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NEWS UPDATES FROM THE ACTUARIAL PROFESSION

Opinion CEO’s comment

Derek Cribb looks at why the IFoA must take a world view to benefi t the profession’s future

I’ve said it before: there is no denying the increasingly global nature of the actuarial world. An actuary in the UK cannot go about their work in isolation, subject as they are to a wide range of external factors – whether that’s changing international standards and regulation, diff ering cultural imperatives or a wide range of global competitors.

This is why it is so important for the IFoA to have a prominent role in the global actuarial community. To protect our members’ interests we should not merely be aware of international regulatory changes, we must be at the forefront of new developments. The IFoA should use its experience to infl uence policy makers and others with impact on actuarial work. It is vital its voice is both heard and respected.

In achieving visibility the eff orts of our volunteers are vital. The IFoA is lucky to have volunteers as members and chairs of many of the Groupe Consultatif and International Actuarial Association’s (IAA) committees and decision making bodies, and after two days of meetings at the IAA it would be hard for me to overstate the complexity of our international engagement. The IFoA’s newly reformed International Board, with support from the executive, is responsible for coordinating and disseminating this international activity, ensuring all IFoA actions can be traced back to the overarching corporate strategy. Valued relationships with other national actuarial bodies also enable the IFoA to share knowledge and keep in touch with developments worldwide.

The IFoA cannot and should not hide from the fact that it has a global membership and operates on a global scale. With international issues shaping the nature of actuarial work, the experience, rich history and groundbreaking research that it off ers have real value, facilitating the growth and evolution of actuarial science. But it is also important to exercise humility; arrogance off ers little benefi t. While celebrating the IFoA’s contribution, it is worth recognising what can be learnt from our counterparts around the world. By embracing the wider actuarial world and the IFoA’s role within it, the Royal Charter can be truly fulfi lled – to work in the public interest to further actuarial science and shape the future of the profession.

Global relevance

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

Darling to speak at Life Conference

Edinburgh in November, perhaps not the most enticing destination for sun seekers, but this year it’s a hot destination for those with an interest in the life actuarial sector.

Over the last year the Life Conference Committee and other volunteers have given their time to produce a thought-provoking and entertaining conference programme. There is no particular theme this year, which has given the committee freedom to choose the strongest spectrum of workshop sessions ranging from data visualisation to what the life industry may look like in 2025.

The conference kicks off with Paul Moore; dismissed as head of group regulatory risk at HBOS, and subsequently labelled a whistleblower for speaking out. He will be arguing that control functions must be central to strategy, unhindered by sales culture or fear.

Previous conferences have seen dedicated blocks of soft skills workshops, but recognising that delegates may wish to have fl exibility over access to softer skills sessions, we’ve now spread them throughout the conference.

For the fi nal plenary session the committee has managed to secure Alistair Darling, former chancellor of the exchequer during the most turbulent and far-reaching economic crisis the world had seen for 60 years. It will be interesting to hear his thoughts on the current economic situation and prospects for the years ahead.

But it’s not just about plenary and workshop sessions. There is evening entertainment from the Red Hot Chilli Pipers, a gala dinner at the National Museum of Scotland and many great networking opportunities available for the 900-plus delegates attending; this is probably the premier event for professionals interested in life insurance.

We hope those attending the conference look forward to this thought-provoking and insightful event. Those considering attending Life 2014 can receive a 5% discount before 20 November – visit: tinyurl.com/pw7yujz ● See feature, page 18

GIRO: from 1 to 40 years

Attending GIRO 40 were 10 of the pioneers who were at the fi rst GIRO Conference in 1974. There were very few actuaries then involved in general insurance, probably no more than 40, and they wanted to get together to arrange joint research and share ideas.

Motor insurance was changing, the old tariff had collapsed, there were insolvencies, the government regulator was embarrassed and there was signifi cant growth. So 24 of them met together in Norwich for two days covering market statistics, profi t, supervision, and technical reserves in general insurance.

The meeting was such a success that it was unanimously agreed to repeat it one year later. Furthermore, volunteers agreed to join working parties to research together and produce papers for the next year. Meetings of GIRO have been held every year since and the number of attendees has grown at an amazing rate, from 24 to 733. It is also interesting, and a compliment to those pioneers, that the culture and format established at GIRO 1 has remained basically the same and also been used in other actuarial disciplines.

From left to right: David Hart, Terry Clarke, Laurence Eagles, Ian Rushton, Hugh Scurfi eld, Memoria Lewis, Bill Abbott, Paul Grace, John McCutcheon, Harry Reid, John Herrick

New expert standard proposed

At the beginning of October we were very pleased to launch a consultation on a proposed new Actuarial Professional Standard (APS X3: Actuary as an Expert) which is designed to assist those of our members instructed as experts in legal proceedings. We have also produced an accompanying detailed Guide.

The aim is to provide some clear principles for work in this area along with some helpful practical guidance for members who might be instructed in this sort of work. The APS and Guide will replace the existing Information and Assistance Note (IAN): ‘The Actuary as an Expert Witness’.

