to enhance their team with a Senior Actuary. The main remit is to provide actuarial support to the management and various stakeholders. Reporting to the Head of Reserving, the senior actuary will be involved in reserving, business planning, cycle management and review of technical SURYLVLRQV 7KH LGHDO FDQGLGDWH LV D IXOO\ TXDOLÂ¿HG 3 & DFWXDU\ ZLWK experience in reserving and Solvency II. Very good communication skills are required and prior international experience would be a plus.

&RQWDFW LYDQ FODUNH#LSVJURXS FR XN +44 207 481 8686

3ULFLQJ $FWXDU\ 6XUUH\ &RPSHWLWLYH 6DODU\ 3DFNDJH $ QHZ DQG H[FLWLQJ RSSRUWXQLW\ WR MRLQ WKH 3ULFLQJ 7HDP ZKLFK forms part of a business unit which over the last two years completed the largest ever UK longevity insurance deal and continues to grow itâ&#x20AC;&#x2122;s client book. As a member of this team you will be playing a central role in pricing a range of de-risking solutions for pension schemes of all sizes and helping to maintain this insurer at the forefront of this developing market.

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August 2013 â&#x20AC;¢ THE ACTUARY 43 www.theactuary.com

22/07/2013 11:03

Appointments

Head of Actuarial Modelling We are currently mandated on a search for a Global Life Insurance group to recruit a new Head of Modelling. The role is based in their London head of¿ce with direct managerial responsibility for the UK based modelling team as well as oversight responsibility for the regional of¿ces. A key focus of the role will be the management of a global system integration project across both Moses and Prophet models. This is a senior managerial position hence prior experience of running actuarial teams across multiple jurisdictions is highly desirable for the role. Due to the associated qualitative challenges of system integration work a strong risk model and controls skill set are crucial for the success of this individual. Candidates should also demonstrate previous experience of proactively and innovatively improving the service delivered to both internal and external stakeholders. Proven experience of creating an environment that supports and inspires people to develop and deliver is also highly desirable. For further information regarding this role, or for a more informal discussion regarding your career aspirations, please do not hesitate to contact us.

Contact Rob Bulpitt

Rupert Rickard

Office Number

For current opportunities please visit

Head of Actuarial, Pensions & Insurance Risk Management 020 7092 3237

+44 (0)20 7092 3200

Manager of Actuarial Non-Life and Insurance Risk Management 020 7092 3219

www.eamesconsulting.com

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Head of Pricing and Product Northern Home counties £six ﬁgure package Staysure is a personal lines intermediary specialised in the over 50s market and the clear impaired travel insurance market leader, growth is dramatic having been in the fast track 100 for the last 3 consecutive years, Staysure fully expects this growth to continue across other general lines. The head of product and pricing will be accountable for developing a full suite of personal lines insurance products which are attractive to the brand’s customers on a sustainable basis. The successful applicant will understand not only data driven customer facing pricing techniques but also net pricing and risk selection with underwriters to secure a proÄtable underwriting result. Working with the marketing director this role will also ensure relevant product features for the target market maintaining the brand’s unique selling points. This is a great opportunity for a highly numerate commercial individual to oversee all contracting, pricing and product design discussions with underwriters and hence have the ability to be master of their own destiny in delivering sustainable proÄtable growth. The candidate will have personal lines experience ideally working with medical data and understand how proÄtable growth can be secured through the combination of targeted marketing, insightful risk selection and rating techniques and thorough pricing review processes. To apply for this role please send your CV and covering letter to Sarah Charman, HR Manager, s.charman@staysure.co.uk

THE ACTUARY • August 2013 www.theactuary.com

ACT.08.13.044.indd 44

22/07/2013 10:37

High Finance Group

www.theactuaryjobs.com

General Insurance Roles Reserving Manager

Chief Actuary

£110k - £130k Basic, London

£120k - £150k Basic, London This growing Insurer is looking for a Chief Actuary to lead their Actuarial team, working across reserving, pricing and capital modelling. The role requires someone who is happy to get stuck in with the technical work. If you are looking to take the next step in your career, and have experience across all areas, this job could be for you! Reinsurance experience is beneficial. William@highfinancegroup.co.uk

World leading Insurer with operations across the globe is looking for a Reserving Actuary to join their team. The right person will work across a variety of commercial lines and lead a strong team, whilst reporting to the Head of Reserving. Previous reserving experience is essential and a consultancy background is preferable. Scope to progress internally quickly is very likely. William@highfinancegroup.co.uk

Consultancy with a difference

General Insurance Actuaries £35k - £135k Basic, North West

£90k - £140k Basic, London Rapidly expanding consultancy with a unique feel is looking for a number of qualified individuals to continue their growth. The Partners are looking for Actuaries with superb communication skills who enjoy their work. The projects will be moulded to suit your skills and interests. A track record of rapid internal progression makes this a unique opportunity. William@highfinancegroup.co.uk

Large General Insurer looking to significantly strengthen their Actuarial team. They require graduates, analysts, managers and Heads of to work across pricing, reserving and capital modelling. You will gain experience across various areas of the team and should be happy working with non Actuaries. Previous GI is ideal and Life switchers will be considered at a more junior level. William@highfinancegroup.co.uk

Pricing Actuary – Specialty Lines

Reserving Actuary

Up to £80k Basic, London

£65k - £90k Basic, London

This US based General Insurer requires an experienced Actuary to assume responsibility for a number of Speciality books written through their Lloyd’s syndicate. Working alongside Senior Actuaries in a innovative environment, strong communication skills are essential. London market pricing experience is preferred although a reserving background will be considered. James@highfinancegroup.co.uk

