The Actuary July 2013

JULY 2013 theactuary.com

Interview: Simon Gadd

The magazine of the actuarial profession

Challenging times for the chief risk officer

Investment Considering the case for investing in Africa

Soapbox Why the Bank of England’s policies are bad for pensions The Actuary

International Highlighting opportunities for actuaries overseas

July 2013

SOLID AS A ROCK? Stabilising liquidity risk under the glare of Basel III p01_july_cover•gcSM.indd 1

24/06/2013 08:43

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THE ACTUARY • May 2013 www.theactuary.com

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JULY 2013

Contents GETTY

18

“The challenge for banks will be to set their strategy only after first arriving at a true and full understanding of economic conditions as they exist today. The ALM process is critical”

24

21

UP FRONT

FEATURES

AT THE BACK

10 IFoA news

18 Interview: Simon Gadd

29 Arts

Richard Schneider talks to Legal & General’s chief risk officer about the challenges of risk management from a life insurance perspective

14 Industry news 16 People/society news 20 SIAS events

21 Banking: Solid as a rock?

Moorad Choudhry gives an overview of risk management in banking and on building a framework for measuring liquidity risk

OPINION 5

24 Modelling: Howzat?

Editorial

On the eve of the Ashes, Cameron Heath and Joe Ryan issue a challenge. Will it leave you stumped or win you an iPad?

Deepak Jobanputra believes that when change comes, opportunity follows

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Letters

26 Investment: I blame Bob Geldof

Membership consultation and mortality in retirement

7

President’s comment In his first editorial, David Hare believes it is time for actuaries to assert their expertise

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Andrew Slater considers the case for investment in Africa

Soapbox Ros Altmann outlines why the Bank of England’s policies are so bad for pensions

35 International supplement iation Geneva Assoc international

lian diversity

The leadingof the insurance think tankopens its doors industry

Brazi World’s sixth largest

As the y, Brazil offers great econom and lifestyle opportunities

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were here?as overse Wish you ies working and

JULY 2013 theactuary.com

Actuar the challenges report on encountered experiences

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South Afric Switzerland

Japan

Brazil

31 Book review Diary of a Hedgehog: Biggs’ Final Words ds on the Markets by Barton Biggs

Take flight A world of

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

ities open

opportun

aries

up for actu

February 2012

Thi This annual issue shines a sp spotlight on emerging reg regions around the world. This year there wo is a focus on Brazil, Switzerland and the Sw Far East. There are also F rregional reports from a actuaries highlighting their experiences of working overseas

• THE ACTUARY

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Alvin Kissoon reviews the latest offering from Matthew Bourne, one of the UK’s most popular choreographers

32 Student Jessica Elkin considers the life of a global actuary

33 Puzzles Test yourself on our Mensa puzzles and win a £25 Amazon voucher

34 Actuary of the future Robert Tailyour-Hayes of the Government Actuary’s Department

51 Appointments and moves

ONLINE A one-year view of longevity trend risk Stephen Richards outlines how a long-term longevity liability might change over the course of a year under the new Solvency II regime

International supplement All the articles featured in the magazine plus exclusive web-only content

WRITER OF THE MONTH Andrew Slater wins a £50 book token for his article on investing in Africa, courtesy of the Staple Inn Actuarial Society

July 2013 • THE ACTUARY www.theactuary.com

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24/06/2013 15:08

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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 Nick Mann +44 (0)20 7324 2794 nick.mann@theactuary.com

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)

New dawn for a new day

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

Picture editor Akin Falope

Deepak Jobanputra believes that when change comes, opportunity follows

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. © SIAS July 2013 All rights reserved ISSN 0960-457X

Like The Actuary on Facebook

The role of an actuary continues to evolve beyond the traditional career path that we have seen over previous decades. The profession offers a wider range of opportunities now than ever before.

Risk management is a particular area of growing importance, driven, in part, by the increasing regulatory focus across the globe. The impact of this stronger emphasis is intended to more appropriately measure, monitor and manage risk. Personally, though, I am always reminded of the infamous reference to US secretary of defence Donald Rumsfeld’s ‘known unknowns’. There have been numerous articles and bestsellers on all topics of risk management and, as such, the advancement of risk management techniques will not only highlight known risks but hopefully also recognise the unknown.

This month, we have an interview with an experienced actuary sharing his views on the role of a chief risk officer (CRO). This is relatively new territory, particularly in an environment described as more volatile and unpredictable than any previously experienced. The role of CRO therefore presents an exciting opportunity but will also be a huge challenge given economic uncertainty worldwide, made more complex by the increasing interdependencies of major economies.

We extend our reach on the theme of risk management into the banking arena with an article that considers asset liability modelling and the challenges posed by Basel III. There has also been a lot happening at the newly branded Institute and Faculty of Actuaries, with new president David Hare establishing his key areas of focus for the coming year. A further series of achievements for the profession relates to the enhancement of services for members, also covered in this month’s issue.

It is staggering to note the dedication of our volunteers, members groups and practice areas, which help drive research, development and thought leadership for the profession and give so much back to developing and enhancing our already strong standing.

‘The profession offers a wider range of opportunities now than ever before’

Deepak Jobanputra editor@theactuary.com

Follow @TheActuaryMag on Twitter

Join The Actuary’s LinkedIn group

July 2013 • THE ACTUARY www.theactuary.com

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24/06/2013 11:51

Opinion Letters letters@theactuary.com

Consultation responses Have your say online

A selection of comments posted online about news stories published on www.theactuary.com.

Bernardino wants industry levy to help fund EIOPA (Full story at bit.ly/151PREZ)

Soapbox: rethinking economic growth (Full story at bit.ly/14Tc8SC)

“This is a concerning development, which must be resisted. If, in addition to the massive Solvency II costs already incurred, one needs to fund one of the bodies that dreamt these measures, then the prospects for the insurance industry are bleak.” – Fessal Bouaziz, 1 June

“This is such a good and succinct article that it should be obligatory reading for all politicians, civil servants and journalists (and actuaries).” – Stephen Rees, 9 June

Work Longer, Live Healthier New research – Work Longer, Live Healthier – suggests that, contrary to popular belief, those retiring earlier don’t necessarily have a healthier retirement. The paper then considered whether raising the state pension age would have an adverse effect on health, and concluded that, on the basis of its consideration of early retirement, it would not.

The author acknowledges that there are issues with some of the data. For example, it may include people who retire early, because they are in ill health already. Furthermore, people retiring early may do so because they are unhappy in their job or with their life and hope a change of circumstance may be a miracle cure, which it may not be; so they may be predisposed to depression. Or they may have been pushed into early retirement through redundancy, which is generally not good for mental health. The author tries to address these issues by casting his net wider.

I wondered whether it would have been useful to compare post-retirement mortality for men who retire at normal retirement age (NRA), for two pension schemes with similar employees but different NRAs, say, 60 and 65, and to see if those with an NRA of 60 die younger. Obviously, early / ill-health / late retirements would be excluded from the data, it would simply be two mortality tables, one for men in Scheme A, who had retired at their NRA of 60, and one for Scheme B, who had retired at their NRA of 65. Such a comparison may already be in the public domain and, if so, I apologise. Similarly, mortality is not the same as being unhealthy, but there must be some correlation! The comparison would not be perfect – for example, those in the scheme with an NRA of 65 may have a slightly higher pension owing to longer service .

I also wondered whether the IFoA had been approached for input. But that is a different question.

Nicola Foote 18 May

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

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I write regarding various consultations to which the Institute and Faculty of Actuaries (IFoA) regularly responds. I have recently raised a concern with respect to one particular consultation response, and I commend the IFoA and its employees for attempting to address my concerns in a serious and prompt manner, but this letter attempts to engage on a broader issue.

My understanding is that consultation responses are currently drafted within the relevant Communication and Consultation Working Party, after which there is a review and sign-off by the relevant Practice Executive Committee (PEC), and then a final review and sign-off by the Public Affairs and Consultations Committee (PACC).

I further understand that it is quite unusual to solicit the opinions or input of individual members of the IFoA during the drafting period for the following reasons: short turn-around times, resource limitations within the IFoA, and the unwillingness to further burden the volunteers on the working parties.

While I am sympathetic to all the above challenges it seems to me quite unsatisfactory that the first time the IFoA’s general membership learns of the Institute and Faculty’s official position on a given issue is at the point of publication. I am not suggesting that members of a working party, or a PEC, or the PACC will have biases, but surely the IFoA would benefit from broader input on any given issue – especially when the issue is on the outer edges of some of the more obscure corners of actuarial practice (as was the case with the particular consultation response about which I raised a concern).

This is even more important when an IFoA consultation response is likely to be deemed by the broader community as a definitive actuarial position, despite the fact that there may be quite a diverse range of opinion within the general membership of the IFoA – opinion that is not even solicited, let alone considered.

I acknowledge that any individual member of the IFoA may offer his or her services to a working party or PEC by formally nominating, but that rather misses the point. In addition, that option is clearly limited to a finite number of eager candidates, otherwise the working parties and PECs would be swollen beyond recognition.

When speaking on behalf of the membership of the IFoA, surely the membership should have their opinions or input solicited? Logistically it may prove to be a challenge, but efforts need to be made to address the current unsatisfactory situation.

Richard Hartigan 31 May PHILIP SCOTT, IFOA PAST PRESIDENT, REPLIES: Mr Hartigan raises an important issue, but also highlights the real logistical challenge we face as a professional body with over 24,000 members.

The IFoA values the considerable efforts of the many members who contribute to consultation responses through the Practice Executive Committee Consultation Committee structure. The PECs recognise this expertise offered by members and regularly seek to expand the Consultation Committees’ reach.

While we recognise that not all members are able to commit time to volunteer, the IFoA will look at ways of making the membership aware of what public consultations we propose to respond to – for example, by publishing a list of ‘live’ public consultations on the IFoA website. This way, members can decide whether they wish to contribute their time or views to the relevant drafting committee.

The editorial team welcomes readers’ letters but reserves the right to edit them for publication. Please email letters@theactuary.com. The deadline for receiving letters for the August issue is 12 July 2013.

THE ACTUARY • July 2013 www.theactuary.com

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24/06/2013 13:53

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

›

Opinion President’s comment

DAVID HARE

Understanding the understated I am thrilled to be writing this first article to you as president of the Institute and Faculty of Actuaries (IFoA). As I said at the President’s Annual Address on 24 June, I had no idea when I qualified as an actuary that, 25 years later, I would be speaking to our members and stakeholders as president. I am humbled to have been elected and welcome the opportunity to help drive forward the IFoA’s agenda, both in the UK and internationally.

In recent years, the IFoA has begun to feel very different from the two separate bodies we once had. There is a real sense of energy about the organisation, among both volunteers and staff, which is infectious. We have a strong executive team, led by chief executive Derek Cribb, that is well placed to advance the work of dedicated volunteers and staff, without whom the organisation would not be able to support its members and other stakeholders.

I have been struck by the staff ’s professionalism and commitment to members, and the spread of actuarial influence, which was one of the key reasons I was willing to be considered for president.

I must also mention the value that I place on those who volunteer for the IFoA in whatever capacity. You all play an immense part in ensuring that we continue to provide an excellent and relevant service to each other, to the rest of the members, and to the many stakeholders and others whom we seek to influence. I look forward to meeting as many of our existing volunteers as possible over the next year, and welcoming more as opportunities arise.

Speaking of opportunities, my predecessor as president, Philip Scott, together with Council, established a great new brand for us with a set of values that will help us to build on our successes: ● community – we want to be part of the action, sharing technical expertise and knowledge where actuaries can add value; ● integrity – we want to be known for doing the right thing in the public interest; and ● progress – we are an international organisation that wants to be part of developing actuarial influence.

These values are about growing our reputation and the trust of our audiences. In order to do that, the work of the IFoA must be relevant – and seen to be so.

In his first editorial as president, David Hare believes it is time for actuaries to assert their expertise The three previous presidents of the IFoA all made their mark. Ronnie Bowie was a change champion and oversaw the merger of the Institute with the Faculty. Jane Curtis focused on financial illiteracy, education and regulation and helped forge great links with government.

Philip Scott highlighted the advantages of a good brand and knowing what we stand for as an organisation, as well as the importance of recognising our customers’ needs.

The role of the president is no longer to set the strategy for the professional body – the Council is responsible for that. The president’s role is to act as a proactive ambassador for the organisation and to help add colour to the implementation of Council’s strategy.

As the fourth president of the IFoA, my aim is to complement our strategy by making sure that the relevance of what the IFoA and each of its members does is well understood.

As explained in my presidential address, I want the organisation to feel relevant to us and I want it to go without saying that being a member of the IFoA is actually helpful to our careers and the work we do. My address was filmed on the day and is now available to view on the IFoA’s website at www.actuaries.org.uk.

I also want the work of our volunteers to be recognised more as fundamental to the impact of the IFoA, and for them to feel appreciated

by the rest of us for the time and effort they give. I am keen that volunteers can see the relevance of what they do for the IFoA and how their input supports the bigger picture.

Sadly, it is no secret that often the work of actuaries is misunderstood or liable to conjecture and, as a result, the value of what we do is not appreciated as well as it might be.

So, as an organisation that is doing more and more, it is important that our stakeholders and the public gain a better understanding of what we do and why it is relevant to them.

Our proactive public affairs activity, building on our volunteer-led research and consultation responses, will be fundamental to achieving this.

In short, I want to ‘ramp up our relevance’.

The IFoA is an international organisation with members spread far and wide, and a professional heritage that dates back over 160 years. With all that talent and experience, and our commitment to working in the public interest, we can help our members and our stakeholders grapple with many of the key issues that are relevant as the world changes.

Most of all, I want our members and volunteers to be proud to be associated with the IFoA , and appreciate that being part of a community means that we can be stronger and more relevant than the sum of all the parts. a

“It is important that our stakeholders and the public gain a better understanding of what we do and why it is relevant to them”

July 2013 • THE ACTUARY www.theactuary.com

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24/06/2013 12:32

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Opinion Soapbox

ROS ALTMANN

Time to get real Quantitative Easing (QE) started in 2009 when the Bank of England, having lowered short-term interest rates to almost zero, decided to force long rates down too, hoping to provide extra stimulus to the economy. Since then, £375bn of new money has been created to buy government bonds.

As a result, yields have fallen to historic lows, despite a doubling of gilt issuance since 2008, and a quadrupling since 2004. This increase in supply would normally be associated with rising yields, but QE has ensured yields have continued to fall. The Bank now owns around a third of the government bond market – more than all UK pension and insurance funds combined.

Nevertheless, the UK economic recovery has been weak. This could be due to the damaging effect of lower yields on UK pensions, especially with an ageing population.

The UK pension system is underpinned by long bond yields. Both defined benefit (DB) and defined contribution (DC) pensions are negatively affected by lower long rates, which may offset any stimulus to other parts of the economy. The Bank of England has attempted to deny this effect. Its research concluded that asset price rises caused by QE would offset any increase in pension liabilities or annuity rates resulting from lower bond yields, so the impact on pensions would be ‘broadly neutral’.

This conclusion does not stand up to scrutiny.

With respect to DB pensions, research from the Pension Protection Fund and other academic studies shows that lower bond yields increase pension fund liabilities far more than assets. A typical pension fund will see an 18%-20% rise in liabilities for every percentage point fall in long bond yields, while its assets will only increase by 4%-10%.

The £375bn QE programme is estimated to have reduced 15-year gilt yields by at least two percentage points, implying a 36%-40% rise in pension liabilities but only an 8%-20% rise in asset values. The resultant worsening of pension deficits has been confirmed by the latest data. Despite strong asset performance and large contributions, many companies are struggling to reduce their deficits. The Pensions Regulator has recently indicated a more accommodating stance to short-term

8

Ros Altmann outlines why the Bank of England’s policies are so bad for pensions

deficit recovery plans, but QE has already damaged many corporate sponsors.

With DC pensions, QE has resulted in a dramatic decline in annuity rates, thereby lowering the pensions of nearly half a million annuity purchasers each year. As the maximum income withdrawals from income drawdown funds are set by the Government Actuary’s Department in relation to single life annuity rates, many pensioners in income drawdown have also faced significant income reductions.

Most pension investors have certainly not seen their asset values rise sufficiently to offset the fall in annuity income.

The Bank also suggested that the effects of QE would typically balance out over the course of a policy cycle. This is not true for those who have bought annuities, because they cannot change their annuity when rates rise. With a fixed annuity, and no inflation protection, they will just become increasingly poorer over time.

Current low bond yields, negative in real terms, do not fit the UK fundamentals.

Inflation and the fiscal deficit would suggest 10 to 15-year yields significantly higher than they currently are. By artificially distorting gilt yields, QE has added risk to the ‘risk-free’ rate that other assets are priced from. The Bank of England believes pushing up asset prices, including housing, equities and other bonds,

will boost growth. However, the risks of this have been underestimated. By creating a bubble in the gilt market, then all other asset prices are at risk too. All asset bubbles burst.

Real growth is created by investing in real assets, such as house building or infrastructure, not just financial assets. Rather than creating more new money, it would be far better to ensure incentives for pension and insurance funds to invest directly in growth-producing assets, house building, infrastructure and small firm loans. There is plenty of money in the economy, it is just not getting to the right places. Buying more gilts is not a recipe for recovery.

In essence, it seems policy has ignored the damage caused to pensions for increasing numbers of retirees in our ageing population.

Lower pensions mean lower long-term growth and there is no strategy for unwinding such massive gilt purchases, so inflation risks are also high. I do hope we will not see more misguided attempts to boost growth by undermining pensions with further money creation.

“Real growth is created by investing in real assets, such as house building or infrastructure, not just financial assets”

Dr Ros Altmann, formerly director-general of Saga, is a pensions and economics policy expert and former investment banker, who has advised governments, corporations, trustees and the pensions industry

THE ACTUARY • July 2013 www.theactuary.com

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24/06/2013 08:35

News IFoA NEWS UPDATES FROM THE ACTUARIAL PROFESSION

Upfront Use your vote

Opinion CEO’s comment Derek Cribb outlines the aim to further enhance the IFoA’s profile online

Focusing our digital vision Derek Cribb is the chief executive of the Institute and Faculty of Actuaries

When I started to work for the Institute and Faculty of Actuaries (IFoA) almost three years ago, the main complaint I received from members was about our website – it just wasn’t working as a resource or as the gateway to the profession that we wanted and needed. While a number of improvements have been made, we know that there is more to be done, so I wanted to tell you about the major project we kicked off earlier this year to redevelop the website.

In line with our commitment to provide the best possible support to our members, our objective is to deliver world-class digital services in the form of a new website and accompanying digital content and community strategy. To get this right, we are undertaking extensive user research, which will inform the structure of the new site – indeed, you may have been involved in one of the focus groups or interviews we ran. Once this research is complete in summer 2013, we will begin building the site with a view to it going live in spring 2014.

Members will notice many benefits. Not only will the new structure make content easier to find, it will also be responsive to smartphones and tablets. The new brand enables us to give the site a complete visual overhaul, making it easier to promote actuaries to those outside the profession. In addition, the website will be integrated with the new virtual learning platform we are developing, which will facilitate online learning and make it more straightforward for members.

The digital content and community strategy will define priorities for the site’s ongoing development so that it remains relevant and continues to meet members’ needs. Our overarching strategy will be to ensure that users and search engines can find our content; that we develop high-value content for learning; and that the website supports our objectives of thought leadership, international engagement and member support.

Further information will follow, but, in the meantime, I hope this gives you assurance that the IFoA is listening to the views of its members and responding accordingly. a

DEREK CRIBB

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ACCESS THE PROFESSION’S ANNUAL REPORT

If you are a voting member of the IFoA, you should have received your voting papers from the Electoral Reform Services (ERS) in relation to the proposed new certified actuarial analyst (CAA) and student actuarial analyst membership categories.

Your Council and the presidential team, David Hare, Nick Salter and Philip Scott, have voted in favour of the changes to the byelaws that will allow the introduction of these proposed membership categories. Immediate past president Philip Scott wrote to members in June to explain why he is supporting the proposed new membership categories, saying: “The Council and I believe that the proposed certified actuarial analyst qualification would be a valuable addition to our chartered professional body, reinforcing those standards of professionalism and excellence by bringing more of those involved in actuarial support roles within our professional framework. It also demonstrates that the IFoA is evolving and innovating to ensure that it continues to be at the forefront of actuarial science.”

As a member-led organisation, the future of the profession is in your hands, so please take the time to vote before the deadline closes at 12 noon on 15 July.

Would you like to take on a professional development role?

In addition to the traditional volunteer roles and tasks that our members undertake each year, there are a number of other Professional Development and Responsibility (PDR) opportunities, whereby members can offer to provide ‘paid’ support for a fixed service.

These opportunities are not, by definition, ‘volunteering’ roles. However, we recognise that the fee paid is nominal and are extremely grateful to, and reliant on, those members who provide this service to enhance and develop our profession.

Any member wishing to be considered for these opportunities can identify them on the volunteer vacancies section of the website by reference to PDR in the title.

To find out more, please contact Debbie Atkins, volunteer engagement manager, at

debbie.atkins@actuaries.org.uk

THE ACTUARY • July 2013 www.theactuary.com

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24/06/2013 13:37

Chinese capital regime tops agenda in Beijing In May, president David Hare, CEO Derek Cribb and director of education Trevor Watkins travelled to Asia to further develop the IFoA’s international links.

During their stay in Beijing, the Chinese Actuarial Association (CAA) arranged a regional actuarial event on the China Risk Oriented Solvency System (C-ROSS) and invited Hare as their guest speaker. This is just one of the series of events that CAA arranges for its regional members. Over the years, we have formed a good working partnership with CAA to promote high levels of actuarial education together.

C-ROSS is the new capital regime, which the China Insurance Regulatory Commission

ARC kicks off with bonds workshop The Actuarial Research Centre (ARC) hosted its first workshop on 8 May based on the theme of bond spreads and liquidity.

The event, sponsored by the Scottish Financial Risk Academy, Partnership Life Assurance (sponsor of ARC’s PhD student Paul van Loon) and the IFoA, was attended by 25 invited experts from banking, consulting, investment and life insurance.

The afternoon was divided into two sessions, each with some short introductory talks followed by a lively, extended discussion under the Chatham House Rule.

Session one focused on the various factors in determining the credit spread on a corporate bond and, specifically, how one might estimate a liquidity risk premium. Session two moved on to the regulatory problem of whether valuation interest rates can include allowance for an illiquidity premium.

The event as a whole was considered to be a great success and left ARC scholar Paul van Loon with many interesting ideas to follow up over the next three years of his PhD. If you would like to become involved in future workshops and co-sponsorship of future projects, please contact ARC’s director, professor Andrew Cairns.

Email A.J.G.Cairns@hw.ac.uk

(CIRC) is introducing to all insurance companies in China, similar to the Solvency II regime in Europe.

Hare gave an update on Solvency II and its relevance beyond the EU. He explained in detail the latest developments on Solvency II and the technical challenges faced by EU insurance companies. The second speaker, from CIRC, talked about the development of the overall framework of C-ROSS, while the last speaker discussed the need to value assets and liabilities consistently.

The event attracted more than 120 delegates, including appointed actuaries, partners, risk managers and student actuaries from across the north China region.

NE W S I N B R I E F Early warning system The Prudential Regulation Authority (PRA) has outlined to the insurance industry how it proposes to use early warning indicators in addition to outputs from the internal models firms in its ongoing supervision of these companies. Indicators with separate parameters are to be used for life and general insurers, with the life indicators further broken down between withprofits and non-profit business.

For details, see the PRA website: bit.ly/19qmWyP

Partial regulation A reminder to all overseas Fellows/Associates who intend to make an application for partial

CAA deputy secretary Gong Xing Feng presents IFoA president David Hare with a gift at the C-ROSS actuarial event in Beijing

regulation: please submit your application to the membership team as soon as possible.

Email: membership@ actuaries.org.uk Applications for partial regulation can be found at bit.ly/18xetu2

New chair for PREC Desmond Hudson is the new lay chairman of the Professional Regulation Executive Committee (PREC).

