The Actuary October 2013

OCTOBER 2013 theactuary.com

Interview: Paul Sharma

The magazine of the actuarial profession

On what the PRA means for UK insurers

Risk management Developing a strategic framework on ERM

General insurance The Actuary

Investigating model error to avoid catastrophe losses

Longevity Alternative options for better life projections

MADNESS OF CROWDS Controlling behavioural risk to avoid emotional markets October 2013

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24/09/2013 09:33

Appointments

What’s underneath?

We look below the surface to spot trends early and show you what is really happening. Whether your need relates to risk management, capital, or strategy, our cutting-edge analysis techniques can help you see deeper than the competition.

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THE ACTUARY • October 2013 www.theactuary.com

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OCTOBER 2013

Contents COVER: GETTY

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26 “Human emotions, biases and frames surrounding problems and information play a critical and poorly understood role in risk and top management decisions”

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UP FRONT 9 SIAS events 10 IFoA news 14 Industry news 16 People/society news

OPINION 5

Editorial Actuaries are in a very good position to create innovative solutions for society, says Deepak Jobanputra

FEATURES

AT THE BACK

18 Interview: Paul Sharma

35 Arts

Richard Purcell and Titas Bakanauskas find out what the newly created PRA means for UK insurers

20 Longevity: Beyond the summit The peak of increased life expectancy may not be as close as you think, say Steven Baxter and Andrew Gaches

22 Mortality: An unpredictable age Daunted by the prospect of estimating old-age mortality with too little data?

Joseph Lu and Steve Bale provide a potential lifeline

24 Risk: Talking the same language 7

President’s comment David Hare outlines why the evolution of the actuarial profession should include making use of rapid advances in technology to take on new roles

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Soapbox André Scruton looks at the problems encountered from whiplash claims and discusses how technology developments can help

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

Good ERM is about developing a framework linking risk with business strategy, says John Bielski

30 GI: Prepare for the worst Erica Nicholson and Andrew Smith investigate whether natural disasters could account for more losses in 2013

33 GI: Who is in the driving seat?

Ian Burningham considers the difference between pricing and reserving actuaries’ roles in the motor insurance industry

Xin Jin immerses herself in the wonderful world of Punchdrunk

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

39 Student Jessica Elkin on the exemplary work of the Student Consultative Forum

40 Actuary of the future Borislav Arnaudov of Towers Watson

ONLINE Longevity in the workplace Joshua Catlett on functional capacity for employees with long-term health conditions

Longevity: The final frontier The longevity catalyst working party considers new scenarios and catalyst events that affect lifespan

Risk: Taking another look Andrew Howe suggests ways to improve an insurer’s risk management strategy

WRITERS OF THE MONTH Graham Fulcher and Matthew Edwards win a £50 book token for their article on behavioural risk, courtesy of SIAS

October 2013 • THE ACTUARY www.theactuary.com

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24/09/2013 09:36

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THE ACTUARY • October 2013 www.theactuary.com

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24/09/2013 11:01

Editorial DEEPAK JOBANPUTRA

Publisher 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 Sub-editors Kathryn Manning Caroline Taylor News editor Vivienne Russell +44 (0)20 7324 2788 vivienne.russell@redactive.co.uk Editorial assistant Tania Forrester tania.forrester@redactive.co.uk

Internet The Actuary website: www.theactuary.com SIAS website: www.sias.org.uk IFoA website: www.actuaries.org.uk

Managing editor Sharon Maguire +44 (0)20 7880 6246 sharon.maguire@redactive.co.uk Editor Deepak Jobanputra editor@theactuary.com Editorial team Sarah Bennett, health, international Jeremy Lee, pensions, investment, ERM, banking

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

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

Aoife Martin, GI, reinsurance, ERM, Solvency II

Art editor Gene Cornelius

Production manager Jane Easterman +44 (0)20 7880 6248 jane.easterman@redactive.co.uk

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

Arts page editor arts@theactuary.com SIAS representative Alvin Kissoon

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Taking the lead

Helen Lau, GI, reinsurance, environment, careers

Student page editor Jessica Elkin student@theactuary.com

Picture editor Akin Falope

Actuaries are in a very good position to create solutions for society, says Deepak Jobanputra

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

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Opinion

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. Contact: Alison Jiggins, The Institute and Faculty of Actuaries, 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 Institute and Faculty of Actuaries, Maclaurin House, 18 Dublin Street, Edinburgh EH1 3PP. T +44 (0)131 240 1325 E membership@actuaries.org.uk Changes of address should inform the membership department as above.

For delivery queries, 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.

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Behavioural science and decision-making theory are areas that have been evolving rapidly and have captured the interest of the insurance industry. Links have been made to behaviours based on psychology and also through the identification of behavioural patterns using data.

With the vast expansion of the electronics industry and mobile technology, the volume of data being captured continues to grow at an unprecedented pace. Analysis of this, often very rich, data can be used to create innovative business models. Some UK supermarkets have the led the way in capturing shopping habits and use this to market personalised offers. More recently, we have seen motor insurers adopting ‘telematics’ to reflect risk more accurately (see page 33).

These changes bring great opportunities for actuaries to create innovative solutions for society. They can also be intrusive. I recall a recent claim citing data and models that exist to predict accurately where an individual may be and what they are doing. This is clearly powerful information but raises other social questions.

Our president states that it is critical we take a leading role in this area of managing statistics and big data, noting that, although we may have been seen as the only specialists in this area in the past, other professionals are becoming well-versed in these skills. I believe actuaries can, and do, look to create solutions to improve society, and our contributions are generally aimed at building a strong future. This is supported by a potent statement from Paul Sharma, outgoing deputy head of the Prudential Regulation Authority, in this month’s interview. He states that actuaries have a strong sense of public service and we work well with multidisciplinary teams.

This is a strong commendation, from a respected honorary actuary.

With an ever-changing world bringing shifting trends in technology, globalisation, demographic change, climate change and more, there are so many opportunities for actuaries to make an impact as we have done in the traditional areas of life insurance, general insurance and pensions. Let’s keep on leading the way in shaping the future.

“We have a strong sense of public service and we work well with multidisciplinary teams”

Deepak Jobanputra editor@theactuary.com

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October 2013 • THE ACTUARY 5 www.theactuary.com

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24/09/2013 09:38

Appointments

ORSA

A forward looking view of capital and solvency Helping insurers meet the challenges of ORSA

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Essential insight serving global ďŹ nancial markets

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24/09/2013 10:59

›

Opinion President’s comment

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

DAVID HARE

The future at your fingertips Over the summer, I spent some time thinking about statistics. In September, a new report by Roger Porkess, sponsored by the IFoA, suggests that by not teaching statistics across a range of nonmathematical disciplines up to A-level, students are left unprepared for the reality of modern working life. A gulf is growing between university and A-level syllabuses that leaves British students at a disadvantage. I believe that is a real concern for UK plc.

As actuaries we work with complex data and statistics as part of our daily working lives – it is what we do. We can therefore, perhaps, become blasé about how the world around us is changing.

Earlier this year I was asked to introduce a fascinating discussion on data analytics.

This is a relatively new business tool used to improve decision-making, raise profitability and gain competitive advantage. Turning raw data into meaningful information through modelling and using this information to provide insights for businesses requires significant input from people skilled in interpreting data – and who know which questions the data needs to answer.

The talk focused on the insurance industry as a case study, and one of the questions from the floor was: “Is this topic actuarial?”

The answer was “not solely”. The reality is that a number of professions have the skills required to be able to use sophisticated tools like this: IT specialists, management consultants and accountants, for instance. The ability to analyse complex data is no longer a skill that only actuaries provide.

To remain relevant we need to be able to adapt and evolve. Actuaries do not have an automatic right to sit on a company board.

As professionals we must each take responsibility for highlighting the benefits our expertise brings to businesses. For instance, these can include understanding technological advances, the efficiencies that they can offer a business and how using this technology can free up our time

David Hare outlines why the evolution of the actuarial profession should include making use of rapid advances in technology to take on new roles in business to focus on other strategic issues.

Businesses want skilled employees, and strong candidates will have ensured that they understand the evolving needs of a company and can demonstrate that they are willing to adapt and take on new roles.

This professional evolution requires more than just compliance with CPD requirements. It is about taking an active interest in advances in technology, whether within the actuarial world or outside. It is about understanding issues that affect businesses, both in and out of your sector.

As members of the IFoA there are opportunities to share experiences and learn lessons from across sectors, regions and disciplines, so this is an advantage that we should all grasp. Those who do will find new, exciting areas that they can apply their expertise to and will demonstrate how relevant and important their skills are.

Those who do not will find they are sidelined.

I would urge speed, as the world is

changing fast. To delay will mean that others equally as capable will move to secure the work for themselves.

Actuaries have the technical, ethical and judgmental skills to do more than just warn and review. Important though this is, we can provide more than this and if the profession is to thrive we must do so. We should lead, not follow.

I leave you this month with a statistic of our own. August saw our membership numbers pass the 25,000 mark, cementing our position as one of the largest global actuarial associations. As we look to roll out the Certified Actuarial Analyst Qualification next year, I expect this number to increase as individuals working alongside our Fellows in technical support roles recognise the value of our quality qualification and the benefit of belonging to a professional body.

Our future is bright – but only if we remain relevant and seize new opportunities. a

“As members of the IFoA, there are opportunities to share experiences and learn lessons from across sectors, regions and disciplines, an advantage we should grasp”

October 2013 • THE ACTUARY 7 www.theactuary.com

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24/09/2013 09:39

›

Opinion Soapbox

ANDRÉ SCRUTON

A pain in the neck for motorists It’s no secret that whiplash is a major problem in the UK. With claims now adding around £90 to motorists’ insurance premiums, it really is an issue for all drivers.

Recent figures from The Association of British Insurers (ABI) reveal that whiplash claims cost UK insurers around £2.2 billion in 2011 and there are now approximately 1,500 whiplash claims in the UK every single day.

These shock figures have led to the UK being dubbed the ‘whiplash capital of the world’ and, worryingly, the problem could get worse before it gets better.

The UK’s compensation culture is spiralling out of control and this is largely because the current system is so easy to abuse.

Unfortunately, solicitors are still partly responsible for the problem because even after they were banned from paying referral fees in April this year, many have quickly found other ways to easily get hold of details of accident victims and persuade them to make a claim.

Lots are being tipped off by unscrupulous car-hire firms and body shop repairers. There are even reports that some personal injury firms are completely ignoring the ban policed by the Solicitors Regulation Authority and still paying referral fees for work.

Part of the problem with the current system is that any fraud can be difficult to detect so it’s always going to be abused. First, whiplash is hard to diagnose accurately, so making sure that only genuine sufferers receive compensation is tricky. Second, unless there’s a paper trail, it can be difficult to prove how a lawyer ended up with the details of someone who’s had an accident, especially because many also run legitimate advertising campaigns to encourage victims to contact them.

More needs to be done, and although there is a lot of noise being made about making the medical evidence in whiplash claims more robust and increasing the small claims track limit, these changes are still some way off.

In the near future, it’s likely that technology and telematics will play more of a role. These systems generally see a box wired into the dashboard of the vehicle that collects real-time information about driving habits

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André Scruton looks at the problems encountered from whiplash claims and discusses how IT advances can help such as speed, distance travelled, direction the vehicle is heading, the presence of objects in close proximity to the vehicle and any sudden stops, starts or swerves.

Earlier this year, the RAC revealed a new system that builds on current telematics technology. The ‘RAC Advance’ system sees a box fitted in its customers’ cars that warns the organisation when a car could break down, rewards motorists who drive responsibly with discounted car insurance through the organisation, and alerts rescue services if the car is involved in an accident.

Generally there are some hurdles to overcome with telematics, such as how many poor decisions a motorist can make before they are penalised and whether insurers will reveal the parameters they use to determine increases or discounts in premiums.

Plus, what happens if more than one driver uses the vehicle? Some insurers are looking at smartphone-based solutions that can monitor and record the data. This should overcome the problem, but comes with other disadvantages because the phone isn’t in the vehicle all the time so won’t always know when the vehicle is being driven, or if it’s stolen. However, there are advantages too because a phone app eradicates the hassle

and expense of having to install a telematics device in a vehicle.

Serious questions have also been raised about telematics technology after it emerged earlier this year that two teenagers who died in a car accident last November may have been speeding in order to get home before a curfew set by the insurer.

The driver’s insurance policy allowed him to drive between 5am and 11pm and his car was fitted with telematics technology to monitor when it was used, with any breaches of the curfew incurring a £100 penalty. As a result, insurers have to look again at their policies to ensure young drivers aren’t being encouraged to speed.

Nevertheless, once these issues are addressed, there’s no doubt this technology can play an important part in improving road safety and offer a solution to bogus whiplash claims by providing detailed information about accidents.

In addition, the data it holds could also prove to be a major source of income in the very near future for all types of firms. Only time will tell.

“There’s no doubt this technology can play an important part in improving road safety and offer a solution to bogus whiplash claims”

André Scruton is managing director of General Legal Protection Ltd

THE ACTUARY • October 2013 www.theactuary.com

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24/09/2013 09:40

TUESDAY 8 OCTOBER

Welcome drinks Staple Inn Hall, High Holborn, London WC1V 7QJ 5.30pm

SOCIAL EVENT

SIAS would like to welcome new members of the actuarial profession to evening drinks at Staple Inn. This is an ideal opportunity to meet new joiners and to learn about SIAS and the profession. The evening will include brief but informative talks from the profession about becoming an actuary and what life is like as a student actuary. This will be followed by some drinks and entertainment, allowing you to meet other new members.

For those of you not so new to the profession, please encourage the new joiners in your company to attend. It is an excellent opportunity for them to meet other young members of the profession.

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

TUESDAY 22 OCTOBER

SIAS Annual General Meeting and Jubilee Lecture Staple Inn Hall, High Holborn, London WC1V 7QJ 5.30pm

PROGRAMME EVENT

SIAS would like to notify its members that the Annual General Meeting for the year 2012-2013 will occur in the Grand Hall of Staple Inn. The accounts and general reports will be available to download from the SIAS website closer to the date.

The highlight of the programme calendar is the Jubilee Lecture and this year we are very pleased to welcome Paul Sharma to speak about international regulatory developments. Sharma is the outgoing deputy head of the Prudential Regulation Authority (PRA) and executive director for policy. He has had responsibility for all policy issues relating to the PRA’s supervision of banks and insurers, including Basel, the Capital Requirements Directive, Solvency II, the Financial Conglomerates Directive and recovery and resolution. Sharma is a chartered actuary and an Honorary Fellow of the IFoA and it will be very interesting to hear his take on the actuarial profession.

Refreshments will be served from 5.30pm, with the AGM and talk starting promptly at 6pm. There is no need to register in advance for this meeting and it will count towards any relevant CPD.

THURSDAY 24 OCTOBER

Pool tournament Rileys Sports Bar Victoria, 16 Semley Place, London SW1W 9QJ

SOCIAL EVENT

The SIAS 2013 pool event is expected to be very popular – so avoid the ‘cues’ and ‘pocket’ your place.

The format of the tournament is as follows: there are 12 American pool tables; each team will have two players; each team plays three group stage matches; winners and runners-up progress to a knock-out competition to decide the winner. Winners and runners-up receive a prize (as well as the immense satisfaction of receiving a citation in a format to be confirmed in The Actuary).

6pm Places are limited and will be offered on a first-come, first-served basis.

Email Mark at social@sias.org.uk to register your team, providing the following information: (a) Primary contact person email address and mobile number. (b) Primary contact person name and SIAS status. (c) Secondary contact person name and SIAS status.

Entry is £15 per team plus £5 per non-SIAS team member. Once your place has been confirmed, payments need to be received into the SIAS bank account within five working days.

FRIDAY 22 NOVEMBER

SIAS annual dinner Old Billingsgate Market, Old Billingsgate Walk, London EC3R 6DX 6.30pm

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

SOCIAL EVENT

To apply for tickets: 1) Download an application form from www.sias.org.uk/socialevents.

2) Email the completed form to social@sias.org.uk on Wednesday 9 October (we regret that we cannot process applications received before this date).

Last year’s event was hugely popular, with tickets selling out within 12 hours, so get your application in early.

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

October 2013 • THE ACTUARY 9 www.theactuary.com

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24/09/2013 09:41

News IFoA NEWS UPDATES FROM THE ACTUARIAL PROFESSION

Upfront Opinion CEO’s comment

Life begins at GIRO40

Derek Cribb outlines how the new resource and environment board will take a cross-practice role

When the barman in the Posthouse on the Ipswich Road in Norwich cleared away the glasses on 24 October 1974, he little realised the significance of the evening. Actuaries, proposing allegiance to the brand-new practice area of general insurance, had gathered to discuss issues facing insurance in the midseventies. Hugh Scurfield, later to become president of the Institute, was in the chair and the ball was rolling. GIRO was born.

Fast forward through dream venues (Sorrento, Killarney, Disneyland), a galaxy of A-list chairmen, pertinent issues over 39 years and speakers whose knowledge was paramount but who added humour to that special cocktail to make GIRO the must-attend annual event.

At GIRO 2013, the GI actuary, now trusted and mature, is reviewing the future and asking whether it is time to evolve or revolve? It is surprising to see how the range of topics has stayed the same over the years, with as many capital calculation related papers (12) in the first 50 papers (which took 11 years to produce) as in the 2013 50-workshop sample. Reserving parity (8) was not surprising. The new modern topic seems to be risk at the expense, perhaps, of reinsurance and pricing topics.

With risk coming of age, GIRO40 will expand further on this as an important component of most papers (at least 43 of 50) having some aspect of either capital calculation, risk quantification, risk reduction, risk driver analysis, or risk optimised decision-making.

With risk continuing to energise our thinking, our methods will evolve. Are we heading for risk-driven unification of diverse topics like pricing, reserving, capital modelling, and business management? What topics are we neglecting in our rush towards risk and how will you help push the research boundaries for GIRO 2014?

Put your ideas forward for discussion and get involved with a working party whilst at the conference. IFoA staff will be on hand during breaks to help you expand further on these ideas. We look forward to an action-packed 40th anniversary with thought-provoking sessions and an exciting social programme. For details on GIRO40 visit: tinyurl.com/bww9vhb

A climate of change Derek Cribb is the chief executive of the Institute and Faculty of Actuaries

I am writing this at a particularly busy time for the IFoA, with three of our residential conferences taking place before the end of the year. These conferences represent two of our largest practice areas, with the 40th anniversary GIRO and the Life conference both taking place in Edinburgh, and our conference for those early in their actuarial career, Momentum, in Newport.