This reputable London Market player requires a nearly/newly qualified Non-Life Actuary. Reporting into senior management, you will be responsible for the reserving operations of the firm’s Lloyd’s of London syndicate. You will work autonomously to complete quarterly reserving tasks, communicating companywide and should be articulate with a strong Non-Life reserving experience. James@highfinancegroup.co.uk

Syndicate Capital Modelling

Senior Corporate Actuarial Analyst

£50k - £65k Basic, London Join this successful Lloyd’s syndicate, and play a key role in their Capital Model development. Reporting to the Chief Actuary, you will work independently and delegate work to junior team members whilst benefiting from excellent career progression. Good exam progress and previous experience within capital modelling is essential, ideally within the London market. Chanelle@highfinancegroup.co.uk

£45k - £65k Basic, London This leading US General Insurer requires an Actuarial Analyst for their Corporate team. You will gain exposure to a variety of products within commercial and personal lines, whilst working across reserving, Solvency II and capital modelling. You will have General Insurance actuarial experience, ideally within reserving, and be progressing towards your actuarial qualification. Chanelle@highfinancegroup.co.uk

Contract Roles Capital Modelling Contractor

Modelling Contractor

£700 - £1100 a day, 6 months, London

£550 - £750 a day, 3 months, South West

General Insurer is looking for a capital contractor who has a proven record in Igloo or ReMetrica and has a deep technical knowledge. The client is looking for someone for an almost immediate start. William@highfinancegroup.co.uk

An experienced Actuarial modelling contractor is required to help run and make small amendments to existing pricing models. The ability to make small coding changes is essential and experience in doing so with both Prophet and Moses would be advantageous. Jack@highfinancegroup.co.uk

Pricing & Reserving Contractor

Financial Reporting Contractor

£650 - £900 a day, 3 - 6 months, London

£600 - £800 a day, 6 months, South East

Lloyd’s syndicate is looking for a qualified Actuary to work across pricing and reserving. The role will work closely with the underwriters developing their models, whilst assisting with the quarterly reserving. Experience in both pricing and reserving will put you at a distinct advantage as will flexibility on a daily rate. William@highfinancegroup.co.uk

An experienced Financial Reporting Actuary is required to help assess and improve the current Reporting process, working closely with the senior management and projects team to begin the implementation of signed off changes. Prior experience in a similar role would be helpful and an immediate start date is required. Jack@highfinancegroup.co.uk

Investment Management

Pensions Actuary Up to £70k Basic, South East

Up to £80k Basic, South East Join the investment team of this market-leading insurer. Working closely with senior stakeholders across the business, you will be responsible for investment analysis and strategy. This will involve a range of economic issues including interest rate modelling, risk measurement and capital management. Previous experience within an asset focussed role and commitment to a career in investments is essential. Miranda@highfinancegroup.co.uk

Join this dynamic, innovative consultancy, advising clients across de-risking, liability management and journey planning in addition to traditional consultancy. You will benefit from industry leading training to support your technical and client facing skills whilst gaining exposure to broader commercial issues. To be successful, you will be a recently qualified Pensions Actuary with first rate communication skills and a strong academic record. Miranda@highfinancegroup.co.uk

JAMES KITT Consultant - GI

CHANELLE ROSENBAUM

MIRANDA WILKINSON

Head of Actuarial

Consultant - GI

+44 (0) 207 337 1202 james@highfinancegroup.co.uk

+44 (0) 207 337 8827 chanelle@highfinancegroup.co.uk

Consultant - Pensions Investments August&2013 • THE ACTUARY 45

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

WILLIAM GALLIMORE

ACT.08.13.045.indd 45

+44 (0) 207 337 8815

www.theactuary.com

miranda@highfinancegroup.co.uk

22/07/2013 10:38

Appointments

Overseas Opportunities Senior Actuarial Analyst- Singapore

Head of Actuarial - Bermuda Dependent on Experience

Up to SGD 90k base + bonus p.a

Exceptional opportunity for a Non Life Actuary with significant markets experience to take a lead Actuarial position at this globally recognised firm. This is a highly strategic role which will require a technically strong Actuary to advise on changing regulations, product innovation, reinsurance treaty optimisation and Enterprise Risk Management. Relocation and compelling package offered.

Opportunity for a part-qualified Actuary with Life Insurance pricing experience to join the Singapore team of this global reinsurer. You will be responsible for pricing risk business, experience analysis and working on capital management solutions. The ideal candidate will be fluent in both English and Malay at business level and have a good exam record.

Credit/Market Risk - Hong Kong

Modelling Manager - Hong Kong

Up to HKD 1 m base + bonus

Our client is searching for a talented actuary with excellent asset and liability knowledge to take for responsibility for Market and Credit Risk at a Regional level. This is an integral role which will offer significant exposure and elevate your corporate profile. ALM, risk modelling and strong investments knowledge required along with a questioning mind as you will need to think outside the box to drive change.

Our client in Hong Kong is looking for a Manager to lead the Prophet Modelling team. This is a new role as they advance the capabilities of the business in Asia, to offer modelling solutions which meet the needs of this rapidly evolving market. If you have the Actuarial modelling credentials in Prophet, MoSes or AFM and are keen to lead a team in Asia we would be keen to hear from you.

Head of Investment - Singapore

Opportunities in Asia

Up to SGD 200k base + bonus Unique opportunity to join this leading insurer in Singapore as they advance their investment proposition to deliver greater investment returns for their customers in Asia. This is a fascinating role and will require a strategically minded investment professional who can optimise the fund portfolio, negotiate with fund managers and offer compelling investment products to their insurance customers.