Hudson has held senior management roles with the Yorkshire Building Society, the Institute of Chartered Accountants of Scotland and the Law Society of England and Wales. He takes over from Sir Philip Mawer on 1 July.

IORP review focus The European Commission has announced that its review of the Institutions for Occupational Retirement Provision (IORP) directive will concentrate on governance and disclosure.

It is no longer pushing for harmonisation of Technical Provisions, the so-called ‘Solvency II for pensions’.

The funding proposals had been widely criticised across Europe, particularly in the UK. Commentators have paid relatively little attention to the provisions for a standardised approach to risk management, governance and disclosures.

These are substantive proposals, which, if implemented in full, could considerably increase pension schemes’ running costs.

Candidates scoop exam prizes The then president-elect of the IFoA David Hare presenting Alasdair Craig (left) with the International Underwriting Association General Insurance Fellowship prize for his performance in the SA3 exam session in September 2011; and Rachel Lynch (right) with the Enterprise Risk Management prize for her performance in the ST9 exam in April 2012.

July 2013 • THE ACTUARY 11 www.theactuary.com

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News IFoA NEWS UPDATES FROM THE ACTUARIAL PROFESSION

Independence in depth

By Martin Potter, incoming leader of the Scottish Board The question of constitutional change is a critical one for the nation and one that the IFoA believes is the preserve of the electorate.

It is important to stress that the IFoA must remain impartial, it is neither pro- nor antiindependence. But, given the importance of the issue, the IFoA believes that the public interest is best served by having a debate that is fully informed on all the relevant issues.

You will therefore not be surprised to learn that Scottish independence is an issue that we have been discussing internally at the IFoA for some time now. As a professional body, we recognise that our membership will hold diverse views. The issue for us therefore has been how best to engage our membership, and how best to inform the issue without becoming the issue.

During the past few months, members of the Scottish Board have identified a number of issues that we believe are relevant to the debate

– subjects such as regulation, taxation, pensions and Europe as well as issues specific to various practice areas. These have been consolidated into a document that has been published on the IFoA website (bit.ly/11ANy8B). Such issues are also being raised by various actuaries and employers in the public arena. For instance, former IFoA president Ronnie Bowie has written in the Scottish media on pensions and independence and has appeared in front of a parliamentary committee.

As a professional body, engaging our membership has been a priority to help shape our thinking on independence.

Members enjoyed a lively discussion of the issues highlighted by the Scottish Board at a sellout event in Edinburgh last month. More importantly, we got valuable feedback from many members that they would like to see the profession increase its profile in this debate.

Consistent with our public affairs strategy, the IFoA has been meeting key government officials and political figures from all parties to share with them our thoughts

Scottish Board leader Martin Potter: ‘Many members would like to see the profession increase its profile in this debate’ on the issues that need to be debated. This engagement, outside the public spotlight of the media, has been well received – our insight and knowledge is valued because of our impartiality.

As we approach the referendum next September, the debate will undoubtably intensify. The IFoA remains committed to informing the debate, both with its members and the wider community.

Member support: seeking excellence ‘To offer excellent support that meets members’ varied and evolving needs.’

This was the objective that Council set for the member support directorate when it launched its new strategy in June 2011.

Memoria Lewis, director, looks back at her team’s successes in meeting it and outlines the challenges for the coming year What is the member support directorate?

It comprises all member-facing functions.

During the past few months, in this column, we have introduced the events, communications, volunteering, communities (practice area secretariat), regions and membership teams. As a directorate, we work in an integrated way to deliver better member services no matter where you are located.

Can you give an example of where the skills of the individual teams really pulled together to make an impact?

Brand. It took an entire year of development and planning from the research phase through conception and then launch; this required the input and coordination of all teams. However, we did not do it alone. With Council, we developed the new values that underpin the brand: community, integrity and progress. These dictate the way we work together as an organisation, how we behave

12

Left to right: Danielle Reiterbund, Chantal Voisin, Alison Jiggins, Niki Park, Memoria Lewis, Amanda Davey, Debbie Atkins, Phil Doggart, Jill Chipchase, Stephanie Snowdon and Jennifer Chapin and how we pursue opportunities. If you attended the spring conferences, you will have noticed a dramatic difference in production – brighter and bolder staging, the consistent look and feel of literature at our stand and how we present ourselves. The IFoA is looking and feeling more professional and acting in a more professional way.

What’s in store for this coming year?

We will be launching a new member-centric website providing information and services that are intuitive to find and use. In order to support learning, we are working with our colleagues to develop a platform that integrates the event archive with tailor-

made content. In a couple of years’ time, it will therefore be possible to experience a major conference even if you are unable to physically attend. We will be launching a volunteer induction pack to bring together information and guidance notes as an online resource. We will be developing this resource to provide access to learning modules and briefings to ensure that members develop skills from the volunteering experience. In addition, you will also see new careers materials and the launch of our Become an Actuary IFoA go-to guide, more proactive service from the membership team, greater engagement with employers and their CPD coordinators and much more.

THE ACTUARY • July 2013 www.theactuary.com

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Come join us

Report shows third-party injury claims continue to rise

Knowledge Sharing Scotland (KSS) is an initiative that has been created as a result of member feedback. Your suggestions showed that there was demand for a greater number of informal continuing professional development opportunities and networking events in Scotland. There was a particular need for activity in Glasgow and Stirling.

The sessions are run by members, for members, and are hosted in local employers’ offices across the country. The sessions are designed to be small, accommodating between 20 and 30 people, and informal in order to generate debate and discussion off the back of a short presentation by a volunteer speaker.

To date, there has been a session in Glasgow, hosted by Hymans Robertson, and one in Edinburgh, hosted by Towers Watson.

The next session, being hosted by Prudential in Stirling, is already fully booked.

A full list of events can be found at

The IFoA’s motor claims third-party working party unveiled the data for third-party injury (TPI) and third-party damage (TPD) claims in 2012 at the General Insurance Pricing Seminar in June.

This is the fourth report from the working party, analysing private-car comprehensive insurance claim data from more than 98% of the motor insurance companies in England and Wales. This year’s report also includes analysis of commercial vehicles, both fleet and non-fleet.

The key findings from the 2012 data amassed for the report showed: ● a continued reduction in the cost of car insurance premiums during 2012; ● that TPI claim frequency continued to increase, despite a decrease in TPD claims and in data from the police on the number of road accidents in the UK involving injury; ● that the average claim costs of TPI continued to rise, but not as much as in previous years, with evidence that the number

bit.ly/YYF6wR

of claimants per claim is rising by less than the frequency of claims themselves; ● that TPI claim frequency is significantly higher for commercial fleet vehicles than it is for non-commercial fleet vehicles, although the average cost per claim is lower; ● that commercial vehicles have not escaped the inflationary trends seen over a number of years in private car comprehensive insurance, however, in 2012, there was a decrease in the average cost of both TPI and TPD claims for commercial non-fleet vehicles; ● that the number of TPI claims for accidents in 2010 continued to increase, suggesting claims farming ahead of the introduction of the Legal Aid, Sentencing and Punishment of Offenders Act 2012.

A full copy of the report is available at

www.actuaries.org.uk Further analysis of the 2012 data will be presented at the 40th IFoA GIRO conference, to be held in Edinburgh in October (see advertisement below for details).

LIFE Conference 2013 GIRO40

Shaping our future: evolve or revolve?

GIRO is the premier conference of general insurance actuaries and is attended annually by more than 650 delegates and speakers keen to hear about topics like Pricing, Reserving, PPOs, Risk Management and other current hot topics. 2013 is the 40th Anniversary of GIRO Conference and Exhibition.

8 - 11 October 2013, EICC, Edinburgh

10- 12 November, EICC, Edinburgh The Life Conference is the premier event for professionals interested in life insurance. Whether UK based or international, the conference is open to anyone with an interest in the life sector.

It offers an ideal forum to meet and exchange ideas with a broad range of professionals.

Speaking this year: Rt Hon Alistair Darling MP Julian Adams, Executive Director for Insurance at the PRA Paul Moore, HBOS Whistleblower Tom Wright, Group Chief Executive of Age UK Michael Blastland, Writer and broadcaster

Plenary speakers include: David Hancock, Head of Risk, Transport for London Ray Hammond, Futurist Dr Steve Peters, Head of Sports Psychology for UK Athletics

With 84 technical workshops to choose from, this conference is not to be missed.

BOOK BEFORE 13 August to receive the early bird fee: http://bit.ly/18mywex

BOOK BEFORE 10 September to receive the early bird fee: http://bit.ly/12AGgI5

July 2013 • THE ACTUARY 13 www.theactuary.com

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News Industry news@theactuary.com

Legislation on defined ambition ‘possible by 2015’, says minister Employers show appetite for ‘third way’ pensions to expand on ‘minimalist’ defined contribution schemes Legislation on ‘third way’ pension schemes based on ‘defined ambition’ risk-sharing could be introduced before the end of the current Parliament, pensions minister Steve Webb has suggested.

Addressing the Institute and Faculty of Actuaries’ Pensions Conference 2013, Webb said that legislation was possible by 2015, although his choice of words suggested it would be for the next government to address.

Webb said that employers were willing to provide something more than a ‘minimalist’ defined contribution (DC) scheme. Defined ambition schemes will offer more guarantees than DC, but with less risk to employers than defined benefit pensions.

“The early signs in talking to employers is that there is an appetite for going beyond the bare minimum core of minimalist DC,” he said.

For more on this story, visit bit.ly/11qo0cT

Insurers have a long way to go to diversify investment portfolios, study warns Firms keen to branch out but risk losing ‘first-mover advantage’ by delaying change to alternative asset classes European insurers need to move faster to take advantage of the benefits of investing in alternative asset classes, according to a study published

by AXA Investment Managers and the Boston Consulting Group.

In Adapting Asset Management Strategies to the Current Market Environment, the firms found that insurers were increasingly keen to counter the effect of low returns by diversifying their investment.

Almost two-thirds (59%) of the chief investment officers surveyed for the report pledged to allocate up to 10% of their portfolios to alternative asset classes, with emerging market debt, infrastructure and real estate identified as the most popular classes for potential investment. However, most have currently invested just 2%-3% of their portfolio in this way.

Laurent Seyer, global head of multi-asset client solutions at AXA IM, warned that insurers risked missing out on the benefits of diversification.

“There is a clear first-mover advantage for those firms who take the steps to genuinely diversify their investment portfolios,” he said.

For more on this story, visit bit.ly/138U47E

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

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Protection payouts on rise The total amount paid out by insurers to deal with death, serious illness or injury increased by 4% to £2.33bn last year, according to figures from the Association of British Insurers. This means insurers paid out £6m every day across life, critical illness and income protection insurance, the ABI said. bit.ly/1b094rq

Retirement savings shortfall The number of people saving adequately for retirement has reached an all-time low, a study from Scottish Widows of 5,200 adults has found.

Only 45% of Britons who could and should be preparing for their old age are currently saving enough; 20% are saving nothing at all for retirement; and over onethird are under-saving. bit.ly/13fuH5D

FTSE 350 deficits fall The aggregate deficit of the UK’s 350 leading companies fell by £10bn in May, despite a decline in equity values towards the end of the month, Mercer has said.

According to the consultancy’s latest pensions risk survey, the estimated deficit of the FTSE 350 companies’ pension schemes stood at £98bn at the end of May. This compares to £108bn a month earlier.

While asset values remained unchanged over the month, at £557bn, the £10bn difference came as liability values fell from £665bn to £655bn. bit.ly/13nEKpk

Bernardino urges levy to help fund EIOPA Europe’s insurance and pensions industries should pay a levy to help fund a stronger, more interventionist European Insurance and Occupational Pensions Authority (EIOPA), the chair of the regulatory body has said.

Speaking in Brussels, Gabriel Bernardino said there was a “clear need” to strengthen EIOPA’s operational independence for it to challenge national supervisors and be given a stronger mandate and powers.

“The current structure of the European system of financial supervision achieved important results in a very challenging environment... We should build on these and improve the system,” he explained. “We should focus on substance, not the theoretical debate about the optimal structure. There is no silver bullet… they all have pros and cons.”

Consideration should be given to whether a fee should be levied on the industry for “partial financing” of its increased mandate, Bernardino said. EIOPA should also be given an independent budget within the central budget of the EU, he added.

For more on this story, visit bit.ly/151PREZ

Europe-wide pensions ‘gender gap’ is 39%, says EC Women in European Union countries receive pensions that are 39% lower on average than for men, according to research.

In its first report on the “gender gap” in pensions, the European Commission found that the difference between the amount women and men receive from state and workplace pensions combined was more than twice the 16% gap between their average pay.

It attributed this to women being less likely to be in employment. They also tend to work fewer hours/years and receive lower wages.

Single women faced a narrower pension gap than the average at 17%. The more children women had, the lower their retirement income, the report noted. It warned that economically independent working women might find the pension system “unfamiliar, anachronistic and limiting”.

“What has been gained for gender balance in the labour market may be reversed in pensions,” the report said. “The worrying fact is that we are only gradually forming an opinion as to whether this fear is unfounded or not.”

The EU should play a decisive role in placing the pensions gender gap on the policy agenda and encouraging national initiatives to address the issue, the commission said.

For more on this story, visit bit.ly/11panPb

THE ACTUARY • July 2013 www.theactuary.com

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› GENERAL INSURANCE

NEWS ROUND-UP

Aviva considers Lloyd’s return Aviva has declined to rule out rumours that the insurance giant is applying for a Lloyd’s licence. In July last year, the company signalled to the London market that it intended to set up a Lloyd’s syndicate as a complement to its corporate and speciality risk team. It coincided with a review of the direction taken by the unit. A spokesman for Aviva said: “We are considering all our options,” adding that the company had no further comment.

Google faces further concessions The EU competition commissioner has suggested that Google will have to make even more concessions to ensure it is not abusing its dominant position in the search engine market. Google business strategy is of particular concern to the insurance industry. Price comparison sites such as MoneySupermarket pay Google millions of pounds each year to have their products advertised on its search listings. If Google aggressively promotes its own aggregator, Google Compare, then other advertisers risk losing market share to the search giant.

Changes will apply only to European versions of the search engine, rather than the widely-used Google.com. If Google fails to comply with EU sanctions, it will face massive fines. In March, Microsoft was fined €561m (£476m) over competition concerns.

with Dresser Industries for US$173.6 million in 2004. AIG then financed the settlement with Lehman Brothers, thereby incurring US$88.6 million in finance costs. AIG billed TransRe in 2012 for its share of the claims, including the finance costs. TransRe said its reinsurance contract would not cover the finance charges from AIG’s agreement with Lehman and sought court clarification that it does not owe AIG for the Dresser claims.

In a 28 March lawsuit, TransRe asserted that AIG has refused to provide access to documents on the risk transferred from AIG to Berkshire Hathaway’s National Indemnity. By transferring the legacy asbestos risks, AIG destroyed the alignment of risks that was the framework of the TransRe/AIG reinsurance relationship, according to court papers.

LARGE LOSSES

PRA moves forward on ICAS+ Just under half of the firms in the Prudential Regulation Authority’s (PRA’s) internal model approval process (IMAP) have opted to use their Solvency II internal model to meet existing individual capital adequacy requirements as part of the PRA’s ICAS+ regime.

The PRA outlined its ICAS+ plans in January and has now started to deliver the new approach with the first insurers in the process. Julian Adams, deputy head of the PRA, said: “It is too early to share learnings from ICAS+ as we are still at a preliminary stage, but we plan to do so as soon as we can, particularly developments used by firms in their modelling techniques.” For standard formula firms, the PRA is currently considering a number of areas and circumstances in which the standard formula may not be appropriate, for example, in capturing pension risk.

It will also trial its early warning indicators (EWIs) in the current individual capital adequacy standards (ICAS) regime for all UK firms using an internal model for regulatory capital assessment in the run-up to Solvency II implementation. Outlined by the PRA’s predecessor, the Financial Services Authority, last year, EWIs are to ensure the ongoing appropriateness of Solvency II internal models after approval. Adams said: “This will help the PRA’s supervision to monitor any downward drift in capital and inform its use and test the calibrations of the EWIs.”

Insurance in Gibraltar set to grow Despite a small population covering an area of only 6.8km2, the insurance industry in Gibraltar is set for continued expansion, driven largely by the country’s economic growth and a large motor insurance market. Despite global economic slowdown, the Gibraltarian economy grew by 11.4% during 2009-2010 and by 5.2% during 2010-2011.

Accordingly, the insurance industry grew by 12.3% in 2012, with gross written premiums totalling £3.6 billion. Growth in the UK automotive market has sparked Gibraltarian motor insurance.

TransRe files asbestos claims Millions of dollars are at stake as Transatlantic Reinsurance Co and its former majority shareholder, American International Group, battle over asbestos claims in several lawsuits. In March, TransRe filed two lawsuits against AIG over asbestos claims in state Supreme Court in New York. In a 1 March lawsuit, TransRe said AIG had agreed to settle asbestos claims

GETTY

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US$5bn

Estimated economic losses from the tornados that hit Oklahoma in May

US severe weather – 18-22 May

US severe weather – 26 May-2 June

Several multi-day outbreaks of severe weather caused significant damage across much of the eastern and central United States during May, causing billions of dollars in damage. The most notable stretch was highlighted by an EF-5 tornado, with up to 210mph (340kph) winds that caused catastrophic damage in Moore, Oklahoma. The tornado left 24 people dead, 387 injured and damaged or destroyed up to 13,000 homes and structures. At least 61 confirmed tornadoes touched down during the event. Total economic losses were expected to approach or exceed US$5bn (£3.2bn), with insured losses of US$2.5bn (£1.6bn) or more anticipated.

During multiple tornadoes in the greater Oklahoma City, Oklahoma and St Louis, Missouri metropolitan regions, at least 76 confirmed tornadoes touched down. This included an EF-5 with 295mph (475kph) winds in El Reno, Oklahoma, that had a record width of 2.6 miles (4.2km). The event was also notable for a major hailstorm in Amarillo, Texas, flash floods in the Plains and Midwest, and damaging winds in the Northeast. Total economic losses are expected to increase beyond US$2bn (£1.3bn), with insured losses in excess of US$1bn (£0.6bn). Insured hail losses in Amarillo alone stand at US$400m (£255m).

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

July 2013 • THE ACTUARY 15 www.theactuary.com

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News People & Society

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

Team gears up for

By Michael Tripp The sun shone brightly on a group of nearly 50 cyclists of all ages who braved a 27-mile ride around London, raising over £20,000 for the Company of Actuaries Charitable Trust.

At 8am on Sunday 2 June, the gates of Staple Inn were opened especially for us by the Profession’s staff. By 9am some 60 or so people had gathered to see the riders set off in four groups of around a dozen, led by an experienced guide from the London Bike Touring Company. The first group got away at 9.15am, including the Bridgeland family, with Colin, aged 8, riding on a

tandem, as well as Bill Rayner and his 14-year-old daughter and Sanjay Gupta and his 15-year-old son. Three other groups set off at intervals after that.

The route took in some lesser-known parts of London as well as the highlights of Greenwich Park, the O2, the Woolwich ferry, the Excel centre, the Olympic Stadium and a very crowded Columbia Road flower market. The guides had designed the route to be mainly along special bike routes, paths, tow paths by canals and even parts of the Greenway footpath, which, we were told, runs over one of east London’s main sewers! The sun

Super sleuths leave day job behind for night of mystery

By Nicole Tooze As the sun set on 23rd May, some 30 SIAS members and friends were transported back to New Year’s Eve, 1899, when George Sweet, the fifth Earl of Coddingham, was holding his ‘Last Gasp’ party and so the intrigue and mystery began…

Everyone transformed into a character for the night and each was given an envelope setting out more information about their character and objectives. It was then every man and woman for themselves! Some people ‘paid’ for information, while others tried to get as much money as possible for their knowledge. There were also some surprises throughout the night, including a proposal (unfortunately, an act) and a very dramatic death scene.

The night was run by two superb actors playing Sam Jenkins, the Earl’s legal adviser, and Inspector Crane.

Congratulations go to Abigail Clifton of AXA and Alex McDonald-Taylor and Nicky Adams of Barnett Waddingham, who won prizes.

Abigail, who played the Earl’s trusted managed to accrue the butler Jarvis, man most ‘money’. Alex’s team m came up with the most c convincing (and correct) c theory of who the murderer was. th Nicky won the prize for playing his N character, Captain Philip Ratliffe, in ch the th most entertaining way.

Many thanks to the fantastic M actors from Murder Mystery Games act and to Vodka Revolution for the great food foo and venue.

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.

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Birth Congratulations to Gareth Jenkins (Zurich) and his wife Helen (St. James’s Place) on the birth of their daughter on 13 April. Catherine Bethan is a sister to David.

Wedding Trevor Brooks (Aon Hewitt) and Jemma Slater (Legal and General) celebrated their wedding day last November with family and friends.

THE ACTUARY • July 2013 www.theactuary.com

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charitable success shone and each group went at its own speed to make the most of the sights and maximise enjoyment. Overall, the fastest group took just over four hours, and the slower, closer to five hours – a good bike ride by anyone’s standards.

The Master of the Worshipful Company of Actuaries, Bill Smith (pictured), stood out from the crowd, resplendent in his professional lycra and riding a Brompton.

Suffice to say, even on a fold-away bike, his was the group that managed the fastest time – it wasn’t a race, of course, but actuaries often like to compete!

At the end of the ride, sore legs and other

parts of the anatomy gave way to a sense of achievement and satisfaction. Sally Bridgeland was presented with a Chris Hoy signed montage for raising the most money (approximately £7,000) and members of the Master’s team received champagne for the encouragement they gave him! A great day and one that we might well repeat.

So what’s next for the Livery? Well, as if 27 miles on a bike wasn’t enough, it’s 180 miles on foot across the North York Moors, the Pennines and the Lake District on Wainwright’s coast to coast route.

Watch this space.

UCT wins award for actuarial transformation The head of actuarial science at the University of Cape Town, Shivani Ramjee, has won an award noting the role of UCT in transforming the actuarial profession.

The citation for the Association of South African Black Actuarial Professionals (Asaba) university award stated: “UCT is the institution that has most supported the work of our mentors. Shivani Ramjee (pictured on right with Asaba member Yageshree Moodley) has been extremely helpful in allowing access to students and encouraging them to participate in our activities. We have also enjoyed a good working relationship with Billy

Enderstein, the South African Actuarial Development Programme (Saadp) representative on campus. This has allowed students to benefit from the synergistic relationship between the two organisations. The school’s diverse student body also provides a good base for Asaba mentorship, allowing mentorship student numbers to grow by 80% between December 2012 and March 2013.”

Ramjee was pleased with the progress but said much still needed to be done. “We have an important role to play in the pipeline of potential actuaries,” she added. “We see this award as a call to further action.”

Deaths Rusi Kaikhushroo DARUWALLA died, aged 91. He became a Fellow of the Institute in 1958.

Alan FARNCOMBE died, aged 99. He became a Fellow of the Institute in 1941.

Professor Stanley Locksley SMALLER died, aged

81. He became a Fellow of the Institute in 1962.

Dr Raouf Halim MAKAR died, aged 92. He became a Fellow of the Institute in 1953.

Tony Peter WILLIAMSON died, aged 59. He became a Fellow of the Institute in 1990.

Building capacity in Rwanda

By Laura Llewellyn-Jones Just a year after our project started in summer 2012, we now have an actuarial examination centre in Kigali, Rwanda.

As part of my job as government actuary to Rwanda, I introduced a careful selection process to recruit mathematician and statistician officers for the Rwanda Social Security Board, who would then study for the first actuarial exam – CT1 – financial mathematics. Following success in the exams, we would then have part-qualified actuaries in Rwanda for the first time!

Applicants needed a mathematicsrelated degree of a good grade. They then sat an A-level mathematics type exam.

We also tested their level of English at the same time.

We invited all applicants to sit the exam (there were around 150 applications) and 86 applicants came on the day. After marking the exams, we interviewed the higher achievers and, following this process, we recruited our mathematicians/ statisticians.

We set up an exam centre at the British Council Offices in Kigali for the April 2013 sitting, when five candidates (pictured above with myself) took CT1.