Supporting our existing practice boards in their development of conferences, relevant CPD and student support will always be a key priority. But it is also important to respond to the changing needs of members. To that end, the IFoA’s Council has agreed we should establish a new resource and environment board, grown from the excellent work and increasingly public outputs of the existing member interest group in this area. It will join the life, general insurance, pensions, risk, health and care and finance and investment boards, which already do great work to represent the interests of our members in these communities.

The new board will also have an important cross-practice role as it will have real relevance to all existing practice areas. Environmental issues are of increasing concern and have the potential to impact substantially on actuarial decisions and practice in the future. The board will be ideally placed to help the profession to adapt to these changes and the research output will also be highly beneficial to our programme of CPD. The significance of this research has already been seen in the success of the IFoA’s January 2013 sessional event on the effects of ‘limits to growth’ on financial markets by Dr Aled Jones et al, which broke new ground and led to a significant amount of press coverage. You can access the research report at tinyurl.com/ajx4rk3 We are working with the chair designate of the resource and environment board to establish the committee structure, membership, and terms of reference. Like all practice boards, the objectives of this group will ensure cross-practice working is encouraged, and the board contributes to the delivery of the IFoA’s corporate plan. We hope to be advertising for members on our volunteer vacancy web pages soon, so watch this space.

DEREK CRIBB

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ACCESS THE IFoA’S STRATEGY

THE ACTUARY • October 2013 www.theactuary.com

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24/09/2013 09:42

IFoA China visit a success David Hare, president, and Paul Reynolds, director of public affairs, attended a joint IFoA and China Re Group members event while on their visit to China in September.

David was invited to speak to members, actuaries and the management team of China Re Group about professionalism. The event took place in the China Re offices in Beijing and Shanghai respectively.

China Re is the largest Chinese reinsurer and has about a hundred actuaries within the group, covering both life reinsurance and P&C reinsurance. The vice president of China Re Group Ren Xiaobing chaired the event and deputy directors Jiang Xianxue and Guan Ling of China Insurance Regulatory Commission (CIRC) attended.

In his presentation, the president spoke about the overall supervision environment in the UK, the role of the IFoA and how it assists members with their professionalism development throughout their career. Mr Jiang and Mr Guan of CIRC spoke about developing the new China Risk Oriented Solvency System (C-ROSS) in China, covering its background, the progress so far, future development and how CIRC is seeking equivalence with EIOPA. Vice president Ren stressed that actuaries play key roles for insurance companies and that professionalism is of vital importance to help them deliver impartial advice to help management to make sound decisions. He said China Re would endeavour to promote development of actuarial technology in China. He also pointed out that the joint event had practical significance that would benefit both sides through the exchange of ideas.

Longevity discussed at length The ninth International Longevity Risk and Capital Markets Solutions Conference was held in Beijing from 6-7 September.

This was hosted by the China Institute for Actuarial Science, Central University of Finance and Economics in China (CUFE).

CUFE has the only Institute for actuarial science in China, and its long relationship with the IFoA goes back to the late 1980s.

The longevity conference is a platform that draws academics, practitioners and policy makers, and other experts from all over the world to address the impact of longevity risk on aging population. At the invitation of the event organisers, David Hare, president, attended the conference in Beijing and gave a pre-dinner speech on the challenges for actuaries in dealing with longevity predictions. In his presentation, David described how actuaries were playing their part in developing thinking to underpin the models used to project future life expectancy.

He also highlighted the vital role that judgement and communication play in dealing with the intrinsic uncertainty that existed in these projections.

While attending the conference, David was

ALAMY

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also interviewed by the China Insurance News. He was asked to discuss issues such as what the Chinese insurance industry could be doing to deal with the ageing population, and how they could manage the longevity risk through product design.

David was also asked to give advice to the Chinese actuaries, for which he emphasised professionalism as well as relevance.

ACT UARI ES ’ CODE C H ANGE S I N FOR CE The changes to the Actuaries’ Code highlighted in the September edition came into force on 1 October 2013 and the new version of the Code is now published on the IFoA website.

The changes are aimed at ensuring the code remains relevant to the profession and reflects any changes to the regulatory landscape.

Following a consultation with members and stakeholders, the Regulation Board has approved the following changes.

(1) the code be amended to reflect the merged body of the IFoA and the replacement of the Board for Actuarial Standards with the FRC; (2) Honorary Fellows be brought within the scope of the Code; (3) impartiality provisions be amended to reflect the Conflicts of Interest Guidance published by the IFoA; and (4) provisions to reflect the requirement of the International Actuarial Association’s ethical code in relation to actuaries accepting responsibility for their own work be introduced.

To assist your understanding of the Code and, in particular, the effect of the new changes, a number of resource materials will be added to the regulation section of the IFoA’s website.

If you have any questions about the effect of the changes, or your obligations under the Code in general, you may wish to submit your query to the professional support service via the portal on the IFoA’s website (tinyurl.com/pz7pa4v).

October 2013 • THE ACTUARY www.theactuary.com

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24/09/2013 09:45

News IFoA NEWS UPDATES FROM THE ACTUARIAL PROFESSION

NEWS IN BRIE F Risk management: changes across the board From the start of the 2013/14 session the enterprise risk management board will be known as the risk management board. The change of name recognises the much wider context and remit of the work this board is undertaking and is an easier reference to use with our industry stakeholders.

Andrew Hitchcox, who is chief risk officer of Kiln, has been appointed as chair of the risk management board with effect from the 2013/14 session. Andrew has already served as deputy chair of the board and other key committee roles and will continue to drive the valuable work this practice area contributes.

Andrew is now seeking to appoint a deputy chair to the board. This is an interesting and rewarding role, shadowing the chair during his term as chair to help deliver the IFoA’s risk management strategy. There are specific projects to be tackled with the expectation the deputy will take over as chair in due course.

If you are interested in applying for this role please visit the volunteer vacancy web page: tinyurl.com/qa6ltgc

Recovery and resolution The IFoA has formed a working party to consider the impacts of developing a recovery and resolution regime for insurers. Having learnt from the banking crisis, regulators are keen that they and financial firms have plans in place to deal with the failure of a company.

While much of the initial work of this group has been focused on understanding the current legal framework for the failure of an insurer, and the circumstances in which an insurer might fail compared to a bank, they have moved on to the specific regimes being proposed.

In August, the financial stability board (FSB) published, inter alia, for consultation the Assessment Methodology for Key Attributes of Effective Resolution Regimes for Financial Institutions and more specific documents dealing with both non-bank financial institutions (including insurers) following on from the IAIS papers in July. Nick Dexter, chair of the working party, said: “We hope the working party can make a valuable contribution to the work of the FSB and other regulators and ensure that, as far as possible, the regime that is implemented is relevant to insurers. Although the formal consultation process closes on 15 October, we anticipate that we need to continue working beyond this date to enable actuaries to play their part in implementing the regime.” Members who are not part of the working group but wish to contribute to its work are advised to contact Paul Shelley at paul.shelley@actuaries.org.uk.

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Get the VIP treatment The ‘Volunteer Induction pack’ (VIP) means, for the first time, all information available to volunteers will be available in one place.

This new online resource has been created in response to member feedback and brings together all the material that supports volunteers, plus some additional tips and hints for best practice, including chairing meetings.

Part of the IFoA strategy is to ramp up its relevance, and through member support it wants to ensure it is a world-class global membership organisation. As part of this, the VIP has been created to provide volunteers with information and support. This resource will be launched this autumn.

At the time of launch, all active volunteers will receive an email link to the VIP, which will be located on the IFoA website in the members’ only section. In addition, each chair and deputy chair of all IFoA committees and working parties will also receive an introductory booklet.

The VIP has been designed in such a way as to allow members to dip in and out of the sections, as and when required – and if something looks to be of interest. We envisage this resource will be especially helpful for new volunteers and it will also act as an aide memoire, and easy point of reference, for existing volunteers, when looking for one of our guides, such as the guidance for memberled research working parties or when wishing to view a document such as the current Corporate Plan.

Volunteers are fundamental to the IFoA. Over 2,500 of our members directly support the profession, through volunteering. This ensures the IFoA remains strong and vibrant.

Without their input we could not make all matters actuarial happen and so miss out on opportunities that could be of benefit to

you, your profession, society and each other. In this 2013/2014 sessional year, we are thrilled to launch this new resource and we hope our volunteers will find it useful.

The VIP is a dynamic resource. The IFoA wants to know what you think of it. If you feel anything is missing or you need further clarification, you are encouraged to ask a question or make a suggestion via the online feedback icons that form part of the resource.

To request a copy of the introductory booklet or, if you are not an active volunteer but would like to receive a link to this new resource, contact: Debbie Atkins: debbie.

atkins@actuaries.org.uk View our current volunteer vacancies:

tinyurl.com/qa6ltgc

Office on the move The IFoA is relocating its offices to modernise the premises to establish an organisation that meets business needs and sets out an operating framework for the longer term. We will continue to be based in London, Oxford and Edinburgh but our offices will be relocated to new buildings. Telephone numbers and email addresses will continue to stay the same so you will still be able to contact the profession as normal.

With effect from 28 October the Oxford premises will be relocating to 40/41 Park End Street, Oxford, with London due to move in November and Edinburgh early in the new year. Information on the new London and Edinburgh offices will be communicated to members via our newsletters, website and The Actuary in the coming months.

THE ACTUARY • October 2013 www.theactuary.com

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Oliver Bettis, chair designate, speaks about the establishment of a new resource and environment board

Why are resource and environmental issues of importance to actuaries?

Increasing globalisation and interconnectivity, recognition that the Earth’s resources are finite, and the far reaching implications of global warming, all point to the need for actuaries to look beyond today’s technical problems, regulatory burdens and client demands. As a profession intimately concerned with the future, nothing less should be expected of us. The world seems subject to increasing discontinuities, so simple projection of past trends is no longer an option.

rich newsletter and have featured in approximately 30 articles in The Actuary magazine.

What indication do you have that members will be interested in this topic?

Over the past several years, our MIG community has grown significantly to over 500 members. Derek Cribb, in his article, has already highlighted our limits to growth work; in addition we have run networking evenings, regularly presented at conferences, published a content

Derek has mentioned the resource and environment board will be encouraged to work ‘cross-practice’ What does that mean in reality?

A key feature of the new board is that it will include members with a background covering most, if not all, of the existing practice areas, such as life, pensions and general insurance. RandE issues potentially affects all areas of actuarial work.

How does the board intend to build on the MIG’s success?

We will: help members of the IFoA recognise and develop strategies to deal with the potential implications of resource depletion and environmental change; conduct and encourage thoughtprovoking research in these areas; promote the role of actuaries in new areas of work arising from resource and environmental issues (RandE); and be the focus for the IFoA’s views on the financial implications of RandE issues.

The board will work closely with the other boards in identifying issues and developing responses. For example, climate change is already on the general insurance agenda, in relation to flooding and fire risks, but it raises investment issues in relation to long-term infrastructure investment to adapt to climate change or mitigate its impact. In the longer term, longevity may be affected and economic growth rates, both crucial to pension funding. Much of our work may be of interest to risk managers.

So, there are already practical ways actuaries can bring their skills to bear?

Absolutely, the board is looking for volunteers in a number of areas, so watch the volunteer vacancies page. It also intends to carry out a survey of members’ views to obtain feedback on concerns and areas of interest. If you are interested in volunteering on resource and environment issues, you can also get in touch with our volunteer engagement manager, Debbie Atkins: debbie.atkins@ actuaries.org.uk

EVENTS AND CONFERENCES 2013 Masterclass series October to December, London

Pensions Conference: 29 October, Bristol – tinyurl.com/phwz54j

A series of breakfast masterclass events. 90-minute sessions on:

6 November, London

4 October The perfect proposal 30 October Pitching to win 21 November Beating bigger competitors no matter their size 10 December Winning business contract to contract These sessions will be led

by Chris Matthews, who has given well-received masterclasses at the IFoA Visit: tinyurl.com/o5ct6jp

Current issues in pensions meets highlights from the pensions conference Update for qualified, newly qualified and non-actuaries. Choose from a range of workshops featured in the

Frailty Workshop 14 October, London

bit.ly/14imdwc

Topics will include the biological approach to frailty, inequalities and the social gerontological approach.

Speakers include: Thomas Kirkwood CBE, Newcastle University; James Nazroo, The University of Manchester; Ngaire Kerse, The University of Auckland.

Visit: tinyurl.com/ojgzj8g

Autumn lecture: Robert Black presentation 7 October, Edinburgh

Life conference and exhibition 10-12 November, Edinburgh

Robert Black, former auditorgeneral in Scotland, will be this year’s guest speaker.

Black will share his thoughts on the challenges for public services and the strengths of policies adopted in England and Scotland.

Visit : tinyurl.com/o59zcos

This year’s conferences will provide discussions around what’s hot and current in life. From professional responsibility with Paul Moore through to Alistair Darling’s thoughts on being chancellor of the exchequer and the current economy.

Visit: tinyurl.com/p8ojuvf

– tinyurl.com/pvmc6m2

14 November, Glasgow – tinyurl.com/o9hnh7n

19 November, Leeds – tinyurl.com/pf8qzsx

26 November, London –

Momentum 2013 4-6 December, Celtic Manor, Newport Aimed at newly and recently qualified actuaries from all practice areas. A range of technical sessions, debates, masterclasses with networking opportunities. This year’s plenary sessions include ‘The future of actuarial science’ and ‘Proud to be professional’ and after dinner speaker, Nick Hewer, of The Apprentice.

Visit: tinyurl.com/pykhjbr

October 2013 • THE ACTUARY www.theactuary.com

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News Industry news@theactuary.com

OFT brokers government action on ‘poor value’ DC pensions The watchdog found savers often could not assess value for themselves and it is ‘vital’ reforms are implemented Reforms have been agreed between government, regulators and the pensions industry to ensure millions of workplace savers get value for money from their defined contribution schemes, the Office of Fair Trading has said.

Following a major market study of workplace schemes, the watchdog found savers often lacked the capability or incentive to assess value for themselves. Complex products had contributed to the difficulty of workers making the right choices about their pensions.

OFT chief executive Clive Maxwell said: “We’ve worked closely with the government, regulators and industry to agree a set of measures that we believe are an important step in helping to ensure that savers get better outcomes.”

These include assessment by The Pensions Regulator (TPR) of small, trust-based schemes, which the OFT singled out as not delivering value.

The Department for Work and Pensions will also consider whether TPR needs new enforcement powers to tackle the problem.

A second area of concern was old and high-charging contract and bundled trust schemes. The Association of British Insurers and its members have agreed to an audit of these schemes to give a full picture of their associated charges and benefits.

Given that auto-enrolment is set to increase the number of workplace pension savers by 80%, Maxwell said it was ‘vital’ the reforms were implemented rapidly.

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

Further Solvency II delays now possible A key European Parliament session to approve proposed amendments to regulations has been put back to next year The European Parliament will now not meet to consider the proposed amendments, known as Omnibus 2, until March 11 next year, according to parliamentary schedules.

Responding to the announcement, KPMG said that this meant there was ‘no clarity’ about when the regulations, which will place new capital requirements on insurers, will be introduced.

Previous speculation around the implementation date was predicated on Omnibus 2 being finalised this year. Now it has been formally recognised that this deadline will be missed, the further risk of a significant delay increases greatly, said Peter Ott, KPMG’s European head of Solvency II. “Political compromise must be reached quickly if Solvency II is ever to be finalised.”

The announcement of the delay came as a Towers Watson survey revealed UK life insurers had used delays to Solvency II to make improvements to how they assess and measure risk in their own models.

In its annual study of risk calibration methodologies, covering 21 of the UK’s life insurers that employ internal models, the consultancy found that most companies rated their risk validation as ‘final’ or ‘almost final’.

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

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

14

DC schemes drive design There is a new generation of defined contribution default funds driving better design and governance across the pensions sector, the National Association of Pension Funds has found. Its Default Fund Design and Governance in DC Pensions report said default funds were becoming increasingly important as they are a requirement for all autoenrolment schemes. bit.ly/funddesign

LibDems behind tax relief cut The Liberal Democrats voted to cut a person’s lifetime pension tax relief allowance by £250,000 to £1m. In a debate on tax policy at the party’s annual conference in Glasgow, chief secretary to the Treasury Danny Alexander said change was needed as 58% of the total £35bn spent on tax relief went to the richest tenth of the population.

The party voted to retain the existing £40,000 annual relief allowance. bit.ly/TAtaxrelief

Actuary in top 10 jobs list Being an actuary has been ranked the seventh best job in the UK by recruitment website Adzuna. High pay, low stress and strong levels of job security pushed it towards the top of the list of over 2,000 jobs examined. Taking the top three places were translator, web developer and surgeon. All boasted a lack of competition, employer demand, rising wages and excellent working environments. bit.ly/Acttop10

Think-tank slams DWP pension pot transfer policy The Department for Work and Pensions is pursuing the wrong approach in its efforts to develop pension pot transfers, according to the Centre for Policy Studies (CPS) think-tank.

The DWP favours the introduction of a ‘pot follows member’ (PFM) mechanism, whereby pension pots are automatically transferred when an employee moves job. But the CPS said this process was slow, plagued by paper-based bureaucracy and mounting costs.

Its report, Aggregation is the Key: Retirement Saving Nirvana for Consumers, makes the case for virtual aggregation – an online portal where people can access information on all their pots of retirement income and transfer assets between providers. It cited a DWP survey, which found just 21% of employees preferred PFM, while 61% wanted an aggregator approach.

“The DWP would appear to have ignored what most [workers] actually want,” said Michael Johnson, the report’s author.

But the DWP insisted that its PFM approach was the right one.

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

Pensions Regulator issues early warning on admin The sheer number of public-sector pension scheme members will make maintaining high-quality data a challenge, The Pensions Regulator (TPR) has warned.

From April 2015, the regulator will set standards of governance and administration for public-sector schemes, intending to bring administration practices broadly in line with those operating in the private sector.

On 6 September, TPR published a report summarising current practice in the eight categories of public-sector schemes: local government; the civil service; NHS; teachers; armed forces; police; firefighters; and judicial workers. Between them, these schemes represent about 12.6 million members and more than 22,000 employers.

The TPR’s Andrew Warwick Thompson said: “The size and number of memberships of public service schemes means they can face challenges in, for example, maintaining high-quality data and records. Although they are run slightly differently to private-sector schemes, we will take a similar approach – prioritising education and enablement but taking action if necessary to make sure schemes are run to a high standard. We plan to monitor and report on the progress of public service schemes each year.”

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

THE ACTUARY • October 2013 www.theactuary.com

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› GENERAL INSURANCE

NEWS ROUND-UP

Indian regulator lacks autonomy Settlement ends AIG litigation India’s Insurance Regulatory and Development Authority (IRDA) has been described as insufficiently independent in a study by the World Bank and International Monetary Fund. The study also stated that the reserve powers of the central government “potentially detract from the supervisor’s powers and independence”.