Clare Bethell, Senior Consultant

Dependent on Experience Approximately 150 FIAs and nearly 700 FSAs work in Asia and the number is rising. Thanks to the globally recognised qualification, the demand for Actuaries is immense. Hong Kong & Singapore are the most popular options but countries like Malaysia, Thailand and Indonesia are keen to attract talent. If you would like to find out more, contact the HFG International team.

clare@highfinancegroup.co.uk

+44 (0) 207 337 8829

GI COMPANY RESERVING ASSISTANT London Up to £75k + bonus + benefits A great opportunity to get involved with acquisition and run off business for this firm’s owned companies. You’ll support the US, UK and European offices. The primary role is to provide reserving and commutation expertise, specifically: • Calculation of Reserves/Technical Provisions (including IBNR, bad debt analyses, expense and cash flow projections). • Providing the required reports for the Reserves and Technical Provisions. • Analyses on reserves e.g. commutations and Schemes, settlement proposals or legal analyses and providing supporting reports. • Exposure analyses where appropriate. • Reserving due diligence on potential acquisitions. • Interaction with Senior Management and relevant functions to ensure that the reserving models continue to appropriately reflect the business and meet regulatory requirements. • Interaction with regulators to ensure timely and accurate delivery of regulatory requirements. In addition, the role may also include: • Capital assessments for clients and the Group including ICA’s and associated. • Reserving analyses for Lloyd’s syndicates. • Actuarial support as required for any litigation.

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

THE ACTUARY • August 2013 www.theactuary.com

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www.theactuaryjobs.com Chief Pricing Officer Competitive Salary + Excellent Benefits, London Due to our strong growth, an exciting and wide-reaching opportunity has arisen for an experienced Chief Pricing Officer (CPO). Reporting to the CFO you will be responsible for a large, highly professional team with a broad commercial and technical remit. A dynamic and driven problem-solver, you will successfully balance commercial and technical considerations while supporting proposition development and improving operational efficiencies. Key areas of responsibility include: â&#x2014;? â&#x2014;? â&#x2014;? â&#x2014;?

Technical and Commercial Pricing Defined Benefit solutions proposition pricing and support Research and Development Technical underwriting

Company overview Partnership is a leading and fast growing writer of enhanced annuities and a specialist provider of financial products that offer better rates to individuals who suffer from shortened life expectancy.Â We are experts in medical underwriting and a leader in the retirement annuity market. Partnership is one of the UKâ&#x20AC;&#x2122;s fastest growing insurers, and has recently been admitted to the London Stock Exchangeâ&#x20AC;&#x2122;s main market for listed securities. Partnership is a company where innovation and ideas are unlimited, and where talent is recognised and rewarded. Partnership has won many awards which reflect its reputation for first class service.

Applications to: recruitment@partnership.co.uk. Please quote: ref: P0616 Visit us at: www.partnership.co.uk Partnership is a trading style of the Partnership group of Companies, which includes; Partnership Life Assurance ce Company Limited (registered in England and Wales No. 05465261), and Partnership Home Loans Limited (registered in England gland and Wales No. 0510 05108846). Partnership Life Assurance Company Limited is authorised by the Prudential Regulation Authorityy and regulated by the Fina Financial Conduct Authority and the Prudential Regulation Authority. Partnership Home Loans Limited is authorised and d regulated by the Financial Conduct C Authority. The registered office for both companies is Sackville House, 143-149 Fenchurch Street, et, London EC3M 6BN.

Hannover Life Reassurance Bermuda Ltd. (HLR Bermuda) is a subsidiary of the Hannover Re Group and has been operating successfully in Bermuda since 2007. HLR Bermuda writes life and health reinsurance business in partnership with our clients around the world. This business is managed by our small team of reinsurance professionals based in Bermuda. We now seek to appoint a nearly qualified or qualified actuary as

Longevity Actuary reporting to the Vice President â&#x20AC;&#x201C; Longevity Trading. The Role: This is a pricing role as part of a small team, encompassing a very wide range of pricing and analytical work. Such work includes analyzing experience to assist in pricing, coming up with new analytical methods to predict mortality, setting appropriate pricing bases for transactions, and building & maintaining efficient systems to keep the business slick and automated. While the role is predominantly technical, it will also have a significant client-facing dimension and will involve travel. The Longevity Actuary will have significant autonomy and be responsible for generating fresh ideas to continually improve the business. Requirements: s 0XVW EH ZLOOLQJ WR PRYH WR DQG ZRUN LQ %HUPXGD s 1HDUO\ TXDOLILHG RU TXDOLILHG $FWXDU\ s 0LQLPXP RI IRXU \HDUV RI OLIH LQVXUDQFH UHLQVXUDQFH H[SHULHQFH VSHFLILFDOO\ ZRUNLQJ ZLWK ELRPHWULF ULVNV s $ VWURQJ SURJUDPPLQJ EDFNJURXQG DQG D SDVVLRQ IRU VROYLQJ FRPSOH[ SUREOHPV s 6RPH H[SHULHQFH RI ILQDQFLDO PDUNHWV DQG SULFLQJ WHFKQLTXHV s ([SHULHQFH ZLWK VWDWLVWLFDO PHWKRGV DQG D FUHDWLYH WKLQNHU s *RRG ZULWWHQ DQG YHUEDO FRPPXQLFDWLRQ VNLOOV HLR Bermuda is an equal opportunities employer. All applications will be held in the strictest of confidence and should be sent to: Jordi Posthumus, Vice President â&#x20AC;&#x201C; Longevity Trading; jposthumus@hlr.bm; telephone: +1 441 535 3177.