I am both nervous and excited for the candidates. It is obviously much more difficult studying abroad for these exams and takes that extra special effort so I’ll be keeping my fingers crossed for them and wish them every success in their future careers.

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

July 2013 • THE ACTUARY www.theactuary.com

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24/06/2013 08:45

RISK

WORTH TAKING

“We are living in an uncertain world, both economically and politically, with unprecedented levels of monetary intervention.

So the primary challenge for the chief risk officer is to understand how these forces may play out”

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On my agenda features@theactuary.com

In uncertain times economically and politically, the role of chief risk officer takes on even greater importance. Simon Gadd, CRO at Legal & General, talks to Richard Schneider about the challenges of risk management from a life insurance perspective

It’s six months since Simon Gadd was appointed chief risk officer (CRO) at Legal & General, having previously run the insurer’s annuities business. So what are his big concerns and how is he enjoying the new career direction?

Tell us a little about your career to date.

I have spent all of my working career with Legal & General, joining directly from completing a mathematics degree at Oxford University.

Despite this, my career has been varied, having performed a wide variety of roles. Some of these have been actuarial, such as pricing, and some very much non-actuarial, including marketing, IT support and training in customer care. Most recently, I have run a variety of businesses, including our retail protection, group protection and annuities businesses.

Do you ever regret choosing an actuarial career?

Once I realised in my early teens that a career as a professional footballer was not possible, I had no regrets about my subsequent choice to become an actuary. It has given me a varied, stimulating and rewarding career. If I had been limited to technical actuarial work, I would probably have got frustrated.

However, actuarial skills combined with some commercial acumen and management skills open up great opportunities in a variety of influential roles. The insight that an actuary acquires into how an insurance company makes money from managing risk is a great asset in a business leadership role.

How do insurers compare with other industries in managing risks, and are there any risks life insurers should never have taken on?

Insurers are definitely more suited to identifying risk, as the taking and management of risk is core to their business model. However, there are examples of insurers becoming blind to some major risks in their business model, or stretching to areas

SAM KESTEVEN

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beyond their capability set, so there may be opportunities to learn from other industries.

In particular, manufacturing industries are probably more expert in identifying and managing operational risk. Insurers should not take on risks they do not understand or that cannot be controlled. An example was involvement in the credit default swap market.

What are the difficulties in developing a risk framework given uncertainty around Solvency II? The fundamental risks run by insurers do not change because of a change to the regulatory capital regime, so, to a degree, the risk framework can be designed and run without certainty on the Solvency II outcome. It is often best to think of regulation as just another risk to the business. If you understand the range of potential outcomes, this can be measured and monitored alongside other risks. However, from a capital planning perspective, it is clearly unhelpful that the timing and outcome of Solvency II is so uncertain.

What challenges do insurance CROs face?

We are living in a very uncertain world, both economically and politically, with unprecedented levels of monetary intervention by central banks. So the primary challenge for the CRO is to understand how these forces and events may play out and affect the insurer’s balance sheet and strategy.

In addition, the CRO needs to understand and help the business to interpret the changing regulatory landscape. With both the interaction between European intervention and UK regulation, and the potential effect of the two new UK regulators – the Prudential Regulation Authority and the Financial Conduct Authority – there is plenty of opportunity for overlapping and conflicting requirements. If the group is operating across different territories, each with different

regulatory environments, then balancing the desire for a consistent approach across the group against local constraints poses another challenge.

Does the CRO role have an upside and how do you measure success?

First, success is very much aligned to the success of the business. An insurance company that manages risks well will be well placed for long-term sustainable profitability, although this alone will not deliver success.

Investors in insurance company shares are looking for growing profit streams, but also predictability and minimal volatility. So the role of the CRO in helping the business minimise unexpected volatility through good risk management can often manifest itself in strong share price performance.

However, measuring the explicit impact of the CRO in a second-line role can be difficult and is clearly more subjective than assessing the performance of the first-line management team. Seeking the opinion of first-line managers regarding the influence exerted by the risk function is an important part of the overall assessment.

What does a typical day in the office look like?

Given that the CRO role looks across all the diverse activities of a group, it would be easy to spend all day in governance and other meetings. The CRO needs to create time to look outside their organisation at the external influences that may affect the performance of the company, including economic, market, regulatory, social and other factors.

What do you do in your spare time?

My wife and I have six-year-old twins, who tend to take first priority over any spare time!

My other passion is sport, so any time that remains is spent playing golf or watching sport – in particular, following my football team, Chelsea, or England rugby. a

July 2013 • THE ACTUARY 19 www.theactuary.com

24/06/2013 11:52

SIAS Events

TUESDAY 23 JULY

Debate: the role of today’s actuary Richard Chalk and Lisa Renton Staple Inn High Holborn, London WC1V 7QJ 5.30pm

PROGRAMME EVENT

This evening will present two debates, focused on the roles of an actuary. Following opening arguments for and against each motion, we’ll open the debate to the floor for what we hope will be a lively and interesting discussion. These debates are cross-discipline, so we hope to see attendees from every actuarial walk of life.

The motions up for discussion are: ● Any GI/life/pensions/investments actuary should switch to a different discipline at some point in

their career. ● It is more important for an actuary to have a good idea than to be able to effectively communicate

that idea.

Richard Chalk has worked at the Financial Services Authority (and now the Prudential Regulation Authority) for six and a half years. After beginning his career in investment banking risk, he moved into actuarial work three years ago. He currently works in the general insurance risk specialists department in the analytics team, where he focuses on capital modelling and Solvency II work.

Lisa Renton has worked in the general insurance London market for five years. She began her career working in underwriting at AIG, before changing career path and moving to actuarial at Travelers Syndicate Management Ltd. Lisa has been at Travelers for the past three and a half years and works as part of the reserving, pricing and planning team for aviation insurance.

Refreshments will be served from 5.30pm and the talk will start promptly at 6pm. There is no need to register in advance for this meeting.

FRIDAY 26 JULY

Boat party The Golden Jubilee, Westminster Millennium Pier Victoria Embankment, London SW1A 2JH 6.45pm

SOCIAL EVENT

All aboard The Golden Jubilee for the biggest party of the summer! Grrrrrr-ab your animal prints and cat ears, this year’s theme is Noah’s Ark! The party begins at 6.45pm at Westminster Millennium Pier. Be sure to be on time as the boat will board two-by-two and will leave at 7pm on the dot. We will return to Westminster Millennium Pier at 10.45 pm.

Once aboard, you will be greeted with welcome drinks to gear you up for a night packed with entertainment.

Plenty of food and drink will be available, so all you need to do is get your creative thinking caps on as the best-dressed girl, boy and group will get a prize!

Don’t paws for thought, tickets are on sale now and are priced at £20 for SIAS members and £25 for nonSIAS members. The ticket price includes food and a drink.

All are welcome, so please feel free to invite your herd along for a great night out. Please register interest at social@sias.org.uk.

This event proved to be extremely popular and unfortunately tickets have sold out!

For more details, contact SIAS Social.

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

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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

THE ACTUARY • July 2013 www.theactuary.com

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25/06/2013 08:16

Banking Asset/liability management features@theactuary.com

Solid as a rock?

Moorad Choudhry gives an overview of risk management in banking, and the challenges of building a framework for measuring liquidity risk The basic banking business model has remained unchanged since banks were first introduced in modern society. In essence, banking involves originating financial and market risk, and then applying effective management of that risk over the business cycle.

Of course, it is as much an art as a science and the model parameters themselves can be set to suit the specific strategy of the individual bank and whether it operates at a higher or lower risk-reward profile. The risk can be categorised as follows: ● managing the bank’s capital; and ● managing the liquidity mismatch between loans (assets) that generally have a longer tenor than deposits (liabilities).

The general term used to describe the above process is asset/liability management (ALM). Banking ALM is a philosophically different concept to pension fund or insurance company ALM. For a fund manager, ALM means ensuring that assets are invested in such a way as to be able to cover long-dated liabilities. In a bank, the business is one of maturity transformation – acting as a conduit through which shortdated deposits are turned into long-dated assets, so here ALM is the art of hedging the

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interest-rate and funding risks that arise from undertaking such transformation. As such, it is more a case of ‘balancing’ assets with liabilities than seeking to use current assets to meet future liabilities.

In this article, I describe the basic principles of ALM in banking, and consider the funding challenges posed by Basel III.

Background From its earliest antecedents, the basic banking model might be described in the following terms: ● leverage: a small capital base is levered into an asset pool that can be 10, 20, 30 times greater, or even higher; ● the ‘gap’: essentially, funding short to lend long. This is a function of the conventional positively sloping yield curve, and dictated by the recognition of the asset/ liability mismatch that arises when long-dated assets are funded by (contractually) short-dated liabilities; ● liquidity: an assumption that a

July 2013 • THE ACTUARY www.theactuary.com

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24/06/2013 13:39

Banking Asset/liability management features@theactuary.com

“The challenge for banks will be to set their strategy only after first arriving at a true and full understanding of economic conditions as they exist today. The ALM process is critical” bank will always be able to roll over funding as it falls due; ● risk management: an understanding of credit or default risk.

These fundamentals remain unchanged.

The critical issue for banks, however, is that some of the assumptions behind the application of these fundamentals have changed, as demonstrated by the crash of 2007–2009. The changed landscape in the wake of the crisis has resulted in some hitherto ‘safe’ or profitable business lines being viewed as risky. Although more favourable conditions for banking are sure to return in due course, for the foreseeable future the challenge for banks will be to set their strategy only after first arriving at a true and full understanding of economic conditions as they exist today. The ALM process is critical to this understanding.

In financial markets, the two main strands of risk management are credit risk on the one hand, which affects the bank’s capital base, and interest-rate risk, currency risk and liquidity risk on the other hand, which arise from the bank’s normal course of business.

ALM practice is concerned with managing all these risks, but particularly the latter from the treasury point of view.

Interest-rate risk exists in two strands. The first strand is the more obvious one: the risk of changes in asset-liability value due to changes in interest rates. Such a change impacts the net present value (NPV) of the cashflows of assets and liabilities, because financial instruments are valued with reference to market interest rates across the term structure. The second strand is that associated with optionality, which arises from products such as early redeemable loans.

22

The other main type of risk that is within the scope of ALM is liquidity risk, which refers both to the liquidity of funding markets and the ease with which assets can be translated to cash.

Whether an asset carries a fixed or floating-rate reset will determine its exposure to interest-rate fluctuations. Where an asset is marked at a fixed rate, a rise in rates will reduce its net present value (NPV) and so reduce its value to the bank; the opposite applies if there is a fall in rates. For assets marked at a floating rate of interest, the risk exposure to fluctuating rates is lower, because the rate receivable on the asset will reset at periodic intervals, which will allow for changes in market rates.

ALM is conducted at group level by the treasury desk rather than at individual operating levels. Such aggregation will produce a net mismatch between assets and liabilities, because different business lines will have differing objectives for their individual books.

This mismatch, or ALM gap, will manifest itself in two ways: ● the mismatch between the different terms of assets and liabilities across the term structure – referred to as the liquidity gap; ● the mismatch between the different interest rates that each asset or liability contract has been struck at – the interest-rate gap.

ALM profiles One of the principal challenges in ALM is that of managing the risks associated with liquidity and funding gaps. The balance of assets to liabilities drives the extent of this risk and also informs management action and the funding strategy. The simplest risk metric in use here is the loan-to-deposit ratio (LDR).

An LDR below 100% means the bank is fully funded by customer deposits and has no need to raise wholesale market funds to cover assets. Banks with a conservative funding philosophy, exemplified for example by HSBC, Santander, BNP Paribas and Standard Chartered, seek to maintain an LDR below 100%. The most conservative philosophy observed in the market is one that ensures that the bank is always a lender to the interbank market, and never a borrower from it. But such an approach would not suit every bank’s business model.

Balance sheet structure influences the funding philosophy of the bank and also drives its product pricing for customers.

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Figure 1 (i) Contractual gap profile

Figure 1 (ii) Behavioural gap profile

< 2 week

< 2 week > 2 week e < 3 month m > 3 month < 6 month m > 6 monthh < 12 month m > 1 year y < 2 year

> 2 weeeek < 3 monthh > 3 mooonth < 6 month n > 6 mooonth < 12 month n > 1 yeaaar < 2 year y > 2 yeeear < 5 year y > 5 yeeear -120

-100

-80

> 2 year e < 5 year > 5 year e -60

-40

SOURCE: THE PRINCIPLES OF BANKING (JOHN WILEY 2012)

-20

0 Deposits

Where LDR is in balance, a bank’s product pricing will reflect its customer depositsbased cost of funding (COF) and so the bank may benefit from a customer pricing advantage compared with one that has a LDR significantly above 100%, where COF will be heavily influenced by the wholesale COF. A bank with an excess of liabilities will typically place its funding surplus in risk-free assets or at the central bank.

Balance sheet structure also dictates the sensitivity of the bank’s profit stream to changes in interest rates. In a perfectly hedged world, assets and liabilities are both floating rate, linked to the same interest rate index and reprice on the same basis. Such a balance sheet profile would be indifferent to upwards or downward shifts in the yield curve. However, customers prefer fixed-rate products and, given that a ‘perfect hedge’ is not possible, the general condition is that asset-driven banks are negatively affected by an upward move in interest rates while liability-driven banks would benefit, and vice-versa. The job of the ALM desk in treasury is to immunise the bank against changing rates, in either direction.

The regulatory requirements facing banks over the medium term are myriad and wide-ranging. There is some overlap between global and national requirements, but the most wide-ranging regulatory reform is the Bank for International Settlements’ Basel III Accord. While there are important considerations for capital, it is in liquidity and funding that Basel III makes the biggest impact, with the imposition of two new liquidity metrics: the liquidity coverage ratio (LCR) and net stable funding ratio (NSFR).

For European banks, meeting the funding requirements of Basel III remains a challenge, although it is less so for Asia-Pacific banks, which traditionally have a conservative funding model.

The regulation burden extends

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20 Loans

40

60

-40

-30

-20

beyond Basel III of course. Requirements at EU and national level also affect banks, and foreign banks with operations in the US will also be subject to regulatory restrictions dictated by the Dodd-Frank and Volcker rules. However, in terms of ALM, Basel III is the most influential.

Basel III impact: liability types The impact of the liquidity coverage ratio (LCR) requirement is to encourage reduced reliance on wholesale funding and a greater share of stable customer deposits as a percentage of the balance sheet. The metric itself is given by: Stock of high-quality liquid assets > 100% 30-day stressed net cash outflows.

This metric demands that a bank holds a stock of ‘liquid’ assets to cover for any expected liabilities outflow during stressed market conditions. What constitutes ‘liquid’ is open to debate, with certain equities, corporate bonds and even residential mortgage-backed securities being eligible to form part of the liquidity buffer. However, the more prudent will restrict their liquid asset buffer (LAB) to cash at the central bank and AAA-rated T-bills and sovereign bonds.

The Basel committee prescribes outflow assumptions for the various types of liability on a bank’s balance sheet. Stable retail customer deposits such as current account balances have the lowest outflow assumptions, while wholesale market funds have the highest. Customer deposits also benefit from being assigned ‘behavioural’ tenor characteristics that reflect the fact that such funds are actually long-dated, far longer in tenor than their contractual maturity. A bank rich in such deposits can generate a smaller funding ‘gap’ for lower cost than a bank trying to meet LCR requirements via long-term wholesale liabilities. Figure 1 shows the marked difference in ALM gap profile at a UK commercial bank, plotting contractual gap profile against behavioural gap profile.

All else being equal, this drives a requirement for more customer deposits, so

-10

0 Deposits

10 Loans

20

30

40

50

as to minimise the size of the LAB, which is often a loss-making portfolio as the bank’s funding costs are invariably higher than the return on LAB assets.

Another major impact of the Basel requirements is the need for banks to better optimise their funding mix, due to the cost implications that the different types of liabilities present. From a strategy perspective, this calls for a formal review and articulation of a funding plan to incorporate: ● a comprehensive review of current liabilities, ordered by cost to the bank; ● determination of the cost of every type of funding, and its tenor characteristics, over the past five years. These results feed into the strategic funding plan going forward; ● a recommendation for the bank’s optimum funding mix, eg stable/non-stable split, regulatory impact, value for money; ● a target date at which the bank has reached the optimum mix, and a deposits plan to work to in reshaping the balance sheet.

This exercise is worthwhile for all banks.

Banks target different balance sheet structures and ALM profiles that reflect their individual business model. It is the job of the ALM desk in treasury to ensure adequate management of the resulting risks.

The principal risk management committee in a bank is the asset-liability management committee, reflecting the importance of ALM in banks. ALM requires consideration of both the balance sheet risks arising from the bank’s asset-liability profile, including interest-rate risk and currency risk, as well as the liquidity and funding risks that arise from the practice of maturity transformation a

MOORAD CHOUDHRY

FCSI is visiting professor at the department of mathematical sciences, Brunel University

July 2013 • THE ACTUARY www.theactuary.com

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24/06/2013 13:39

Modelling Cricket features@theactuary.com

Howzat?

On the eve of the Ashes, Cameron Heath and Joe Ryan issue a challenge that may leave you stumped – or could just win you an iPad mini four days or were unlimited or ‘timeless’. The last and most famous ‘timeless Test’ was in 1939 between South Africa and England – 1,981 runs were scored over nine days of play before the match was abandoned so that the England team could catch their boat back from Durban.

The first five-day Test match in England was played in 1948, and now all Test matches are five days, with approximately six hours of play per day.

Aside from the increasing ‘exposure’, other factors that may have caused the increasing run trend include batsmen scoring runs more quickly – possibly influenced by one-day and T20 cricket – as well as flatter pitches that are covered overnight and when it rains to help them maintain an even bounce of the ball, plus heavier bats. In determining ‘rating factors’, we considered the ground where the Test is being played, the teams involved and whether they are playing home or away, the players and even the date of the match. These explain much of the ‘claims’ variance in the diagram, much like age of driver, driving history, postcode, and model of car are used for rating a motor policy.

Australia scores more runs than national teams on average, and England scores at about average, so overall we would expect there to be more runs between these sides than the average Test match. But this summer’s Ashes will be played in England, where we generally see lower run totals than other countries. Also, different grounds lend themselves to higher or lower scoring matches – Old Trafford has a lower total average, The Oval is known to be good for batting and hence has a higher average, and we have too little data for Chester-le-Street, where the final match will be played, so have had to use first-class match data as a proxy.

A crucial factor in determining the number of runs is the ability of the players in the 1,500 2,000 current team – we can’t rely too heavily on

Following our successful football predictions article featured on The Actuary website in March 2013, in which we successfully used a stochastic model to predict the top six teams in the championship at the end of the season, we turned our attention to cricket. This time, we needed a different approach to meet a different challenge – trying to forecast the total runs scored by both teams combined, rather than how one team performs relative to another. Our solution was to build a rating factor model akin to that used in motor pricing, where ‘claims’ were runs and ‘exposure’ was days of play. With all sorts of rating factors and trends to analyse, and even a (negative) ‘cat’ loading, in the form of the British weather, we started by looking for historical data, and – just as with motor claims – there’s lots of it.

The average runs per test for all test matches since 1900 is 990, but you may not want to guess 2,970 (990 in each of three matches), as over time this figure has been increasing. There are a number of possible reasons for this.

As you might expect, we started by looking at exposure – the length of Test matches. Test matches are scheduled over five days, but this was not always the case. They used to be scheduled over three days, Graph 1: Distribution of runs scored per Test since 1900

0

500

1,000 Number of runs

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historic data. Australia’s once dominant position in world cricket is less evident today. At the time of writing, England have five players in the top 20 of the ICC Test Championship Batting Rankings compared with one for Australia, and four bowlers in the top 20 versus Australia’s three.

We also noted the date of the matches as a potential rating factor.

There are essentially two reasons for this – the weather and the state of the pitches. Britain’s great obsession is implicitly allowed for in past data, but that does assume the weather over these 15 days will be as it has been over the past century. Take note, there have been four test matches that were total washouts, where fewer than 50 runs were scored in total. You might want to fire up your cat model to help here.

As for the pitches, they are rarely used the season before the Test these days, but if they are, they may wear faster, making it more difficult to bat. In addition, pitches tend to dry out over summer, so will be harder, flatter and faster in August and September than in May. There are a host of other factors that could influence the total number of runs, which you may want to consider. It is also important to note the overlap between factors and to avoid double-counting.

Modern technology is playing a big role in insurance markets, with the use of telematics becoming increasingly important for motor insurance. Does modern technology – through improved training and the ability to scrutinise technique through watching television replays – affect the number of runs scored? Does the fact that players are playing more Test matches increase the number of runs, or does fatigue come into it? Likewise, covers and better drainage have meant that pitches are generally in better condition than in the past. Do better salaries and sponsorship deals motivate players to score more runs?

Just like changes in regulation impact insurance pricing, there have

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been many rule changes over the years that you may want to factor in.

For example the ‘no ball’ rule was changed in 1963 – in the 1962/63 Ashes series there were only five no balls, three years later there were 25. In 1931 the stumps were made higher and wider, and more recently we’ve seen the introduction of the Decision Review System.

It’s up to you how you make your prediction – detailed model or simply a guess – and just like pricing, the science is there to help; the key is getting the answer right. That said, we’re actuaries and we’d love you to tell us how you went about it, so there’s an optional space on the competition form if you’d like to do so.

With the Ashes starting in a few days, we are applying our actuarial skills to cricket and giving you the chance to win an iPad mini by doing the same. We want you to tell us how many runs you think will be scored by England and Australia combined in the third, fourth and fifth tests in total. An iPad mini will be presented to the person who is closest to the actual total. Full terms and conditions can be found at www.barnett-waddingham.co.uk/insurance/ashes-competition/

CAMERON HEATH (left) and JOE RYAN (right) are both members of the Insurance Actuarial Practice at Barnett Waddingham.

July 2013 • THE ACTUARY www.theactuary.com

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24/06/2013 11:53

Investment Africa features@theactuary.com

“ I blame

Bob Geldof ”

Andrew Slater considers the case for investment in Africa

oriented sectors remains an important economic driver, and an agriculture rebound in drought-affected areas will also help growth. Uncertainties in the global economy are the main risk to the region’s outlook, but plausible adverse shocks would likely not have a large effect on the region’s overall performance.’

I blame Bob Geldof: Monday mornings, silly names for children, unruly hair... but what I blame him for in particular is the enduring image of Africa, courtesy of Live Aid in 1985. While the image sticks in the mind, the reality has moved on tremendously.

In fact, Ethiopia is, after Nigeria, the second most populous country in Africa with over 80 million people. The population of Africa recently reached one billion people and is forecast to double by 2050.

But that’s OK, because there is lots of space, as the map graphic (far right) from FlowingData.com, The True Size of Africa, illustrates.

In 2013, Africa is the place where everyone wants to be seen: David Attenborough and team capturing the most magnificent wildlife scenes; and the Top Gear crew larking around and driving on better roads than we get back home in the UK. So why all the interest in Africa? Two reasons. The first I cannot articulate any better than the International Monetary Fund did in May in its Regional Economic Outlook survey entitled Sub-Saharan Africa: Building Momentum in a Multi-speed World: ‘Growth remained strong in the region in 2012, with regional GDP rates increasing in most

26

Level playing field

countries (excluding Nigeria and South Africa). Projections point to a moderate, broad-based acceleration in growth to around 5.5 per cent in 2013/14, reflecting a gradually strengthening global economy and robust domestic demand. Investment in export-

Figure 1 shows real GDP growth for various regions.

Africa is ahead of central/ eastern Europe and Latin America, and catching up with Asia. Figure 2 shows that, at the same time, inflation is under control. Emerging market investments also provide some much-needed diversification within investment portfolios as they are less correlated with developed market investments.

If you were comfortable that the UK environment would deliver 5.5% real GDP growth and that (against a background of quantitative easing) inflation is under control, then please turn the page to the next article. If not, and you observe zero yields on fixed income and the gyrations of developed market equity at the whim of politicians, then read on.