The report was the first by independent assessors and went on to say that IRDA does not have risk-based early-warning systems in place to ensure the health of the insurance industry. The ratios measured (solvency margins) appear to be largely generic rather than based on emerging experience, it added.

The study criticised the government guarantee given to the policyholders of India’s main life insurer, the Life Insurance Company, and said that it would be useful only during a time of global uncertainty. It recommended that the value of the guarantee should be included in product pricing.

It recommended that: “Relevant standards should be produced and ideally an Actuarial Standards Board established. In addition, there should be a plan to introduce specialised certification of actuaries, particularly for non-life business.”

A US judge has approved a $72m (£45m) settlement to resolve shareholder claims that Berkshire Hathaway’s General Re Corp engaged in a deal that helped to inflate the reserves of American International Group (AIG).

Approval of the settlement brings to an end nearly a decade of litigation surrounding AIG’s accounting practices and brings the total of approved settlements to more than $1bn (£6bn).

In April, a related $115m (£72m) settlement with AIG former chief executive Maurice Greenberg, three other executives and two of Greenberg’s companies was approved. A $725m (£455m) settlement with AIG and a $97.5m (£61m) accord with accounting firm PricewaterhouseCoopers has also been agreed.

The lawsuit, led by two Ohio state pension funds, alleged that AIG and Gen Re violated federal securities laws through a $500m (£314m) reinsurance transaction in 2000.

LARGE LOSSES

FCA to address data collection The Financial Conduct Authority has said that it recognised that the way in which the Financial Services Authority (FSA) collected data from firms was poor and that it will address the “data and information legacy it inherited”. The regulator published a data strategy paper on how it will manage and use the data collected from firms. The FCA said it recognises that in the past the FSA did not always request data from firms in a “clear and effective way”.

It said: “We have listened to the firms we regulate, who told us there are a number of failings, including: too many requests for data and information without clear information about why it was needed; unreasonable timescales, resulting in firms needing to divert resources to meet our requests; and a failure to communicate what the data and information was used for, leaving firms questioning whether it was used at all.”

The FCA also said it recognises that the FSA did not have the internal checks to identify what was being asked of firms, and lacked the necessary technology to store and use the data it had appropriately.

Capital influx puts market at risk A flood of investment capital into structures linked to insurance could lead to instability and spark a new financial crisis if left unsupervised, the chairman of Lloyd’s of London has warned. This has allowed insurers to spread risk and drive down prices.

John Nelson, head of the historic insurance market, said the trend helped fund expansion to keep pace with growing economies and rising demand. But he warned that, without proper supervision, the fund flows could end up undermining the stability of the insurance sector.

“Some of the structures being used could undermine the qualities of the insurance model, which provides a secure and reliable risk transfer market for specialist risk, and indeed the reliable payment of claims,” Nelson said. He added that the industry and financial regulators must be “extremely watchful”.

“We must make sure that the capital remains properly attached to the underlying transaction so that the risk is properly assessed, properly priced and properly supervised,” he said.

These statements came at a time where reinsurers and brokers have made comments for the Monaco reinsurance conference that demand for catastrophe cover is expected to rise by around 50% by 2020.

Global insurance broker Willis has also warned that $40bn (£25bn) of traditional capital is likely to be replaced by new forms of capital.

GETTY

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total economic losses from the storms that hit the US$400m Estimated US states of Colorado, Wyoming and Montana in September

Thunderstorms, United States, September Powerful thunderstorms swept across parts of the Rockies and Plains in early September, causing damage in several states.

Montana was worst affected, with a wind gust of 104mph (167kph) recorded in Beaverhead County.

Hailstones the size of golf balls were noted elsewhere in the state. As well as property damage, agriculture was heavily affected, especially wheat, barley and potato crops. Losses

are expected to be in the region of US$50m (£31m).

At least eight tornadoes touched down (six of which were in Colorado), although most of the damage resulted from hailstones the size of a softball and flooding in northeastern Colorado. Thousands of homes, businesses, schools and vehicles were affected. Agriculture was severely damaged as well. Total economic losses were estimated at US$400m (£251m), with insured losses over US$225m (£141m).

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

October 2013 • THE ACTUARY 15 www.theactuary.com

24/09/2013 09:50

News People & Society

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

Cowling installed as master

By Irene Paterson On 17 July, the Worshipful Company of Actuaries (WCA) and guests came together at Fishmongers’ Hall to reflect on a wonderful year presided over by master Bill Smith and to celebrate the installation of the new master, Charles Cowling.

The evening began with the court of the WCA assembling to consider the business of the company and to install three new liverymen, as well as admit two new freemen to the company.

Master Bill Smith presided over the ceremony before it was adjourned for welcome refreshment. It was soon time to attend the installation ceremony, where I was delighted to be sitting beside the new master’s cousin, Joe Byllam-Barnes. A well-known figure in the City, having held a number of posts, including

director of the Guild of Freemen of the City of London, Joe looked on with pride as Bill placed the chain of office on Charles’ shoulders, completing the handover to the new master.

Marion, Bill’s wife, was also gracious in passing on the mistress’s badge to Charles’ wife, Becky, who, in addition to her own professional duties, will support Charles in his year as master.

With warm congratulations, Martin Miles was also installed as the new senior warden and Peter Thompson as the new junior warden.

The assembled company then enjoyed some light refreshment mingling with guests and other members before proceeding up the splendid main staircase to the banqueting hall.

The principal guest at the installation dinner was Mike Brace CBE. Mike has competed in six

winter paralympic games and was previously the chairman of paralympics GB and a board member of London 2012.

In his speech, Charles announced that the joint campaign by the WCA and The Actuary to reach a target of £1 million for charitable fundraising activities by actuaries has reached just over £800,000. Indeed, past master Bill Smith’s charity bike ride of nearly 50 riders had raised more than £27,000 and the new master will be leading the way on the 180 miles of Wainwright’s ‘coast to coast’ walk.

Lastly, Charles was delighted, as one of his first duties as master, to award a special prize to Ronnie Sloan for his charitable fundraising over many years, often in his Superman outfit and always with great purpose.

Ironman shows steel Well done to Phil Lloyd on completing his first Ironman triathlon in Zurich and raising more than £3,000 for Parkinson’s UK, a national charity that offers support to people with Parkinson’s and their carers and leads the work to find a cure for the condition.

Phil entered the Ironman as a personal challenge as well as to raise money for Parkinson’s UK. He trained for the event for a year and completed the 2.4 mile swim, 112 mile bike ride and marathon run in a time of less than 13 hours.

If you would like to sponsor Phil and provide support for his chosen charity, please visit www.virginmoneygiving.com/phil-lloyd where you can also find a more detailed description from Phil of his Ironman experience.

More information on Parkinson’s UK can be found at www.parkinsons.org.uk

16

Older and wiser

Editor required for American Journal

Kent Sandom’s retirement is busy with hobbies including bridge, violin and tennis, but he has been persuaded to join a recruitment agency designed to promote the employment of retired people. Age Against The Machine’s retirees have catered for a themed party based on The Great Gatsby, transformed a beautiful New Zealand garden and various building projects are in prospect. The agency is led by retail expert Mary Portas (left), and its work will be covered in a Channel 4 TV programme later this year.

The Society of Actuaries invites applications and nominations for the position of editor of the North American Actuarial Journal. Complete position description; information about the NAAJ; desired editor qualifications; editor responsibilities; and application/nomination procedures can be found at www.soa.org/Naaj/Editor.pdf The Society of Actuaries will provide some level of compensation to the editor. Letters of interest should be sent by 31 October, to: Edward W (Jed) Frees, chair, actuarial science, risk management and insurance, Wisconsin School of Business, jfrees@bus.wisc.edu

THE ACTUARY • October 2013 www.theactuary.com

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Join The Actuary’s LinkedIn group

Considering the world’s best career The SIAS Committee, as part of its charitable initiative, has recently joined forces with the Brokerage Citylink, a charity providing careers advice and opportunities to young people in London. The first collaboration was a half-day workshop entitled ‘An introduction to the actuarial profession’, held at Staple Inn and attended by A-level students from eight different schools.

Despite taking place on a sunny afternoon in the week after AS-levels, the turnout was impressive and 22 young mathematicians listened to the SIAS volunteers talk about what actuaries do, the path to becoming an actuary and why it is officially the best job in the world (according to the Wall Street Journal at least). The session ended with a business game that gave the students a taste of the day-to-day challenges faced by actuaries.

If you would be willing to help out at future events, please contact Greg Campbell at charities@sias.org.uk

Profession grows in Uganda

By Kaawha Albert After eight years, Makerere University Kampala, Uganda, has more than 300 graduates in actuarial science. These graduates are preferred to those graduating in statistics, economics or accounting by Ugandan employers in banking, insurance and pensions due to the broad nature of the actuarial degree.

The Actuarial Association of Uganda (TAAU) is the umbrella organisation for actuarial science in Uganda and is working to gain relevance in a range of sectors by contributing to policies that will benefit the country.

TAAU has submitted valuable advice to government and regulators in regard to the Pensions Liberalisation Bill, which is a major change for the country. Input by TAAU has been recognised by industry regulators and stakeholders like the Insurance Regulatory Authority, Uganda Retirement Benefits

Writers welcome The Israeli Association of Actuaries has a new webbased actuarial magazine.

The Association welcomes volunteers who wish to write for the publication, which can be seen at: www.hactuar.com

REX / SHUTTERSTOCK

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Births Eleanor BeamondPepler (PRA) and James Pepler (GAD) are delighted to announce the birth of Imogen Ruth on 6 August, a sister for Bronwen.

Authority, Insurance Institute of Uganda and Uganda Insurers Association.

TAAU members are pursuing the Institute and Faculty of Actuaries exams and currently have two members who have completed the CT exams. These members serve to encourage the younger students through talks at the university and various TAAU activities.

TAAU is working with various international actuarial associations to begin mentorship programmes and organise tutorials and seminars to promote the profession in Uganda.

With TAAU at the helm of promoting the actuarial profession, Uganda will have a great wealth of actuarial skills and expertise to serve both local and international markets within the next three to five years.

For more information, visit www.ugandanactuaries.com/

Deaths Brian DARWIN died recently, aged 66. He became a fellow of the Institute in 1973.

Kenneth MURDEN died recently, aged 94. He became a fellow of the Institute in 1951.

Actuary to be a City sheriff

By Brian Ridsdale By a Charter of King Henry I, London liverymen were given the right to elect two sheriffs. There are about 23,000 liverymen belonging to 108 livery companies, and their major purpose these days is charitable. Each year, the livery companies are able to distribute in total more than £40 million.

The office of sheriff is older than that of the Lord Mayor itself, dating from 1131. The duties of the sheriffs are to oversee the smooth running of the Old Bailey. The sheriffs also attend the Lord Mayor in her official duties (the Lord Mayor in the coming year will be alderman Fiona Woolf CBE, only the second female Lord Mayor in the history of the City). The main object of the Lord Mayor and the sheriffs is to promote London’s financial services at home and abroad.

On 24 June, two sheriffs were elected and, for the second time, one of the sheriffs is an actuary.

Adrian Waddingham CBE, a past master of the Worshipful Company of Actuaries (WCA), was elected as the non-aldermanic sheriff. Sir Paul Judge was elected aldermanic sheriff. Adrian follows in the footsteps of actuary Ken Ayers, who was sheriff in 1995/1996.

The new sheriffs took up their office on 27 September, and will live in the Old Bailey for their year of office. The new Lord Mayor takes up office on 8 November and her election is marked by the colourful Lord Mayor’s parade around the City on 9 November. This parade is well worth seeing, and will be live on BBC. You will see the current master of the WCA, Charles Cowling, in one of the horse-drawn carriages.

The WCA has also entered a float with the theme that ‘maths is fun’. The float includes TV celebrity Johnny Ball. The sponsors of the float in addition to the WCA are the Association of Consulting Actuaries, SIAS and Barnett Waddingham LLP.

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

October 2013 • THE ACTUARY www.theactuary.com

17

24/09/2013 11:59

IRONING OUT THE CRISES Paul Sharma is the outgoing deputy head of the Prudential Regulation Authority.

On the eve of his departure he talked to Richard Purcell and Titus Bakanauskas about the value actuaries can add, and what the newly created PRA means for UK insurers

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24/09/2013 09:54

On my agenda features@theactuary.com

Paul Sharma recently decided to step down from his role as deputy head of the Prudential Regulation Authority and executive director of policy at the Bank of England following a career of 20 years. He firmly believes those years have presented a wide range of challenges and experiences that he can now draw upon in his new role as co-head of regulation practice with consulting firm Alvarez & Marsal. Before making his departure, he sat down with The Actuary to discuss the current regulatory climate.

Was an actuarial career always on your radar?

Having graduated with a degree from Cambridge in mathematics, I had two job offers: one to work for an accountancy firm in London; the other to train as an actuary in Norwich. A career in London suited me more, and I accepted a job as a trainee accountant at Arthur Young (now Ernst & Young).

What made you switch to the public sector?

You can specialise in insurance very early on, even as an accountant, and working for the regulator is appealing as it offers experiences you cannot get elsewhere.

What key skills or experiences would you say have helped you in progressing in your career?

Working in insurance means you have to have a strong grasp of the actuarial and legal matters. The other key skill is communication, and being able to influence. Technical specialists can bring a lot to the table, but without softer skills, people don’t always listen to them.

What are the priorities for someone in your role?

It’s about implementing a new way of supervising firms and learning lessons from the financial crisis to create a judgementbased regulatory framework. We are moving away from a rules-based approach, and to one that is more forward looking. We need to embed this new approach in the way firms work. Overall the objective of the PRA is to reduce the probability of firms failing, and where failure does happen, making sure that it happens in an orderly way.

What has changed now that prudential regulation is part of the Bank of England?

There are a lot of synergies from having micro and macro management of the financial sector under one roof. It means the Financial Policy Committee can better understand the impact on insurance companies when considering the overall stability of the financial system. We are also collaborating at lower levels to ensure better understanding of the consequences of regulatory intervention.

GREG FUNNELL

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We are now also focusing on a smaller number of issues. We provide less but more meaningful guidance, and the PRA’s supervisory statements form an important part of that.

Do you think we have created new risks by having the PRA separated from the FCA? By having one regulator focused on financial strength and the other on consumer protection it means both areas are getting the attention they deserve. The FSA would have sometimes prioritised one area above another. There does need to be a strong level of cooperation between the PRA and FCA, and this is baked in by ensuring counterparts at several levels meet and work together on issues.

Mark Carney is the first non-British governor of the Bank of England in its 300-year history. Do you think we should import more experience?

One thing we have learnt from the financial crises is that ‘group think’ is a problem. To address this we need diversity of thought, whether that’s different cultures or from different professional backgrounds. The PRA has also recognised this and is the only European prudential regulator to have staff from virtually every EU country.

Solvency II has shown the difficulties of unifying financial regulation internationally. What do you think we can realistically achieve by working with other European regulators in the near future?

Working together is of value to firms, as they know the regulatory regime they operate under is recognised overseas. Although Solvency II has been delayed, we have had a single European insurance market since 1994, and updating and improving the EU regime is important in making sure all insurers are held to the same high standards. Now we are part of the Bank of England we take into Europe the tremendous reputation and weight this carries. This should help us be more effective in working with our European counterparts.

The government has said big banks are bad for business. Should we break up large insurance companies too?

Ring-fencing has been at the centre of the plans for banks. But this was introduced into insurance in the early 20th century when the Long-Term Business Fund and General Business Funds were created. It has stood insurers in good stead. It is important to have diversity across insurance companies; we need firms that sell both single and multiple lines of business; we need proprietary companies and mutuals. By also having a proportionate and principles-based regulatory regime we can help make sure barriers to

entry are not too high, and so maintain and even improve this diversity.

You were made an honorary fellow of the Institute and Faculty of Actuaries in 2008. What is your view on the role actuaries can play in protecting the stability of the financial system?

Their role is fundamental in maintaining the safety and security of the financial industry.

Within the non-life market during my working life this role has been totally transformed from rarely being used by firms to now being integral, and helping bring a new level of professionalism to this market.

I think actuaries can do more to help improve the professionalism of the wider financial services sector, and can work alongside other professions in multidisciplinary teams. They can also help reduce the ‘group think’ problems we have had in the past. More generally, I think actuaries have a strong sense of public service, and this is important in helping to lead by example.

How do actuaries add value within the PRA? I always found working in multi-disciplinary teams with actuaries was very important in helping me to develop my technical skills and knowledge. At the PRA, actuaries work in both specialist and multidisciplinary teams, and we use them in wider-field roles. We recently appointed an actuary to lead our work with the Financial Services Compensation Scheme in developing their rules, which is a very legal role.

What one bit of advice would you give to budding actuaries at the start of their career?

Although the communications exam might seem unimportant compared to the other technical papers, communication skills will be a key driver for success in your career.

What do you like to do when you’re not at work?

I like going on holiday with my six-year-old goddaughter. History is also a passion of mine, and I like reading books in this genre.

My favourite books are Decline and Fall of the Roman Empire and The Meditations of Marcus Aurelius. I would recommend anyone who works in risk to read a book about the fall of a civilisation. I also enjoyed Cromwell – the biographical film about Oliver Cromwell.

What is your favourite motto?

“I will maintain”. This was the motto of William of Orange, founder of the Bank of England. a Paul Sharma will be talking at the SIAS Jubilee Lecture on Tuesday 22 October. Details will be released shortly in The Actuary magazine and via the SIAS newsletter.

October 2013 • THE ACTUARY www.theactuary.com

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24/09/2013 09:55

Longevity The long-term rate features@theactuary.com

The peak of increase in life expectancy may not be as close as you think.

Steven Baxter and Andrew Gaches explain the possible pitfalls For those who enjoy a country walk, or the more strenuous exertions of bagging Munros, you may have experienced the conviction that you have reached the summit of your climb, only to find that as the ‘summit’ nears you have been fooled and there is plenty more climbing to do.

With longevity projections this has been the story for many decades.

Oeppen & Vaupel (2002) showed how demographers and actuaries alike have valiantly tried to project life expectancy, only for their projections to be proven too low, typically within a period of just five years. In each case, the projections succumbed to the same pitfall, assuming that life expectancy was close to peaking, or that the summit has been reached.

In recent times, the actuarial profession in the UK has sought to address this, introducing minimum improvements, which have morphed into ‘long-term rates’ in the Continuous Mortality Investigation (CMI) model. The idea behind these is to ensure that life expectancy continues to increase rather than rapidly levelling off to some maximum attainable value. However, our projections continue to include an implicit assumption that the rapid rate of increase in life expectancy seen in recent decades has peaked.

Past trend and future projection

Beyond the summit 20

The challenge of defending this assumption is best seen by Figure 1 (page 21). The chart shows the increase in period life expectancy of a man age 65 in each decade from the 1950s onwards.