Hannover Life Reassurance Bermuda Ltd. Victoria Place, 2nd Floor

31 Victoria Street +DPLOWRQ +0 %HUPXGD

August 2013 â&#x20AC;˘ THE ACTUARY 47 www.theactuary.com

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Appointments

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www.theactuaryjobs.com

PENSIONS&INVESTMENTFUTURES STRATEGIC RISK CONSULTING

PENSIONS

MARKET-FACING SCHEME ACTUARY

LONDON

up to £300k

LONDON

PENSIONS £ very attractive

Our client seeks qualified actuaries to join a high-quality team providing project-based risk solutions to flagship corporate clients. The successful candidate will design and implement a wide range of risk management strategies. Star1516

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.

SENIOR INVESTMENT CONSULTANT

INVESTMENT SOLUTIONS

up to £100k + benefits

Our client is seeking a qualified actuary with experience of the investment advisory market to work in London as part of a growing team on innovative bespoke projects. Star1396

MANAGEMENT CONSULTANCY BIRMINGHAM

PENSIONS £ excellent + bonus + benefits

INVESTMENT

BIRMINGHAM

£ to attract the best

Market-leader seeks high-calibre qualified actuary to play a key role in the development of a new investment business. You will work with cutting-edge tools to design innovative solutions. Star1515

ALM ANALYST

INVESTMENT

LONDON

£ excellent + bonus + benefits

Global firm seeks qualified actuary to provide management consultancy services to corporate sponsors of pension schemes. You will provide specialist advice on risk solutions and scheme financing to a wide range of clients. Star1377

High-performing ALM team in London seeks a part-qualified or qualified actuary to join a technical and quantitative group advising insurance companies, banks and corporates on risk management. Star1430

PENSIONS ACTUARY

SENIOR PENSIONS CONSULTANT

LEEDS

LEEDS up to £75k + bonus + benefits

BIRMINGHAM

BIRMINGHAM £ excellent + bonus + benefits

Leading financial services group seeks a part-qualified or qualified pensions actuary to undertake a supervisory role, having immediate responsibility for managing and developing relationships with a range of clients. Star1586

Leading pensions consultancy is seeking a part-qualified actuary to work on challenging corporate and trustee consulting projects for high-profile clients.

BUSINESS DEVELOPMENT MANAGER

ACTUARIAL ASSOCIATE

SOUTH EAST

INVESTMENT

up to £60k + bonus + benefits

Star1411

LONDON

PENSIONS £ excellent + bonus + beneﬁts

Growing investment consultancy seeks a talented individual with strong consulting skills to support bid management for tenders undertaken by the investment team, identifying opportunities and researching prospects. Star1573

Leading consultancy has an exciting opportunity for a part-qualified pensions actuary to join its London office to identify revenue growth opportunities within the client portfolio and build strong client relationships. Star1581

ACTUARIAL ANALYST

RISK & MODELLING INVESTMENT ANALYST

LONDON

INVESTMENT up to £47k + bonus + benefits

Leading independent investment consultancy is seeking a part-qualified actuary to provide practical support to client facing consultants, conducting performance analysis reviews for a range of investment portfolios. Star1580

LONDON

INVESTMENT

up to £45k + bonus + benefits

A fantastic opportunity for a part-qualified actuary to support an industry-leading risk modelling team in all aspects of modelling for UK pension schemes. ALM experience is required. Star1478

Star Actuarial Futures Ltd is an employment agency and employment business

LONDON

INVESTMENT

Star1517

www.staractuarial.com

Antony Buxton FIA

Louis Manson

Irene Paterson FFA

MANAGING DIRECTOR

PARTNER

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

ACT.08.13.049.indd 49

M +44 7595 023 983 E louis.manson@staractuarial.com

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

Carolina Emmanuel SENIOR CONSULTANT August 2013 • THE ACTUARY 49 www.theactuary.com M +44 7841 872 575 E carolina.emmanuel@staractuarial.com

23/07/2013 08:24

Appointments

NON-LIFEFUTURES REINSURANCE BROKER

NON-LIFE

LONDON

£ excellent package

LONDON

NON-LIFE up to £130k + bonus + benefits

This is a fantastic opportunity to take up a client-facing role as a reinsurance broker. You will have excellent influencing skills and the technical skills and creativity to analyse the market and design new reinsurance solutions. Star1530

Seeking a qualified non-life actuary to lead and inspire a global pricing team, developing relationships with underwriters, brokers and wider stakeholders. You will drive best practice in actuarial analysis across multiple lines. Star1477

SPECIALTY LINES ACTUARY

MARKET-LEADING MODELLING

LONDON

NON-LIFE £ excellent + bonus + benefits

Leading client seeks a high-calibre qualified actuary with specialty lines pricing experience, particularly in marine and energy, and a commercial focus to make deals happen. Star1463

LIABILITY PRICING ACTUARY LONDON

NON-LIFE up to £93k + bonus + benefits

SOUTH EAST

NON-LIFE £ excellent + bonus + benefits

Our client is seeking part-qualified and qualified actuaries to develop its capital modelling and reserving capability. This is a unique and exciting opportunity to make an impact within a fast-paced and innovative environment. Star1542

CAPITAL ACTUARY LONDON

LONDON MARKET up to £90k + bonus + benefits

Leading global insurer seeks a qualified non-life actuary to take responsibility for leading the development, implementation and maintenance of actuarial pricing tools and techniques across its European business. Star1571

Growing Lloyd's Syndicate seeks a part-qualified or qualified non-life actuary with strong communication skills to maintain, run and develop its capital model.

MOVE TO NON-LIFE

RISK CONSULTANCY

DUBLIN € excellent + bonus + benefits

DUBLIN

Star1545

LONDON WITH TRAVEL

NON-LIFE £ excellent + bonus + benefits

Our client has a number of exciting opportunities for talented actuaries from all actuarial backgrounds to join its Dublin office and specialise in non-life insurance. Contact us for more details. Star1558

Boutique risk consultancy seeks outstanding candidates with a commercial mindset and a good understanding of the current regulatory environment to provide cutting-edge advice Star1588 to large clients from around the globe.