The second reason for the interest in Africa is closer to home. With the new statutory

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24/06/2013 08:47

FLOWINGDATA.COM: THE TRUE SIZE OF AFRICA

objective for the Pension Regulator to support scheme funding arrangements that are compatible with sustainable growth for the sponsoring employer, we finally have a level playing field where we can have a sensible discussion about investment strategy.

It is no longer an attitude of ‘if you have the cash then you have to pay the cash’, regardless of other uses for that cash. That was always a rather blinkered view of pension scheme financing, analogous to spending money on the seatbelts of a car at the expense of the brakes. That is not to say seatbelts are redundant in a car – they clearly are not – but it is a question of emphasis and balance. It is the same with a pension scheme’s investment strategy: there is need for balance between risk-minimising and return-seeking elements to the total portfolio.

Given that the environment is now conducive to sensible investment deliberation, how might a small allocation to Africa, say 1% to 2%, affect a pension scheme?

Such an allocation will not increase total portfolio risk because of diversification.

Based on Figure 3, a 2% diversified allocation across Africa would have shown as an extra 1% on the funding level over 2012.

I am not going to try to argue that investing in Africa is risk-free. Of course, there are risks, but risk levels are on the way down, and the risks take the form of ‘known unknowns’ – something that cannot be said about developed markets, where, thanks to the

“I am not going to try to argue that investing in Africa is risk-free. But risk levels take the form of ‘known unknowns’ – something that cannot be said about developed markets”

politicians and central banks, we are in an environment of ‘unknown unknowns’ and where risk levels are arguably increasing.

The key thing is that the risks of investing in Africa are expected to be handsomely rewarded, because the perception of risk by those looking in from the outside is greater than the actuality of risk. One common measure of the price of an investment is the ratio of enterprise value (EV) to the earnings before interest, taxes, depreciation and amortisation (EBITDA) operating profit. Figure 4 shows the EV/ EBITDA ratio has had a weak recovery in Africa following 2008 and is still well below the 10-year average of 2008, while other regions have significantly recovered.

So Africa is presenting cheap valuations and high GDP growth. How did we get to this position today? For me, the story of Africa’s renaissance started in the 1970s in China, when Deng Xiaoping, former leader of the Communist Party of China, said: It doesn’t matter whether a cat is black or white, as long as it catches mice. That change in attitude laid the seeds for the growth throughout China over the past decade. In turn, this has led to China’s involvement in Africa,

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Investment Africa features@theactuary.com

“There is a growing ‘middle class’ in Africa that is increasingly urban and has money left over each month for discretionary expenditure. This is the fundamental driver of Africa and explains why returns have been – and will be – phenomenal” Figure 1 Selected regions: real GDP growth, 2008–14

Figure 2 Selected regions: inflation, 2008–14 (end of period)

10% 8%

20%

2% 10% -2% Sub-Saharan Africa Developing Asia Central and Eastern Europe Latin America and the Caribbean

-4% -6% -8% -10%

2008 2009

2010

2011

2013 2013

Projected

MSCI FM Africa

Sub-Saharan Africa Developing Asia Central and Eastern Europe Latin America and the Caribbean

15% Percentage change

Percentage change

6% 4%

Figure 3 2012 returns from different African regions (£ based)

Source: Sub-Saharan Africa: Building Momentum in a Multi-Speed World, IMF 2013

34.93%

MSCI EFM Africa – ex ZA

40.65%

MSCI Egypt

22.42%

MSCI Ghana

10%

28.59%

MSCI Zimbabwe 5%

2014

46.62%

0%

2008 2009

2010

2011

2013 2013

Projected

2014

MSCI Kenya

54.79%

MSCI Nigeria

55.75% 0% 10%

20% 30% 40% 50% 60%

Source: Sub-Saharan Africa: Building Momentum in a Multi-Speed World, IMF 2013

Source: MSCI

including seeking commodities and building roads and infrastructure.

But the Africa story is much more than China. Africa is moving away from the loony politics of yesteryear and replacing it with democratic governments who behave in the fashion of a developed country. Africa is leapfrogging the West in one crucial area: technology. Kenya, with part-financing by Vodafone, has pioneered M-Pesa or mobile money. This mobile-phone-based money transfer system is the most developed mobile payment system in the world.

Thanks to these factors coming together, there is a growing ‘middle class’ in Africa that is increasingly urban and has money left over

each month for discretionary expenditure.

This is the fundamental driver of Africa and explains why returns have been – and will continue to be – phenomenal. Access to this growth is through the supply of old-fashioned equity capital for earnings growth and will take the form of both listed and private equity. But investors need to be aware of the unique conditions and terms of emerging market investment compared with those for developed markets.

So here’s an investment idea for you. Let’s suppose you find a life company that has had to turn away new customers because it has reached the maximum new business capital strain. Its domestic market is an emerging market for life insurance products, both risk and savings, of approximately 40 million people, a number which quadruples when you include the neighbouring region. Would you supply capital to facilitate that insurer’s growth? As Bob Geldof would (almost) say, show us the money! a

Figure 4 EV/EBITDA multiples comparison to African markets 16x

Africa markets combined Brazil, Russia, India, China, South Africa (BRICS) combined Developed markets combined

14x 12x

ANDREW SLATER is managing director of RisCura’s UK operations

10x 8x 6x 4x 2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Source: S&P Capital IQ, RisCura Fundamentals Analysis

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arts@theactuary.com

Arts It is 25 May 2013, the night of the Champions’ League final, but I’m forgoing this to see Highland Fling, a contemporary reworking of 19th-century Danish choreographer August Bournonville’s ballet La Sylphide, at the Festival Theatre, Edinburgh. Multi-awardwinning choreographer Matthew Bourne originally premiered the performance in 1994, and this ‘romantic wee ballet’ has been produced exclusively by Scottish Ballet, with the La Sylphide score performed by the Scottish Ballet Orchestra.

This is no traditional ballet. The setting is modern Glasgow, complete with tartan and a

Alvin Kissoon reviews the latest offering from Matthew Bourne, one of the UK’s most popular choreographers

Neil Lennon scarf above the door. The story revolves around James, a young Scot who is about to get married. Highland Fling opens at the stag and hen parties of James and his fiancée Effie at a Glaswegian nightclub. James encounters a Gothic fairy (the sylph) who then appears to him the next day in his council flat.

His love and obsession grows for the sylph and this journey takes him into a forest, where we discover whether his search for true happiness has been successful.

I am a fan of Bourne’s work. His reworking of traditional ballets are designed to make them more accessible to the audience,

including imaginative sets and contemporary twists. They also leave room for the audience to interpret the performances in their own way. I have previously seen Nutcracker! and Sleeping Beauty and enjoyed both performances – the best way to describe them would be fun. So I am looking forward to his latest show.

Act 1 does not fail to deliver. It is the morning after the stag do, with beer cans, an inflatable sheep and the obligatory male friend dressed in a bra; the mood is filled with touches of humour and there are plenty of laughs from the audience. The scenes with the

BOURNE TO CAPTIVATE

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At the back Arts

graceful sylph leading James astray are also fun, as we follow him into his obsession. As the curtain drops, James is fleeing into the city, and I await the second act with interest.

Act 2 is set in a forest with a rusting car and the city lights aglow in the background. A more traditional ballet emerges, with James dancing with the sylphs to a gothic and haunting theme.

Following on from the humour of Act 1, this seems less accessible. When the shocking conclusion arrives, it appears out of step with the rest of the act rather than something that has been slowly building.

The performances from the Scottish Ballet and Scottish Ballet Orchestra are very good, and the designs and settings certainly draw you into the scenes. There is a lot to like about this production. The distinction between the styles of the two Acts gives rise to comparisons, and I can imagine the talking point being the

difference between them rather than the good quality of the performance as a whole. And, at just 1 hour 35 minutes, including a 20-minute interval, it is much shorter than other ballets.

Overall, it has been a good night and Bourne’s productions will certainly be of interest to anyone who fancies trying contemporary ballet. This run of Highland Fling will have ended at the time of going of print, however, Matthew Bourne is showing his interpretation of Swan Lake at the Sadler’s Wells Theatre in Islington in December and January. London has an amazing variety of arts events and this is one example of something to look forward to for Christmas. It will certainly be very different to the day job!

“This is no traditional ballet. The setting is modern Glasgow, complete with tartan and a Neil Lennon scarf above the door”

Matthew Bourne’s Swan Lake will be at Sadler’s Wells, Rosebery Avenue, London EC1R from 4 December 2013 – 26 January 2014

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

Aon Benfield’s new Solvency II-focused version 6 of ReMetrica is the dynamic financial analysis tool of choice for the world’s leading actuaries.

ReMetrica continues to evolve to help reduce model size by up to 95% when tools are becoming increasingly complex in a Solvency II world. In addition, the latest version helps insurers more accurately model credit risk in today’s uncertain economic environment.

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

aonbenfield.com/empower

Empower Results™

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THE ACTUARY • July 2013 www.theactuary.com

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BOOK REVIEW

Diary of a Hedgehog: Biggs’ Final Words on the Markets by Barton Biggs PUBLISHER John Wiley & Sons ISBN 978-1118299999 RRP £19.99

“Biggs reminds us that... understanding the effect of human emotions and behaviour, both individually and collectively, is as important as having a rigorous investment process” What do a hedge fund manager and a hedgehog have in common? Sure, some might say that hedge fund managers have the tough spiny exterior required to fend off attacks on their performance fees – and you’d like to think their nocturnal habits include staying awake worrying about the positions they are taking with your money – but, generally, they are not ones to shy away in the undergrowth.

It turns out there is actually little in common save the first five letters in each of their names. Nevertheless, written by the late Barton Biggs, who was famed for predicting the dot-com bubble well before it burst, the hedgehog’s diary promises to provide its readers with some final insight into the mind of a successful and highly regarded investor and hedge fund manager.

Published posthumously in late 2012, the book is a

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chronological selection of Biggs’ investment commentary between mid-2010 and mid-2012 – a time of great uncertainty in global markets and experimentation in global policy.

Biggs has an engaging writing style. If he were still writing today, I would enjoy receiving these commentaries in my inbox. That way, I could dip in and out of them as I wished. The same might be said of this book, as even with the short contextual paragraph added before each chapter, one feels that the commentary loses some of its lustre outside the throes of the markets they describe. Indeed, one can’t help but feel that the book would be enhanced by the inclusion of the performance of Biggs’ own portfolios as compared with the market — if not over short periods, at least over the whole period covered.

It is worth persevering though, because it is also this immediacy of thought that provides us with the promised insight into how Biggs weighed up and considered key factors influencing his investment decisions. In addition, without the benefit of the housekeeping that a retrospective offers, these writings serve as a reminder of the need for humility when bad decisions are made. It would be an interesting exercise for asset owners to consider their own reactions to market events.

One episode that comes to mind lies in the middle of the period covered by the book: August 2011. This month saw sharp drops in equity prices across all major stock exchanges, driven by fears of contagion from the European sovereign debt crisis. It also sparked a protracted period of high volatility in those markets.

On 3 August, Biggs wrote: “A few more days of this, and we are going to get a powerful rally.” On 8 August, Biggs wrote: “No one can predict outcomes, but my guess must be only a day or two away from a powerful rally that could retrace half of the decline of the last two weeks.” On 15 August, Biggs quotes from Lord Tennyson’s The Charge of the Light Brigade and looks back at what history can teach us about booms, bubbles and bust – too little, too late?

But history lessons alone do not help the modern investor. “Bear in mind that Mr Market is both contrary and sadistic and thus loves to inflict the maximum amount of discomfort and pain on his worshippers.”

By giving Mr Market a personality, Biggs reminds us that markets do not behave according to the historical parameters of quantitative models and that understanding the effect of human emotions and behaviour, both individually and collectively, is as important as having a rigorous investment process.

The book ends with a conclusion written by Biggs, which could easily have been placed at the front. “I am struck with how hard it is to be an investor and a fiduciary. When managing risk in a portfolio… you always have to remember that there is the possibility of a catastrophic outcome.”

This is something for us all to bear in mind, at a time when policy has become a key driving force in markets.

Better to acknowledge and manage the range of risks, than to bury six hundred heads in the hedgerow of unknown unknowns. ● Jeremy Lee is a features editor at The Actuary

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

July 2013 • THE ACTUARY www.theactuary.com

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At the back Student student@theactuary.com

Student Desperately seeking sunshine or distant shores? Maybe it’s time to dust off your passport and sample life as a global actuary, writes Jessica Elkin

the party, so long as these bodies say you’re a good’un’. Likewise, Brits can transfer their achievements abroad under the same agreements. To find out more, simply look on the IFoA’s website – there is a paper for each actuarial association. They’re not obviously located, but there is a search box on the home page which can be put to good use. Otherwise, ‘How to register as a student’ is a good start.

THE FUTURE’S BRIGHT …BECAUSE IT’S ABROAD

What about beginners?

Actuaries are nothing if not hedonists, I’m sure. We live for the moment, footloose and fancy-free. However, as bright young things with bright long futures, we will undoubtedly at some point adjust our focus beyond the here and now, and think about what lies beyond the end of an examination script and the point of an examiner’s red pen.

One of the upsides of working with numbers is that they are essentially the same in every country – ‘two plus two equals five’, et cetera – and actuarial work is available globally, as you may notice reading through this international issue. So why not consider working away from the motherland?

Global actuarial citizen I met qualified actuary Melanie at a careers fair in Dorset, but her cheerful Aussie tones suggested she was not a local. Turns out, she is not only Australian but a wanderer of the world; a denizen of international climes. After leaving Oz, she worked in Hong Kong and the US before settling in sunny England. She gave me plenty of food for thought on worldwide actuarial mobility.

A common query from foreign actuarial students or qualified actuaries is whether they will be able to bring their qualifications and/or exemptions to the UK and work as actuaries over here. Melanie did not need to take new exams to be able to practise in these different countries; she qualified with the

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If someone from more exotic climes wishes to study in the UK, that is a possibility too. The tricky part is obtaining a visa, which will need to be applied for by a UK employer, so you’d need to get a company interested in hiring you in advance. Fortuitously, however, the IFoA has appointed education advisers overseas, whose role is to advise students and Australian Institute and was able to transfer the potential students on matters related to the credits to the UK. This was some time ago, but profession (particularly with regard to it seems the principle still stands. education, tuition and examination These days, the Institute and Faculty of activities). The IFoA also offers a reduced rate Actuaries (IFoA) has ‘mutual recognition for education services to help out students agreements’ with actuarial societies in South working or studying in certain countries.

Africa, Japan, Australia, Canada, India and the It’s a long list but, again, is available on the US, essentially meaning ‘come on in and enjoy IFoA’s website.

Helpfully, there are also various newsletters published online so that you get a feel for the work being done to help build the membership community. These are sent to members in different parts of the world to ensure that everyone can keep up to date with the activities of their favourite profession. Aspiring actuaries from these parts of the world are encouraged to write to the international newsletters team with any ideas or suggestions.

Gangster’s paradise Of course, you may not always need to transfer to a new qualification.

A UK Fellow of the IFoA is a prestigious position and may take you to foreign lands without having to jump through hoops. If you would like to try your hand as an ex-pat, visit www.theactuaryjobs.com for actuary jobs both in the UK and overseas. It’s the ideal place to start, surely!

Me? I quite fancy the Caribbean – possibly owing to a vision of lounging in a hammock with a cocktail in one hand and a calculator in the other. And palm trees, of course. Don’t forget the palm trees. a

THE ACTUARY • July 2013 www.theactuary.com

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At the back Coffee break puzzles@theactuary.com

Puzzles

Gridlock?

Mensa puzzle 553

—

A MENSE PRIZ E PUZZL

What number should replace the question mark in the grid?

—

Supermarket sweep Mensa puzzle 551

8 5 3 2 ?

At the supermarket, Faith buys DOUGHNUTS, CUSTARD, QUICHE, CARROTS and FENNEL. Who buys ONIONS, SAMOSAS, TOMATOES, FISH and SUGAR? For a chance to win a £25 Amazon voucher, please email your solution to puzzle 551 to: puzzles@theactuary.com

by Wednesday 17 July 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.

Mix and match Mensa puzzle 552

FAR

SHE

L

MEN

Watch out for that barrier! Bridge puzzle 34 South hands 2 ♠Q53 ♥ K986 ♦AKQ86 ♣2

3 ♠4 ♥AK94 ♦AKQ86 ♣ 853

North hands 4 5 ♠987642 ♠A762 ♥2 ♥J32 ♦32 ♦ 54 ♣ AQ54 ♣ AJ108

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?

Bridge puzzle provided by David Lampert

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5 2 2 0 2

1 7 3 3 0

3 4 9 5 3

6 5 1 4 7

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?

1 ♠4 ♥AJ72 ♦ AKQ86 ♣ 853

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

What letter should appear next in this sequence?

O

J

M

H

K

F

I

?

Answer to Bridge puzzle 33 ♠KJ8 ♥98 ♦KQ1065 ♣QJ10 N W

E S

♠Q109 ♥AKJ1076 ♦A ♣AK4

You are South and end up in 6♥. West leads A♠.

How will you play the heart suit?

ANSWER: Pity about the spade lead as you may have managed to dispose of your spades on the diamonds.

You now need to find Q♥. With 5 outstanding and no other knowledge, finessing is the right approach. Do you want to insure against a singleton Q♥ in the West hand by cashing a top heart and then finessing? No! If West has 1 heart, there is a 20% chance of it being the queen and 80% of being a small one, leaving East with 4 headed by the queen! To guard against a 4-1 break, finesse immediately. If it succeeds, finesse again. This guards against East having 4 hearts headed by the queen. Now if you had 5 hearts and Dummy 3…

July 2013 • THE ACTUARY 33 www.theactuary.com

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At the back Coffee break puzzles@theactuary.com

SOLUTIONS FOR JUNE 2013 Find a friend Mensa puzzle 548 Tanya’s friends are Sara, Nicky, Leon, Gemma and Kurt.

Who has friends named Lynn, Toni, Carl, Franco and Isaac?

ANSWER: Colin. The last letters of the friends’ names are reversed to give the answer.

A ship is battling against a strong tide to safety.

It uses 6.5 gallons of fuel every hour and sails at 17mph in still conditions. The ship is 22 miles from safety and the flow against it is 9mph.

The ship has 18 gallons of fuel remaining.

Will it reach safety?

ANSWER: Yes, with one eighth of a gallon of fuel remaining.

Congratulations to this month’s winner – Andrew Meikle of Barnett-Waddington

© Nylfia 34

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4

5

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Employer and area of work Government Actuary’s Department, advice to MoD.

How would your best friend describe you?

Reliable, honest, and good-natured.

What motivates you? Helping a worthy cause.

What would be your personal motto? Do what you can with what you’ve got.

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Tolstoy, Queen Victoria, mountaineer Edmund Hillary, first British astronaut Helen Sharman and actor Richard Burton. I’m not sure what we’d talk about, but I’d love to sit and listen to stories of their fascinating lives. Hopefully they wouldn’t talk about how bad my cooking is.

What’s your most ‘actuarial’ habit? I like planning ahead.

If you could learn one random skill, what would you learn? A foreign language.

Favourite Excel function? You can’t beat a good vlookup.

How do you relax away from the office? Playing sports; playing guitar and piano; and reading.

Alternative career choice? Realistically, teacher.

ANSWER: 9.75km

Unrealistically, astronaut.

Tell us something unusual about yourself In 2007, I did a solo trek of 350 miles across northern Spain over 18 days.

ANSWER: Congratulations to this month’s winner – John Flanagan, who wins a £25 Amazon voucher, courtesy of SIAS 2

Catch-up conundrum Mensa puzzle 549 Car A and car B set off from the same point to travel the same journey. Car A has a start of four minutes before car B sets off. Car A travels at 45km/h and car B travels at 65km/h.

How many kilometres from the starting point will the cars draw level?

Numerate and literate?

Crossword puzzle

D E D E K I N D I S O R E U H 9 10 D I A S P O R A D E S G L S B 11 12 O D O M E T E R P A 13 N N R R C N 14 P Y T H A G 15 16 17 L S D M I S 18 A R C H I M E D E S 19 G O S N F T 22 23 R O T A R Y O S C U A O A C R 24 N A P I E R 25C O L I G I L U N 27 26 E U C L I D S T A G

ROB TAILYOUR-HAYES

Name five dream guests you would invite to your dinner party? Russian novelist Leo

All at sea Mensa puzzle 547

1

ACTUARY OF THE FUTURE

Greatest risk you have ever taken? Moving to

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O P O W I N S C A O R E

O D A T T E A L E A S S

20

21

G F L A T E L R F O R M I A E S E T

Woolf in disguise Mensa puzzle 550 A quote by British writer Virginia Woolf has been split up and the groups placed in alphabetical order. anno avoi ceby ding dpea life tfin youc What should it say?

ANSWER:

You cannot find peace by avoiding life

California without a job – it worked out great in the end though!

If you could go back in history, who would you like to meet? I’d have to pick Isaac Newton.

What’s your most treasured possession? My Fender Telecaster electric guitar – although I wish I could play it a lot better than I do.

What are the top three things you would like to achieve in your lifetime? Financial security for my family; to visit every continent on earth; to skydive from the edge of space.

If you ruled the world, what would you change first? Being ruler of the world – no one should have that much power.

Do you know an actuary destined for greatness?

You can nominate an Actuary of the Future by emailing

aotf@theactuary.com

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Brazilian diversity

Geneva Association

Wish you were here?

As the world’s sixth largest economy, Brazil offers great opportunities and lifestyle

The leading international think tank of the insurance industry opens its doors

Actuaries working overseas report on the challenges and experiences encountered

JULY 2013 theactuary.com

The magazine of the actuarial profession

Switzerland

South Africa Japan

Brazil

Take flight A world of opportunities opens up for actuaries

February 2012 • THE ACTUARY

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The International Supplement Contents

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A more worldly actuary Derek Cribb considers the global spread of the actuarial profession

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Feature: Israel Ofer Brandt describes how he is creating a better future for actuaries in Israel

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Q&A: Brazil David Beatham discusses his reasons for moving to São Paulo

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Feature: Brazil Brazil’s rapid growth and the opportunities it has created

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Q&A: Switzerland Sonal Shah and an offer that was just too good to refuse

10 Profile: Geneva Association Sonal Shah and John Fitzpatrick discuss the association’s aims

14 Q&A: Dubai How moving to Dubai opened doors for Francesca Mills

15 Q&A: Singapore Mark Godson on grasping opportunities and broadening your horizons

Welcome In our international supplement we have a selection of articles from actuaries across the world. Each article has its own individual discovery, providing a bite-sized view of the challenges of living and working in a ‘foreign’ country. The geographical choice for actuaries appears to be growing as markets develop across the globe. This offers great opportunities for actuaries wanting to broaden their experiences.

There is a clear demand for experienced actuaries in developed markets to share best practice in new and developing markets; I am sure the traffic goes in the opposite direction too. While experiencing life abroad may have been difficult a decade ago, it now seems far more accessible.

As I read the last of the printed articles I was eager for more and I’m glad to report that we have a number of others online. I am sure that in years to come there will be a growing number of transfers across the actuarial globe. It really is a small world after all!

Deepak Jobanputra editor@theactuary.com

16 Q&A Tokyo Yosuke Fujisawa believes Japan can become a pioneer in the field of risk management

ONLINE Q&A: Australia James Claxton

Q&A: South Africa Watson Teo

Q&A: Switzerland Julian Tse

Q& A: Hong Kong Philip Bundy

Q&A: Germany Rob Lynch

Profile: Brazil Dinarte Bonetti

Profile: Brazil Ronald Poon Affat

Editor Deepak Jobanputra editor@theactuary.com International features editor Sarah Bennett features@theactuary.com Managing editor Sharon Maguire sharon.maguire@redactive.co.uk +44 (0)20 7880 6246 Display / recruitment sales Katy Eggleton katy.eggleton@redactive.co.uk +44 (0)20 7324 2762 Design / pictures Gene Cornelius / Akin Falope Sub-editors Caroline Taylor Henry Manners Production manager Jane Easterman +44 (0)20 7880 6248 Editor, Redactive finance division Mike Thatcher Publishing director Joanna Marsh

Published by the Staple Inn Actuarial Society.

The editor, The Institute and Faculty of Actuaries and Staple Inn Actuarial Society are not responsible for the opinions put forward in The Actuary.