The proposed new standard introduces high-level, principles-based requirements for members instructed as an expert witness or expert advisor in relation to proceedings in the UK, covering not only instructions in relation to civil court cases but also other types of proceedings, such as disciplinary hearings and tribunals.

Of course, we recognise that many of our members are based outside of the UK so the detail of the provisions may not be appropriate to apply. However, we propose that those members should be required to follow the spirit of the APS.

The draft Guide contains more detailed practical guidance for members and has drawn upon the experience of members of the working party and review group to create material that provides useful assistance to those instructed in legal proceedings or who are considering accepting an instruction to act.

We would encourage you to read the proposals and give us your views by 9 December. A link to an online version of the consultation package and the questionnaire can be found on the IFoA’s website: tinyurl.com/oorubvh.

BOARD EFFECTIVENESS: A PANEL DISCUSSION Host: Anthony Hilton

The non-executive director member interest group presents: Board effectiveness, 11 November, Staple Inn Hall, London. Chatham House rules apply. With 20/20 hindsight, commentators on the fi nancial crisis, the BP Deepwater Horizon episode and other corporate disasters point the fi nger at what they see as ineff ective boards. There is widespread scepticism that board self-assessment of performance is at all rigorous and leads to improvement action.

Hosted by Anthony Hilton of the Evening Standard, (above), the illustrious panel will tackle the following questions: ● How to recognise that a chair may need external help. ● How to choose the right assessment process and assessor for different contexts. ● What are the benefits to an individual NED of a strong assessment process? ● How to sustain a freshness of approach over time.

Panel guests include: Joe MacHale: formerly a nonexecutive director of The Royal Bank of Scotland Group Plc from 2004, throughout the financial crisis until May 2013; Colin Mayer: Said Business School and author of: Firm Commitment: Why the Corporation is Failing Us and How to Restore Trust in It; Belinda Hudson: consultant, Independent Audit, corporate governance experts Nick Kirkland: CEO, CIO Connect; non executive director, The Children’s Mutual.

This event is free to all members; kindly sponsored by KPMG. For details visit: tinyurl.com/nr3n5or

NEWS IN BRIEF

Information gathering exercise re: APS P1’s confl icts provisions

The new confl icts provisions in APS P1 v.2.0 (tinyurl.com/pzxegbg) have been in place now since July 2013. To understand and assess how these new provisions are working in practice, the IFoA will launch an anonymous information gathering exercise regarding the application of these new provisions. The exercise will be directed at scheme actuaries using the practising certifi cates renewal process and will begin from 1 January 2014. We will be writing to scheme actuaries in more detail about this exercise shortly.

Confl icts: new guide for employers of actuaries

A new guide for employers of actuaries (tinyurl.com/omzsshr) regarding actuaries’ confl icts of interest has recently been published. The guide is designed to assist employers in understanding the obligations that actuaries have as regards identifying and addressing confl icts of interest, as it may be necessary for employers to take these into account when considering their own organisation’s approach to confl icts of interest. If you have any queries on this or any other regulatory issues then please contact the Professional Support Service (tinyurl.com/psadgjl) or email:

confl icts@actuaries.org.uk

Is your organisation represented at our CPD co-ordinators’ briefi ng?

The IFoA is holding its CPD co-ordinators’ briefi ng session on 20 November at Staple Inn Hall, London from 09.30 to 14.00. David Hare, president, will be chairing the meeting which will be based on “Ramping up our relevance – ensuring we meet members’ varied and evolving needs.” The IFoA would like hear views from as many organisations as possible. If you look after CPD at your fi rm, please attend this free event. Contact Debbie Atkins: debbie.

atkins@actuaries.org.uk

Call for medal and Honorary Fellow nominations

Nominations for a Gold or Finlaison medal (tinyurl.com/nes8s4r) and Honorary Fellow (tinyurl.com/ov49guz) status are now open. All members are eligible to put forward a nomination by 18 November. Please contact lorraine.atherton@ actuaries.org.uk if you have any questions.

NEWS UPDATES FROM THE IFOA

Does maths education

What’s wrong with maths and fi nancial education in the UK? Do you have any ideas which might help shape a new Worshipful Company of Actuaries research project?

The Worshipful Company of Actuaries (the Company) has a charitable objective of supporting mathematical and fi nancial education in schools and improving school age students’

Sarah Mathieson, head of research and knowledge at the IFoA speaks about furthering actuarial science

When we talk about research at the IFoA, what does this actually involve?

The IFoA’s fi ve-year strategy published in 2011 included a reinvigoration of the Learned Society through “advancing all matters relevant to actuarial science”. The IFoA’s research is about developing our subject, within both traditional actuarial fi elds and newer areas, to ensure that actuarial science continues to remain relevant and sustainable in the long term.

Central to research at the IFoA is the 70-odd working parties and their 600-700 volunteers, who are researching topics ranging from genetics to risk culture, as well as a range of research projects that the IFoA commissions from third parties. Research projects also often involve partnering with other organisations. For example, we are about to embark on a project with the highly-respected Institute of Fiscal Studies.

How is the IFoA’s research used and accessed?