PRICING MANAGER

FINANCIAL RISK MANAGER

SOUTH EAST

NON-LIFE up to £80k + bonus + benefits

SOUTH EAST

NON-LIFE up to £80k + bonus + benefits

Leading global insurance group seeks a part-qualified or qualified non-life actuary to manage and support pricing activities, lead the development of pricing strategies and teams, and manage stakeholder relationships. Star1584

Leading insurer is seeking an experienced risk professional to contribute to the development of a comprehensive insurance and financial risk management framework, identifying and managing risks across the group. Star1544

CORPORATE ACTUARIAL ANALYST

RESERVING ANALYST

LONDON

NON-LIFE

£ excellent + bonus + benefits

Worldwide insurer seeks a part-qualified or qualified non-life actuary with strong reserving experience to work closely with its capital modelling, reinsurance and claims functions on a wide range of exciting projects. Star1563

HEAD OF PRICING

up to £55k + bonus + benefits

This is an opportunity for a part-qualified actuary with strong technical and communication skills to join a major global insurer. You will perform reserving analyses for a variety of lines of business. Star1498

Antony Buxton FIA

Lance Randles MBA

Paul Cook

Clare Roberts

MANAGING DIRECTOR

ASSOCIATE DIRECTOR

SENIOR CONSULTANT

THE ACTUARY • August 2013 www.theactuary.com M +44 7766 414 560 E antony.buxton@staractuarial.com

ACT.08.13.050-51.indd 50

LONDON

NON-LIFE

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

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

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

23/07/2013 08:25

www.theactuaryjobs.com

LIFEFUTURES

LONDON

LIFE

up to £110k + bonus + benefits

HEAD OF MODELLING

LIFE

BRISTOL

up to £100k + bonus + benefits

Global insurance group seeks a qualified actuary with commercial acumen and stakeholder management skills to review and challenge market submissions for all financial reporting activity, providing in-depth commentary and analysis. Star1585

We have a diverse and exciting opportunity for a qualified actuary to lead, manage, motivate and develop an actuarial modelling team, creating and maintaining a strategic modelling platform to meet business needs. Star1550

SYSTEMS DEVELOPMENT ACTUARY

WITH-PROFITS LEAD ACTUARY

SOUTH COAST

LIFE

up to £90k + bonus + benefits

LIFE up to £90k + bonus + benefits

SOUTH COAST

A fast-growing and successful insurance group seeks an actuarial systems expert to develop a long-term strategic vision for its systems infrastructure, whilst improving the efficiency of current systems. Star1569

Our client has a fantastic opportunity for a qualified life actuary to take the lead on technical matters within the actuarial reporting function, working closely with the Actuarial Function Holder. Star1568

PROJECT ACTUARY

CONSOLIDATION ACTUARY (WITH-PROFITS)

SOUTH COAST

LIFE up to £80k + bonus + beneﬁts

SOUTH COAST

LIFE

up to £80k + bonus + benefits

Leading insurer seeks a qualified life actuary to take up a key role in its growing life business, working closely with the systems team in the transformation of the valuations and reporting areas. Star1570

Leading insurer seeks a qualified life actuary to conduct high-level analysis within its with-profits reporting function. You will be responsible for providing technical support and coaching to ensure high standards within the team. Star1567

INTERNATIONAL REPORTING MANAGER

GROUP PROTECTION PRICING ACTUARY

SOUTH EAST

LIFE

up to £75k + bonus + benefits

LONDON

LIFE

up to £65k + bonus + benefits

Leading life company seeks qualified actuary to deliver the actuarial elements of MCEV, IFRS and regulatory reporting, including clear commentary and analysis for senior management and external reporting. Star1566

Our client is seeking a qualified actuary with an excellent understanding of financial and insurance risks to provide pricing and product development support to its protection business. Star1529

WITH-PROFITS ACTUARIAL ANALYST

LIFE

RISK ANALYST

LIFE

up to £50k + bonus + benefits

SOUTH COAST

up to £50k + bonus + benefits

SOUTH COAST

Seeking a part-qualified life actuary who has with-profits experience to apply actuarial skills and techniques, together with industry knowledge and experience, in the identification and analysis of business issues. Star1576

Leading insurer seeks a part-qualified life actuary to work within its risk function, taking responsibility for 2nd line of defence, capital modelling, ORSA and analysis of actuarial methodologies. Star1578

GROUP FINANCE ANALYST

ACTUARIAL SYSTEMS ANALYST

SOUTH COAST

LIFE up to £50k + bonus + benefits

Our client has an exciting opportunity for a part-qualified actuary to work within its group capital management function, dealing with both life and non-life workstreams, proposing and implementing new strategies. Star1575

SOUTH COAST

LIFE up to £50k + bonus + benefits

This is a great opportunity for a part-qualified actuary with a good knowledge of actuarial platforms to transfer their skill set and pick-up new systems within a fast-paced environment. Star1579

Star Actuarial Futures Ltd is an employment agency and employment business

HEAD OF MARKET ENGAGEMENT

www.staractuarial.com

Louis Manson

Irene Paterson FFA

Carolina Emmanuel

MANAGING DIRECTOR

PARTNER

SENIOR CONSULTANT

M +44 7595 023 983 E louis.manson@staractuarial.com

ACT.08.13.050-51.indd 51

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

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

Peter Baker SENIOR CONSULTANT August 2013 • THE ACTUARY 51 www.theactuary.com M +44 7860 602 586 E peter.baker@staractuarial.com

23/07/2013 08:26

Appointments United Kingdom

United Kingdom General Insurance Group Head of Capital London Paul Francis £160,000 + Bonus + Beneﬁts An exceptional large commercial lines underwriter with a Lloyd’s arm is seeking an experienced capital/risk orientated Actuary to head up the group function. You will advise the board on capital and reinsurance optimisation, and investment strategy.