No part of this publication may be reproduced, stored or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission of the copyright owners.

While every effort is made to ensure the accuracy of the content, the publisher and its contributors accept no responsibility for any material contained herein. © SIAS July 2013 All rights reserved Redactive Media Group 17-18 Britton Street, London EC1M 5TP +44 (0)20 7880 6200 Internet The Actuary website: www.theactuary.com SIAS website: www.sias.org.uk IFoA website: www.actuaries.org.uk

Circulation 22,733 (July 2011 to June 2012)

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The International Supplement Derek Cribb Derek Cribb considers the future for actuaries in terms of global spread and the opportunity that could offer to expand the scope of actuarial sciences. He also introduces Wen Li, lead representative of the Institute and Faculty of Actuaries in China and south-east Asia

A global future

COVER: BEN THE ILLUSTRATOR

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actuaries. And if we plot the changing practice areas of our membership against Australia, for example, we can see a clear trend (see Figure 1). Although there are still lots of roles in traditional areas, one might look to investment banking and investment management as obvious growth opportunities.

With more actuaries embedded in these wider fields, the profession has exemplars for new candidates who are targeting careers outside pensions and insurance, creating a virtuous circle. We must help address the mind-set of employers and candidates in mature markets. It is a challenging task but

with an increasingly globalised market we should look to build on advances into wider fields made by actuaries around the world.

To pick up the final point that Dr Avrahampour made at the Pensions conference, new qualifications should help actuarial science to develop. With this in mind, I remain excited about the Certified Actuarial Analyst qualification. If this is approved by our membership, then its broad nature will allow actuaries to cross sector boundaries and ensure that we continue to advance the scope of actuarial science in accordance with our Royal Charter.

Figure 1: Changing practice areas for actuaries in Australia 45% 40% 35% 30% 25%

Feb 2003 Feb 2008 Feb 2013 Aus

20% 15% 10% 5%

plo Pen ye sio e b ns en an e d Lif fits ei He ns alt ur ha an nd ce ca re ins o u Ge r ad ranc ne vic e ral e ins ur an ce ma Inv na est ge me m n ba nk I ent t ing nv (ad est vis me ory nt ) Ed uc Inf ati orm on ati on tec hn olo gy Ot he ra ctu ari Ot he al rn on -ac tu ari al En t ma erp na ris ge e r me isk nt

0%

em

Recognising the geographic diversity of our members and fostering a global community of actuaries is at the core of the IFoA’s international strategy, so I am extremely pleased to welcome you to this year’s international supplement.

At June’s IFoA Pensions conference, I was delighted to present a session with Dr Yally Avrahampour from the London School of Economics, which reviewed the development of the actuarial profession and also looked to the future. Many opportunities seem to be emerging outside the UK for actuaries. But the term ‘actuary’ seems to mean slightly different things in different locations, depending on the maturity and regulatory cultures of different markets. His thorough analysis of historical growth periods of actuarial science showed that in more permissive governance regimes, there was more scope for actuaries to work outside their traditional fields. The stringent regulatory system in the UK means that opportunities could be more restricted, so opportunities for developing a broader profession are likely to be located overseas.

In developing countries, the move from agriculture to manufacture and services brings improved longevity and increased assets, contributing to a marked growth in insurance premiums. As these countries take a greater share of global insurance business, the demand for actuaries can be expected to grow. The BRIC countries of Brazil, Russia, India and China tell a similar story. In Brazil, there are now almost 100 reinsurers; in 2007, there was only one. Similarly, the number of life insurers in India (including joint ventures) has shown steady growth from three in 2000 to over 20 in 2010. These new markets are an enticing opportunity for those willing to take advantage of them.

However, this is not to say that there are not opportunities closer to home – we often talk about actuaries moving into ‘wider fields’. In the UK, the convergence of the insurance and banking markets will continue to lead to a greater demand for actuaries in banking. In South Africa and Australia, other opportunities have opened up. In South Africa, employers view banking as a core activity for

The Institute in China and SE Asia, by Wen Li When I took up the role of lead representative of the Institute and Faculty of Actuaries (IFoA) in China and south-east Asia three months ago, I realised it was going to be different from any actuarial roles I had undertaken in the past.

In the capacity of this role, I am looking after the IFoA’s interests in China, Hong Kong, Singapore and Malaysia. My priorities include developing links with universities; encouraging a vibrant member community as well as building links with employers, local associations and regulators. I would like to ensure that members in the region feel a part of our global community and that our expertise can influence and boost the local markets.

We are currently organising quarterly member events in Beijing and Shanghai and have set up a mentoring system for our student actuaries. I’m also trying to help Fellows in the region to build technical links with Fellows in the UK. Please get in touch to discuss any ideas: wen.li@actuaries.org.uk or (0086) 138 1098 1647.

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The International Supplement Israel Ofer Brandt arrived at City University in London with just a suitcase to his name. Twelve years later, he returned home to Israel with his family and a freight container following closely behind. Now, to give back to the profession, he is championing the education of actuaries in Israel and beyond

Teaching the actuaries of tomorrow Having completed the one-year postgraduate diploma course in actuarial sciences at City University in London, I thought I would stay for just one more year before returning to Israel and finishing my actuarial exams.

But, 12 years later, I received a phone call early on a Sunday morning. On the other end of the line was the CEO of Clal Insurance Company in Israel. It was the opportunity I’d been waiting for, a senior position with the largest insurance company in Israel.

In November 2000, I found myself on the aeroplane to Tel Aviv, amused by the thought that 12 years earlier I had arrived in the UK with my then girlfriend and one suitcase, and here I was with my three little children and wife sitting next to me, knowing that a full freight container was following.

There is no doubt that my work in the UK provided me with the solid actuarial experience that I needed to develop my A new continuous career. Working with Liberty Life, a mediumeducational size unit-linked company, exposed me to a programme variety of essential technical actuarial work. means the future After five years with the company, I moved on is bright for and joined Tillinghast Towers Perrin, now Israel’s actuaries known as Towers Watson. There I worked with bright colleagues and actuarial friends, and developed a holistic approach to actuarial and management issues.

Coming home Relocating to Israel called for all the actuarial experience I had gained in the UK. Not long after my arrival, a change of shareholder ownership required me to calculate the embedded value of the company. This was a great opportunity to work closely with my reporting staff, learning the company’s business activities, and on a wider scale, familiarising myself with local actuarial practices, local regulatory framework and the structure of the local insurance market.

In recent years, the Israeli commissioner of insurance adopted and stated that he would continue to adopt international regulatory frameworks and practices, such as the IFRS accounting practice; European Solvency II and Market Consistent Embedded Value reporting. For a period of six years from 2005, I served as president of the Israel Association of Actuaries (ILAA). This was my way of contributing back to the profession, which I continue to do now by chairing the association’s education committee. I started with what I regarded as the most important issue, education – the raison d’être of any actuarial association.

Being a small profession (with a total of about 300 members), the ILAA lacks the financial resources and manpower needed to sustain a

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continuous educational programme. This was when the tight partnership with the Institute and Faculty of Actuaries (IFoA) began.

With the support of the UK Actuarial Profession, a memorandum of understanding between the two bodies was signed in 2008, allowing ILAA’s students access to the UK education and examination system.

Now, ILAA’s students sit the UK exams, but with one twist – they are allowed to write their answers in Hebrew.

This agreement has been a great success and, to my knowledge, was the first of its kind between the Institute and Faculty of Actuaries and a non-English-speaking association.

In 2009, the ILAA joined the Chartered Enterprise Risk Analyst (CERA) global initiative, marked by a multilateral treaty, signed in Hyderabad, India, during meetings of the International Actuarial Association (IAA). The treaty was backed by 14 IAA member associations, based in 12 countries around the world. Last month, the ILAA was formally approved to award the new CERA qualification for actuaries with unanimous support from the CERA treaty board.

Amidst all this activity, an ongoing project that the ILAA is working on together with the IFoA is the mutual recognition agreement between the two associations. I truly hope it will be signed by the end of this year.

I am convinced that the solid educational infrastructure we put in place will ensure that the highest standards of the actuarial profession in Israel are kept into the future and will develop generations of actuaries to come.

Ofer Brandt is a Fellow of the Institute and Faculty of Actuaries, a Fellow of the Israel Association of Actuaries and a chartered enterprise risk analyst of the Society of Actuaries. He holds a BSc from Tel Aviv University and an MBA from both the Kellogg School of Management in Chicago and Tel Aviv Recanati Business School.

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The International Supplement Brazil Q&A David Beatham is chief pricing actuary, general insurance, at Zurich, Brazil. After spending three months working on a consultancy project in Rio de Janeiro, he decided to make the move permanent and switch offices from the UK to São Paulo. Here, he provides an insight into his work in the emerging Brazilian market

Sunning it up in São Paulo Explain what motivated you to seek employment overseas I wanted the opportunity to work in a different culture, getting experience outside the UK market.

What attracted you to Brazil?

Swapping the freezing cold UK climate for a tropical climate is obviously a great benefit.

Brazil is so large – it would take years to fully explore the whole country. Between the magnificent Iguassu Falls, the Amazon rainforest, the sun-soaked beaches of Rio de Janeiro and the fantastic resorts in the north-east, there really is an almost unlimited scope to your travel options.

What were the main challenges you faced moving overseas?

Learning Portuguese is critical as English is not widely spoken. The vast cultural differences between Brazil and England take a bit of time getting used to as well.

What are the main differences you have found working overseas compared with working in the UK? Lunch is a very important part of the day. All Brazilians eat out for lunch in restaurants.

What is the most topical industry issue facing pricing actuaries in Brazil?

Pricing actuaries are relatively new within the Brazilian market. There has been a strong drive in recent years to focus on solid, technical-based pricing and more sophisticated rating tariffs. This is particularly important in the personal lines motor insurance market, where new entrants and increased competition have put increased pressure on bottom-line results.

What is the best thing about where you work?

The opportunity to chill out in the swimming pool or go to the beach at the weekend all year round.

And the worst?

São Paulo is world-renowned for having some of the worst traffic jams in the world. Most

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people use cars to get around the city of 20 million people because of the poor-quality local transport system. A heavy tropical rain storm during Friday night rush hour can bring the whole city to almost gridlock. Living near the office is an absolute must.

Tell us an unusual fact about São Paulo .

Over 300,000 Japanese people live there, mostly in the Liberdade neighbourhood. This is the largest Japanese population in the world outside Japan.

Do you have any advice for others looking for overseas work?

I think it’s important to visit the country first, either on holiday or, ideally, working as part of a project. Getting a work visa for Brazil is not a trivial process, so it’s best to try to get an internal transfer within a company or arrange the job before you decide to make the move.

Would you describe yourself as a global actuary and why?

I don’t think I can claim global status at this stage of my career. Before I do, I’d really need to have worked in at least three different continents.

The World Cup and upcoming Olympics have accelerated growth in São Paulo

What future opportunities exist in the Brazilian insurance market?

Next year is World Cup, and the 2016 Olympics in Rio de Janeiro have accelerated both the rate of investment in infrastructure and the interest of multinationals to enter in the Brazilian market. The level of penetration of insurance is still low, with only 25% of Brazilians buying motor insurance and even fewer buying household insurance. The theory is that this will grow during the next decade as the middle class develops, creating more jobs and more opportunities.

Have you noticed anything different to the UK from an insurance perspective?

Three of the differences I have noticed in the personal lines prices area are that there is no legal requirement to purchase motor third-party liability insurance. In fact, the primary focus for most customers is physical damage cover. Also, selling directly via internet or telephone is virtually impossible as there is an extremely powerful labour union for brokers. And, lastly, the motor insurance market is highly concentrated, with only three or four major players controlling the majority of the market.

Have you learnt a new language?

I’ve learnt Portuguese, which is a very important part of adapting to the Brazilian way of life.

Spanish is next on my list.

Have you taken up a new sport/pastime?

I’ve been educating the Brazilians about the English style of football (or lack of it). São Paulo has a large amount of bicycle routes and the warm weather makes it great for cycling every weekend.

July 2013 • A SUPPLEMENT TO THE ACTUARY 5 www.theactuary.com

24/06/2013 17:01

The International Supplement Brazil

Cocktail of growth factors As Brazil’s economy grows, its insurance market is also changing: an increasingly competitive marketplace is emerging within personal lines and companies are embracing the global trend of implementing a more rigorous enterprise risk management (ERM) framework.

Direct insurance in Brazil At present, customers across Brazil have had little exposure to direct insurance and have yet to experience the deluge of advertising that has driven the US and European markets.

There is only a limited culture of self service and a general expectation that a sales agent will be available to help customers.

However, Brazil is experiencing some of the fastest rates of GDP growth, and internet penetration across the region is growing rapidly. As the reach of the internet expands, so does the potential of internet-direct sales for personal lines insurance.

Naturally, the incumbent insurers and brokers are reluctant to cede their market share and have taken steps to strengthen their relationships against this potential change in distribution channels. This has left the door wide open for exploration of the direct channel to be led mainly by smaller players (which are typically part of larger multinationals) and other new entrants, all of which are keen to conquer a sizeable share of the market as first movers and capitalise on changing consumer trends. In a similar fashion, Direct Line stormed the UK market back in the 1980s, when its domestic market was dominated by brokers, as Brazil is now.

Rapid GDP growth and fast-increasing internet penetration across the region leave the door wide open for direct sales to take the Brazilian insurance market by storm. Sherdin Omar, James Littlewood and Nuno Vieira take a closer look at the market that is offering opportunities for beleaguered multinationals and start-ups alike The growth of Brazil’s economically active population could spark customer expansion

These same multinationals face stagnant growth and intense competition in their domestic markets, leading to significant pressure to maintain profitability, and they see Brazil as a chance to achieve global growth and profitability. During the next 20 years, Brazil’s economically active population is expected to exceed the dependent population (children and seniors), which provides huge potential for customer expansion. This cocktail of growth in internet usage, aggregators and economically active population could lead to a significant shake-up.

Could the landscape change?

Direct insurance is still at an embryonic stage, accounting for as little as 1 per cent of sales. However, a dramatic shift could be on the way, with four new price comparison websites being launched in the past year and the entrance of many new insurers that are backed by multinationals. Used to selling insurance direct to their customers, they will undoubtedly look to leverage their existing knowledge and systems to establish a significant market share.

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A SUPPLEMENT TO THE ACTUARY • July 2013 www.theactuary.com

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signals change for Brazil Benefits of enterprise risk management There is a growing interest in ERM among larger Brazilian firms, which have embraced measures ranging from explicit and clear risk appetite statements emanating from the top of the organisation to the reinforcement of internal audit, actuarial and risk management functions.

One of the main reasons for this trend is the competitive landscape. With new entrants and price comparison websites burgeoning, the incumbent insurers are operating defensive strategies to halt the

“Direct insurance is still at an embryonic stage, accounting for as little as 1 per cent of sales.

However, a dramatic shift could be on the way” commoditisation of their products. Their approach is to deploy strategies orientated towards product diversification, innovation and sustainable yields, where the assumption of taking riskier positions in search of higher profits is secured by a solid risk management framework.

Another reason for embracing ERM is the historical drop of interest rates in Brazil, which is forcing insurers to sustain lower combined ratios and to move to alternative investments, such as equity and real estate, to seek higher financial returns.

This means new approaches to underwriting, claims management processes, asset and liability management, and riskreturn optimisation of the portfolio.

For example, the automobile insurance market is characterised by strong players, fierce competition and a trend towards high combined ratios, exacerbated by the high frequency of fraud and litigation claims.

Hence insurers need a constant improvement in data governance, combined with wellinformed, risk-evaluating intelligence and technology throughout the processes of underwriting, risk classification, pricing, reserving and investment management.

Regulation The other reason for an increased interest in ERM is regulation. In 2013, Brazil’s supervisory authority, SUSEP, updated the 2008 risk-based capital framework. It issued several items of regulation to quantify capital standards for underwriting, credit and operational risk and allowing the introduction of internal models as an alternative framework to the current standard formula.

SUSEP is currently reviewing the market risk framework and a new framework is expected to be released by the end of 2013.

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Since 2004, SUSEP has required each insurance company to produce detailed monthly policy and claims data and an annual actuarial valuation report demonstrating the adequacy of all technical provisions as of the financial closing date. This includes making statements about data quality, methodological approaches and historical consistency of best estimates. The effect of this requirement was to reinforce the actuarial function within the governance structure in insurance companies.

Overall, the agenda for SUSEP in the next few years appears to be consistent with risk-based supervision and with the core insurance principles from the International Association of Insurance Supervisors and the International Actuarial Association.

Opportunities for actuaries in Brazil Brazil is a market that is becoming increasingly competitive and has a population that is still growing. Changes in the market, led by competition and regulation, offer a wealth of challenges and hence exciting opportunities for actuaries, spanning product design (general insurance and life), technical pricing, risk and investments.

In summary, sound and effective risk management may be the best strategy for Brazilian insurers to maintain their competitive edge.

Sherdin Omar is a senior manager in Ernst & Young’s financial services team and is based in the UK. James Littlewood is a director in Ernst & Young’s Global Insurance Centre and has a strategic business development role covering all of Latin America.

Nuno Vieira is a senior manager in Ernst & Young’s financial services team and is based in Brazil.

July 2013 • A SUPPLEMENT TO THE ACTUARY 7 www.theactuary.com

24/06/2013 17:00

Appointments

What is driving the demand for Actuaries in Asia?

At the recent General Insurance Conference (GIC) in Singapore a key challenge facing by Insurers in Asia is the forthcoming â&#x20AC;&#x153;Regulatory Tsunamiâ&#x20AC;?. Each country is experiencing a wave of new risk based capital regulations and enterprise risk management related initiatives.

In Singapore you have RBC2 and the ORSA both anticipated for the end of the year, ICAAP is new in Malaysia, Indonesian Financial Condition Report (FCR) was effective from June 2013 and the China Insurance Regulatory Commission (CIRC) intend to implement a 3 pillar structure, Thailand adopted RBC regulations this year and Hong Kong is in consultation regarding what they need to put in place.

Combined with the huge appetite to purchase insurance products as GDP per capita rises especially in the Big Emerging Markets (BEM) of China, Indonesia and South Korea. This volume of market activity and sector growth creates excellent opportunities for Actuaries.

Key skills needed by (Re) Insurers and Consultancies include: Â&#x2026; "DUVBSJBM .PEFMMJOH ° 1SPQIFU .P4FT "'. *HMPP BOE 3FNFUSJDB Â&#x2026; 'JOBODJBM 3FQPSUJOH ° .$&7 &7 &&7 *'34 Â&#x2026; 3JTL .BOBHFNFOU° 'JOBODJBM .BSLFU $SFEJU *OTVSBODF 3JTL Â&#x2026; $BQJUBM .BOBHFNFOU &DPOPNJD $BQJUBM .PEFMMJOH &4( 4PMWFODZ ** Â&#x2026; *OWFTUNFOU .BOBHFNFOU BOE "TTFU -JBCJMJUZ .BOBHFNFOU "-.

Â&#x2026; 1SJDJOH 1SPEVDU %FWFMPQNFOU To discover the energy, excitement and entrepreneurialism of working in Asia first hand please contact the International team at High Finance Group:

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Jason Sykes Director

Clare Bethell Senior Consultant

Collette Edwards Consultant

Hallie Chin Researcher

jason@highfinancegroup.co.uk

clare@highfinancegroup.co.uk

collette@highfinancegroup.co.uk

hallie@highfinancegroup.co.uk

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

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The International Supplement Switzerland Q&A Sonal Shah had just completed a Solvency II contract in London and was thinking of getting away for the British winter. Although she may have had somewhere warmer in mind, when an opportunity to work in Switzerland for four months presented itself, it was too good to say no to.

A winter escape? as the client needed me to start working as soon as possible.

Given the contract nature of my role, I had to make all travel and accommodation arrangements myself.

One of my main challenges was finding accommodation at very short notice, which is difficult enough in Zurich, and even more so for short-term tenancies.

How did you find the contract role overseas?

I had completed a Solvency II documentation contract in London, and was contemplating a few weeks off to travel to sunnier climes to escape the British winter. It just so happened that a recruitment consultant got in touch with me around that time to gauge whether I would be interested in working on a project in Zurich for a few months. I decided to apply for the role.

What attracted you to the particular country that you were working in?

Despite Switzerland not conforming to my hopes of ‘sunnier climes’ at that time of year, I was keen to revisit Zurich. It was a city I was familiar with, having previously worked there for three months a few years ago. I suppose spending winter in Switzerland compared with the UK wasn’t too difficult to weigh up!

What were the main challenges you faced when moving overseas?

As is often the case with contracting, an urgent need for a suitable resource means that the turnaround time from applying for a role to being hired can be very short.

I had under a week to sort out my move

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What are the main differences you have found working as a contractor overseas compared with contracting in the UK? In only a couple A popular approach to of hours, one can be on a mountain, contracting in the UK is to do it via one’s own amidst the limited company. I found wonderful Swiss that contracting is far countryside more complicated for foreigners in Switzerland whose company is not registered there. This was made worse by lack of time to overcome the mountain of Swiss bureaucracy. So the recruitment agency put me in touch with a company specialising in global payroll and contract management. For a not insubstantial monthly fee, given the cost of living in Switzerland, the management company arranged my work permit/registration, payroll, tax, social security, pension and professional indemnity insurance.

Effectively, the set-up was such that I was on the management company’s payroll as a consultant to the client. This meant that the contract was in my name. Such a set-up may not be favoured by some UK contractors, who carefully plan the structure of their limited companies around both personal and corporation tax efficiency. Depending on local rules, contractors may be allowed a certain personal tax-free expense allowance.

Despite the increased organisation and costs involved, contracting overseas can provide the opportunity to interact with a diverse group of professionals and to get involved in interesting and possibly more varied work than contracting roles in the UK, which are typically rather specific in nature.

Do you have any advice for others looking for contract roles overseas?

Do your research on how contracts are set up, work permit/visa requirements, the cost of living (given that, as a contractor, you will be responsible for all your expenses), tax and other compulsory deductions, local language requirements, lifestyle changes and cultural differences.

Don’t be put off by the extra administration involved in contracting abroad; the benefits far outweigh this. Taking on a contract role for a few months can be an excellent way to explore a new country while enhancing your actuarial experience.

What is the best thing about where you worked?

Nature in Switzerland is splendid. The excellent Swiss public transport means that, from Zurich, one can be on the mountains within a couple of hours.

And the worst?

Perhaps the temperature dipping to below -10 degrees Celsius in the city more than once.

Have you learned a new language?

I managed to improve a little on my basic German skills, and picked up a smattering of the local language, Schwyzerdütsch (Swiss German).

What was your favourite local custom / tradition and did you join in?

The Swiss love to make the most of their countryside; in winter months, winter sports in the mountains are very popular. Here, I discovered a new sport: snowshoeing. Not to mention the scrumptious Swiss chocolate and fondue – fortunately suitable fare for a vegetarian!

July 2013 • A SUPPLEMENT TO THE ACTUARY www.theactuary.com

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25/06/2013 08:20

The International Supplement Switzerland

Geneva Association: home What are the key objectives of the Geneva Association?

The Geneva Association (GA) is the leading international insurance think tank for strategically important insurance and risk management issues. It identifies fundamental trends and strategic issues, where insurance plays a substantial role or which influence the insurance sector. The Geneva Association membership comprises a statutory maximum of 90 chief executive officers (CEOs) from the world’s top insurance and reinsurance companies. Its members have total assets of more than US$11.7tn, are headquartered in 27 countries around the world and employ more than 2 million people who serve customers in more than 140 countries.

Sonal Shah meets up with John Fitzpatrick, secretary-general of insurance economics think tank the Geneva Association, to gain a closer understanding of the association, its work and its ambitions for the future

solely Swiss or indeed European organisation.

The chairman is from the US, as am I, although I have spent a large part of my career in Europe.