The grey bars show historic experience observed within the Office for National Statistics (ONS) England and Wales data, which underpins the CMI projections model. With the exception of the 1960s, we see a sustained trend life expectancy increased in each decade, and by noticeably more than the preceding decade.

The blue bars in Figure 1 show the projected increases from an assumption commonly adopted for pension scheme funding and market-based pricing of longevity. This shows a rapid reversal in the trend, assuming improvements have peaked and are rapidly declining to the level of increases implied by the long-term rate (for illustration we have used a long-term rate of 1.5%, however for rates of 2% and below a very similar picture is seen).

This picture has been dubbed ‘extreme trend reversal’, and it is easy to see why. It assumes improvements this decade will be at a similar level to those seen in the 1990s. Within a few years it will be clear whether this assumption is being borne out in practice – if not then we are likely to have to recommend increases in longevity reserves for our clients and employers. We therefore recommend considering alternative assumptions. One possibility is the green bars in Figure 1, which allows for a more gradual run-off of improvements to the same long-term rate. For a life insurer with an inflation-linked annuity book, this would increase reserves by some 4%, while for a pension scheme with a mix of in-payment and deferred annuities, the increase in technical provisions would be closer to 6%.

The CMI default How has the ‘extreme trend reversal’ become the default assumption?

The answer lies in the core parameters embedded in the CMI projections model.

THE ACTUARY • October 2013 www.theactuary.com

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24/09/2013 10:11

STEVEN BAXTER leads the

longevity analytics programme at Club Vita. ANDREW GACHES is a longevity consultant at Hymans Robertson

Figure 1: Increases in period life expectancy for men from age 65 in each decade

1950s 1960s 1970s 1980s 1990s 2000s 2010s 2020s 2030s 2040s 2050s 2060s 0

0.5

1.0

Historic Improvements

Years

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2.0

2.5

CMI 2011 (1.5%)

3.0

An alternative basis

How do we get to the long-term rate?

Historic improvements

What is the longterm rate

How long does it take to get to the long-term rate

Options for better projections

Time Figure 3: Are improvements increasing or falling?

3 2.5 Rate of mortality Improvement, % p.a.

As users of the model we should challenge ourselves whether the core model continues to be appropriate for our advice. If not, then an alternative parameterisation of the model is needed. It is relatively easy to adjust the model using the advanced parameters to obtain a run-off of improvement that continues to increase for a few years before falling away to the long-term rate.

The simplest way to do this is to increase the ‘proportion of convergence remaining at the mid point’ parameter to greater than 50%. As the tail-off is starting later, it would also be reasonable to assume it will take improvements longer to reach the long-term rate.

To reflect this you can increase the ‘period of convergence parameter’ in the CMI model. Doing this you will be able to replicate the green bars in Figure 1.

The issues raised in this article have been noted as part of the CMI’s recent consultation on the future of the projections model. At the profession’s annual mortality and longevity seminar there was a split vote on whether the convergence parameter should be made part of the core model.

A half-way house whereby the core model asks the user to choose between a small number of pre-set ‘peaked’ and ‘not-peaked’ variations may be the solution. a

1.5

Figure 2: CMI approach to project improvements

Rate of Improvement in mortality

The CMI model projects improvements (technically in two parts – the age-period and cohort components) from an initial starting rate to the long-term rate in line with the schematic of Figure 2. While users of the model can employ the advanced parameters to change all the parameters highlighted in Figure 2, most actuaries rely on the core version of the model where only the long-term rate for the dominant age-period component can be changed.

In the core model, the shape of the convergence to the long-term rates does not depend on the ‘direction of travel’ in historic improvements. Instead it assumes a pattern similar to the lower-green line in Figure 2, for example, immediately following a downward trend. When the CMI model was first released, this assumption seemed plausible.

The grey line in Figure 3 shows the smoothed period improvements observed in ONS death data when the first edition of the CMI projections model (CMI_2009) was published.

Improvements appeared to have flattened off in recent years and the CMI concluded that this “illustrates possible emerging, but inconclusive, evidence of mortality improvement rates appearing to level off ”.

In contrast the green line in Figure 3 shows the smoothed data available two years later which led the CMI to comment that “the lower trajectory apparent from including the 2008 data has been almost fully reversed by the 2009 and 2010 data for both males and females” (Working paper 55). By this stage, the default convergence assumptions no longer look plausible.

To date, the CMI has produced five variants of the lines in Figure 3, each based on an ONS dataset up to a different point in time (2007 to 2011). Four of the lines show a steep upward trajectory in the most recent years, only the one available when the CMI model was first released flattens off.

2 1.5 1 0.5 0 1970

1975

ONS data to 2008

1980

1985

1990

ONS data to 2010

1995

2000

2005

2010

Sources: CMI/ONS

October 2013 • THE ACTUARY www.theactuary.com

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24/09/2013 10:12

Mortality Losses and models features@theactuary.com

Ever felt daunted by the prospect of estimating old-age mortality with too little data?

Joseph Lu and Steve Bale provide a potential lifeline

An unpredictable age The increasing number of people living to very old ages has attracted much public attention lately. This highlights the need for accurate estimates of mortality rates. Obtaining sufficiently credible datasets for analysing mortality experience at these ages can be challenging though. For example, most Continuous Mortality Investigation (CMI) life tables are often based on low data volumes above age 90 and rely upon extrapolation of younger age mortality. This introduces uncertainty in the derived mortality rates at higher ages.

The general population Industry and general population life tables usually have different mortality rates. We believe that this is largely attributable to differences in socio-economic distribution between their respective populations. Interestingly, though, differences in mortality rates for different socio-economic groups have been observed to narrow at older ages (Hoffmann, 2005; CMI working paper 66). If this is the case, then we might be able to use the population data to determine the mortality rates at these higher ages. This overcomes the problem of insufficient data for the ages in most datasets used by the insurance or pension industry.

A key problem with UK demographic data is that the number of people alive each year is estimated from the most recent census, and is therefore subject to reporting or calculation bias. We discuss a method that

22

estimates mortality rates at higher ages using death data of cohorts born many years ago, that can be expected to no longer have any surviving members, for example those born in 1890. This is known as the ‘extinct generation’ method. It has the advantage of using the more reliable death data alone to construct mortality rates, without relying on census data so avoids the problems related to census estimates.

So does mortality between socio-economic groups converge at very old ages? We have analysed CMI Self-Administered Pension Scheme (SAPS) mortality data from 2005 to 2009. This is split by pension band, which we have assumed to be a good proxy for socio-economic circumstances of the SAPS population. The results are summarised in Figure 1.

The chart shows that as age increases, the difference in mortality between the pension bands does in fact narrow. The differences between pension bands are less pronounced for females and the convergence is less distinct, as described in CMI working paper 66. We have also observed this socio-economic convergence in larger datasets, including the General Practice Research Database (GPRD) and Office for National Statistics total English population (Lu et al, 2013).

More research is required to confirm the trajectories, but possibilities include: ● Differences in mortality rates between people in different socio-

THE ACTUARY • October 2013 www.theactuary.com

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24/09/2013 10:32

JOSEPH LU heads longevity risk at Legal & General and STEVE BALE is longevity risk management actuary within the longevity risk team

The extinct generation method can be used to estimate population mortality rates at higher ages for cohorts that have no surviving members. The population estimate for a cohort at age x is the sum of all future deaths for the cohort. For example, the population size of the cohort at age 100 is the number of deaths among cohort members, from the year that the cohort turned 100 until the year that the last member of the cohort died.

We looked at the population of lives born between 1875 and 1900 inclusive, so those lives reaching age 100 between 1975 and 2000. For lives born after 1900, their registered death information will not be complete for ages less than 109 years. Working backwards from the oldest life, populations, and so mortality at previous points in time, can be constructed.

This approach arguably provides a better estimate of population than census-based projections, and at least maintains consistency between death and exposure data.

We have used the extinct generation approach to determine and compare mortality for different countries. The derived mortality rates are summarised in Figure 2.

Different countries will be exposed to different healthcare, lifestyle and socio-economic risk drivers, which will influence their mortality in different ways. However, we can see that for most countries analysed, older age mortality rates are clustered fairly closely. The two outliers appear to be Japan and the US. In Japan, under-reporting of deaths at very old ages has been discovered in a number of cases.

Further investigation is needed into the US data.

Key data issues of the extinct generation approach when used for other countries include territorial changes over time, significant war mortality and estimation of military population, and changes in recording and validating deaths over time.

Other countries’ data are subject to differing recording and quality checks and may have different approaches to inclusion/exclusion of mortality related to non-residents. The approach also assumes that there is negligible migration for very old ages.

Information from extra data The above results could be used to inform the derivation of life tables at higher ages. For example, the initial mortality rates (Qx) above age 100 of the recent CMI SAPS draft S2PMA are higher than those of most countries examined here.

The Qx between age 95 and 105 calculated using the extinct generation method for England and Wales are on average about 4% lower than those implied by the CMI SAPS draft S2PMA and about 8% lower than the S1PMA mortality rate tables.

On the other hand, the same rates from our calculation are about 6% higher than that of CMI PNMA00 life table. These are not direct

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Joseph Lu and Steve Bale would like to thank Andrea Peterson for her contribution and Wun Wong for the provision of GPRD data

Figure 1: Progression of mortality rates for males for 2005 to 2009, split by pension band

% of pension band £8,500 - £13,000

Extinct generation method

comparisons, in that the rates shown above have not been adjusted to allow for any changes in mortality rates over time. The extinct generation method’s mortality rates would have to be adjusted with changes in mortality improvement, potentially giving lower mortality rates and increasing the differences from the SAPS table.

Pension schemes’ liabilities calculated using the SAPS tables would increase if mortality rates above age 95 were to be replaced with those estimated from the extinct generation method. This method could potentially help inform the derivation of higher-age mortality, especially for the purpose of sense-checking.

Our initial research does show that differences in mortality rates eventually converges at higher ages, but we appreciate that more detailed research to refine this assumption is needed.

The extinct generation method may be advantageous as is does not rely on census estimates, but further analysis of how mortality rates have changed in the past at higher ages is required. With questions remaining on how best to estimate higher-age mortality, we hope to encourage further research into mortality rates and longevity drivers at these older ages. a

160% 140% 120% 100% 80% 60% 40% 60-64 65-69 70-74

75-79 80-84 85-89 90-94 Age

Figure 2: Very old age mortality for a range of countries, year of birth 1875 -1900

0.5 Crude mortality rate Qx

economic groups might converge as assumed in CMI SAPS draft S2 life tables for pensioners in different pension amount categories. ● Differences in mortality rates between people in different socioeconomic groups might converge and cross over as observed between ill and normal health retirement populations in CMI working paper 35. ● Differences in mortality rates between people in different socioeconomic groups might remain if a more sophisticated way of differentiating the population – including factors such as lifelong total wealth and education level – were used.

We have assumed henceforth that socio-economic convergence to general population mortality at higher ages does indeed occur.

0.4

0.3

0.2 95

96

97

98

99

100 Age

101

102

103

104

105

October 2013 • THE ACTUARY www.theactuary.com

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24/09/2013 10:32

Risk management Business strategy features@theactuary.com

Talking the same language Integrating risk into business decisions isn’t easy. The first challenge is often to establish a common language, as there is no standard risk terminology and different stakeholders have different perspectives.

Actuaries often focus upon a detailed categorisation of financial, insurance and other quantifiable risks. Decision-makers, however, also spend a lot of time considering strategic and emerging risks, and the organisation’s risk appetite and strategy. So what is needed is a framework that captures and distinguishes between these different types of ‘risk’. To be really effective, the risk framework needs to link to the way the business operates in practice.

Risk profile An organisation’s risk profile can be defined as all the events that might result in losses now or in the future. Given the wide range of potential risks it helps to split these into three groups:

Good enterprise risk management needs everyone in an organisation to have a consensus on the subject.

This is about much more than producing a risk glossary.

It’s about developing a framework that improves the overall management of the business and then linking this with the business model, says John Bielski 24

Risk profile

Immediate risks

Events that might impact the current business and would result in a loss within the near future, such as a change in interest rates or an operational error

Strategic risks

Events that might impact the business strategy of the company which may impact business written currently or in future, which are more likely to require a strategic response rather than resulting in an immediate loss

Emerging risks

Events that might occur in the future, which may impact business written currently or in future, but which are difficult to assess and quantify

Immediate risks are usually set out in a risk categorisation document with a two- or three-level hierarchy, corresponding to the risk capital model. For example, financial markets risk may be broken into equity, property and interest rate risks, each of which is then further broken down depending upon the materiality of the risk. This should also include risks that are not always easily quantifiable, such as operational or liquidity risks.

THE ACTUARY • October 2013 www.theactuary.com

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24/09/2013 10:33

JOHN BIELSKI is an independent risk and actuarial consultant

Strategic risks might include the impact of competitor activity, changes to regulation, or the wider economy. Emerging risks might include events such as a cure for cancer or technological developments, which then become strategic or immediate risks if they were to materialise. Due to their uncertainty and longer-term nature, strategic and emerging risks are often captured individually and crudely ranked rather than being quantified in a risk capital model.

Bringing it all together An organisation’s risk profile, risk strategy and risk appetite are central elements of a wider risk framework. The risk profile could be thought of as capturing input risks, risk appetite as capturing output risks, and the risk strategy as the process that converts one into the other.

This approach can also be applied to the business model elements, to produce the following:

Risk appetite and strategy

Inputs

Process

Outputs

Risk appetite is commonly used to define the acceptable amount of risk to key measures of success such as solvency, earnings and reputation.

For example, solvency risk appetite is often defined in terms of a target credit rating or maintaining solvency under a certain level of stress.

External and internal environment

What the organisation does

Objectives and constraints

Business model

Opportunities

Business strategy

Business objectives

Risk framework

Risk profile

Risk strategy

Risk appetite

Risk appetite

Board-approved statements on the desired level of risk to key measures of success

The term ‘risk appetite’ can also be used in other ways such as setting out desired types of risks, rather than the amount of risk as above.

Furthermore, risk appetite might be defined at lower levels of an organisation, for example, the number of system errors an IT department is comfortable with. Allowing risk appetite to be used in all these ways can lead to confusion and can be avoided through restricting the term to the core board-level statements.

Replacing these other uses of ‘risk appetite’ with their own distinct terms provides useful clarity. This is particularly true for statements relating to the desired types of risks, which we will call ‘risk strategy’.

This is developed allowing for factors including perceived core risks, diversification, expertise and competition. It may take the form of a target risk profile or a number of statements on which risks the organisation wishes to increase, accept or reduce exposure to.

Risk strategy

Board-approved statements on the desired risk profile of the organisation

Business model Just as risk management starts with understanding the organisation’s risk profile, management of an organisation requires understanding of business opportunities. While ‘upside risk’ is a term found in risk management, ‘opportunities’ has wider connotations and is more commonly used. Business opportunities are often articulated within a SWOT (strengths, weaknesses, opportunities and threats) analysis.

Opportunities

The opportunities available to the organisation to increase its value, including new products and markets, mergers and acquisitions

As with risk appetite, the term ‘business model’ can have as many interpretations but at a high level can be thought of as containing two key elements:

Business objectives

What the organisation aims to achieve, including key measures of success and performance such as required returns on capital

Business strategy

How the business aims to meet its objectives, including the products it expects to sell and markets it expects to operate in

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This approach enables the business model and the risk framework to be developed and updated together. Indeed, developing a risk framework may help to articulate the business model more clearly. Each element of the business model relates to that of the risk framework: ● Identified business opportunities and threats should be consistent with immediate, strategic and emerging risks ● The business strategy and risk strategy should be developed together to ensure that the mix of risks arising from the products sold are acceptable ● The risk appetite should be framed in terms of key business objectives Of course, the flow is never purely left-to-right. An organisation can adjust its risk profile through reinsurance, hedging, adjusting productmix or other techniques. It might also adjust its business strategy in order to meet its business objectives, or its risk strategy to ensure the overall level of risk remains within its risk appetite.

Consider a general insurance company that spots an opportunity to branch out into home insurance, in line with the company’s strategy to seek profitable new lines of business. Doing so would increase catastrophe risks (from windstorms) whereas the company’s risk strategy is to reduce an already heavy exposure to catastrophe risk. In addition, the new line of business would increase the volatility of the company’s earnings beyond its risk appetite. To tackle this, the company could investigate obtaining catastrophe reinsurance cover, which would reduce profitability but bring catastrophe risk into line with its risk strategy and earnings volatility within its risk appetite.

Conclusion Getting everyone in an organisation talking about risk in the same way is about much more than defining risks captured in a capital model. It needs a holistic approach encompassing the risk framework and the business model. Successful implementation needs energy and drive from the risk function and chief risk officer, combined with engagement and support from right across the business.

It also takes time, as the development of a consistent risk framework and business model is likely to be an iterative process that will be refined over a number of business-planning cycles. However, the benefits will be simpler, clearer and improved decision-making, and a solid foundation for meeting future regulatory requirements. a

October 2013 • THE ACTUARY www.theactuary.com

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24/09/2013 10:33

Risk Behavioural economics features@theactuary.com

BEHAVIOUR UNDER CONTROL? Has your ERM framework missed a fundamental risk type? Graham Fulcher and Matthew Edwards explore the issue

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Enterprise risk management (ERM) in insurance firms has concentrated on such tangible risks as mortality, reserving, financial, catastrophe and operational risk. In addition, insurers, particularly life insurers, have increasingly considered the behavioural traits of their policyholders. But insurers should pay particular attention to the behaviour of their own risk stakeholders, because their behaviour is itself a considerable source of risk. Indeed, it as a risk as important as model risk, if not more so, sitting ‘above’ many other sources of risk.

To put this idea in context, it is instructive to consider how risk management has moved over the last 10-15 years.

The focus on sources of variation (for example, risk) was initially all about parameter risk: by how much might equities move? Attention moved on to consider, in particular, how these different parameter risks might interact; and then, with such aspects ‘solved’, less tangible but very important forms of risk such as basis risk and model risk came into view. But even if a firm has all of these supposedly under control, there is still enormous scope for damage from the behavioural characteristics of its risk stakeholders.

THE ACTUARY • October 2013 www.theactuary.com

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24/09/2013 12:00

GRAHAM FULCHER is the European non-life sales leader and MATTHEW EDWARDS leads insurance risk in the life practice at Towers Watson

Behavioural economics

Anchor bias

Over the last 30 or so years, the term ‘behavioural economics’ has become common currency; indeed, the FCA’s first ‘occasional paper’ was entirely devoted to the subject (Applying Behavioural Economics at the Financial Conduct Authority, April 2013).

The FCA defines behavioural economics as an area that “uses insights from psychology to explain why people behave the way they do.