Head of Liability Pricing London Sarah Robins £130,000 + Bonus + Benefits A global powerhouse in the non-life arena is seeking a qualified Actuary to lead the pricing team for financial lines, D&O and other liability classes. Previous class experience is an advantage though strong pricing and management ability are the core skills.

Capital Modelling Analyst London Ben Pitt Up to £55,000 + Bonus + Beneﬁts Expanding London market business requires a part qualiﬁed Actuary for their capital & risk team based in the City. Whilst prior capital experience would be preferred it is not a prerequisite as excellent training will be provided.

Analyst - Reserving/Pricing/Capital London Rachel Kelly £50,000 + Bonus + Beneﬁts A growing London market business requires a part-qualiﬁed GI Actuary. Reporting to the Chief Actuary you will be responsible for a range of reserving, pricing and capital work - a perfect opportunity to enhance your actuarial experience in a new area.

Contracts - GI Capital Actuary London Stewart Cherry £800-1000/day A leading Lloyd’s syndicate is looking for a Senior Capital Actuary assist them on a 6-9 month contract. The ideal candidate will have excellent working knowledge and experience of; IGLOO, model build and validation within Solvency II.

Syndicate Reserving London Stewart Cherry £700-900/day A qualiﬁed reserving Actuary is required to join a London market syndicate to assist them on a 6 month contract. The ideal candidate will have recent Lloyd’s syndicate experience and have specialised in reserving, risk reserves and technical provisions and ResQ across Solvency II and BAU.

Life Insurance Modelling Actuary - Health London Richard Howard £60-80,000 + Bonus + Benefits Exciting opportunity for a qualified life or health Actuary to join this leading provider of health insurance. Responsible for the development of models, documentation and governance. Must be qualified and have an experience of statistical modelling.

Annuities Project - Life London David Parker £60,000 + Bonus + Benefits A leading UK business is looking for part-qualified to newly qualified actuaries for a number of positions in their market leading annuities team. You will be a strong communicator with good exam success. Commercial experience preferable.

Pricing Actuary Edinburgh David Parker £70,000 + Bonus + Beneﬁts One of the largest UK L&P businesses is looking for a qualiﬁed Pricing Actuary for a newly created role. This project based role includes tactical pricing, proposition development and requires exceptional interpersonal skills.

Head of Reporting & Change London Clare Nash £130,000 + Market Leading Package A new and challenging opportunity for a market leader. My client seeks a qualified Actuary with a solid background in financial reporting (EV, IFRS). Motivating a team and embedding change is key. Strong commercial and strategic flair to this appointment.

Contracts - Life Pensions Consultant London Rob Bentham Up to £900/day Our client is looking for a qualiﬁed Actuary for an initial 2-3 month role. You will work as part of the business’s pensions team to review the business strategy and the risks associated with that strategy. Knowledge of DB pension schemes is essential.

Pricing Actuary Midlands Rob Bentham Up to £700/day Our client is looking for a qualiﬁed Pricing Actuary for an initial 3 month role. You will work as part of the business’s pricing team to provide additional support during the course of a number of upcoming projects. Knowledge of annuity pricing is essential.

General Insurance - UK

Contracts - GI - UK

Life Insurance - UK

Paul Francis 0207 649 9469 Rick Davis 0207 649 9353 Sarah Robins 0207 310 8552 Ben Pitt 0207 310 8719 THE ACTUARY • August 2013 Rachel Kelly 0207 310 8579 www.theactuary.com

Stewart Cherry

Clare Nash David Parker Richard Howard

0207 310 8651

Contracts - Life - UK Rob Bentham

0207 649 9351

0207 649 9350 0207 310 8649 0207 649 9356

Please contact one of the team for further information on any of the opportunities above or visit www.ojassociates.com/jobs

Ben ACT.08.13.052-53.indd 52

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www.theactuaryjobs.com United Kingdom

Europe Reserving Actuary Patrick McMahon

Dublin, Ireland Up to €110,000 + Bonus + Beneﬁts

My client, one of Ireland’s largest personal and commercial lines insurers is looking to recruit two reserving actuaries, ideally with personal lines motor experience. This is an excellent opportunity to work in a small, dynamic team with increased exposure.

Senior Actuary Pricing (P&C) Holland Julien Fabius €€€Competitive Leading insurance group seeks an experienced pricing Actuary. You will have pricing responsibilities for all products; Retail, Corporate, Direct. The role will report in to the Head of Pricing and you will participate in knowledge sharing programs with the global group ofﬁce.

Senior Life and Health Risk Manager Germany Manuel Lovell €€€Competitive My client needs a Senior Life and Health Risk Manager to standardise modelling governance across pricing, valuations and other actuarial topics on both a group-wide and local basis. You must be an excellent communicator with ﬂuent English.

Senior Validation Ofﬁcer Brussels (Belgium) Laurence Baken €€€Competitive An outstanding opportunity for a validation expert to validate Solvency II 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.

Igloo Contractors Helger Wiese

Reinsurance Pricing Actuary Mainland Europe and Ireland Benjamin Moses £850 - £1,150 per day International reinsurers looking for experienced pricing actuaries to work in various locations around Europe. Reinsurance pricing experience is desired, and the willingness to travel is essential. Please contact Benjamin for more information.