What are the three most important research topics for the GA? Financial stability, climate risks and ageing populations. Since the financial crisis erupted in 2008, policymakers around the world have been working on improving oversight of financial markets. The insurance sector has, rightly, been an area that they have been looking at. We support the G20-led efforts to tackle systemic risk in the financial system. However, any regulations imposed on insurance companies must be appropriate to address the risk presented and not affect the balance of insurance markets and the

Please describe the opportunities that the GA offers to its members It’s a very exciting organisation owing to the seniority of its membership. For example, at the annual general assembly (AGM) in London in June 2013, we had 60 chief executives around the table meeting regulators, senior politicians and central bankers for discussions on the economy, legislation and other issues that affect the insurance industry.

There are two key aspects of the association that our members seek and enjoy. First, with only CEOs as members, it allows industry leaders of both large and small companies to network and meet one another on equal terms, without distractions. The AGM is the main occasion for this, but others such as our annual Insurance and Finance Seminar also provide opportunities to meet other C-suite industry executives.

Second, we organise international expert networks and manage discussion platforms for the senior insurance executives and specialists of our members’ companies and provide an interface with policymakers, regulators and multilateral organisations.

Does the GA focus on Switzerland or reach out into the international arena?

The Geneva Association is very much a global organisation. As our members come from 27 different countries, we are far from being a

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to peak performers business of insurance unnecessarily. Over the past four years, we have produced research and analysis to support regulators in their understanding of the insurance industry and pursued an intensive dialogue with regulators, supervisors, central bankers and the insurance industry.

Second, we are interested in natural catastrophe risks, principally climate risks but also disaster risks as a whole. It is a fact that disasters are happening more often and they are causing bigger losses. Populations are growing rapidly and urban areas have grown enormously, concentrating economic risks. The value of the property that we own and the value of our possessions continue to increase rapidly. At our AGM we launched our most recent report, Insurers’ Contributions to Disaster Reduction – a Series of Case Studies, which provides an analysis of the ways in which governments and insurers can and do collaborate in mitigating the effects of catastrophes. The concept was developed as part of our ongoing dialogue with the United Nations International Strategy for Disaster Reduction (UNISDR).

Margareta Wahlström, United Nations special representative of the Secretary-General for disaster risk reduction, joined us for the conference.

A video of the meeting is now available on our website www. genevaassociation.org/ Although the financial impact of a major disaster is clearly noticeable in developed countries, an exceptional economic boom – driven above all by reconstruction – can quickly revive the slump in economic performance.

Insurance plays a significant part in this resilience. As an example, in Japan, after the 2011 earthquake and tsunami,

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“We have made a significant difference to discussions between the insurance industry and the regulators in dealing with systemic risk” some 90% of the US$38.5bn of insured losses was paid within three months of the disaster.

By creating an environment in which insurance can work efficiently, governments have the opportunity to share risk effectively with the private sector. That takes the potential cost of disasters away from their own economy and spreads it around the world through insurance and reinsurance. We are working hard to raise this issue with our governmental counterparts to aid progress.

Lastly, we are looking at the implications of ageing populations. Increasing life expectancy and falling fertility rates are creating a demographic situation that has become one of the greatest economic and societal challenges of the 21st century. Funding these longer lives will become increasingly difficult under current schemes. The sustainability of public and corporate pension schemes is also at risk – the cost of funding state pension benefits is set to rise dramatically – by more than double in some countries. This poses a considerable political and economic dilemma about how to keep the burden on the working population bearable while not sacrificing the standard of living for those drawing pensions.

Against this backdrop, governments and employers tend to shift responsibility for oldage security to individuals. The financial crisis has accelerated this. Insurers can make a meaningful contribution to old-age security if a conducive legal and regulatory framework is in place, devising innovative solutions for the broadest possible spectrum of society. We aim to foster a better collaboration between insurers and governments on this issue.

Tell us about the GA’s conferences We run a series of conferences, approximately 20 per year, on the issues that I’ve just mentioned. They are increasingly seen as a forum for discussion of insurance

issues and challenges. We are finding it necessary to limit attendance to keep the discussion at an effective level.

What would you see as the GA’s greatest achievement or influence to date?

The association has achieved a lot in recent years. In particular, we have made a significant difference to discussions between the insurance industry and the regulators in dealing with systemic risk. The work of regulators has required a broad overview of our industry, tackling misconceptions and educating regulators whose experience is primarily in banking about the role of insurance in the financial system at an international level. Our work has been well received by regulators and has helped in a series of areas: to decouple the regulatory process for insurance from that of banking; to encourage acceptance that core insurance activities do not create systemic risks; and to lead regulators to focus on activities rather than on institutions themselves.

What are the GA’s main challenges?

The global issues faced by the insurance industry – changes in regulation that may unnecessarily affect the way insurers do business, and the dual challenges of ageing populations and climate risks.

From an operational perspective we are a relatively small organisation and, like most, could always do with more resources.

What are the main differences you have found between working overseas and in the UK? I’ve worked in Europe, the UK and the US. They each have their own characteristics and merits. I can’t say I have a favourite, but it has been a pleasure to work within a broad range of cultures and styles.

July 2013 • A SUPPLEMENT TO THE ACTUARY www.theactuary.com

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Appointments

From Jamaica to Joburg Kadene Clarke shares her experience on coming to South Africa after starting off her career in the Caribbean.

WHAT IS YOUR BACKGROUND KADENE?

I spent two years working in pension consulting for Towers Watson in the US and five years working in life insurance in Jamaica and Barbados. I now work with Hannover Re Africa in the Corporate Actuarial department.

WHAT WERE YOUR REASONS FOR COMING TO SOUTH AFRICA?

HOW DO THE SALARIES AND COST OF LIVING IN SA COMPARE TO THAT OF THE CARIBBEAN?

Salaries are lower in SA than in the Caribbean but so is cost of living. Perhaps the biggest differential I see is with food. It is certainly cheaper here to go to a high-end restaurant and enjoy a three course meal than it is to do the same back in Jamaica or Barbados.

WHAT DO YOU DO IN YOUR SPARE TIME?

My fiancé and I teach Math to grade 4 and 5 kids on Saturdays in Soweto, which we absolutely love! Outside of that, we both enjoy hiking and travelling.

At the time that I was thinking of moving to SA, I was at a professional crossroads. I was not quite sure that I wanted to be an actuary but the thought of having to abandon the many years spent studying and start anew were quite daunting. SA was attractive, not only because of its developed life insurance market, but also because of the many non-traditional roles that actuaries play. The move presented the possibility of exploring something new while making use of my actuarial training and experience.

TRICKY QUESTION: BEING A “FOREIGN NATIONAL”, HOW DO YOU SEE BLACK ECONOMIC EMPOWERMENT IMPACTING THE JOB MARKET?

WHAT WERE THE CHALLENGES OF GETTING A JOB IN SOUTH AFRICA? ANY RESTRICTIONS?

Quite honestly, the job hunting process wasn’t as difficult as I thought it would be. Fortunately, the SA government has a special permit in place, which allows qualified non-South African actuaries to come to SA and explore opportunities.

I believe employers were more willing to meet with me because I already had a work permit. Sure, I encountered the challenge of not being a BEE candidate but the SA3 team was quite determined in their effort to find me a job that was in line with my expectations. I’ve now been with Hannover Re Africa for a year and I’ve never been happier!

There are a number of things that impress me with working in South Africa. Firstly, the level of actuarial knowledge and expertise here is quite impressive. I attended ASSA’s convention last year and was amazed by the depth and breadth of the topics covered. Secondly, it is very encouraging to see so many young people in very senior roles in organizations, from CEO’s to senior partners at big firms.

The youth have a lot to offer, and I don’t believe this is fully appreciated everywhere. I also love the fact that actuaries here take on a lot of non-traditional roles. This certainly raises the profile and marketability of the profession and discards the common notion of what an actuary should be.

WHERE ARE YOU SEEING THE GREATEST DEMAND FOR ACTUARIES?

ANYTHING ELSE YOU WANT TO SHARE?

The Life Insurance industry has quite a number of opportunities for actuaries. With the work that is being done with the government’s national health insurance scheme, I think you will see an increase in the demand for health actuaries in the public sector.

My experience in SA has been nothing short of amazing both on a professional and personal level. The country continues to face a number of challenges, but it seems to me that everyone is committed and willing to work together for the good of each other and the country.

HOW DOES THE SOUTH AFRICAN CULTURE DIFFER FROM CARIBBEAN / AMERICAN CULTURE IN THE WORKPLACE (AND IN EVERYDAY LIFE)?

The SA job culture is very different from what you would see in the Caribbean/America, although to be fair, my view of the SA workplace is based mainly on my experience at Hannover Re Africa, so I’m not sure how representative my view is, but there is definitely a greater work life balance here than in the

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Caribbean/America. Outside of the workplace, I would say SA is very similar to the Caribbean. Folks here are so warm and friendly. That, in itself, is the definition of the islands!

BEE will definitely play an important role in the job market.

However, I believe there are a lot of underdeveloped sectors such as education and health, which will benefit from the expertise of qualified actuaries, regardless of their ethnicity.

WHAT IS THE BEST THING ABOUT WORKING IN SOUTH AFRICA?

THE ACTUARY • May 2013 www.theactuary.com

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www.theactuaryjobs.com

South African Actuaries Abroad

SA3 is a dedicated actuarial recruitment company, run by actuaries. We pride ourselves in exceptional service and have numerous satisfied clients and candidates in South Africa and abroad. Our aim is to make the job searching process as easy and discreet as possible for the candidate and the filling of vacancies quickly and effective for the employer. Whether you are looking for a new challenge in South Africa, the UK, Australia or the rest of the world, we offer a dedicated and service focused recruitment solution unmatched by anyone else in South Africa.

Henda (FIA, FASSA) qualified in 2001 and has 12 years of industry experience. She has worked in life and health insurance in South Africa and Australia before she joined the team in 2009.

Her hobbies include running, tennis, camping, herb gardening and 4x4 trips with her husband and children.

wilhelm@sa3.co.za Cell: +27 (0)82 823 9978

henda@sa3.co.za Cell: +27 (0)83 603 2961

LIFE PRODUCT DEVELOPMENT SPECIALIST

0ɄɄȰȨȽȝ ȘɄɑ Ǹ ȽȐɬ ȃȣǸȵȵȐȽȝȐѵ

Wilhelm (FIA, FASSA) qualified as an actuary in 2004 and co-founded SA3 (South African Actuaries Abroad) in 2005 with his wife Helena. He worked in the Life Insurance Industry in both the South African and UK markets and gained his experience at some of the major insurers in both countries. His 3 kids take up most of his spare time, but besides that, he is a keen traveller.

His hobbies include any sport that’s played with a ball.

Cape Town Our client is searching for a Senior Actuarial Student or Newly Qualified Actuary to join their young and innovative new venture. The incumbent must be able to work independently and take initiative. Responsibilities will include research, development, pricing and implementation of life products.

BUSINESS DEVELOPMENT ACTUARY

Johannesburg We have a role for an outgoing and energetic newly qualified actuary with previous life experience to join our client’s business development team. The incumbent will be responsible to build and maintain client relationships.

GI ACTUARIAL SPECIALIST

Johannesburg A position for an Actuarial Student has become available within our client’s short term business. We are looking for a candidate with relevant experience and good technical skills to be involved in reserving, capital modelling and reporting.

HEALTH SPECIALIST

Cape Town Our client is searching for a senior resource with previous health, life or EB experience to expand the actuarial capacity within their company. Key responsibilities will include the pricing, design, reporting on and management of health products.

LIFE CAPITAL MODELLING SPECIALIST

Johannesburg We have a role for a suitably experience candidate (Newly Qualified Actuary) to join our market leading client’s capital modeling team. The successful candidate needs excellent exam progress and previous life valuations or capital modeling experience.

NEW INITIATIVES ACTUARY

Cape Town Our client is searching for a Nearly/Newly Qualified Actuary for a new exciting role in their Employee Benefit Business.

The incumbent should be able to work independently and be able to work with various stake holders. Previous EB experience will be beneficial.

LIFE CONSULTING ACTUARY

Cape Town or Johannesburg Our client is searching for a Nearly/Newly Qualified Actuary to take a senior role in their Cape Town or Johannesburg office. Responsibilities will include the full spectrum of actuarial services across a range of companies, including exposure to leading industry and technical developments. Previous valuations or technical life insurance background is required.

LIFE VALUATIONS SPECIALIST

Johannesburg We have various roles for candidates of all levels with previous life valuations experience. Roles range from valuations actuary to actuarial analyst and involves delivery of all corporate actuarial functions of the company.

www.sa3.co.za May 2013 • THE ACTUARY 47 www.theactuary.com

ACT.07.13.046-047.indd 47

25/06/2013 09:18

The International Supplement Dubai Q&A Francesca Mills followed her husband to Dubai for his work. Although she didn’t have a job prepared, she was happy to trade her British lifestyle for sunnier climes. However, the move gave her the chance to work in sectors that would not have been open to her and, two years later, she’s still not regretting it

A land of opportunity issue in a Muslim country, but that hasn’t been a challenge. There are differences across the region, but I’ve not found the UAE to be discernibly different from the UK.

Explain what motivated you to seek employment overseas.

My husband and I relocated for his job.

How did you find the role you are doing?

I moved over without a job and spent two or three months exploring my options. At the last minute, just as I was about to join a different company as a life actuary (my area of practice in the UK), a recruitment firm called to tell me about the Munich Health role. From our first meeting it seemed like the right fit.

What attracted you to the particular country that you are working in?

Having spent three decades in Britain, the sunshine was a big draw! For nine months of the year, Dubai enjoys a perfect climate and the lifestyle that goes with that.

What were the main challenges you faced when moving overseas?

This has to be one of the easiest countries to relocate to – it is set up to welcome expatriates.

The major frustrations arose from arriving under my husband’s sponsorship. It meant I needed his formal permission to do absolutely everything.

He even received a notification every time I made a purchase from our joint account!

Thankfully, I’m on my own visa now. In a work sense, I expected being female to be more of an

14

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What are the main differences working overseas compared with working in the actuarial profession in the UK? Dubai’s population is over 90% expatriate and the mix of nationalities is immense. One has to be respectful and understanding of different cultures. The working day Dubai is ‘set begins at 8am and can be up to welcome long, but my work-life expatriates’ – if balance is far better than in you can handle the UK. It helps that my the scorching ‘commute’ takes 5 minutes heat, of course and that the beach is right on the doorstep! From my own experience, there is more opportunity to prove yourself in a completely new role.

What is the most topical industry issue facing actuaries in the country where you work?

In my field, I think it is the ever-changing regulatory landscape. Each country in the region has its own regulatory regime. We see huge differences between Abu Dhabi’s forward-thinking Health Authority and Dubai’s less proactive equivalent, creating two very different health insurance markets in geographically adjacent Emirates. We know that Dubai will aim to catch up and that big changes could be right around the corner!

What is the best thing about where you work?

Variety. I get involved in almost all aspects of the business, from underwriting, through medical research and disease management, to financial forecasting. I like that I’m applying

the range of actuarial skills to different scenarios every day.

And the worst?

I’ll never get used to starting the working week on a Sunday!

Give an unusual fact about the city in which you work.

Dubai’s ultra-rapid expansion has left a few glaring omissions, such as the absence of street addresses!

What are the key attributes an actuary or actuarial student would need to work in your role / country?

Excellent communication skills. I’ve found my ability to phrase complicated things in a simple way has really been tested.

Where do you call ‘home’?

Home will always be York.

What is your favourite local custom / tradition and do you join in?

Whilst Dubai is very tolerant of non-Muslim cultures, Ramadan is strictly observed and it definitely changes. I like that the more spiritual atmosphere lends itself to reflection. I have attempted to fast for a few day to show support for my colleagues.

Have you learned a new language?

Not yet. English is spoken everywhere and appears on all signs, but some Arabic would be useful and show a commitment to the region, which expats in Dubai sometimes struggle to convey.

Have you taken up a new sport / pastime?

I’ve qualified as a fitness instructor. I meet amazing new people every day in my classes.

How often do you read The Actuary magazine? Do you read it online or in print? Do your colleagues read it?

I read it every month – it is a welcome break from the computer. It is important for me to keep up with the latest actuarial developments from the outside world.

SHUTTERSTOCK

25/06/2013 08:21

The International Supplement Singapore Q&A Mark Godson had always wanted to live and work overseas, but had never set his heart on anywhere in particular. When an opportunity to work in Singapore presented itself, he said yes and jumped on a plane eight weeks later. Four years on and he would recommend it to anyone

When opportunity knocks Explain what motivated you to seek employment overseas.

I had always wanted to work overseas, but without a specific place in mind. I thought it would be interesting from a professional and personal point of view.

How did you find the role you are doing?

One of the partners in the firm was asked to move to Singapore to set-up an actuarial office. He asked me if I would assist him. The opportunity was there and I decided to take him up on the offer. There were only about eight to 10 weeks between accepting the offer, and being on a plane to Singapore.

What attracted you to Singapore?

There were a number of factors that contributed. There is a huge difference working in a country with a rapidly developing economy compared to one that has already developed. The role meant that I could experience the full range of this spectrum.

I was forced to alter my way of working in each one, and really get to know individual industries rather than thinking of the region as one entire whole.

Secondly, it had to be somewhere that both my wife and I would be happy to live. We had previously visited Singapore, and thought that it could be that place.

Lastly, English is the main business language spoken in Singapore, meaning the transition would be easier.

What were the main challenges you faced when moving overseas?

From a professional perspective, the main challenge was that I had zero knowledge of the local life insurance industry in Singapore, or any of its neighbouring countries. My ideas on how things should be done were based on my UK experience, so I needed to adapt my way of thinking.

From a personal perspective, it was the fact that we were moving to a country that we had no connection to. While it was easy to meet people, it naturally takes a little while to form close friends. Luckily, we have made some lifelong friends from our time overseas.

SHUTTERSTOCK

p49 (15)_supplement_Singapore_Q&A_FINAL•CT.indd 49

What are the main differences you have found to working overseas compared with working in the UK? Actually, the main thing I have noticed is that actuarial work is very similar the world over.

The fundamental principles do not change, you are just applying them differently.

Would you describe yourself as a global actuary and why?

Yes. Working abroad has made me realise how universal and well thought of the actuarial qualification is, and how much of a difference you can make. I would certainly consider working in other locations in the future.

What is the best thing about where you worked?

I have had the pleasure of working with some fantastic people, both internally and with our clients. Working in a small team means that you can generate a strong team spirit and really get to know people.

Where do you call ‘home’?

London, and it always will be.

And the worst?

Some very long nights working in hotel rooms or project rooms.

Have you learned a new language?

Unfortunately not. I have learned a few words of a number of different languages, but they are usually food related, or occasionally insults.

Give an unusual fact about the country in which you work.

Apart from Monaco, Singapore is the most densely populated country Although one of in the world. However, the most densely because it’s so well populated cities planned, it doesn’t feel at in the world, all claustrophobic.

Singapore retains a sense of space

What is your favourite local custom?

Singaporeans love to eat out, and it’s easy to see why. Most people will go out to eat lunch, dinner and sometimes a late supper as well.

Have you taken up a new sport / pastime?

Being so hot, swimming is ideal. I could swim almost every day in fantastic weather.

How often do you read The Actuary magazine?

Each month, in print, and back to front like everyone else!

What are the key attributes an actuary or actuarial student would need to work in your country?

A willingness to adapt.

There are far fewer actuaries in companies here than in the UK and each person needs to take on a broader role.

Do you have any advice for others looking for overseas work?

Don’t be afraid to try it.

The absolute worst outcome is that you don’t like it and move back home again.

July 2013 • A SUPPLEMENT TO THE ACTUARY www.theactuary.com

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25/06/2013 08:21

The International Supplement Japan Q&A After working in Japan as a pensions actuary, Yosuke Fujisawa moved to Canada to obtain a masters in actuarial science. He returned to Japan with an interest in risk management and the belief that Japan could become a pioneer in the field, compelling him to change his career focus from pensions to risk

Risking it all for a better future

What country and city are you based in?

Tokyo, Japan.

Explain what motivated you to seek employment overseas.

In order not to conform to the stereotype, you should experience a different culture from your own.

How did you find the role you are doing?

I am curious about the role of actuaries in risk management. Insurance and pensions have a long history, but risk management doesn’t – it is possible to be a pioneer in the field.

That’s one of the reasons why I changed from pensions to risk management.

What might attract people to work in Japan?

Traditional architecture, delicious food and a feeling of hospitality. Not all Japanese can speak English, but we welcome foreigners.

You can feel the hospitality.

In terms of an actuarial career, we are facing difficult economic and demographic conditions that have never been experienced before, such as low interest rates and prolonged longevity. Some traditional actuarial techniques may not work in Japan.

We need to think ‘outside the box’. I believe

16

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that, in the future, the Japanese experience could be a lesson for other countries. One of my ambitions is to share what we learn from Japanese situations with overseas actuaries at international actuarial conferences.

enjoy Christmas and White Day. Good news for us when exams are held before Christmas!

What is the most topical industry issue facing actuaries in the country where you work?

For pension actuaries, protecting defined benefit (DB) plans is the most topical issue. A recent fraud committed Sardines: Tokyo by an investment adviser rush hour is in Japan, similar to notorious for Bernard Madoff ’s Ponzi being one of scheme in the US caused the busiest in some DB plans to lose the world part of their funds. This fraud triggered a debate about whether employee pension funds, traditional DB plans in Japan, should continue. This problem is now under discussion in Japan’s National Diet – similar to the UK Parliament.

Do you have any advice for others looking for overseas work?

Go for it. Working overseas will broaden your mental and intellectual horizons.

What is the best thing about where you work?

Job security. Japan has only 1,300 Fellows of the Institute of Actuaries of Japan in spite of the large insurance market. That scarcity contributes to our job security.

And the worst?

We have to take a packed train to and from our workplace in Tokyo.

Give an unusual fact about the country in which you work.

Actuarial exams are held around Christmas, and the results of the exams are issued around Valentine’s Day (14 February). Our central motivation to pass the exams is to

What are the key attributes an actuary or actuarial student would need to work in your role / country?

In the area of risk management, you need to have ‘healthy scepticism’. Unbiased views will prevent management from making mistakes and will lead them to success.

Would you describe yourself as a global actuary and why?

So far, I don’t think so, but I will be one day.

Where do you call ‘home’?

Waterloo in Canada. It’s the place where my foundations as an actuary were built.

What is your favourite local custom / tradition?

The voluntary spirit like we saw after the 2011 Tōhoku earthquake and tsunami. Many Japanese people volunteered to help the victims.

We can see a similar spirit in the actuarial field. For example, since Japanese universities don’t have actuarial departments, most actuarial candidates must take the exams while working. To support them, we started an online-based actuarial exam study group, which now consists of more than 600 candidates. They can access study materials for free, and they periodically gather to tutor each other. This voluntary spirit is part of the culture in Japan.

How often do you read The Actuary magazine? Do you read it online or in print? Do your colleagues read it?

I read the magazine online by seeing links through a Twitter feed that shows new articles – so it’s very convenient to read. I’m not sure my colleagues read it, but my actuarial friends on Twitter definitely do.

SHUTTERSTOCK

25/06/2013 08:22

SPONSORED BY

At the back Appointments peoplemoves@theactuary.com

Moves Keith Griffin has been promoted to senior vicepresident, chief actuary, at Ariel Re. He has been with the company in Bermuda since 2009.

Deloitte has appointed Jeremy Haynes (above) as a partner in its insurance practice. He will provide actuarial and underwriting services to commercial lines insurers and reinsurers, and joins Deloitte from RSA Insurance Group, where he was most recently director of insurance risk and portfolio pricing. A Fellow of the Institute and Faculty of Actuaries, Haynes has more than 23 years’ experience in actuarial, underwriting and risk roles.

She was previously a member of the executive management at SunGard Insurance, where she was responsible for the actuarial consulting services for life insurance.

Pedro Ortiz (below) has joined CNP Insurance Group in Madrid as head of business projects.

He has worked as a

consulting actuary for Barnett Waddingham and Hewitt, and more recently, as product actuary for AIG and AXA. Towers Watson has appointed James Davies (below) as a senior international consultant.

Davies joins from Mercer’s International Consulting Group in Chicago, where

Insurance specialist consultancy Pro Insurance Solutions has appointed Petra Wildemann (above) to the position of global practice lead for actuarial consultancy services, based in the company’s Zurich office.