People do not always make choices in a rational and calculated way. In fact, most human decision-making uses thought processes that are intuitive and automatic rather than deliberative and controlled.”

In our view, chief risk officers (CROs) of insurance companies and others involved in ERM have much to gain from an understanding of behavioural economics.

One of the important roles of ERM is to help firms to make appropriate decisions in the face of risk and uncertainty. It is essential for a CRO to understand the common flaws in decision-making, to help individuals to overcome them, and to understand the implications for the firm’s risk management framework.

Anchor bias is one of the best-known findings of experimental psychology. This bias occurs when individuals are asked to estimate an unknown quantity. If before estimation the individuals are presented with a particular value for that quantity then their estimates inevitably stay closer to that prior value than would otherwise have been the case.

Typically the way this is illustrated is by asking the question in two parts: for example subjects are asked the two questions: ● Was the Peace of Westphalia signed before or after 1815? ● What is your best estimate of when the Peace of Westphalia was signed?

This typically produces answers to the second question significantly later in average than a group asked the same questions but with the 1815 anchor changed to 1515 (in some cases even on average 300 years later).

Astonishingly, the same bias is produced even when the individuals ‘know’ (or would if they were acting and thinking rationally) that the anchor in the first question cannot have any influence on the second question (such as when they generate the last three digits of the first number themselves, for example from their own telephone number).

In a purely ERM context, anchor bias is often exhibited by insurers in their choice of parameters when building internal models.

This bias is often encouraged by some of the main ‘hurdles’ in the insurance sector – regulators and auditors – expecting firms to lie close to some market benchmark or standard regulatory formula. Anchoring can also apply in a qualitative sense: insurers can be anchored in their model design to marketstandard approaches or to models developed for a different purpose.

Anchor bias can also be important for finance and actuarial teams in insurers when setting reserves for new lines of business (especially where they are long-tailed). In this case it is often the business plan of the new underwriting team (in some cases the business plan that may have formed part of an acquisition or interview process) which can unwittingly act as an anchor. Furthermore, the standard Bornhuetter-Ferguson reserving technique can mathematically incorporate these results as an anchor on the real results

Thinking, fast and slow One of the leading researchers in this field is the psychologist Daniel Kahneman, who won the 2002 Noble Prize for Economics for his work (principally with the late Amos Tversky) on heuristics, biases and prospect theory.

Heuristics are experience-based techniques for problem solving, such as rules of thumb.

Prospect theory is a generalisation of the classical utility approach, which allows for the biases that people exhibit when faced with uncertainty.

Kahneman has pulled together and amplified his work in this field over the last 40 years in his recent book Thinking, fast and slow, a work that has met with generally great acclaim. As well as identifying the various biases to which we are subject in the face of risk and uncertainty, Kahneman develops a vocabulary that people and firms can use to acknowledge and discuss these biases, and suggests ways in which the biases can be taken into account in decision-making.

We consider some of these biases and discuss applications to the role of risk management in insurance companies.

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“Human emotions, biases and frames surrounding problems and information play a critical and poorly understood role in risk and top management decisions” Luca Celati, The Dark Side of Risk Management

October 2013 • THE ACTUARY www.theactuary.com

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24/09/2013 10:35

“The next challenge for organisations is to integrate their conventional quantitative risk management toolkit with a behavioural overlay”

Risk Behavioural economics features@theactuary.com

Luca Celati

Early 2000s Parameter risk

Data risk

for many years if (as is common) the business plan is used to set prior loss ratios.

Late 2000s Interactions and dependencies

Basis risk

identification to minimise this bias include: ● Consulting as widely as possible in

the organisation

Availability heuristic – risk identification Availability heuristic is a shortcut that people make when trying to estimate the probability of events, in which their probability estimate is biased by how ‘front of mind’ the event is (in other words by the ‘availability’ of the event to their thinking).

Consider a well-known example: public surveys show that high-profile causes of death (for example, tornadoes, accidents, lightning strikes) are estimated as being much more frequent than they actually are, whereas the opposite is the case for ‘lower-profile’ causes, such as diabetes or asthma.

Even though risk evaluation is the core function of the insurance industry, insurers are not immune from this type of bias – as can be seen by reviewing surveys of which risks most concern insurance practitioners.

For example, consider the Centre for the Study of Financial Innovation’s bi-annual Insurance Banana Skins survey, which asks respondents to rank the risks that most concern them. In the 2009 survey, the top four ranked risks: investment performance/equity markets/capital risks/macro-economic trends were all clearly related to the financial crisis.

Only two years previously these had ranked 11th/13th/26th and unranked.

For a CRO (or other executive) whose role is to identify, assess and rank the risks facing a company, a clear understanding of this bias is key in the risk identification process. CROs can adopt a two-stage strategy here, splitting risk identification into working risk identification and tail risk identification.

Working risk identification focuses on risks with, say, a one-in-10-year return period (or similar order of magnitude). For these risks availability bias can, if anything, be a positive influence, and the focus is on recent history.

Tail risks (for instance, one-in-200-year risks) are where the impact of availability bias is greater. Strategies a CRO can adopt in tail risk

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● Reading as widely as possible across

industries and looking at historical crises and events to expand the number of risks ‘available’ ● Looking back at past years’ lists of major risks and consciously ensuring that the risk ranking does not vary too much from year-to-year in light of topical events ● Encouraging people in risk workshops to reduce their focus on recent events, perhaps by posing such questions as “Imagine you had not read a newspaper for the last five years; what risks would you see as facing our firm?”

Now? Model risk

Behavioural risk

performance or outcomes as one-off bad luck but to attribute good performance to skill.

These illusions are manifestations of a broader bias – the optimism bias.

In the context of setting business plans both these biases are readily observed: ● We have already seen that business plans can often anchor initial financial results and even reserves over a period of time ● Likely future results are often assessed using an ‘as-if’ version of historical results that explicitly identifies incidences of past poor performance as being due to one-off, nonrepeatable causes and which are then in effect removed from the historical data used to set assumptions.

Planning fallacy and related biases

Managing behavioural risk

Another key bias that Kahneman and Tversky identified was the planning fallacy, in which plans (for example business plans or project plans) are unrealistically close to best-case scenarios and significantly underestimate the likelihood or potential scale of failure.

Again this is an important consideration for a CRO whose key role is often identifying the risks inherent in a plan; be that a major project or the insurer’s financial business plans over, for instance, a one or three-year time horizon.

A key remedy to counter the planning fallacy that Kahneman identifies is ‘reference class forecasting’ – that is, accessing as wide a possible a source of distributional information about the outcome of similar projects or plans, and especially information sourced from outside the enterprise doing the planning.

For an insurer, this typically involves making extensive use of market and external benchmarks and external advice.

There are many related biases which can both cause and aggravate the planning fallacy: ● Anchor bias (as discussed above) so that an initially optimistic plan becomes an anchor when considering risks ● The illusion of control and over-confidence: both in explaining the past and when considering the future, individuals are prone to dismiss poor

Risk culture is at the heart of an enterprise risk framework and we have seen great value in firms commissioning an external risk culture survey.

However, as we have discussed above, even insurance risk professionals may demonstrate various biases in their decision-making.

One starting point to counter this problem is to include a behavioural assessment in such a risk culture survey. Another is to introduce an expert judgement policy and accompanying documentation process that seek to nullify these biases.

When developing a capital model one of the most important and often neglected risks is model risk. Model risk can be considered a ‘meta’ risk due to largely qualitative factors, for example: re-using an inappropriate old model; misinterpreting results; or failing to communicate the results of the model effectively. Insurers that are most advanced in capital modelling understand and mitigate model risk alongside other risks.

Behavioural risk is another meta risk: the risk that key stakeholders exhibit biases or behaviours which mean that a firm’s whole ERM framework will not function as it is supposed to.

Those firms who want to develop truly effective ERM frameworks need to manage and mitigate behavioural risk. a

THE ACTUARY • October 2013 www.theactuary.com

p26_28_oct_Risk_FINAL•CTgc.indd 28

24/09/2013 10:36

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

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ACT.10.13.029.indd 29

24/09/2013 11:29

General insurance Losses and models features@theactuary.com

PREPARE FOR THE WORST 30

THE ACTUARY • October 2013 www.theactuary.com

p30_31_oct_catastrophe_FINAL•CTgc.indd 30

24/09/2013 10:38

ERICA NICHOLSON

and ANDREW SMITH work in the actuarial and advanced analytics team at Deloitte

Could there be $500bn of global insured weather-related catastrophe losses in 2013?

This would be four times bigger than the worst recorded year’s losses, in 2005, which included hurricanes Katrina, Rita and Wilma.

Figure 1 (below left) shows distributions fitted to historic weather-related catastrophe losses. We have used a regression model to estimate an underlying exponential trend, and then fitted distributions to the mean and standard deviation of the de-trended data.

According to the lognormal model, a $500bn loss is a one-in-5000-year event, while the fitted Generalised Pareto Distribution (GPD) implies a $500bn loss has a probability of zero.

We should already be suspicious about model risk. The probability of a loss exceeding $500bn can be debated, but zero must be an underestimate, however many statistical test results we invoke in support of the GPD. If it were to happen, a $500bn loss would have a huge impact on the insurance industry.

After paying the claims, we would recalibrate our models and find some distributions consistent both with 2013 and earlier years, just as we recalibrated in 2006 following 2005 losses. But why wait until 2014 to reflect possible extreme losses in commercial decisions? We can get ahead of the game and identify better models today.

Erica Nicholson and Andrew Smith investigate whether natural disasters could account for more losses in 2013 than ever before

The range of possible models Validation is not a proof of model correctness.

Low volumes of data and constantly changing parameters allow us at best to assert that a model could plausibly have generated historical data. There may be many such plausible models – the weather catastrophe data rejects neither the lognormal nor GPDs. We can rank the models according to the data fit; while all are within random tolerances, Figure 1: Models fitted to Swiss Re weather-related CAT data, 1970-2012

2013 Loss ($bn)

Consistency tests

Robustness tests

Description

Comparing the outputs of different models calibrated to the same data.

Generating random data from a model, and feeding that data back into the calibration process to see if you recover the parameters you started with.

Taking random data from one model, using it to fit a different model, and seeing how good the predictions are relative to the first model.

What it tells you

The range of different experts’ estimates given the data.

The likely accuracy of parameter estimates, in terms of bias and variability.

How wrong your inference could be if you pick the wrong model.

What it doesn’t tell you

How much results might be What happens if the model distorted by random fluctuations specification is incorrect? in the observed history.

150

50 0

Lognormal 99.5% 90%

GPD Median

PAMIR TIMES

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The range of possible models is vast, and it is usual practice to employ an expert to help in the selection. There is a danger that the manual intervention introduces statistical bias. Experts might seek safety in numbers by following a herd. They may over-estimate the effectiveness of reviews in rates or policy conditions. In the worst cases, a model may be cherry-picked purely on the basis of a commercial outcome.

The main defence against human bias is benchmarking, that is, comparing the implications of different models, each fitted to the same data set. This is harder than it seems.

You might benchmark three commercial catastrophe models, but forget another 10 extinct models whose answers were commercially unattractive. The three models you check might produce capital requirements within 10% of each other, but there might be

Benchmarking approach

200

100

Model benchmarking

Table 1: A: Summary of techniques

300 250

some will fit more closely than others. Figure 2 (page 32) presents this wide range of possible non-rejected models (and within each model, non-rejected parameter values), in blue. The better fitting models are higher up the chart.

Within the non-rejected models, there is also a range of possible values for the 99.5 percentile. The more we allow the model to deviate from the data, the greater the possible range of 99.5 percentile, particularly at the upper end where tail information is scarce by definition. This is shown on the horizontal axis of our chart. Models to the right of this range result in a higher estimate of potential future losses at the 99.5 percentile than models towards the left.

Approaches to analysing model error vary according to the nature of the error to be detected. Table 1 (below) describes some of the techniques.

How your fitting techniques behave on real data.

October 2013 • THE ACTUARY www.theactuary.com

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24/09/2013 10:38

General insurance Losses and models features@theactuary.com

models in the graveyard with results four times bigger. There is a risk of self-delusion if this is not explored thoroughly.

Figure 2: Range of non-rejected models and parameters

Stochastic methods

Poor

ust

Model fit to data

Rob

Cherr

y pick

Good

Best fit

Compound interval Model output: fitted 99.5%

Figure 3: Prediction frequencies

100% 99%

Prediction Frequency

98% 97% 96% True = GPD, fit = LN True = LN, fit = LN True = GPD, fit = GPD True = LN, fit = GPD

95% 94% 93%

Shape (99.5% /median)

Figure 4: Target return period to achieve a one-in-200 prediction frequency 3,000

Target return period

2,500 2,000 1,500

1,000 True = Lognormal True = GPD

500 0

32

5

10 15 Shape, captured by 99.5% /median

20

At the other extreme, the compound interval concept lies at the bottom right of the chart representing the most robust outcome of all the non-rejected models. This is a 99.5%-confidence interval for the 99.5 percentile. When applied to the Swiss Re CAT data, the compound interval implies a possible loss in excess of $1,000bn. Such an event would require an extreme set of parameters to coincide with an extreme 99.5 percentile result.

The compound interval is one interpretation of what a 99.5 percentile means in the context of underlying model uncertainty. An alternative is to allow diversification between the parameter and process error, which leads to the concept of a prediction interval. A prediction interval is a function of past data that has a given probability of containing a future observation. This allows for the fact that both the past data and the future observation have come from a random process. Unlike the compound interval, a prediction interval does not require the worst-case parameter estimate and the worst-case outcome to occur simultaneously.

In a recent paper, Andreas Tsanakas and Russell Gerrard of Cass Business School explained estimated percentiles might be less prudent than you think. If you fit a model and try to estimate a 99.5 percentile from the fitted parameters, you might only end up covering 97% of future observations, because of the impact of parameter error. They then proposed working backwards, initially using a higher level of confidence so that, after allowing for parameter error, the prediction interval covers 99.5% of future outcomes.

To test a proposed prediction interval based on 40 years of data, we generate random samples of 41 years. For each sample, we use the first 40 years to construct a 99.5 percentile, with the same algorithm as the real catastrophe data.

As we are testing a formula and not a single value, the actual catastrophe history is ignored in this calculation. Instead, we use Monte Carlo to simulate the ‘prediction frequency’ that the claimed 99.5 percentile exceeds the 41st observation. We do this for a range of distribution shapes, which we parameterise on the horizontal axis of Figure 3 (left) in terms of the ratio of the 99.5 percentile to the median.

Figure 3 shows a prediction frequency analysis. We can choose to fit a lognormal model (green) or generalised Pareto model (grey). On real data, we can’t choose the ‘true’ model, as this is unknown. The beauty of a Monte Carlo setting is that we know exactly what model generated the data. The solid lines show the prediction frequency where we have correctly

guessed the true model family. This is sometimes called a ‘consistency test’. These prediction frequencies lie below the 99.5% we might have, because of the effect of using parameter estimates based on 40 years’ data, rather than the ‘true’ parameters. In other words, if we input a target 99.5 percentile, what comes out might represent only a 97% or 98% prediction percentile. The dashed lines show the effect of fitting a mis-specified model, which is called a ‘robustness test’. In this example, the worst case is fitting a GPD when the data comes from a lognormal distribution. If we want to get the prediction probability as close to 99.5% even when the model is mis-specified, it is better to fit lognormal distributions.

Working backwards Following the Tsanakas-Gerrard technique, we ask what initial percentile achieves a 99.5% prediction frequency, when fitting a lognormal distribution. We can use Figure 4 to consider the consequences of using a one-in-2,000 quantile of the fitted GPD distribution to estimate a one-in-200 event. This produces a prediction frequency of at most one-in-200 if the data has really come from a GPD, and also for lognormal data provided the 99.5 percentile does not exceed fifteen times the median. Generally, the more skewed the underlying distribution, the higher percentile you have to pick to get the prediction interval you want.

One way to interpret this is to say if we will tolerate a ruin probability of one-in-200, we have to plan a one-in-2,000 event from a best estimate model, and up to another ninein-2,000 cases arising from the model or parameters turning out to be wrong (because 1/2000 + 9/2,000 = 1/200). At the one-in-200 level, the problem of estimating the wrong model or parameters is nine times bigger than the risk captured within your best-fit model.

Conclusion When data is scarce, there can be many models capable of passing validation, with a wide range of implied capital requirements. Benchmarking different models can help us to understand the scope for human bias in model selection. Taking random data from one model and using it to fit another model can inform us of the potential for mis-estimation, which is exacerbated by the skew of the distribution. We have given an indication of the possible uplift required to modelled percentiles to allow for the risk the model was incorrectly selected. Model builders can reduce the risk of nasty surprises and get a step ahead by investigating the plausible models that both fit the data and produce more significant tail events not captured in the available historical data.

We all hope a $500bn catastrophe won’t happen, but if it does we should be prepared. a

THE ACTUARY • October 2013 www.theactuary.com

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24/09/2013 10:39

General insurance Telematics features@theactuary.com

Who is in the driving seat?

Ian Burningham considers the differences between pricing actuaries’ and reserving actuaries’ roles in the ever-changing motor insurance market The UK motor insurance market is a highly competitive industry, one that has undergone significant changes over recent years – and it is likely there are more ahead. Some of these may be a continuation of past trends, while others have the potential to fundamentally alter the future of the industry. The impact of this on the role of the actuary is unclear, but it is likely to be very different for those involved in pricing as opposed to reserving.

Historical performance Motor insurance has struggled to report a profit over recent years – although individual insurers can and do deliver profits (as an aside, it is interesting to consider whether the market exhibits characteristics of a zero-sum game, with profits for any individual insurer essentially being at the cost of the rest of the market).

Figure 1 on page 34 shows reported operating ratios for the industry from FSA returns over recent years. The influence of historical landmark changes can be seen particularly in the reported loss ratios for 2009/2010, when the industry adjusted for the Ogden rate change and started recognising periodic payment orders (PPOs).

Sequentially, the years after saw the benefits of reserve releases.

The impact of these landmark changes on profitability is slightly different if the changes in reserves are allocated back to individual accident years. Figure 2 on page 34 contrasts the reported FSA loss ratios above with the adjusted loss ratio from a sample of insurers where reserve changes have been allocated back to the original accident

p33_34_oct_GI_insurance_FINAL•CTgc.indd 33

year. Although some approximations are made, it presents quite a different view on the historical industry profitability – essentially a much flatter history but still unprofitable over the long term after allowing for expenses.

Both these views paint a picture of an industry that is intensely competitive, one that has had to respond to environmental changes in order to try to achieve profits – and where sustained profitability is difficult.