The Netherlands €100 - €150 per hour

My client, based in The Netherlands, is currently building a team of IGLOO modellers, I am looking to speak to contractors with strong IGLOO modelling experience. Please contact me directly for more information.

Asia Head of Product Governance Hong Kong Jonny Plews £££Competitive Leading insurance group seeks a high proﬁle Actuary to lead the product development and strategy across the region. You will have worked in group and local functions, and will have a strong ability to inﬂuence. No Asian experience or languages required. Head of Product Strategy (A&H) Hong Kong Gary Rushton £££Competitive A leading global insurer is looking for an experienced A&H Actuary to build a more robust Accident & Health product portfolio across the Asia region. Strong technical understanding and A&H experience a must, excellent communication skills required.

Chief Actuary Hong Kong Jonny Plews £££Competitive APAC HQ requires an experienced Actuary to lead the reporting function. You will be analysing the numbers from local business units and presenting your ﬁndings to the Board. Strong technical, leadership & communication skills are vital. No Asian experience needed. Lead Pricing Actuary Singapore Gary Rushton £££Competitive Global insurer requires an experienced Actuary to lead their pricing initiatives across SE Asia and the Middle East. Reporting to the CEO you will oversee the existing pricing team. A unique opportunity to play an integral role in this dynamic business.

APAC Chief Actuary Hong Kong Toby Weston £££Competitive Global insurance brand seeks exceptional Actuary to lead their pricing, reserving and capital functions across APAC. I am looking for a technically rounded GI Actuary who has the ability to communicate with non-actuaries and inﬂuence at board level.

Re-Insurance Pricing Actuary Singapore Toby Weston £££Competitive Big 3 re-insurance broker seeks Re-Insurance Pricing Actuary to join the team covering SE Asia. Working as a second in command, this person will work closely with multinational clients using advanced techniques to structure re-insurance solutions.

Europe Benjamin Moses Helger Wiese Emina Biscevic Patrick McMahon Audrey Dresen Julien Fabius

ACT.08.13.052-53.indd 53

Asia +44 207 310 8793 +31 20 262 0280 +49 89 3803 8965 +353 1 685 2413 +41 43 508 0444 +31 20 716 8450

Laurence Baken Manuel Lovell Frederik Mees Ten Oever Cali Shoshan Emérique Opou

+32 24 012 249 +41 44 580 3711 +31 20 262 0282 +44 207 398 4041 +33 1 76 77 46 30

Jonny Plews +852 5804 9200 Gary Rushton +852 5804 9223 Toby Weston +852 5804 9042 Chris Lee +852 5084 9253 August 2013 • THE ACTUARY 53 Joanne Lim +852 5804 9225 www.theactuary.com Clémence Laupie +852 5804 9265

22/07/2013 10:42

Appointments

Life Actuarial Market: Some People Are Saying It’s Quiet… We Beg To Differ! By Clare Nash

Things are changing however. Other needs within organisations are emerging in response to the changes of 2013. We have seen more demand for those adept at managing change prompted by multiple restructures and M&A activity. Strong capital and reporting skills are still pivotal for embedding SII and “consolidating” projects. Several high proﬁle longevity projects have really gathered momentum. Reinsurers are investing in their pricing teams to gain a commercial edge over their competitors. We have seen increased demand for candidates who are not only highly skilled technically but have good presentation skills and competence in senior stakeholder management. Communication ability is key. The secret ingredient that worked in an interview ﬁve years ago will not necessarily secure you your next appointment in today’s market. The life market has changed and will continue to do so. It’s important to remember that change can create opportunity.

---------------------------------------------------------------

So far, 2013 has been quite an unusual time for the market; everyone knows that the delay in Solvency II has prompted a slight decline in the abundance of jobs we have witnessed in previous years. Changes in the market have made many people put a potential job hunt on hold and made hiring managers a lot more considered in their approach. Thus far, it’s been a year of “taking stock”.

Adaptability and embracing this will ultimately make you a more successful candidate and/or hiring manager and will set you apart from others. The market is becoming increasingly busy – opportunity is there if you want it. We are currently experiencing our busiest quarter of the year. We have more appointments (often on an exclusive basis) than at any other point this year. Here are a few examples: • • • • • • • •

Senior Risk & Capital Actuary – Global Reinsurer Head of Actuarial Reporting – Group Head Ofﬁce Head of Modelling – Large UK Insurer M&A Director Investment Pricing Actuary – Global Insurer Longevity Risk Actuary – Direct Insurer ALM Analyst – Direct Insurer Commercial Projects Actuary – Direct Insurer

For a more in depth discussion about changes in the market, interview coaching, securing the right candidate or if you just want to know about market leading roles UK wide, please feel free to call me for a conﬁdential discussion. Clare Nash – Head of Life Actuarial | cn@ojassociates.com | +44 207 649 9350

Exclusive Appointment Actuarial Risk Appointment

Richard Howard - Senior Consultant, Life & Investments Actuarial

London Six Figure Basic + Package

Richard specialises in recruiting permanent Life Insurance Actuaries and Risk professionals into the UK market. Richard has 8 years of recruitment experience with an excellent track record of delivery, particularly on hard-to-ﬁll roles. Richard prides himself on his ability to ﬁnd the right candidate for the right role and always looks to build long-term relationships. He is well-respected as a trusted advisor and partner to both those seeking new employment, and those looking to hire their next quality candidate.