Wildemann has over 25 years of experience in the insurance industry.

What’s coming up in The Actuary?

Read, contribute, comment, advertise The issue themes below are not exclusive – the aim is always for a strong crosssection of articles to cater for The Actuary’s wide readership.

While we take every care to adhere to the themes shown, please note that this schedule is subject to occasional revisions. Please check prior to particular issue deadlines for details.

USEFUL CONTACTS

August 2013 Published: 1 Aug Contributor deadline: 7 Jun Ad booking deadline: 16 Jul ● Life ● Soft skills ● Health and care

he was Midwest leader.

A Fellow of the Institute and Faculty of Actuaries, Davies began his career with Hewitt, Bacon & Woodrow, where he was a senior actuary, scheme actuary and pensions consultant before joining Mercer in 2004.

Guy Carpenter has announced that Jason Hurley (right) will join Guy Carpenter as managing director of UK life reinsurance as from 2 September. Hurley will be based in London and will be responsible for building the firm’s life reinsurance presence

MAY 2013 theactuary.com

APRIL 2013 theactuary.com

Interview: Mansel Aylward

The magazine of the actuarial profession

in the UK and Ireland.

He joins from RGA UK Services, where he was senior vice-president, business development.

A Fellow of the Institute and Faculty of Actuaries, he has also worked for AMP-NPI, Actuarial Education Company and Sun Life.

A vision for a healthier, happier nation

JUNE 2013 theactuary.com

Interview: John Kay

The magazine of the actuarial profession

The mild-mannered prophet of doom

Health

Underwritten annuities

Engaging products for consumer protection

A compilation of articles on planning for retirement

General insurance

Pensions Long-term end game or living in the moment?

A known unknown: defining and measuring claims inflation

Arts Alan Turing: beyond the enigma

Arts The golden years of a glam rock megastar

Interview: Steve Webb

The magazine of the actuarial profession

The pensions minister talks exclusively to The Actuary

Risk Underestimating the value of intangible assets

Reinsurance Can capital relief unlock hidden benefits for long-tail business?

Arts Bi(centennial) birthdays and the wonder of theatre

COMING OF AGE Cost casts shadow over longer life expectancy

September 2013 Published: 5 Sep Contributor deadline: 8 Jul Ad booking deadline: 20 Aug ● Reinsurance ● Environment ● Modelling and software October 2013 Published: 3 Oct Contributor deadline: 1 Aug Ad booking deadline: 17 Sep ● General insurance ● Careers: wider fields ● Risk management ● Mortality/longevity

FIT FOR PURPOSE

Planning a prosperous future for retirement

November 2013 Published: 7 Nov Contributor deadline: 13 Sep Ad booking deadline: 22 Oct ● Solvency II ● Pensions ● Life

Editor editor@theactuary.com Newsdesk news@theactuary.com Features features@theactuary.com

HUNGRY FOR POWER

Switched-on actuaries in the sustainability markets

December 2013 Published: 5 Dec Contributor deadline: 7 Oct Ad booking deadline: 19 Nov ● Soft skills ● Enterprise risk management ● Investment

Student student@theactuary.com Arts arts@theactuary.com Advertising katy.eggleton@redactive.co.uk July 2013 • THE ACTUARY 51 www.theactuary.com

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25/06/2013 08:18

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

The ball is in your court High Finance Group (HFG) work on a range of Actuarial roles within a variety of Actuarial teams in the UK and internationally. If you are interested in discovering the potential roles that would suit you and your aspirations please get in touch with one of our dedicated Actuarial consultants who have an extensive knowledge of current market trends and conditions.

General Insurance Roles Head of Actuarial

Pricing Actuary £120k - £150k Basic, London

£100k - £125k Basic, London

New Lloyd’s Syndicate with a small Actuarial team is looking for a qualified Actuary to join their managerial team. This role will work across pricing, reserving and capital modelling whilst growing the Actuarial division. The right person should be a qualified Actuary and previous Reserving and Pricing exposure would be beneficial. This position offers great exposure to the Board and is a unique opportunity.

William@highfinancegroup.co.uk

Leading General Insurer whose Actuarial function has grown dramatically over the last 3 years is looking for a senior pricing Actuary to join their team. The right person should have previous pricing experience and relish working closely with the Underwriters. The role will suit someone who enjoys a challenge and ideally has a strong IT background too. Either personal or commercial lines will be considered.

William@highfinancegroup.co.uk

Capital Model Developer

London Market Reserving Actuary Up to £80k Basic, London

Upto £100k Basic, Surrey A rare chance for an experienced Capital Modeller to go back to the roots of their profession and be part of a team coding and developing a new product within the General Insurance market. This product is at the early stages of development and will give the successful candidate the opportunity to see a process right the way through to completion and offering to market. The successful candidate will have strong capital modelling experience and be looking to go back to the development side of the work. James@highfinancegroup.co.uk

A large London Market player is looking to recruit a nearly qualified Non-Life Actuary to join a new team within their Reserving function. The role will work across; the Solvency 2 Technical Provisions and Quarterly Reserving processes. A key selling point of the role is the calibre of the team you will be working with, providing great development and training opportunities. The role will grow with the teams expansion providing you with excellent career progression. The ideal candidate will be nearly qualified or have the equivalent experience.

James@highfinancegroup.co.uk

Corporate Actuary

Syndicate Reserving Analyst £50k - £65k Basic, London

This successful US insurer is looking to add a talented Senior Analyst to their Corporate Actuarial team, taking over reserving and capital modelling responsibilities. You will gain early responsibility whilst building on your commercial and personal lines knowledge, opening various doors for you within the market. To be successful you will have previous reserving experience and be approaching qualification as an Actuary. Chanelle@highfinancegroup.co.uk

Head of Actuarial

JAMES KITT Consultant - GI

CHANELLE ROSENBAUM Consultant - GI

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

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

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

WILLIAM GALLIMORE

+44 (0) 207 337 8800

ACT.07.13.052.indd 52

£40k - £70k Basic, London Rare opportunity to join the reserving team of this market leading Lloyd’s syndicate, working closely with the Head of Reserving whilst liaising with other actuarial team members. This position will provide you with a broad insight into the business, the chance to take significant responsibility within the Reserving process whist receiving excellent training from senior management. To be successful you will be part-qualified and have previous Non-life reserving experience.

Chanelle@highfinancegroup.co.uk

www.highfinancegroup.co.uk

25/06/2013 08:27

London : Chicago : Hong Kong : Singapore : Shanghai

www.theactuaryjobs.com

Non-Life Reserving Actuary - Germany/Switzerland 6HQLRU 3 & $FWXDU\ *HUPDQ\ $WWUDFWLYH 6DODU\ %HQH¿WV 3DFNDJH $WWUDFWLYH 6DODU\ %HQH¿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\ TXDOL¿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 %HQH¿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 EHQH¿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 ¿UVW GHJUHH DQG FRPPLWPHQW WR HLWKHU WKH ),$ RU &)$ TXDOL¿FDWLRQ

&RQWDFW VLPRQ DUWKXU#LSVJURXS FR XN +44 207 481 8686

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\ TXDOL¿HG 3 & DFWXDU\ ZLWK experience in reserving and Solvency II. Very good communication skills are required and prior international experience would be a plus.

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3ULFLQJ $FWXDU\ 6ZLW]HUODQG &RPSHWLWLYH 3DFNDJH Our client, a multinational property and casualty reinsurer, is ORRNLQJ WR HQKDQFH WKHLU WHDP ZLWK D -XQLRU 3ULFLQJ $FWXDU\ 7KH main remit is to provide actuarial pricing support for underwriters across property, casualty and specialty lines of business. You will also interact with clients and brokers. Additional responsibilities include the maintenance and development of actuarial models and tools. Strong VBA and Excel skills are required. Relevant experience in commercial property and casualty reinsurance is H[SHFWHG 7KH LGHDO FDQGLGDWH LV D QHDU TXDOL¿HG DFWXDU\ 6$9 DAV, FIA, CAS etc). Fluent English is a must, good knowledge of another European language would be an advantage. &RQWDFW SKX QJRF#LSVJURXS FR XN +44 207 481 8686

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May 2013 â&#x20AC;¢ THE ACTUARY 53 www.theactuary.com

25/06/2013 08:28

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

THE ACTUARIAL TEAM tŽƌŬŝŶŐ ĨƌŽŵ Žĸ ĐĞƐ ŝŶ >ŽŶĚŽŶ ĂŶĚ ƵƌŝĐŚ ŽƵƌ ĐŽŶƐƵůƚĂŶƚƐ ƐĞƌǀŝĐĞ ĐƵƐƚŽŵĞƌƐ ĂĐƌŽƐƐ >ŝĨĞ͕ EŽŶͲ>ŝĨĞ͕ WĞŶƐŝŽŶƐ͕ /ŶǀĞƐƚŵĞŶƚƐ ĂŶĚ ,ĞĂůƚŚĐĂƌĞ ǁŝƚŚ Ă ƉŽƌƞ ŽůŝŽ ŽĨ ĐůŝĞŶƚƐ ŝŶĐůƵĚŝŶŐ /ŶƐƵƌĂŶĐĞ ĐŽŵƉĂŶŝĞƐ͕ ZĞŝŶƐƵƌĞƌƐ͕ ZĞŐƵůĂƚŽƌƐ͕ ŽŶƐƵůƚĂŶĐŝĞƐ ĂŶĚ ZĂƟ ŶŐ ŐĞŶĐŝĞƐ͘ tŝƚŚ Ă ƌĞŶĞǁĞĚ ĂŶĚ ŝŶĐƌĞĂƐĞĚ ĨŽĐƵƐ ŽŶ ƚŚĞ ŵĂŶĂŐĞŵĞŶƚ ŽĨ ƌŝƐŬ͕ ƚŚĞ ƌŽůĞ ŽĨ ƚŚĞ ĐƚƵĂƌLJ ŚĂƐ ŶĞǀĞƌ ďĞĞŶ ƐŽ ďƵƐŝŶĞƐƐ ĐƌŝƟ ĐĂů ʹ ĂŶĚ ŝƚ͛Ɛ Ă ŵĂƌŬĞƚ ƚŚĂƚ ǁĞ ŬŶŽǁ ŝŶƐŝĚĞ ŽƵƚ͘ :ĂŵŝĞ tĂůŬĞƌ DĂŶĂŐĞƌ Ͳ >ŝĨĞ ĐƚƵĂƌŝĂů

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E j.walker@darwinrhodes.com +44 (0) 207 621 3775

E c.carroll@darwinrhodes.com +44 (0) 207 621 3759

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THE ACTUARY • May 2013 www.theactuary.com

ACT.07.13.054.indd 54

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ACT.07.13.055.indd 55

May 2013 â&#x20AC;˘ THE ACTUARY 55 www.theactuary.com

24/06/2013 14:16

Appointments

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High Finance Group

www.theactuaryjobs.com

Life Insurance Roles M&A Technical Lead

Risk & Capital Actuary £90k - £130k Basic, London

£90k - £130k Basic, London

An opportunity for an experienced Actuary to join this privately backed insurer. Working with the CRO and Chief Actuary, you will have previous knowledge across Risk & Capital management, taking responsibility for the development and integration of the new reporting methodology frameworks. Exceptional communication skills and demonstrable business acumen are essential. Graeme@highfinancegroup.co.uk

This is an exceptional opportunity to become an integral member of the Senior Management leading M&A valuations. Sitting within the Group function, you will play a key role in strategic development. A proven track record working on M&A and influencing stakeholders to Board level are key to success in this position.

Graeme@highfinancegroup.co.uk

Policy Specialist

Group Protection Pricing Actuary £80k - £100k Basic, London

£55k - £80k Basic, London

A new role within an advisory team tasked with researching and lobbying on Public Policy affairs across the industry. This is an excellent chance to network across the Insurance 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

An experienced newly-qualified Pricing Actuary is required for the Group Protection team of this International Life insurer. Technical ability and prior protection product experience are essential, with internal development encouraged. This is a great chance to become fast-tracked in an exciting International business and gain significant experience in a challenging environment. Jack@highfinancegroup.co.uk

Solvency II Risk Actuarial Analyst

Systems Actuarial Analyst

£40k - £60k Basic, London

£35k - £55k Basic, London

A multi national life insurer is looking for a part qualified actuary to join their Solvency II Group risk function. This role will be helping with the application of the internal model with focus around analysing the risk function. You will have an excellent academic background and prior life insurance experience, ideally centred around Solvency II and Risk.

Sophia@highfinancegroup.co.uk

A leading life insurer is looking to increase their systems function and bring in an ambitious actuarial student. You will be responsible for building models as well as liaising with the other teams. This is the perfect role for a senior student who has an excellent technical background. Previous life insurance knowledge is essential and management experience is preferred. Sophia@highfinancegroup.co.uk

Senior Actuarial Analyst

Commercial Finance Actuary

£35k - £65k Basic, South Coast A mid-sized composite insurer seeks a Senior Actuarial Analyst to support qualified actuaries in their Capital, Pricing, Reporting and Systems teams. The position offers rotation across all areas, allowing the successful candidate to choose the direction of their career. This role will suit an experienced Actuarial student looking to diversify their skill-set. Jack@highfinancegroup.co.uk

£80k - £120k Basic, London This position is pivotal in business strategy development, profitability and financial effectiveness. You will have excellent market and life insurance product knowledge with experience in senior stakeholder interaction. Reporting to the commercial finance lead, this is an untraditional opportunity offering senior management and range of diverse responsibilities. Graeme@highfinancegroup.co.uk

Contract Roles GI Actuarial Contractor

Prophet Modeller

£700 - £1100 a day, 6 months, London

£700 a day, 6 months, South Coast

General Insurer with an Actuarial team of 25 is looking for a qualified Actuary for 6 months to support their Actuarial function, the right person will work across reserving and capital modelling with some exposure to the pricing function too. Either personal or commercial experience will be considered. William@highfinancegroup.co.uk

A well-established Life insurer requires a Prophet Developer to rebuild their existing Pricing models in Prophet. The role requires strong Prophet development experience and the ability to replicate models from scratch and is suited to Prophet developers.

Jack@highfinancegroup.co.uk

Pricing & Reserving Contractor

Pricing Actuary

£700 - £1000 a day, 6 months, London This Syndicate is looking for a qualified Actuary to work across pricing and reserving for 6 months. This person will be required to work closely with both teams and assist in the day to day technical work. Previous London market experience is beneficial. .

William@highfinancegroup.co.uk

£700 - £900 a day, 9 months, South East A qualified Pricing Actuary is required for maternity cover at this UK Life insurer. You will update and amend the current pricing models, advising on new product development. There will also be a small team of Actuarial Analysts reporting into this position, so management experience is essential. Jack@highfinancegroup.co.uk

Pensions & Investments Roles Pensions Risk Management

Asset Modeller

Up to £70k Basic, London

Up to £80k Basic, South East Join this market-leading insurer in a technically and intellectually challenging position. This is a high profile role, working with senior stakeholders on a range of economic issues including interest rate modelling, risk measurement and capital management. Experience within an asset focussed role, an outstanding academic record are essential. Miranda@highfinancegroup.co.uk

GRAEME BRAIDWOOD

SOPHIA CROSSMAN

Consultant - Life

Consultant - Life

+44 (0) 207 337 8820

+44 (0) 207 337 1207

graeme@highfinancegroup.co.uk

sophia@highfinancegroup.co.uk

Join this innovative consultancy, providing clients with market-leading advice across de-risking, liability management and journey planning.

This is an excellent chance for a senior actuarial student or recently qualified Pensions Actuary to move away from traditional Defined Benefit work and utilise their broader business acumen working in a cross discipline team. Miranda@highfinancegroup.co.uk JACK SNAPE Consultant - Life Interim & Perm

MIRANDA WILKINSON Consultant - Pensions & Investments

+44 (0) 207 337 8810

+44 (0) 207 337 8815 May 2013 • THE ACTUARY miranda@highfinancegroup.co.u www.theactuary.com

jack@highfinancegroup.co.uk

57

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ACT.07.13.057.indd 57

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Appointments

Overseas Opportunities Head of Financial Analytics - Hong Kong

Investment Actuary - Singapore Up to SGD 120k base + bonus p.a

Up to HKD 1.4m p.a. + Bonus Leadership role for an experienced Life Actuary to head a dynamic team of 15 actuaries and analysts delivering business results to the Executive. This role requires comprehensive technical actuarial knowledge in Financial Reporting and Risk Analytics covering MCEV, EV/EEV and IFRS, as well as excellent communication skills in English and ideally Chinese with proven management expertise.

Excellent opportunity for a nearly/newly qualified Investments actuary, to analyse fund performance, handle compliance and manage a small team. A key part of the role is selecting and deselecting funds and over time you will also develop new investment linked products. The ideal candidate will have a pricing background and good knowledge of investment linked Products.

Financial Risk Manager - Hong Kong

Technical Modelling Actuary - Mumbai

Up to HKD 1 m package p.a

Up to INR 4.5 m base p.a + bonus

Take your Financial Risk knowledge to Asia… our Client is searching for a specialist to join their Regional Head office team in Hong Kong. You will be instrumental in defining the risk management framework, negotiating with the regulator and reporting to the Risk Committees.

Market level risk, ALM, model validation and derivatives experience in the context of Solvency 2 is essential for this role.

Our client in India is looking for a technical actuary with advanced modelling skills in Life insurance to join their team. This is a far reaching role covering Pricing, Financial Reporting, economic capital modelling and ad hoc projects. If you are looking to have a real impact creating modelling solutions in an emerging market we would be keen to hear from you. Relocation and visa offered.

Fund Manager - Singapore

Actuarial Modelling Manager - HK

Up to SGD 150k base + bonus Exciting opportunity for an Investment professional with a background in asset management to move in house. This is a unique position and will require a strategically minded investment professional who can optimise the fund portfolio, negotiate with investment providers and support selection decisions for their investment linked product suite.

Clare Bethell, Senior Consultant Collette Edwards, Consultant

Up to HKD 1m package p.a Multinational Insurer seeks a Modelling Specialist to operate at a strategic and conceptual level, to influence and shape the way they model their business in Asia. Expertise in actuarial modelling for Life Insurers is essential as you will be developing maodels in Prophet leading a team of actuarial analysts and communicating technical concepts across the business.

clare@highfinancegroup.co.uk collette@highfinancegroup.co.uk

+44 (0) 207 337 8829 +44 (0) 207 220 0174

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.

Visit www.theactuary.com to see how we’ve changed 58

THE ACTUARY • July 2013 www.theactuary.com

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www.theactuaryjobs.com

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

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.

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

LDI Relationship Manager Investment Management London

My client is recruiting an experienced Relationship Manager to manage and develop a portfolio of institutional clients.

With an in depth understanding of liability driven investment and equity derivatives you will be responsible for maintaining and developing relationships with your clients, working strategically at all times to maximise potential new revenue streams and ensure client satisfaction Rob Bulpitt through the delivery of a premium level Head of Actuarial, Pensions & of service.

Insurance Risk Management To discuss this and other opportunities we are working on currently, please contact us directly. We have specialist consultants covering the pensions, investments, non-life and general insurance markets.

020 7092 3237 rob.bulpitt@eamesconsulting.com

Rupert Rickard Manager of Actuarial Non-Life and Insurance Risk Management 020 7092 3219 rupert.rickard@ Offi eamesconsulting.com

For current opportunities please visit www.eamesconsulting.com

Pensions & Investments | Non-Life | Life & Health UK | Europe | Asia PDFL¿F www.eamesconsulting.com

July 2013 • THE ACTUARY 59 www.theactuary.com

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Appointments

From Jamaica to Joburg Kadene Clarke shares her experience on coming to South Africa after starting off her career in the Caribbean.

WHAT IS YOUR BACKGROUND KADENE?

I spent two years working in pension consulting for Towers Watson in the US and five years working in life insurance in Jamaica and Barbados. I now work with Hannover Re Africa in the Corporate Actuarial department.

WHAT WERE YOUR REASONS FOR COMING TO SOUTH AFRICA?

HOW DO THE SALARIES AND COST OF LIVING IN SA COMPARE TO THAT OF THE CARIBBEAN?

Salaries are lower in SA than in the Caribbean but so is cost of living. Perhaps the biggest differential I see is with food. It is certainly cheaper here to go to a high-end restaurant and enjoy a three course meal than it is to do the same back in Jamaica or Barbados.

WHAT DO YOU DO IN YOUR SPARE TIME?

My fiancé and I teach Math to grade 4 and 5 kids on Saturdays in Soweto, which we absolutely love! Outside of that, we both enjoy hiking and travelling.

At the time that I was thinking of moving to SA, I was at a professional crossroads. I was not quite sure that I wanted to be an actuary but the thought of having to abandon the many years spent studying and start anew were quite daunting. SA was attractive, not only because of its developed life insurance market, but also because of the many non-traditional roles that actuaries play. The move presented the possibility of exploring something new while making use of my actuarial training and experience.

TRICKY QUESTION: BEING A “FOREIGN NATIONAL”, HOW DO YOU SEE BLACK ECONOMIC EMPOWERMENT IMPACTING THE JOB MARKET?

WHAT WERE THE CHALLENGES OF GETTING A JOB IN SOUTH AFRICA? ANY RESTRICTIONS?

Quite honestly, the job hunting process wasn’t as difficult as I thought it would be. Fortunately, the SA government has a special permit in place, which allows qualified non-South African actuaries to come to SA and explore opportunities.

I believe employers were more willing to meet with me because I already had a work permit. Sure, I encountered the challenge of not being a BEE candidate but the SA3 team was quite determined in their effort to find me a job that was in line with my expectations. I’ve now been with Hannover Re Africa for a year and I’ve never been happier!

There are a number of things that impress me with working in South Africa. Firstly, the level of actuarial knowledge and expertise here is quite impressive. I attended ASSA’s convention last year and was amazed by the depth and breadth of the topics covered. Secondly, it is very encouraging to see so many young people in very senior roles in organizations, from CEO’s to senior partners at big firms.

The youth have a lot to offer, and I don’t believe this is fully appreciated everywhere. I also love the fact that actuaries here take on a lot of non-traditional roles. This certainly raises the profile and marketability of the profession and discards the common notion of what an actuary should be.

WHERE ARE YOU SEEING THE GREATEST DEMAND FOR ACTUARIES?

ANYTHING ELSE YOU WANT TO SHARE?

The Life Insurance industry has quite a number of opportunities for actuaries. With the work that is being done with the government’s national health insurance scheme, I think you will see an increase in the demand for health actuaries in the public sector.

My experience in SA has been nothing short of amazing both on a professional and personal level. The country continues to face a number of challenges, but it seems to me that everyone is committed and willing to work together for the good of each other and the country.

HOW DOES THE SOUTH AFRICAN CULTURE DIFFER FROM CARIBBEAN / AMERICAN CULTURE IN THE WORKPLACE (AND IN EVERYDAY LIFE)?

The SA job culture is very different from what you would see in the Caribbean/America, although to be fair, my view of the SA workplace is based mainly on my experience at Hannover Re Africa, so I’m not sure how representative my view is, but there is definitely a greater work life balance here than in the

60

Caribbean/America. Outside of the workplace, I would say SA is very similar to the Caribbean. Folks here are so warm and friendly. That, in itself, is the definition of the islands!

BEE will definitely play an important role in the job market.

However, I believe there are a lot of underdeveloped sectors such as education and health, which will benefit from the expertise of qualified actuaries, regardless of their ethnicity.

WHAT IS THE BEST THING ABOUT WORKING IN SOUTH AFRICA?

THE ACTUARY • May 2013 www.theactuary.com

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www.theactuaryjobs.com

South African Actuaries Abroad

SA3 is a dedicated actuarial recruitment company, run by actuaries. We pride ourselves in exceptional service and have numerous satisfied clients and candidates in South Africa and abroad. Our aim is to make the job searching process as easy and discreet as possible for the candidate and the filling of vacancies quickly and effective for the employer. Whether you are looking for a new challenge in South Africa, the UK, Australia or the rest of the world, we offer a dedicated and service focused recruitment solution unmatched by anyone else in South Africa.