The requirements of the actuary during the past 10 years have evolved with the motor insurance market. There have been increasing demands on reserving for PPOs, ongoing Degree of influence

Telematics

PPOs

Pricing actuary

Significant

Moderate – significant

Reserving actuary

Moderate – significant

Significant

sophistication in pricing approaches and models of telematics (and range of data employed), plus the ongoing search for the ability to differentiate risks through segmentation analysis. These have different impacts on both pricing and reserving actuaries. So who is in the driving seat?

Telematics There are different potentials regarding the future of telematics, with quite different effects on the industry and the consequent demands placed on actuaries. It is not clear that telematics will necessarily ‘take over the industry’ the way some of the more evangelistic proponents believe, but it certainly has the potential to be a significantly disruptive influence.

In an extreme scenario, the expansion of telematics may allow for essentially ‘individually priced’ products for certain segments – an ultimate outcome being a pricing segment of one. Given that traditional insurance relies on pooling of risks, this may create interesting challenges. While such an extreme is unlikely, thinking through how pricing and reserving actuaries might respond to such an extreme can be useful.

The use of telematics devices could become the preserve of ‘good’ low-risk drivers who choose to have their driving behaviour recorded and use their driving behaviour history to secure lower premiums. This leaves only ‘bad’, higher-risk drivers, retained within a traditional motor insurance model and paying significantly higher premiums. For the most extreme risks, they may be viewed as uninsurable

24/09/2013 10:42

General insurance Telematics features@theactuary.com

7400 6400 5400 4400 3400 2400 1400 400 2005

2006

2007

Earned premiums (£m)

2008

2009

Reporting accident loss ratio (%)

(at least at an economically affordable level for the driver). Should such an outcome emerge, some form of policy intervention may result to create a ‘market’ in the face of market failure.

An alternative scenario is that higher-risk drivers are forced to have their driving habits tracked using in-car telematics, with lower-risk drivers kept in a traditional insurance model where it is viable for the risk to be pooled. This may reduce the overall profit pool available in the traditional insurance model, while the financial dynamics of this type of high-risk telematics pool are still to be fully explored.

The growth of telematics usage could have some interesting impacts on reserving actuaries – delays in claim notifications should reduce, and estimates of frequency should be closer to statements of fact. There are, however, a range of things that reserving actuaries may need to consider. These could include: ● Validity of historical data: how will detailed telematics claims data be blended with past (aggregate) reserving assumptions? ● Reserving segments: what groupings or aggregations of segments might be used once individual driving data is available? How closely should these align with pricing segments? (Always a problem, but possibly exacerbated in a telematics world). How often might these change as more and more data becomes available? ● Severity indicators: what information is the best indicator of the severity of the crash, and therefore able to provide guidance as to likely claim outcomes? ● Adequacy of case reserves: will detailed telematics be data-fed into case reserving philosophy? Or will it remain the province of the deeply analytical areas of an insurer, with actuaries having another tool to assess incurred but not reported (IBNR) or incurred but not enough reported (IBNER)?

On the surface, the development of telematics looks like a boon to pricing actuaries – with countless additional data elements to add in to create new rating factors and

34

2010

140% 120% 100% URLs

160% 140% 120% 100% 80% 60% 40% 20% 0%

Figure 2: Reported FSA loss ratios contrasted with adjusted loss ratio

Earned premiums (£m)

Operating & reported loss ratios (%)

Figure 1: Operating ratios for the industry from FSA returns over recent years

2011 Operating ratio (%)

80% 60% 40% 20% 0% 2005

2006

25th and 75th percentile

relationships, and refine existing pricing models. It’s not clear, though, how the data will interact with existing models. It is possible to create a driver ‘score’ to add in as an extra rating variable – one more factor in the multivariate model. Existing rating factors, however, can be viewed as proxies for driver behaviour, which leads to predictions of claims. Telematics data should provide more direct insight into actual driver behaviour – how will the existing proxies interact with the more directly observed data?

Actuaries involved in the pricing of motor insurance are experienced at dealing with large data sets, and disentangling the complexities of relationships. It is unlikely their lives will become simpler as they start to blend together the new with the old.

Overall, the development of telematics will have a greater impact on pricing actuaries than reserving actuaries – not least as they are responsible for finding new sources of profit or new profitable segments as the market competitiveness keeps margins down.

Reserving actuaries will still have a part to play, including the ongoing challenge of reconciling views with their colleagues setting prices.

Growth in telematics may result in separate ‘risk pools’ with different mechanisms to transfer risk. Traditional insurance models may be limited to sub-segments of the existing industry.

Expansion of PPOs Similar to telematics, the recent emergence of PPOs creates challenges for both pricing and reserving actuaries. The past few years in particular have seen an increase in the level of reserving sophistication applied to PPOs, and this is likely to continue.

The treatment of reserving for PPOs has been inconsistent to date, as actuaries have got to grips with the complexities of the liability.

In particular, the treatment of PPO IBNR has become more sophisticated over the past few years, with some convergence in market approaches. Overall, the industry has moved on from applying a simple loading or uplift to

2007

2008 Means of clients

2009

2010

2011

Reported loss ratio

the portfolio. It is expected that this will remain an area of development.

Challenges continue for reserving actuaries, most clearly in the analysis of the accuracy of prior years’ reserves, and incorporating any feedback into current estimates. It is also expected an emerging issue over time will be the development of specific management information and identifying key indicators to assist in managing the PPO liability. While most actuaries are concerned with measuring rather than managing liabilities, as motor insurance moves from a short-tail class to a long-tail class, it will be natural for the organisation to expect the actuary to provide significantly more insight into year-to-year movements.

Pricing actuaries in motor insurance have been used to distilling large volumes of claims data and identifying mis-priced segments in the market place. The past few years have seen the need to develop approaches that extend the large claim analysis undertaken and overlay a range of PPO assumptions. Some of these assumptions (for example, propensity to claim/ convert to a PPO) will vary not only with size but with economic conditions.

The impact on the work of reserving actuaries will be more marked than on those who work in pricing. While pricing is likely to see an ongoing development of existing approaches, the reserving function may well need to be transformed as the portfolio becomes essentially a long-tail class of business.

The motor insurance industry will continue to evolve and individual business models will adapt along with it. The role the profession plays will develop alongside this. Just as the future of a successful business model is unknown, it is not clear how pricing and reserving actuaries will respond to these ongoing changes. Ultimately, both will have to collaborate in order to steer towards the future motor insurance market. a Ian Burningham is a director with KPMG and works in the insurance practice

THE ACTUARY • October 2013 www.theactuary.com

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24/09/2013 10:43

At the back Arts arts@theactuary.com

Arts

Xin Jin immerses herself in the wonderful world of Punchdrunk, and has a tip for a future West End hit

A HOLLYWOOD FABLE Masks, dark rooms, smoke. No, it’s not a scene from Eyes Wide Shut, but the latest, much anticipated theatrical adventure presented by Punchdrunk and the National Theatre.

The concept of interactive theatre isn’t a new one – we see it on the streets of London’s Covent Garden every day. However, and it is a big however, Punchdrunk has taken it beyond the horizon. It is a tale of the dark side of the Hollywood dream, where fantasy is sharply at odds with reality.

The set is a disused postal sorting office next to Paddington Station. The set designers have gone to great lengths to transform the vast space over four floors into an American film studio, with its own wardrobe, make-up departments, research area, and, most important, a cash bar.

Follow your own path The ingenuity of the use of space is that even though you are exploring a film set, you can’t help but notice the attention to detail from the designers. So much so, that each room feels more like a piece of installation art.

Your wanderings will take you from a line dance in a Southern bar to the middle of a space adventure on the red planet. Where you end up and what you see is the result of the choices you make when you step into the world of The Drowned Man. Love, jealousy, paranoia, torrid affairs: all themes to discover as you move from room to room. The producers have cleverly given you just enough hints to get a flavour of the story.

However, it is up to you to piece together the whole story. This is difficult given that the narratives are being performed simultaneously over the three floors by a vast cast and that some of the actors change characters and come back in other roles. It is possible to grab a fuzzy comprehension of the central story, but to understand the sub plots is a much tougher task. This doesn’t detract from the finalé, which is powerful and moving.

Every which way: discover love, jealousy, paranoia and torrid affairs as you move from room to room Make sure you stay until the end for it.

More than anything else, The Drowned Man is a theatrical experience like no other. You are allowed to roam from floor to floor. You can follow one character and watch their whole tale unfold – although if you are going to do this, be quick, as they can be very sly! Or you can stay in one space and wait to see what happens next.

The choice is entirely yours. This is both empowering and frustrating; you have the freedom to explore whatever you like, but you are also left with the knowledge that you may have missed out on something.

This is a show that is worth seeing while you get the chance. Even though the performance lasts for up to three hours, it is by no means a passive experience, and you have to be fully prepared to take in the surroundings to make the most of the show. A limited number of

additional £19.50 concession tickets for anyone under the age of 26 are released for sale on Mondays for performances the following week.

Destined for success Another show I would recommend keeping your eye out for is The Color Purple. It has just completed a summer run of sold-out performances at the Menier Chocolate Factory, and is based on the novel by Alice Walker. The production is the perfect blend of music and storytelling. Cynthia Erivo, who plays Celie, has such a presence on the simply designed stage.

She even received a standing ovation in the middle of the production. It would be such a shame if this doesn’t transfer to the West End.

The Drowned Man is playing until 30 December at Temple Studios, 31 London Street, London W2 1DJ

October 2013 • THE ACTUARY 35 www.theactuary.com

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24/09/2013 10:44

At the back Coffee break puzzles@theactuary.com

Puzzles

Nylfia is an actuary who solves and sets cryptic crosswords created especially for The Actuary

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

by Wednesday 16 October

— RD SWO CROS IZE PR E PUZZL

FELLOWS LOST AND FOUND

—

There are 10 Fellows in the correct solutions. These are not referred to in the subsidiary part of the clues, and are to be entered into the relevant solutions where they will fit to match the definition part of the clues, which are normal.

Across

11 Cry about being caught in deception (6)

1 Disaster for immediate pastpresident – he’s lost races (6) 4 Smart from residual lead in hint of sting (6) 9 Pay Rooney, for example, to go to Orient (4) 10 Believer confused and missed point – can be proved (10)

12 What Nylfia does in letter is nutty and sweet? (8)

17 A bitterly contested independence (2,7)

13 Boldly refute with inclusion of trial opening and closure (9)

21 Shaking with virus in body, head withdrawn (8)

15 Source of riches for one in whom property is vested (4)

22 Singer moons dance leader in awkward situation (6)

16 Separation presented in paper

24 Move to free bishop from

1

2

3

4

following reporter’s initial interest (4)

6

5

7

8

25 Model model? (4) 26 Doesn’t have to end messed up in trap (6) 27 Upper body with brown back in view (6)

Down 1 Future Partner has new limits to challenge existing head (7) 2 Singer made lewdest suggestion (5)

10

9

techno problem with time constrained (10)

3 Brutish cyclist with notable turn? (7)

11

5 Service used for weaving mats? (6)

12

6 Vintage source noted whence information obtained through informal contact (9) 14

13

15

7 Vermin allowed turn tail in satellite (7) 8 Letter artisan uses to change to another alphabet (13)

18

17

16

19

14 Sway uncle with fine argument (9)

20

22

21

23

16 Thug covering back with explanation, ultimately (7) 18 Chemical variant that is including Sulphur and Oxygen with recast marijuana (7)

© Nylfia

24

36

25

26

27

19 Tartar in temper with amount of cargo (7) 20 American university in comparison with top grade included (7) 23 Underworld master (5)

THE ACTUARY • October 2013 www.theactuary.com

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24/09/2013 10:46

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

—

A MENSE PRIZ E PUZZL

Nosh gnasher Mensa puzzle 564

—

At a restaurant, Heidi orders the ravioli, Isaac orders gnocchi and Mario orders risotto.

Does Tanya order the lasagne or the fusilli?

For a chance to win a £25 Amazon voucher, email your solution to puzzle 564 to: puzzles@theactuary.com by Wednesday 16 October 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.

Money, money, money Mensa puzzle 563

Riddle in the ranks Mensa puzzle 565

Rearrange the letters of

What number should appear next in this sequence?

‘POOR DRUNK ALIEN’ to give three currencies.

6 35 143 323 667 1147 ?

What are they?

Bridge puzzle 37 Find the right discard You are East. Dummy is North.

Wheel value Mensa puzzle 566

The Bidding: S W 2NT Pass Pass 3♥ (2) Pass Pass

Use the letters given to complete the pyramid so that one seven letter word, one five letter word, one four letter word and three words of three letters can be read.

N 3♣ (1) 3NT

E Pass Pass

What are the words?

(1) (2)

Stayman 4 hearts, may also have 4 spades

♠K952 ♥K54 ♦9752 ♣J7

N W

E

♠10876 ♥10982 ♦Q86 ♣32

S

A

E

E

F

H

I

N

N

N

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West leads K♣, followed by Q♣, Declarer ducking both times. West leads a 3rd club, Dummy throws a heart. Declarer will win with A♣ but before that you have to find a discard.

What do you discard?

Bridge puzzle provided by David Lampert

SHUTTERSTOCK

p36_38_oct_puzzles_FINAL•CTgc.indd 37

October 2013 • THE ACTUARY www.theactuary.com

37

24/09/2013 10:46

At the back Coffee break puzzles@theactuary.com

SOLUTIONS FOR SEPTEMBER 2013 Piece of the pie Mensa puzzle 559

N

C

E

Take one letter from each sector to give the name of a Swiss cheese. Take a further letter from each sector to give the name of an Italian cheese. The remaining letters will give the name of a British cheese.

What are the three names?

Neutron number Mensa puzzle 561

E

R A

A I

T S

Answer: Emmental, Parmesan and Cheshire.

L P E

H M

M R

5

E

9

E

3 2

H N

Congratulations to this month’s winner – Nicola Higgins of Canada Life

A

What number should replace the question mark? ANSWER: Eight.

Starting at the top of each group, the first number, plus the second number, minus the third number, plus the fourth number, gives the fifth number.

(1st group: 5 + 3 = 8, 8 – 1 = 7, 7+ 2 = 9.

2nd group: 4 + 2 = 6, 6 – 6 = 0, 0 + 5 = 5.

3rd group: 1 + 8 = 9, 9 – 3 = 6, 6 + 2 = 8).

1

1

S

?

8

4

M 5

2 5

2

3

6

Cubic ruse Mensa ? G puzzle 562 6

Digital dilemma Mensa puzzle 560

What letter should replace the question mark?

Which number is the odd one out? ANSWER: 807. The three digits in the other numbers total 13.

Y C 1

D

5 B V 12 J

ANSWER: S

Answers to Careful with the majors! Bridge puzzle 36 ♠AQJ1093 ♥983 ♦Q1082 ♣_ _ ♠4 ♥104 ♦KJ76543 ♣K65

N W

E S

This hand came up recently in a Simultaneous Pairs for Kidney Research.

♠87652 ♥QJ5 ♦_ _ ♣109832

♠K ♥AK762 ♦A9 ♣AQJ74

You are South and end up in 6♥. West leads a trump.

A. How do you guarantee your contract when outstanding trumps are 3-2.

B. If instead West had led a spade, what is your only hope for the contract?

ANSWERS (a) In addition to the trump loser, you have 1 diamond and 4 clubs to lose.

You are also short of entries to Dummy. Clearly spades are needed for discarding your losing minors. Draw a second round of trumps, leaving the outstanding winner. Now overtake the K♠ with the A♠ and run the spades, discarding 9• first. The opponent with the third trump can take it whenever he/she likes. If this happens before you have removed all your losers, you win the minor suit return, ruff a club and play spades until your club losers have gone. This will work even if the spades are 6-0. If the opponent does not ruff at any time, you ruff 3♠ and then ruff your losing club. (b) The spade lead removes an entry to Dummy and you have to use Dummy’s third trump earlier. Win in hand and cash AK♥. Now ruff a club in Dummy and play out the spades. You have to hope that the layout is as above, i.e. that the opponent with the third trump also has 5 spades.

Bridge puzzle provided by David Lampert

38

THE ACTUARY • October 2013 www.theactuary.com

p36_38_oct_puzzles_FINAL•CTgc.indd 38

SHUTTERSTOCK

24/09/2013 10:46

At the back Student student@theactuary.com

Student Jessica Elkin reports on the exemplary work undertaken by the Student Consultative Forum

M U ST N ’ T G R U M B L E (OH, GO ON THEN...)

Moan, moan, moan. What a bunch of negative nellies students are! Particularly around examination time. Haven’t done enough, there is too much material, why is there a question about zombies on that CT4 paper, where did the time go? I think we’ve all had enough.

That being said, life would be terrible if we all sat placidly on our haunches and allowed the world to roll on by unchecked. Votes for women, McDonald’s injecting a bit of nutrition into its food, the reinstatement of Coco Pops after the ‘Choco Krispies’ debacle… all of these things happened because someone wasn’t afraid to stand up and have a good moan.

The same is very much true of students and the actuarial profession. Far from being an unheard voice, like those little green aliens trapped in the grabby machine in Toy Story, you have the power to effect change. The Student Consultative Forum exists as a body of representatives that meets every six months to discuss examination procedures in general, as well as any events in individual exam rooms and the nuances of specific questions.

Please Mrs Butler Think of the forum as a go-between for the students and the Powers That Be. If a dog eats your exam paper, you were abducted by aliens during the exam, or the grammar isn’t up to scratch in one of the questions, you can tell the group and they will listen, discuss resolutions to the problem or issue, or attempt to find ways to prevent such unfortunate occurrences.

As well as students taken from SIAS, various

PHIL WRIGGLESWORTH

p39_oct_student–FINAL•CTgc.indd 39

actuarial societies and yours truly, there are representatives from ActEd and the exam board, as well as the registrar and the director of education from the Institute and Faculty of Actuaries. Minutes of the meetings are available online, so you can check up on how your comments were discussed at a later stage.

There tends to be a fair amount of scepticism surrounding such ventures. Do they really achieve anything? I can vouch for the SCF. Its successes include the introduction of electronic permits; the wider availability of CA2 and CA3 in the north of England; the

changing of exam centres in Edinburgh and Dublin because students were unhappy with them; larger desks in centres and the further training of invigilators. After questions raised at the SCF, documentation describing the process involved in marking exams and why it takes so long to release results was published, and CA2 and CA3 exam papers have become available for practice. Hot topics currently in the works are the publishing of pass marks for exams, which looks like it may be viable in the future, and an imminent review of the work-based skills documentation and instructions for clarity.

Many actuarial societies around the country have a representative on the committee, but if you are unaware of your nearest one then do drop me an email at student@theactuary.com letting me know if you’d like anything raised. It will all be anonymous. Don’t worry; I am very persistent and very tenacious.

What else?