The outlets that our members are probably most familiar with are the sessional meeting programme, the IFoA’s residential conferences and other thought leadership events. They provide members with CPD opportunities but also off er a forum to discuss and develop the subject further. All sessional meeting papers, conference papers and many other research papers are stored on our website. Sessional meetings are also fi lmed and can be viewed online for free, wherever you are in the world (off ering CPD). See: tinyurl.com/q3ed7do

Some research can fi nd its way into one of our two journals – the British Actuarial Journal (BAJ) and Annals of Actuarial Science (AAS) – which IFoA members can access for free (tinyurl.com/7ldtz9t).

The IFoA also uses its research to support its public interest role through informing public policy development. The IFoA advocates evidence-based policy making. We use our intellectual capital of research outputs and analysis to provide that evidence. Examples of this include referencing our research in consultation responses to government and regulators, as well as using it at meetings with civil servants and politicians.

add up today?

understanding of fi nancial and mathematical concepts and practice. As part of fulfi lling this objective, the Company and its Charitable Trust are looking for new projects which will start when the current Royal Society Fellowship (researching how maths teaching and assessment can be structured to improve general thinking abilities) draws to a close in two years’ time. The search is now on for ideas, if you have any suggestions for what you think should change, please email tim.birse@btinternet.com. The Company’s Education Committee will then go on to explore the most promising ideas and consider how best to make a diff erence.

For further information on the major projects supported by the Charitable Trust visit:

tinyurl.com/pq3q839

What is the role of the research and knowledge team?

Our team help to make some of this happen through project managing the commissioned research, supporting the sessional meeting process and managing the production of the journals. We also work with the Awards Committee and manage most of the IFoA’s prizes and awards, which celebrate success and excellence in our actuarial community. Kay Henderson (research programme manager), John Anderson (research project manager), Chiara McCormack (research project manager), Lorraine Atherton (research and knowledge assistant) have all joined the team recently.

As well as dissemination through events and publications, our librarians, David Hood and David Raymont, off er a comprehensive information service for the development of new research. Kevin McIver (research relationship manager) is also developing relationships with the wider actuarial research community, particularly with universities, to support the exchange of ideas and sustain the development of actuarial science together. The team also supports the Actuarial Research Centre (ARC), which was set up as a joint initiative between the IFoA and the Scottish Financial Risk Academy (SFRA) to support a small number of actuarial science PhD studentships.

What’s happening in the team over the coming months?

An exciting development will be the establishment of the new Research and Thought Leadership Board (RTLB), which will provide a single focal point for research across the IFoA.

After recruiting two PhD students into the ARC last year, we also hope to have two or three new students commence their studies at the ARC over the coming months. Towards the end of the year, the IFoA will also be opening an exhibition at the Royal Society in London on longevity, the impact that the work of Royal Society Fellows has had on life expectancy and the role of actuaries in measuring longevity.

How can members and other people get involved?

If you have completed some research, consider presenting at a sessional meeting, which also includes publication of your research in the BAJ. The AAS also welcomes submissions as a peer-reviewed journal. Join or set up a working party at: tinyurl.com/d2q3pbq

From time to time, we require volunteers for review panels for the commissioned research projects and new members for the journal editorial teams. Most of these opportunities can be undertaken from anywhere in the world so don’t be put off if you are not UK-based. If you would like to fi nd out more or be kept up to date via our research e-newsletter, please email research@actuaries.org.uk

EVENTS AND CONFERENCES 2013

Sessional research event: Investigating risk reporting practices in the global insurance industry 18 November

For more information visit: tinyurl.com/pnzpsfu

Masterclass series: Beating the competition whatever the size 21 November

Pitching against much bigger, better-known competitors often feels like an exercise in futility. But paradoxically, the bigger guys are the easiest to beat – if you approach the pitch the right way. The session will include a number of topics, among them the warning – “No one got fi red for hiring IBM”; Profound misconceptions that cause you to lose; and the two-part process – remedy your weakness and exploit theirs along with many more. For details go to: tinyurl. com/odxpy7u

CPD networking event on risk and capital management 27 November

This session is aimed at showing an unconventional view of the weakness and uncertainty of well accepted fi nancial models and to off er methods and strategies for dealing with them. The discussion focuses the implications for creating new models, as might be done in a Solvency II, ICA+ or capital management project. For more information go to: tinyurl.com/q9jghtg

Momentum 2013

4-6 December

The Momentum Conference is aimed at newly and recently qualifi ed actuaries from all practice areas. The programme will cover a range of technical sessions, debates, Masterclasses and much more, with great networking opportunities throughout. For details go to: bit.ly/17uU87l

Networking event: resource and environment open forum

11 December

Climate change, limits to growth, responsible investment. This is a great opportunity to meet actuaries with an interest in environmental issues, and to contribute to the development of the strategy of the Resource and Environment Board, recently launched by the IFoA. For more information go to: tinyurl.com/oskqam2

Current highlights in pensions seminars

14 November – Glasgow 26 November – London

This year we have a collaboration running through the seminars, covering highlights from this year’s Pensions Conference as well as current issues in the pensions sector. For details go to: bit.ly/1duZwI1