Henda (FIA, FASSA) qualified in 2001 and has 12 years of industry experience. She has worked in life and health insurance in South Africa and Australia before she joined the team in 2009.

Her hobbies include running, tennis, camping, herb gardening and 4x4 trips with her husband and children.

wilhelm@sa3.co.za Cell: +27 (0)82 823 9978

henda@sa3.co.za Cell: +27 (0)83 603 2961

LIFE PRODUCT DEVELOPMENT SPECIALIST

0ɄɄȰȨȽȝ ȘɄɑ Ǹ ȽȐɬ ȃȣǸȵȵȐȽȝȐѵ

Wilhelm (FIA, FASSA) qualified as an actuary in 2004 and co-founded SA3 (South African Actuaries Abroad) in 2005 with his wife Helena. He worked in the Life Insurance Industry in both the South African and UK markets and gained his experience at some of the major insurers in both countries. His 3 kids take up most of his spare time, but besides that, he is a keen traveller.

His hobbies include any sport that’s played with a ball.

Cape Town Our client is searching for a Senior Actuarial Student or Newly Qualified Actuary to join their young and innovative new venture. The incumbent must be able to work independently and take initiative. Responsibilities will include research, development, pricing and implementation of life products.

BUSINESS DEVELOPMENT ACTUARY

Johannesburg We have a role for an outgoing and energetic newly qualified actuary with previous life experience to join our client’s business development team. The incumbent will be responsible to build and maintain client relationships.

GI ACTUARIAL SPECIALIST

Johannesburg A position for an Actuarial Student has become available within our client’s short term business. We are looking for a candidate with relevant experience and good technical skills to be involved in reserving, capital modelling and reporting.

HEALTH SPECIALIST

Cape Town Our client is searching for a senior resource with previous health, life or EB experience to expand the actuarial capacity within their company. Key responsibilities will include the pricing, design, reporting on and management of health products.

LIFE CAPITAL MODELLING SPECIALIST

Johannesburg We have a role for a suitably experience candidate (Newly Qualified Actuary) to join our market leading client’s capital modeling team. The successful candidate needs excellent exam progress and previous life valuations or capital modeling experience.

NEW INITIATIVES ACTUARY

Cape Town Our client is searching for a Nearly/Newly Qualified Actuary for a new exciting role in their Employee Benefit Business.

The incumbent should be able to work independently and be able to work with various stake holders. Previous EB experience will be beneficial.

LIFE CONSULTING ACTUARY

Cape Town or Johannesburg Our client is searching for a Nearly/Newly Qualified Actuary to take a senior role in their Cape Town or Johannesburg office. Responsibilities will include the full spectrum of actuarial services across a range of companies, including exposure to leading industry and technical developments. Previous valuations or technical life insurance background is required.

LIFE VALUATIONS SPECIALIST

Johannesburg We have various roles for candidates of all levels with previous life valuations experience. Roles range from valuations actuary to actuarial analyst and involves delivery of all corporate actuarial functions of the company.

www.sa3.co.za May 2013 • THE ACTUARY 61 www.theactuary.com

ACT.07.13.060-061.indd 61

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Appointments

NON-LIFEFUTURES REINSURANCE BROKER

NON-LIFE

LONDON

£ excellent package

LONDON

NON-LIFE £ excellent + 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. Ref: Star1530

Market leader seeks casualty pricing actuary with a commercial perspective to work closely with brokers and big ticket clients in one of the most sought after roles in the general insurance arena.

Ref: Star1465

SPECIALTY LINES ACTUARY

HEAD OF PRICING

NON-LIFE

LONDON

£ 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.

Ref: Star1463

RESERVING ACTUARY

NON-LIFE

SOUTH EAST

up to £120k + bonus + benefits

Fantastic opportunity to join a specialist (re)insurance group as the first actuary within a growing business unit. You will lead the reserving process, provide pricing support and calibrate the internal model.

Ref: Star1392

NON-LIFE

SPECIALTY LINES PRICING LONDON

£60k to £100k + bonus + benefits

LONDON

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

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.

Ref: Star1477

HEAD OF PRICING AND RESERVING LONDON

NON-LIFE

up to £120k + bonus + benefits

Develop your pricing and reserving skills within a global non-life specialist, leading a small team in the provision of expert actuarial analysis and support.

Ref: Star1224

REINSURANCE PRICING ACTUARY LONDON

NON-LIFE

£ excellent + bonus + benefits

We are seeking part-qualified and qualified actuaries with strong communication skills for high profile specialty lines pricing roles offering significant interaction with underwriters and senior actuaries.

Ref: Star1536

London Market client is seeking a qualified actuary with strong communication skills and reinsurance pricing experience to take up a challenging and exciting role with a commercial focus.

Ref: Star1464

SPECIALTY LINES REINSURANCE PRICING

STRATEGIC CONSULTING ACTUARY

ZURICH

NON-LIFE

CHF excellent + bonus + benefits

NON-LIFE

€ excellent + bonus + benefits

DUBLIN

Global leader seeks a part-qualified or qualified actuary with specialty lines reinsurance pricing experience. You will demonstrate initiative, creativity, flexibility and the desire to work in an international environment.

Ref: Star1490

An award winning employer seeks a non-life actuary to join its expanding team. This role offers an excellent opportunity to influence the development of the practice and to contribute to clients at a strategic level.

Ref: Star1460

CAPITAL MODELLING

RESERVING IN THE CAPITAL

SOUTH EAST

NON-LIFE £ excellent + bonus + benefits

Our client is seeking high-calibre part-qualified and qualified actuaries to develop its general insurance capital modelling capability. Successful candidates will have strong technical skills and experience of Igloo or Remetrica.

Ref: Star1541

Antony Buxton FIA 62

CASUALTY PRICING ACTUARY

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

ACT.07.13.062-063.indd 62

NON-LIFE up to £75k + bonus + benefits

LONDON

Global insurance group seeks a part-qualified or qualified actuary to provide reserving and commutation expertise, calculating technical provisions and performing bad debt Ref: Star1526 analyses, expense and cash flow projections.

Lance Randles MBA

Paul Cook

Clare Roberts

ASSOCIATE DIRECTOR

SENIOR CONSULTANT

SENIOR CONSULTANT

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

25/06/2013 08:33

www.theactuaryjobs.com

LIFE PENSIONS INVESTMENTFUTURES PENSIONS

LONDON

up to £300k package

MARKET-FACING SCHEME ACTUARY 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.

Ref: 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.

CORPORATE CONSULTING

INSURANCE RISK MANAGEMENT

PENSIONS up to £200k package

NATIONWIDE

We have a wide range of opportunities for high flying corporate pensions consultants with strong business winning credentials.

These roles offer a track to partnership for the right candidate.

Ref: Star1503

LONDON

LIFE

up to £110k + bonus + benefits

Global firm seeks a risk expert with project management experience to design end-to-end risk management frameworks. You will have strong consulting skills and a passion to succeed and deliver.

Ref: Star1488

PRICING RISK MANAGER

INVESTMENT ACTUARY £ excellent + bonus + benefits

LONDON

Ref: Star1517

BRISTOL

LIFE up to £85k + bonus + benefits

Due to business growth our client seeks an investment actuary with a strong technical and modelling background.

Good communication skills are required to present at client meetings. Banking experience desirable.

Ref: Star1441

Leading life and pensions provider seeks a qualified actuary to influence and support the delivery of high value business, introducing strong risk management and pricing controls.

HEDGING SOLUTIONS

INTERNAL MODEL MANAGER

LONDON OR SOUTH EAST

INVESTMENT up to £85k + bonus + benefits

Ref: Star1521

BIRMINGHAM

LIFE up to £75k + bonus + benefits

Contact us now to discuss this exciting new role with a specialist investment team where you will design, model and implement bond and derivative-based liability hedging solutions.

Ref: Star1532

This is an exciting opportunity for a qualified actuary to lead the design, development, testing and validation of the Internal Model within a leading financial services company.

INVESTMENT SOLUTIONS

IN-HOUSE PENSIONS

INVESTMENT

BIRMINGHAM

£ to attract the best

Ref: Star1512

LONDON

Up to £67k+ bonus + benefits

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.

Ref: Star1515

Our client is seeking a qualified pensions actuary to contribute to the risk management of its pension funds, developing its market and longevity risk appetites, limits, targets and policies and reviewing its funding plans.

Ref: Star1528

GROUP PROTECTION PRICING ACTUARY

CUTTING-EDGE IN-HOUSE PENSIONS

LONDON

LIFE

up to £65k + bonus + benefits

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.

Ref: Star1529

SOUTH EAST

up to £65k + bonus + benefits

Our client seeks a part-qualified or qualified pensions actuary to join its in-house pensions team and provide advice on de-risking projects, deal structures and the implementation of an internal valuation and ALM system.

Ref: Star1537

Star Actuarial Futures Ltd is an employment agency and employment business

STRATEGIC RISK CONSULTING

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.07.13.062-063.indd 63

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

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

Peter Baker SENIOR CONSULTANT May 2013 • THE ACTUARY 63 www.theactuary.com M +44 7860 602 586 E peter.baker@staractuarial.com

25/06/2013 08:33

Appointments United Kingdom

United Kingdom General Insurance London Market Senior/Chief of Pricing London Paul Francis £150,000 + Bonus + Benefits Oliver James have a range of London Market Liability/Casualty pricing roles in the (re)insurance arena. This is the most high profile of them and is an exceptional, Greenfield opportunity. Call me if you have an interest in this area, or this specific role.

Reinsurance Solutions Actuary London Rick Davis £110,000 + Good Bonus + Benefits A leading London Market insurance company requires a GI Actuary to structure complex reinsurance solutions. Working across numerous classes of business this is a varied role that will develop strong reinsurance pricing and capital skills.

Pricing Manager London Sarah Robins £75,000 + Bonus + Benefits I am recruiting for a Pricing Manager for a leading multinational insurance company. You will look after a team of four and will have a huge amount of exposure to the senior management team. You must have personal lines pricing experience.

Capital Modelling Analyst London (City) Rachel Kelly £60,000 + Bonus + Benefits Leading global insurer is seeking a part qualified Actuary to join their capital modelling team. This is a high profile, expanding area of the business with challenging work and regular exposure to senior management. Prior capital experience would be advantageous, though not essential.

Contracts - GI Pillar 1 Actuary London Stewart Cherry Up to £850/day Our client is looking for someone to review key elements of the Pillar I workstream in order to estimate the time and resource required to complete the gap analysis and develop the implementation plan for Pillar I.

Reserving Actuary London Stewart Cherry Up to £1000/day Our client is looking to acquire a strong Reserving Actuary to join their group actuarial team for an initial 6 month role. Strong previous reserving experience is essential and London Market combined with personal lines experience will be desirable.

Life Insurance Protection Pricing Actuary London Richard Howard £60,000 - £80,000 + Bonus + Benefits Excellent opportunity for a qualified Pricing Actuary to join this successful team in London. Responsible for providing pricing and product development support across the company’s group plans and targets. Must have relevant pricing experience.

Qualified Systems Actuary South East David Parker £90,000 + Bonus + Benefits Are you looking for an environment to challenge and reward? An award winning insurance business is looking for a qualified Life Actuary to lead cutting edge projects in their expanding systems team. Developer level knowledge of Prophet/MoSes/Mo.net.

International Reporting Manager South East Richard Howard £80,000 - £100,000 + Bonus + Benefits Exclusive opportunity for an Actuarial Manager to join this leading Life insurer in the South East. They are looking to recruit a qualified Actuary with excellent experience of MCEV, IFRS. Must have experience of leading successful actuarial teams.

Project Actuary London Clare Nash £110,000 + Package An unusual position has arisen within a global player; my client seeks a qualified Actuary with significant experience in capital and reporting. Pricing backgrounds considered. This is a varied appointment which is highly visible across the group.

Contracts - Life Actuarial Analyst Scotland Rob Bentham Up to £650/day Our client is looking to bring on an Actuarial Analyst to support the embedding of the FCA guidelines on real rates of return in illustrations. Strong Excel and VBA skills are essential and previous experience with illustrations is preferred.

64

Project Actuary North of England Rob Bentham Up to £1000/day Our client, a multinational Life insurer, is looking to put together a project team of six qualified actuaries to support various aspects of their Irish portfolio transfer to the UK. Ideally you will have previous Part VII experience.

General Insurance - UK

Contracts - Life & GI - UK

Life Insurance - UK

Paul Francis 207 649 9469 Rick Davis 207 649 9353 Sarah Robins 207 310 8552 Ben Pitt 207 310 8719 THE ACTUARY • May 2013 Rachel Kelly 207 310 8579 www.theactuary.com

Rob Bentham Stewart Cherry

Clare Nash David Parker Richard Howard

ACT.07.13.064-065.indd 64

207 649 9351 207 310 8651

207 649 9350 207 310 8649 207 649 9356

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

24/06/2013 08:38

www.theactuaryjobs.com United Kingdom

Europe Life Actuaries Patrick McMahon

Dublin - Ireland €40,000 - €95,000

P&C Actuary Holland Julien Fabius €85,000 + Bonus + Benefits Opening for a P&C Actuary to work on Reserving, Pricing and Solvency II with an operating company of a global insurance player.

On the reserving side you will contribute to new methodology for one of the product lines.

Dublin is full of excellent opportunities for Actuaries. I’m currently working on a number of exciting positions in Risk/Capital/Reporting/Product Development and Consulting at various levels from part qualified up to managerial level.

Reinsurance Pricing Actuaries Zurich, Switzerland Audrey Dresen CHF120,000 - CHF200,000 Several reputable reinsurance firms are strengthening their pricing teams with qualified or experienced Actuaries. Varying from start-up to well-established, there are exciting opportunities with a close link to the business.

Igloo Contractors Helger Wiese

Life Retrocession & Credit Risk Manager Dusseldorf Emina Biscevic €€€Competitive Leading reinsurer is seeking a Life Retrocession and Credit Risk Manager in Germany. You will be mainly responsible for relationship management with different parties (such as brokers, and retrocessionaires…).

VIPiTech Modeller Brussels (Belgium) Laurence Baken €€€Competitive Top European insurer is looking for a VIPiTech modeller on Group Level. Your focus will be to develop and implement the group model group-wide VIPiTech valuation model, following a structured and phased model release schedule.

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.

Non-Life Actuaries in Switzerland and Germany

By Audrey Dresen & Emina Biscevic

Switzerland According to the FINMA, the Swiss reinsurance market currently represents CHF30bn in annual gross premium and hosts approximately 70 reinsurance firms, making it one of the leading hubs together with the US, Bermuda and Singapore. In addition to a number of well established players, Zurich has seen several new entrants in the past two years. Firms are realising the need to be close to their clients and European business is increasingly being written from Zurich. This has resulted in hiring of Underwriters and Pricing Actuaries. We expect that going forward a number of reinsurers will also move Capital & Solvency projects to their Swiss office.

In the past our clients looked for qualified Actuaries with sound I.T. skills, who knew pricing methods and could update the tools.

This is changing. Whilst the SAV, FIA, DAV are still highly respected qualifications, technical skills are no longer the sole important feature of an Actuary. Today’s reinsurer looks for Pricing Actuaries that show an interest in the business, who work in close cooperation with Underwriters and advise them in managing the portfolio.

Effective communication is crucial, including the ability to explain the pricing to Underwriters and clients. Workflows and methods are being optimised, and we see a strong trend of Actuaries be

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

With the renewals season ahead of us, reinsurance firms are reinforcing their Pricing teams. We see an increasing number of vacancies for experienced non-life Pricing Actuaries coming up.

Interestingly, the run-off market seems to be an exciting new area to consider for non-life Actuaries.

coming involved in the business. Their opinion has a bigger impact, as long as they can clearly show their reasoning behind it.

Germany Worldwide, the run-off potential is estimated at around €425bn (Bannister) and according to PWC over a half of this amount is included in the reserves of European non-life/casualty insurers.

The largest regions remain Germany, Austria and Switzerland. The €100bn German speaking run-off market continues to grow. According to a new Swiss study, the vast run-off markets in German speaking countries are set to expand further as more European (re)insurers focus on making efficient use of equity capital.

According to a PWC survey, one of the most important developments in the run-off market over the next 12-18 months will be ‘Continued opening up of the German market.’ We can notice a high demand for actuarial and risk professionals. Actuaries with a non-life background and strong reserving and capital management skills as well as experts in valuation and structuring will get good opportunities to take over a part in these developments.

Furthermore our clients often confirm the fact that the Actuarial qualification is no longer the most important box that needs to be ticked. Especially reinsurance companies that are seeking Actuaries with a strong talent for relationship management for example.

Contact Details: Germany Germany Switzerland

Europe Benjamin Moses Helger Wiese Emina Biscevic Patrick McMahon Audrey Dresen

ACT.07.13.064-065.indd 65

Emina Biscevic Manuel Lovell Audrey Dresen

+49 (0) 89 380 389 65 +49 (0) 89 220 610 03 +41 (0) 43 508 0444

General Contact Details +44 207 310 8793 +31 20 262 0280 +49 89 3803 8965 +353 1 685 2413 +41 43 508 0444

Laurence Baken Julien Fabius Manuel Lovell

+32 24 012 249 +31 20 716 8450 +41 44 580 3711

Email:

actuary@ojassociates.com

Web:

www.ojassociates.com

Please contact one of the team for further information on any of the opportunities above or visit 65 May 2013 • THE ACTUARY www.theactuary.com www.ojassociates.com/jobs

24/06/2013 08:38

Appointments

Asia Director of Product Strategy - Life 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.

Director of Capital - Life Hong Kong Jonny Plews £££Competitive APAC HQ requires an experienced Actuary to lead the Capital 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 exp needed.

Head of Pricing - Life Singapore Gary Rushton £££Competitive A genuine leader within the global insurance market is currently looking for an experienced Actuary to provide strategic and technical leadership for all pricing initiatives across Asia. The role will report in to the MD and require a high degree of gravitas.

Head of Valuations - Life Hong Kong Alex Ince £££Competitive Global life insurer based in Hong Kong requires an experienced Actuary to manage their valuations team and assist with other projects (incl. capital and ALM). Prior experience of IFRS and HKGAAP is ideal. Fluency in Cantonese an advantage.

Lead Actuary - GI Hong Kong Toby Weston £££Competitive European insurer seeks qualified Mandarin speaking Actuary with broad technical ability and strong communication skills to join their HK office as the lead Actuary for the region, working on M&A and broader business projects as well as traditional areas.

Capital & Reserving Actuary - GI Singapore Toby Weston £££Competitive Our client is a leading global re/insurance group and are looking for a UK qualified Actuary to join their team in Singapore. Reporting to the head of APAC this person will be responsible for all capital modelling and reserving duties across South East Asia.

Frequently Asked Questions (for HK & Singapore market) - Part 2

By Jonny Plews

What is the cost of living like in HK/Singapore?

Similar to every major city HK/Singapore are not cheap places to live, though they are no worse than London. In fact, after time when you get to know the local delicacies, it becomes much cheaper to live here. Rent is expensive if you live near the financial district but if you live further out prices drop (just like London). For a detailed comparison visit www.numbeo.com.

How is the quality of life?

This is one of Asia’s biggest advantages as quality of life is very high. I have lived my entire life in the UK, and I’ve not looked back since I made the move. In Asia, simply put, personal support is both highly available and affordable so all of the necessary day-to-day time consuming chores in life can be taken care of for you. This gives you much more time to be proactive or spend the time as you please. Asia also has many fascinating and beautiful places to explore. Due to the accessibility of these places (using only 15 days annual leave last year) I spent time in China, Bali, Borneo, Thailand and still had time for a trip back to the UK to see family and friends. In Asia I feel like I am getting the most out of my life in every way.

Is it easy to adapt to life in Asia?

There are of course many cultural differences between the UK and Asia, though because of the British history it is very easy to adapt to life here - HK especially is a fusion of Britain and China and in

Asia

66

Jonny Plews +852 5804 9200 Alex Ince +852 5804 9224 Gary Rushton +852 5804 9223 Toby Weston +852 5804 9042 THE ACTUARY • May 2013 Chris Lee +852 5084 9253 www.theactuary.com

ACT.07.13.066-067.indd 66

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For Part 1 please refer to June’s edition of “The Actuary Magazine” or our website: www.ojassociates.com

my eyes the best of both. Street names all have English names, local supermarkets sell all the familiar products, and there are over 30,000 Brits based here now (as well as Americans, Europeans, Antipodeans…). It is also very easy to meet people here, there is a huge expat community who are only too eager to help in any way.

Whether it’s introducing you to new friends, or to the various social/sports clubs, most people were once in a similar situation and have the answers to the many questions you inevitably will have.

Do I need to speak any languages?

No, very few expats decide to learn local languages as there is little need. If you decide to learn one I think it will enhance your entire Asian experience (through better culture understanding and awareness, and stronger relationships) though English is the first business language. On a social basis English is also the primary language used (in the international community) so there are no barriers to meeting new friends.

Family Life Due to the domestic helper system in Asia, combining a social and family life is very easy. If you’ve got children already at school it can be very tricky as international school places are limited (more so in Singapore) but if you have a young family then it is perfect.

My first child is due in November and I am relishing the fact that she will grow up learning Mandarin and Cantonese and have a huge amount of opportunities opened up for her in later life.

For more information on life or work here in Asia please call Jonny on +852 5804 9200

General Contact Details

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actuary@ojassociates.com

LinkedIn: oliver-james-associates

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24/06/2013 08:37

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.

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

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

+44 207 649 9353

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

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

RACHEL KELLY GI Actuarial & CAT Modelling rachel.kelly@ojassociates. com +44 207 310 8579

SARAH ROBINS GI Actuarial sarah.robins@ojassociates. com +44 207 310 8552

rick.davis@ojassociates.com

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.

Europe

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

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

JULIEN FABIUS Benelux, Actuarial

BENJAMIN MOSES European, Actuarial

MANUEL LOVELL Germany, Actuarial

LAURENCE BAKEN Germany, 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

+41 43 716 8450

+44 207 310 8793

+49 8922 061 003

+32 2401 22 49

+353 1685 2413

Asia

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

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

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

ALEX INCE Actuarial alex.ince@ojassociates.com +852 5804 9224

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

PHILIP CHAU Actuarial philip.chau@ojassociates.com

CARL CHAN Actuarial carl.chan@ojassociates.com

+852 5804 9287

+852 5804 9070

General Contact Details

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@OJAssociates May 2013 • THE ACTUARY 67 www.theactuary.com

ACT.07.13.066-067.indd 67

24/06/2013 08:37

Appointments www.the-arc.co.uk

The Actuarial Recruitment Company

A fresh approach

Varied London Market role London

General Insurance To £75K

A senior trainee with ideally previous London Market pricing

Capital Actuary London

General Insurance Circa £100K

management and mentoring of more junior staff. Ref: ARC26222

This role working for a specialist P&C (re)insurer will be involved in the development and running of the company’s internal capital model. Initially the role will involve the design and build of a Remetrica based model. The client is looking for an individual with excellent technical skills as well as previous experience in capital work and a sound knowledge of Solvency II. A Remetrica background would be preferred for the role. Would possibly suit a non-life consultant with good communication skills. Ref: ARC26223

Pricing Actuary London

Contractors London

experience is needed for this small niche insurance business. The role will include involvement in pricing, reserving, capital management as well as reinsurance optimisation work. Previous reserving and Solvency II knowledge would be useful. The role will involve

General Insurance Circa £90K

This role reports to the Head of Pricing within this international insurance and reinsurance organisation. Covering all lines of business, the successful candidate should have the technical and communication skills to work autonomously with support as required. Contribution on ideas about best practice and ability to question and influence underwriters will be required skills, in addition to development of pricing tools and analytics. A good GI consultant who doesn’t have pricing experience may be considered. Ref: ARC26205

General Insurance £500-£1K per day

We are still getting regular contract roles coming through across capital, pricing and reserving work. If you would like to register your interest in new contract options then contact Roger Massey.

Ref: ARCContractors

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 68

THE ACTUARY • May 2013 www.theactuary.com

ACT.07.13.068.indd 68

24/06/2013 09:10