Similarly, the profession is soon to put out a call for student volunteers for an international version of the SCF, in order to take into account the concerns of actuarial students worldwide. I can also reveal the following news: ● The possibility of results letters being emailed or available on the members website is being considered, still in early discussions. ● A new online marking system for the subjects CT5, CT7 and ST5 has been trialled in the recent exams session – you can expect more news on this later. ● Calculator use during reading time will be brought to the next SCF for discussion and then to Education Committee for a decision.

The decision would then take effect from April 2014 exams. ● A graph paper exam booklet is available, following requests. ● CA2 can now be taken online. ● The CA3 exam is under review and an update should be available after the next SCF. In the meantime, another past exam question is available on the website. ● New guidance on passing exams is also available, with a new exercise and hints and tips published on the profession’s website.

The IFoA’s website is chock-a-block with further information on most of the above – and now that you’ve finished your exams, you have all the time in the world to read it. a

October 2013 • THE ACTUARY www.theactuary.com

39

24/09/2013 10:47

At the back Appointments

SPONSORED BY

peoplemoves@theactuary.com

Moves to London to run Aon Hewitt’s global benefits consulting practice in the UK. He will lead Aon Hewitt’s employee benefits advice to global multinationals.

Tan Suee Chieh has been appointed group CEO of NTUC Enterprise, the holding company of 12 social enterprises set up by the National Trades Union Congress, the labour movement of Singapore.

In the Singapore Business Awards, Suee Chieh was named outstanding CEO of the year.

Premier has announced that as well as his senior consultancy role and running the Bristol office,

focus on recruiting life actuaries in the UK and lead the development of their international operations. He joins from Darwin Rhodes.

John Reeve will lead activity in the charity and not-for-profit sector, developing relationships with trustees and taking control of Premier’s social media involvement.

Jamie Walker has joined specialist recruiter Fairbank Partners as a senior manager. He will

regulators, tax authorities and public sector bodies internationally.

It is headed by Paul Bispham (left) who has held board-level positions in insurance, reinsurance and intermediaries. ARTA will have 10 consultants specialising in life and general insurance.

Actuarial Regulatory & Tax Advisors Limited (ARTA) has been set up to provide advice to financial services

They include Laurence Kleerekoper (below left), Irene Lane and Mike North (below), all formerly of the UK Government Actuary’s Department.

Between them, they have experience of working with regulators and tax authorities in more than 20 jurisdictions.

Carl Redondo has relocated from Shanghai

ACTUARY OF THE FUTURE

BORISLAV ARNAUDOV

looks exactly like the Michelin man.

Employer and area of work

What’s your most ‘actuarial’ habit?

Towers Watson – investment.

Never going out. Ever.

How would your best friend describe you?

If you could learn one random skill, what would you learn? Without a doubt, Macramé. Google

Not going to the dentist in 3½ years.

it. It’s incredibly underrated.

What’s your most treasured possession?

being alone.

Favourite Excel function? I’m not a huge fan of

My heart… But seriously, it’s my brand new Rolex Submariner.

What would be your personal motto? “Money

Excel actually. I tend to do most of my calculations by hand.

Greatest risk you have ever taken?

Bulgarian.

What motivates you? Perpetual fear of

don’t make my world go round, I’m reaching out to a higher ground”– Des’ree 1994.

“The first rule of marketing is...”

“Buy low, sell high.”

Name five dream guests to invite to your dinner party?

Ben Bernanke, Paul Krugman, Mark Carney, Messrs Black and Scholes and Pamela Anderson. The first four to discuss investment strategies and Pamela because, well, she’s a real idol of mine.

40

How do you relax away from the office?

I love nothing more than winding down to the classic, soothing Bulgarian poetry of Kolkebuchech, and am an active member in my local poetry reciting club.

Also heavy death metal.

Alternative career choice?

Lion tamer.

Tell us something unusual about yourself I have a birthmark that

What are the top three things you would like to achieve in your lifetime?

1. Fame. 2. Fortune.

3. AOTF 2013.

If you ruled the world, what would you change first? Bognor – In my opinion it is quite literally an appalling place.

Do you know an actuary destined for greatness?

You can nominate an Actuary of the Future by emailing

aotf@theactuary.com

THE ACTUARY • October 2013 www.theactuary.com

p40_oct_AOTF_peop•FINAL•CTgc.indd 40

24/09/2013 10:47

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

Grow your career With over ten years experience in actuarial recruitment, HFG can provide clear and unbiased career advice to anyone interested in finding out about the opportunities that are currently available to them.

General Insurance Roles Head of ERM

First Inhouse Actuary

£100k - £130k Basic, London

£120k - £150k Basic, London Niche General Insurer is looking for their first inhouse Actuary to work closely with senior management. They are looking for a strategic thinker who is really up for a challenge focusing across pricing and reserving. The right person should be a qualified Actuary, capable of working on their own without guidance. This is a unique opportunity to work in a fascinating company. William@highfinancegroup.co.uk

Lloyd’s syndicate requires a Capital Actuary to develop their capital function whilst reporting to the CRO. You should have managerial experience and be eager to role up your sleeves getting involved with technical work. The role will be moulded around the successful applicant, offering exposure to pricing and reserving. Previous ReMetrica experience would help but is not essential. William@highfinancegroup.co.uk

Group Reserving Manager

Deputy CRO £90k - £120k Basic, Ireland

£110k - £130k Basic, London Established Lloyd’s syndicate is looking for a Reserving Manager to strengthen their team. The role will suit someone who is looking for a step up in their career and enjoys managing a team of part and newly qualified Actuaries. This role will report to the Head of Reserving and is a great chance to join a firm that has a superb reputation for promoting internally.

William@highfinancegroup.co.uk

This global General Insurer requires an experienced Non-Life Actuary for their Group Risk team. The team provides a second line of defence to the quantitative aspects of the Groups’ subsidiaries including internal model validation and reserve reviews. You will come from a reserving or capital modelling background. The role reports into a qualified Actuary and involves a lot of quantitative work you are used to, whilst expanding your CV in a developing area for Actuaries. James@highfinancegroup.co.uk

Remetrica Modeller

Senior Reserving Analyst £85k - £100k Basic, London

£45k - £65k Basic, London

A medium sized Lloyd’s Managing Agent is looking to add two experienced Capital Modelling professionals to its team. The role involves developing the internal model to comply with regulatory requirements as well as embedding the model into the wider business by communicating with internal stakeholders. Ideally you will be close to qualification or be a couple of years post qualified and have previous Capital Modelling experience, ideally using ReMetrica. James@highfinancegroup.co.uk

Opportunity to join a leading Lloyd’s syndicate, predominantly focusing on reserving, whilst liaising closely with the wider Group Actuarial function.

You will work closely with senior management and take on early responsibility. This is a fantastic opportunity for an ambitious part-qualified Actuary to develop their reserving skills, whilst building on their non-life product knowledge. Chanelle@highfinancegroup.co.uk

Retail Pricing Analyst

Group Risk Analyst £40k - £60k Basic, London

Join this leading international insurer in their London based retail function.

You will assist in the development of the pricing team, with additional involvement in capital modelling. This is your chance to develop within a thriving business, with opportunities for rotation in both the retail and commercial lines functions. You will be a part-qualified Actuary with significant non-life pricing experience. Chanelle@highfinancegroup.co.uk

£35k - £55k Basic, South Coast A mid-sized composite is seeking an ambitious student Actuary to join its Group Risk team. You will delve deeply into the numbers and appreciate their origins, then analyse and model how these financials move under different risks. With a third of your time split across Life, GI and investments, this is a fantastic opportunity to gain a great oversight of a composite insurer, and allow your career to literally take any direction moving forward. Jack@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

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

ACT.10.13.041.indd 41

24/09/2013 11:19

www.theactuaryjobs.com

KhZ >/ Ed^ Z '>K > ͵ E ^K Z t ƐƚĂďůŝƐŚĞĚ ŝŶ ϭϵϵϲ͕ ĂƌǁŝŶ ZŚŽĚĞƐ ŝƐ ĂŶ ĂǁĂƌĚ ǁŝŶŶŝŶŐ ƐƉĞĐŝĂůŝƐƚ ƌĞĐƌƵŝƚĞƌ ŽƉĞƌĂƟ ŶŐ ǁŝƚŚŝŶ ŶŝĐŚĞ ĂƌĞĂƐ ŽĨ ƚŚĞ /ŶƐƵƌĂŶĐĞ ĂŶĚ &ŝŶĂŶĐĞ ƐĞĐƚŽƌƐ ĂŶĚ ŝƐ ƉĂƌƚ ŽĨ ƚŚĞ ƌLJĚĞŶ ,ƵŵĂŶ ĂƉŝƚĂů 'ƌŽƵƉ͘ tŽƌŬŝŶŐ ĨƌŽŵ Žĸ ĐĞƐ ŝŶ >ŽŶĚŽŶ͕ ƵƌŝĐŚ͕ ,ŽŶŐ <ŽŶŐ͕ EĞǁ zŽƌŬ͕ ^LJĚŶĞLJ ĂŶĚ DƵŵďĂŝ͖ ŽƵƌ ĐƚƵĂƌŝĂů ŽŶƐƵůƚĂŶƚƐ ƐĞƌǀŝĐĞ ĐƵƐƚŽŵĞƌƐ ĂĐƌŽƐƐ >ŝĨĞ͕ EŽŶͲ>ŝĨĞ͕ WĞŶƐŝŽŶƐ͕ /ŶǀĞƐƚŵĞŶƚƐ ĂŶĚ ,ĞĂůƚŚĐĂƌĞ ǁŝƚŚ Ă ƉŽƌƞ ŽůŝŽ ŽĨ ĐůŝĞŶƚƐ ŝŶĐůƵĚŝŶŐ /ŶƐƵƌĞƌƐ͕ ZĞŝŶƐƵƌĞƌƐ͕ ZĞŐƵůĂƚŽƌƐ͕ ŽŶƐƵůƚĂŶĐŝĞƐ ĂŶĚ ZĂƟ ŶŐƐ ŐĞŶĐŝĞƐ͘

Non-life: Pricing Manager ĞŶƚƌĂů >ŽŶĚŽŶ ͻ άϴϬ<ͲάϭϬϬ< н ďĞŶĞĮ ƚƐ

EŽŶͲ>ŝĨĞ͗ WĂƌƚ YƵĂůŝĮ ĞĚ ĞŶƚƌĂů >ŽŶĚŽŶ ͻ ŝƌĐĂ άϱϱ< н ďĞŶĞĮ ƚƐ

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DĂƌŬĞƚ ůĞĂĚŝŶŐ >ŽŶĚŽŶ ŵĂƌŬĞƚ ŝŶƐƵƌĞƌ ŝƐ ƐĞĞŬŝŶŐ Ă ƉĂƌƚ ƋƵĂůŝĮ ĞĚ ŶŽŶͲůŝĨĞ ĂĐƚƵĂƌLJ ƚŽ ũŽŝŶ ƚŚĞŝƌ ĐĂƐƵĂůƚLJ ďƵƐŝŶĞƐƐ͘ tŽƌŬŝŶŐ ĂĐƌŽƐƐ h^ ĂŶĚ /ŶƚĞƌŶĂƟ ŽŶĂů ĐĂƐƵĂůƚLJ LJŽƵ ǁŝůů ďĞ ƉĂƌƚ ŽĨ Ă ǁĞůůͲĞƐƚĂďůŝƐŚĞĚ ƚĞĂŵ͘ ĂLJ ƚŽ ĚĂLJ ĚƵƟ ĞƐ ŝŶĐůƵĚĞ ƵŶĚĞƌǁƌŝƟ ŶŐ ƐƵƉƉŽƌƚ ;ƉƌŝĐŝŶŐ͕ ŵŽĚĞů ĚĞǀĞůŽƉŵĞŶƚ͕ ŵĂŶĂŐĞŵĞŶƚ ŝŶĨŽƌŵĂƟ ŽŶͿ͘ /ŶǀŽůǀĞŵĞŶƚ ŝŶ ƋƵĂƌƚĞƌůLJ ƌĞƐĞƌǀŝŶŐ ĂŶĚ ƉƌĞƐĞŶƟ ŶŐ ƌĞƐƵůƚƐ ĨŽƌ ƌĞǀŝĞǁ ƚŽ ƐĞŶŝŽƌ ĂĐƚƵĂƌŝĞƐ ĂŶĚ ƵŶĚĞƌǁƌŝƚĞƌƐ ĂŶĚ ĚĞƚĞƌŵŝŶŝŶŐ ƉĂƌĂŵĞƚĞƌƐ ĨŽƌ ƵƐĞ ŝŶ ƚŚĞ ŐƌŽƵƉ ĐĂƉŝƚĂů ŵŽĚĞů ǁŝůů ĂůƐŽ ĨŽƌŵ ƉĂƌƚ ŽĨ ƚŚĞ ƌŽůĞ͘ WƌĞǀŝŽƵƐ >ŽŶĚŽŶ ŵĂƌŬĞƚ ĞdžƉĞƌŝĞŶĐĞ ƉƌĞĨĞƌƌĞĚ͘ ZĞĨ͗ ϰϳϱϰϬ ŽŶƚĂĐƚ ĂƚŚLJ ĂƌƌŽůů ŽŶ Đ͘ĐĂƌƌŽůůΛĚĂƌǁŝŶƌŚŽĚĞƐ͘ĐŽŵ

EŽŶͲůŝĨĞ͗ ĐƚƵĂƌŝĂů WƌŝĐŝŶŐ ŶĂůLJƐƚ ĞŶƚƌĂů >ŽŶĚŽŶ ͻ άϱϬŬ н ďĞŶĞĮ ƚƐ

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ZĞĨ͗ ,ϰϳϲϬϬ ŽŶƚĂĐƚ ŶƚŚŽŶLJ ,ŝůů ŽŶ͗ Ă͘ŚŝůůΛĚĂƌǁŝŶƌŚŽĚĞƐ͘ĐŽŵ

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t ǁǁǁ͘ĚĂƌǁŝŶƌŚŽĚĞƐ͘ĐŽŵ E >ŽŶĚŽŶΛĚĂƌǁŝŶƌŚŽĚĞƐ͘ĐŽŵ zŽƵ ĐĂŶ ĨŽůůŽǁ ƵƐ ŽŶ dǁŝƩ Ğƌ Λ ĂƌǁŝŶZŚŽĚĞƐϭ September 2013 • THE ACTUARY h< Θ hZKW | ,KE' <KE' | ,/E | /E / | h^dZ >/ | h^ www.theactuary.com

ACT.10.13.042.indd 43

43

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London : Chicago : Hong Kong : Singapore : Shanghai

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Reserving Actuarial Analyst - London 'LUHFWRU 3HQVLRQV $GYLVRU\ /RQGRQ $WWUDFWLYH 6DODU\ %HQH¿WV 3DFNDJH 7RS 4XDUWLOH %DVLF 6DODU\ %RQXV DQG %HQH¿WV This multinational reinsurer is looking to hire an actuarial analyst for their reserving team. The main remit is to assist in the quarterly reporting and reserving process. You will also provide support in planning, portfolio analysis and monitoring. Furthermore, the role is involved in 6ROYHQF\ ,, VXSSRUW 7KH LGHDO FDQGLGDWH ZLOO EH D QHDU TXDOL¿HG DFWXDU\ with experience in general insurance and reserving. Knowledge of London Market business would be advantageous. This role would suit a team player with good communication and technical skills. &RQWDFW SKX QJRF#LSVJURXS FR XN +44 207 481 8686

This blue chip employer is looking to hire an experienced pensions DFWXDULDO FRQVXOWDQW WR MRLQ WKLV VXFFHVVIXO DQG JURZLQJ QDWLRQDO ¿UP The team advises both sponsoring employers as well as trustee boards on pensions risk management, funding and investment strategy. &DQGLGDWHV ZLOO KDYH TXDOL¿HG DQG KDYH DW OHDVW \HDUV H[SHULHQFH PDQDJLQJ D SRUWIROLR RI FOLHQWV DGYLVLQJ RQ GH¿QHG EHQH¿W DQG GH¿QHG contribution schemes. He/She will have demonstrable experience of winning and managing the delivery of corporate projects to both listed and private companies. &RQWDFW DQWKRQ\ FKLWQLV#LSVJURXS FR XN +44 207 481 8686

7UXVWHHVKLS 6HHNLQJ ,QYHVWPHQW &RQVXOWDQW /RQGRQ Â&#x2026; %RQXV %HQH¿WV

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$Q LQGHSHQGHQW WUXVWHH RXW¿W DUH NHHQ WR PDNH D VHQLRU KLUH DQG KDYH decided an investment consultant looking for a change of direction would compliment the existing expertise within the team. You will be responsible for developing and managing a portfolio of pension funds providing trustee services so excellent client management and communication skills are a pre-requisite. You will be expected to demonstrate an in depth knowledge of UK pensions and regulation VXUURXQGLQJ WKH LQGXVWU\ &DQGLGDWHV ZLOO EH &)$ DQG ),$ TXDOL¿HG DQG will have worked within a UK investment consultancy for at least six years.

If youâ&#x20AC;&#x2122;re an Investment Consultant that lives in Berkshire, Hertfordshire or even the west side of Surrey and are tired of the commute to London then this could be the ideal opportunity for you. A client is looking at hiring an investment consultant with between 4-7 years experience to be based from their practice in Berkshire. You will be studying for the CFA or actuarial exams RU ZLOO KDYH DOUHDG\ TXDOL¿HG &DQGLGDWHV IURP D UDQJH RI consultancies will be considered, however the experience must be UK based.

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

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/RQGRQ 2I¿FH IPS Group, Lloydâ&#x20AC;&#x2122;s Avenue House, 6 Lloydâ&#x20AC;&#x2122;s Avenue, London EC3N 3ES 7HOHSKRQH 020 7481 8686 Email: actuarial@ipsgroup.co.uk /HHGV 2I¿FH IPS Group, 8 St Paulâ&#x20AC;&#x2122;s Street, Leeds LS1 2LE 7HOHSKRQH (PDLO DFWXDULDO#LSVJURXS FR XN ACT.10.13.043.indd 43

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

24/09/2013 11:26

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If you would like to take part please go to TheActuary. com or go to http://bit.ly/The_Actuary_Survey In return for your time, as well as our infinite appreciation you can win £100 of Amazon Vouchers Deadline: 18th October October 2013 • THE ACTUARY 43 www.theactuary.com

ACT.10.13.044.indd 43

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www.theactuaryjobs.com THE UK’S EUROPEAN UNIVERSITY The University of Kent is one of the UK’s most dynamic universities demonstrated by our strong European and international presence, our excellent RAE results which confirmed Kent’s position as one of the UK’s most research intensive universities, and the quality of our teaching and student experience; Kent was ranked 20th in the 2014 Guardian University Guide and achieved a 90% satisfaction rate in the 2013 NSS for overall student satisfaction.

Lecturer in Actuarial Science (2 posts)

Ref: STM0391

£31,644 - £45,053 p.a.