Role Proﬁle:

We have an exclusive mandate to recruit a senior actuarial risk candidate. This unique position will play a pivotal and key part in the continued strengthening of the organisation’s risk function. Reporting directly into the CRO the purpose of this role is to provide operational and strategic support through the development and maintenance of risk management and governance frameworks. The candidate will lead the creation of ORSA documents through applied work on stress and scenario testing. The role will focus heavily on the validation of the internal model for longevity and other insurance risks and they are looking for a strategic and commercially astute candidate who can provide a challenge to output when appropriate. The position will also include management of the operational risk framework and ownership of models and methodology applicable to this area of risk. Candidate Requirements: They are looking for a qualified Actuary who has significant exposure to the life insurance market and in particular risk management. Experience of dealing with risk and mitigation techniques is essential as well as an understanding of UK and European regulations. Must have strong communication skills and the ability to deal regularly with board members and other members of the actuarial and longevity teams. For more information or a confidential discussion please contact Richard Howard on +44 207 6499356 or email Richard.howard@ojassociates.com

General Contact Details

actuary@ojassociates.com

LinkedIn: oliver-james-associates

Web

www.ojassociates.com

Twitter:

@OJAssociates

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www.theactuaryjobs.com

United Kingdom

Meet some of the team... Oliver James Associates has the largest and most integrated Actuarial team in the marketplace. Our team of over 30 consultants covers the major insurance hubs in Europe and Asia.

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CLARE NASH Life & Investments, Actuarial & Risk clare.nash@ojassociates.com

RICK DAVIS GI Actuarial & CAT Risk

+44 207 649 9350

PAUL FRANCIS GI Actuarial, Risk, Compliance & CAT Modelling paul.francis@ojassociates. com +44 207 649 9469

STEWART CHERRY GI, contract stewart.cherry@ojassociates.com +44 207 310 8651

ROB BENTHAM Life & GI, contract & interim rob.bentham@ojassociates. com +44 207 649 9351

BEN PITT GI Actuarial & CAT Modelling ben.pitt@ojassociates.com

DAVID PARKER Life & Investments, Actuarial & Risk david.parker@ojassociates. com +44 207 310 8649

rick.davis@ojassociates.com +44 207 649 9353

Our consultants have developed an indepth technical understanding of the intricacies of the actuarial profession and can offer sound and conﬁdential career advice. On this page you can take a closer look at some of our team, however for a full list of consultants and more detail on their individual specialisms please visit our website. www.ojassociates.com/actuarial-team. SARAH ROBINS GI Actuarial sarah.robins@ojassociates. com +44 207 310 8552

+44 207 310 8719

Europe

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AUDREY DRESEN Switzerland, Actuarial, Risk & Compliance audrey.dresen@ojassociates.com

JULIEN FABIUS Benelux, Actuarial

BENJAMIN MOSES European, Actuarial

MANUEL LOVELL Germany, Actuarial

LAURENCE BAKEN Benelux, Actuarial

PATRICK MCMAHON Ireland, Life & GI

julien.fabius@ojassociates. com

benjamin.moses@ojassociates.com

manuel.lovell@ojassociates. com

laurence.baken@ojassociates.com

patrick.mcmahon@ojassociates.com

+41 43 508 0444

+31 20 716 8450

+44 207 310 8793

+49 8922 061 003

+32 2401 22 49

+353 1685 2413

Asia

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JONNY PLEWS Director, Asia jonny.plews@ojassociates. com +852 5804 9200

GARY RUSHTON Head of Actuarial gary.rushton@ojassociates. com +852 5804 9223

TOBY WESTON GI Actuarial toby.weston@ojassociates. com +852 5804 9042

PHILIP CHAU Actuarial philip.chau@ojassociates.com +852 5804 9287

JOANNE LIM Actuarial joanne.lim@ojassociates.com

CLÉMENCE LAUPIE Actuarial clémence.laupie@ojassociates.com +852 5804 9265

+852 5804 9225

General Contact Details

actuary@ojassociates.com

LinkedIn: oliver-james-associates

Web

www.ojassociates.com

Twitter:

@OJAssociates August 2013 • THE ACTUARY 55 www.theactuary.com

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Appointments www.the-arc.co.uk

The Actuarial Recruitment Company

A fresh approach

Head of Capital London

General Insurance £Excellent plus good benefits

Reserving Actuary London

General Insurance Circa £80K

Reporting to the Group Chief Actuary this role will be responsible for all capital modelling within the insurance group. Candidates will need to be able to demonstrate good leadership in both management and technical development. The roleholder will work closely with senior management and will need to develop strong working relationships with underwriters, risk management and external agencies. The client is looking for a qualified actuary with a number of years of capital and Solvency II experience. Ref: ARC26223

A nearly/newly qualified actuary or senior trainee is needed for this reserving role working across all business lines for a major London Market player. Candidates will be expected to have a number of years of reserving experience, ideally from within a Lloyd’s or other London Market environment. Very good communication skills are required as the role holder will work closely with a number of areas of the business including senior management. Some UK travel will be required. Ref: ARC26224

Reserving Actuary Paris

Actuary Life Hong Kong/Singapore Attractive Salary + Relocation

Life Attractive Salary + Relocation

This large insurer is looking to recruit a nearly or recently qualified

Are you interested in working in Hong Kong or Singapore? We have

actuary with at least 4 years experience in the life sector. The

a number of opportunities for qualified and senior actuaries in the

successful candidate will have some reserving experience and will also need strong communication skills due to the liaison / interaction

insurance and consultancy markets. At the senior end, we are looking for actuaries with 15+ years experience including consultancy exposure. We are also looking for qualified actuaries with risk

requirements of the role across other parts of the business and

management experience. Please contact Chris Cannon if you are

externally. An excellent package is on offer. Ref: ARC26226

interested. Ref: ARCHKSING

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

0781 333 7891 0781 398 9016 0771 122 8449

andy@the-arc.co.uk roger@the-arc.co.uk chris@the-arc.co.uk

The Actuarial Recruitment Company is an employment agency 56

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