In addition, a market related supplement will also be payable to a qualified Actuary Salary is dependent on experience and qualifications Applications are invited for two positions of Lecturer in Actuarial Science which have arisen as a result of expansion of our programmes and planning for retirement of existing staff. These two posts will be based at our Canterbury campus and will be available from 1st March 2014 or as soon as possible thereafter. The posts are on a full time basis, but applications for one of the positions on a part time basis would be considered. A starting date before 1st March 2014 can also be considered.

The successful candidates will join the Centre for Actuarial Science, Risk and Investment (CASRI), which is part of the School of Mathematics, Statistics and Actuarial Science (SMSAS). The Centre is well established and offers both undergraduate and postgraduate programmes in Actuarial Science and Finance. All our Actuarial Science programmes are accredited by the UK Actuarial Profession. CASRI has a strong international reputation and in terms of the range of our courses and the number of actuaries employed is one of the world’s largest university actuarial departments.

The persons appointed will be expected to contribute to the School’s teaching activities in Actuarial Science and Finance. The positions will also provide opportunities for research, consultancy and enterprise activities. Ideally, at least one appointee will be expected to contribute to innovative research programmes in Actuarial Science and other areas of finance. An excellent package including relocation costs is offered.

Informal enquiries may be made to John Millett, Director of CASRI, on + 44 (0)1227 827173 (direct line) or e-mail: J.D.Millett@kent.ac.uk.

Informal visits to the School are welcomed.

For further details and to apply for this post please visit www.kent.ac.uk/jobs Closing date for completed applications: 8th November 2013.

Interviews are expected to be held: 9th December 2013.

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

Head of ERM Our client, a leading London market syndicate with circa $1bn worth of premium, is sourcing a Head of ERM to develop their capital and risk function.

Responsibilities will include oversight and management of the capital modelling process and development of ReMetrica, the completion of Lloyd’s returns for interim and ¿nal LCR submissions and to chair the Internal Model Committee. You will have to assist in the development of the ERM framework including appetite setting and monitoring, and leading on all emerging risk development and planning.

You will be involved with pricing reinsurance in peak season, and interact with the business to help embed an analytical culture throughout the organisation.

The role holder will have an extensive capital and risk background, and ideally have Remetrica exposure. You will have the gravitas and technical ability to be able to handle an autonomous role and strong Lloyd’s market knowledge.

Contact Rob Bulpitt

Rupert Rickard

rob.bulpitt@eamesconsulting.com

rupert.rickard@eamesconsulting.com

Office Number

For current opportunities please visit

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

+44 (0)20 7092 3200

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

www.eamesconsulting.com

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October 2013 • THE ACTUARY 45 www.theactuary.com

ACT.09.13.044.indd 45

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ACT.10.13.046.indd 46

24/09/2013 12:42

www.theactuaryjobs.com

Overseas Opportunities Capital Modeller – Singapore

Financial Management Actuary – HK

Up to SGD 140k base + bonus

Up to HKD 1m package

The regional head office of this Global insurer are searching for an inquisitive Life Actuary with proven problem solving skills to join the Financial Management team in Hong Kong. The work is all project related, travelling across Asia Pac, working alongside senior stakeholders in the business. Comprehensive package including relocation.

Take the Capital Modelling techniques you have developed in the UK to Asia. Our client is searching for a nearly / newly qualified Non-Life Actuary who has accumulated deepened capital modelling expertise in Solvency II to apply these advanced techniques to their business in Asia. Plenty of opportunity to travel with this role. Employment pass and relocation offered.

Regional Strategy Manager – Singapore

Life Actuarial Consultant – HK Up to HKD 1m package

Up to SGD 130k base + bonus

A well reputed Asian Insurer is advancing their Insurance Strategy Team in the Singapore Regional office. The role will be 60% actuarial and 40% project and strategy related. You will be a nearly / newly qualified Life Actuary with a good mix of Life insurance or consulting experience, and have ideally worked in multiple markets.

Excellent opportunity for a progressive Life Actuary to join this world renowned consulting firm in Hong Kong. This far reaching role covers Risk Management, Valuation, Reporting and Actuarial Modelling project work. Your market knowledge, actuarial experience and languages skills (English and ideally Chinese) will all come into play!

P&C Actuarial Analyst - China

Senior Actuarial Analyst –Singapore Up to SGD 85k base + bonus

Up to RMB 500k package

Perfect opportunity to take your General Insurance experience to China. The ideal candidate will have made good exam progress (CTs completed) and be looking for the next step. Experience in Reserving, Pricing or Capital modelling preferred and knowledge of SAS is useful. Business level Mandarin and English essential.

Clare Bethell, Senior Consultant Hallie Chin, Consultant

This is an excellent first role in Singapore for a part/nearly qualified actuary with financial reporting experience in life insurance. Specific knowledge of USGAAP, UK statutory reporting or Solvency II would be very helpful along with user experience of MoSes. Work permit and relocation assistance offered.

clare@highfinancegroup.co.uk hallie@highfinancegroup.co.uk

+44 (0) 207 337 8829 +44 (0) 207 220 0178

Coal Pension Trustees Services Limited

In-House Pensions Actuary Job Ref: CPT/JS Location: Sheffield, South Yorkshire Salary: Dependent upon experience

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A unique opportunity for a high-quality pensions actuary to provide in-house support to two of the largest defined benefit pension schemes in the UK. You will be involved in a number of diverse areas of work including driving forward funding valuations, liaising with Government departments and working alongside the inhouse investment and risk teams to deliver the strategic objectives of the pension schemes.

You will need the ability to think strategically, have a proven track record of managing complex projects with a variety of stakeholders and the experience of delivering advice to Trustees and board level corporate clients.

If you are interested in applying for this opportunity, please send your CV in the strictest confidence to Charlotte Dawson. Coal Pension Trustees Services Ltd, Ventana House, 2 Concourse Way, Sheffield, S1 2BJ, charlotte.dawson@ coal-pension.org.uk or call 0114 2536439 for more information.

October 2013 • THE ACTUARY 47 www.theactuary.com

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www.theactuaryjobs.com

Life Insurance Roles Protection Product Lead

Deputy AFH

£100k - £130k Basic, London

£100k - £140k Basic, London Directly supporting the Group AFH you will work closely with the senior management team including the CFO. With a full oversight remit you will have responsibility across the breadth of the actuarial function from both a technical and high level perspective. To be considered you will have extensive Life office experience, senior stakeholder engagement skills as well as a deep technical understanding.

Graeme@highfinancegroup.co.uk

As part of a leading International Life Insurer, you join a highly proactive team tasked with developing the regional proposition of this UK-based business. With specific knowledge of Protection products as well as a strong hands on understanding of Prophet, you will play an integral role as lead Product Actuary. This is a fantastic opportunity to develop strong managerial experience and direct exposure to the Middle Eastern and Asian markets. Graeme@highfinancegroup.co.uk

Financial Reporting Manager

Capital Actuary

£60k - £90k Basic, South West

£55k - £85k Basic, South East

A fast changing Life insurer seeks a qualified Actuary to become their Financial Reporting Manager. You will manage 6-8 students through the reporting process. A strong Financial Reporting background is required ideally with the experience of multiple year-end and quarterly cycles.

This role would suit an Actuary with post-qualified experience and the ability to manage people. Jack@highfinancegroup.co.uk

A large international Life Insurer requires a recently qualified Actuary with a strong capital background to join their International Team. This opportunity requires a good understanding of the drivers of capital requirements and capital management techniques, and the ability to undertake or co-ordinate stress and scenario testing as required by regulators or Group. Jack@highfinancegroup.co.uk

Regulatory Reporting Actuary

Pricing Actuarial Analyst £35k - £60k Basic, London

£55k - £70k Basic, Surrey Join this leading Life Insurer in a managerial position. Our client is seeking a qualified Reporting Actuary to take ownership of quarterly valuation processes along with managing a team of students. This is the perfect role for someone who is looking for more responsibility and the opportunity to liaise with the senior stakeholders across the business. Sophia@highfinancegroup.co.uk

This multinational life insurer is looking for an ambitious senior student to take on a key role in their pricing team. You will be involved in technical pricing in addition to risk and capital management. This exciting opportunity is for someone with previous Life insurance experience, who is looking to progress their career in a commercially focussed role. Sophia@highfinancegroup.co.uk

Contract Roles Reserving Contractor

Prophet Modeller

£750 - £1000 a day, 6 - 9 months, London

£60k - £80k, 6 months FTC, Bristol

Lloyd’s syndicate is looking for a reserving Actuary, ideally with technical provisions experience to join their Actuarial team. The role requires someone with good hands on reserving experience who can also see the bigger picture. Potential for the role to go on longer than a year. William@highfinancegroup.co.uk

A large Global Life Insurer is keen to recruit a Prophet Developer to join their growing Modelling team during a period of transition. This role will require strong Prophet development experience and the ability to replicate models from scratch. This role is for Prophet developers, not those who run Prophet Models. Jack@highfinancegroup.co.uk

Capital Modelling Contractor

Reporting Actuary

£750 a day, 6 months, London General Insurance company requires someone with strong Capital Modelling experience to ensure their Internal Model is compliant with Solvency 2 regulation. An exciting opportunity for a qualified Actuary (or equivalent experience) with a background in model development to return to the hands on technical work of coding and building a Capital Model. Igloo experience is preferred. William@highfinancegroup.co.uk

£50k - £75k, 6 months FTC, South An experienced Actuary is required for a 6 month project to assist the Valuations team through year-end reporting. This fixed-term contract requires good knowledge of With-profits and Peak 1 and 2 valuations, some stochastic modelling experience and the ability to hit the ground running almost immediately. Jack@highfinancegroup.co.uk

Pensions & Investment Roles Pensions Risk Manager

Investment Actuary

Up to £75k Basic, South East

Up to £70k Basic, London Opportunity with a niche Capital advisory firm, focused on the provision of investment products for clients with long-dated inflation linked assets. The role will include identifying and structuring hedging and restructuring options, derivative pricing and advising clients on broader capital issues. In-depth understanding of the financial markets and the issues facing insurers or pension funds from an investment perspective is 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

This is your chance to specialise in Pensions Risk Management. You will assess and implement de-risking options, working closely with senior stakeholders to direct and implement strategy. Having recently qualified, you will have excellent understanding of the issues facing sponsoring employers of DB schemes. Excellent communication skills and the motivation to have direct ownership over projects is key to success in this position. 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

jack@highfinancegroup.co.uk

miranda@highfinancegroup.co.u k

020 7337 8800

www.highfinancegroup.co.uk

actuarial@highfinancegroup.co.uk September 2013 • THE ACTUARY 43 www.theactuary.com

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www.theactuaryjobs.com Hannover Life Reassurance Bermuda Ltd (HLR Bermuda) is a core subsidiary of the Hannover Re Group and has been operating successfully in Bermuda since 2007. HLR Bermuda specializes in bespoke ¿nancial and longevity solutions in partnership with our clients around the world. This business is managed by our small team of reinsurance professionals based in Bermuda.

We now seek to appoint a nearly or newly quali¿ed actuary as

Financial Reporting Actuary reporting to the Corporate Actuary/Chief Risk Of¿cer.

The Role: The Financial Reporting Actuary is responsible for the development and maintenance of actuarial valuation systems, including the HLR Bermuda internal capital model (MoSes) and valuation database (TSQL). This is a hands-on modeling role requiring the accurate and timely development of valuation systems to meet the reporting demands of the corporate actuarial function. The Financial Reporting Actuary will work closely with the Capital Actuary to ensure that system validation and documentation meets international standards of regulation.

The ¿nancial reporting aspects of this role encompass a wide range of internal and external reporting duties. Internal reporting duties include the preparation of IFRS management accounts, MCEV, economic balance sheet valuations and group Solvency II reporting. External reporting includes the preparation of statutory ¿lings to be submitted to the Bermuda Monetary Authority.

Requirements: • Nearly or newly quali¿ed actuary • Familiarity with International Financial Reporting Standards (IFRS), Market Consistent Embedded Value (MCEV) and Solvency II • Competent developer of MoSes actuarial models • Ability to program in Visual Basic for Applications (VBA) and TSQL • Experience of working within a controlled model environment incorporating the speci¿cation, development, testing and documentation of actuarial models • Excellent written and verbal communication skills This is a unique opportunity to join a highly successful and dynamic team. Relocation assistance can be provided.

HLR Bermuda is an equal opportunities employer.

All applications will be held in the strictest of con¿dence and should be sent to: Amy Ponnampalam, Corporate Actuary/CRO; aponnampalam@hlr.bm; telephone: +1 441 535 7688.

Hannover Life Reassurance Bermuda Ltd. Victoria Place, 2nd Floor 31 Victoria Street Hamilton HM 10, Bermuda

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 October 2013 • THE ACTUARY 49 www.theactuary.com

ACT.10.13.049.indd 49

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HEAD OF AUDIT up to £100k + bonus + benefits LIFE EDINBURGH

STAR1596

HEAD OF MODELLING

TECHNICAL LEAD

up to £100k + bonus + benefits

up to £90k + bonus + benefits

LIFE BRISTOL

STAR1550

LIFE SOUTH COAST

STAR1568

Leading insurance group seeks a qualified life actuary to review, evaluate and influence strategic plans, taking into account business priorities and risks.

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

Qualified life actuary required to take up a leadership role providing technical direction to a high-performing team. Influencing skills are key. You will work closely with the Actuarial Function Holder.

SYSTEMS DEVELOPMENT ACTUARY

PROCESS-IMPROVEMENT ACTUARY

MARKET ENGAGEMENT MANAGER

up to £90k + bonus + benefits

up to £80k + bonus + benefits

up to £80k + bonus + benefits

LIFE SOUTH COAST

STAR1569

LIFE SOUTH COAST

STAR1570

LIFE LONDON

STAR1615

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

Fast-growing insurer requires a technical life actuary to review reporting structures, and to ensure internal transparency and access to the debt markets. Communication, influencing and project management skills central to the role.

Market-leading insurer is seeking a qualified life actuary with sound actuarial reporting capabilities to lead market engagement on reporting cycles to ensure timely and highquality submissions.

REPORTING AND PLANNING ACTUARY

PROJECT ACTUARY

GROUP PROTECTION PRICING ACTUARY

up to £68k + bonus + benefits

up to £68k + bonus + benefits

LIFE GREATER LONDON

STAR1564

LIFE MIDLANDS

up to £65k + bonus + benefits STAR1642

LIFE LONDON

STAR1529

Seeking a qualified life actuary to support the production of the business plan through detailed modelling and analysis, using strong relationships with leadership teams to ensure ownership of the results.

Our client has an exciting opportunity for a qualified life actuary to provide expert actuarial advice in the delivery of a wide range of projects to agreed timescales and quality.

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.

MODELLING ACTUARY

CAPITAL OPTIMISATION ACTUARY

PRINCIPAL AUDITOR

up to £60k + bonus + benefits

£ excellent + bonus + benefits

£ excellent + bonus + benefits

LIFE SOUTH WEST

STAR1634

LIFE SOUTH EAST

STAR1598

LIFE LONDON, SCOTLAND

STAR1646

Major life company is seeking a qualified actuary to manage the control and gatekeeping processes involved in the development of actuarial models.

Leading life company seeks a part-qualified or qualified actuary to analyse the capital requirements on economic and regulatory bases, identifying and removing constraints and proposing mechanisms to release excess capital.

Leading financial services company is seeking a qualified life actuary to provide a valueadding service by leading the delivery of audit reviews of processes, controls and systems.

WITH-PROFITS ACTUARIAL ANALYST

RISK ANALYST

ACTUARIAL ASSISTANT

up to £50k + bonus + benefits

up to £50k + bonus + benefits

up to £30k + benefits

LIFE SOUTH COAST

STAR1576

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

LIFE SOUTH COAST

STAR1578

LIFE YORKSHIRE

STAR1649

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

Seeking a part-qualified life actuary to provide actuarial support for the full range of our client's products, whilst providing pricing and testing support for new product developments.

FINANCIAL RISK MANAGER

HEAD OF VALUE MANAGEMENT

DIRECT ENTRY PARTNER

up to £90k + bonus + benefits

IDR excellent package

£ to attract the best

STARVACANCIES LIFE SOUTH COAST

STAR1623

Growing insurance group seeks a qualified actuary to take a lead role in assessing, challenging and optimising its investment portfolio. You will also play a key role in the validation of the group’s capital models.

50

STAR1632

Major international financial services group seeks a qualified life actuary with group employee benefits experience to develop best practices to drive value creation across all of its Indonesian entities.

LIFE & NON-LIFE INTERNATIONAL

STAR1600

We are working on a number of exciting direct entry partner opportunities for life and non-life actuaries of the highest calibre. Please contact us for more details.

Louis Manson Lou

Irene Paterson FFA Ire

Joanne Young Joa

Peter Baker

MANAGING DIRECTOR MAN

PARTNER PAR

OPERATIONS DIRECTOR OPER

SENIOR CONSULTANT

THE ACTUARY • October 2013 www.theactuary.com M +44 7595 023 983 E louis.manson@staractuarial.com

ACT.10.13.050-051.indd 50

LIFE INDONESIA

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

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

M +44 7860 602 586 E peter.baker@staractuarial.com

24/09/2013 11:48

L I F E N ON -LIFE P E N S IO N S IN VESTM ENT HEAD OF AUDIT

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

REINSURANCE BROKER

up to £100k + bonus + benefits STAR1591

£ excellent package

NON-LIFE BRISTOL

STAR1595

NON-LIFE LONDON

STAR1530

Leading global insurer is seeking a qualified non-life actuary to lead and direct its risk function, building on a strong core of actuarial skills including experience of reserving, pricing, reinsurance and capital.

Leading financial services company has an unrivalled opportunity for a qualified non-life actuary to lead the development and implementation of the audit response for its general insurance business.

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.

CAPITAL MODELLER

LONDON MARKET RESERVING

REINSURANCE PRICING ACTUARY

up to £90k + bonus + benefits

up to £80k + bonus + benefits

£ excellent + bonus + benefits

NON-LIFE LONDON

STAR1647

NON-LIFE LONDON

STAR1621

NON-LIFE LONDON

STAR1648

Niche insurance and reinsurance group seeks an experienced capital modeller to take model use to the next level and play a key part in the continuing development of a high-profile business function.

Take up a central role in a London Market company. The successful candidate will be a team player with good communication skills, a proactive nature and strong reserving experience.

Global reinsurance broker seeks a part-qualified non-life actuary to be involved in cutting-edge modelling and have significant interaction with both brokers and clients.

LONDON MARKET PRICING

REINSURANCE ACTUARY

STRATEGIC PRICING CONSULTANT

up to £50k + bonus + benefits

£ excellent + bonus + benefits

NON-LIFE LONDON

STAR1617

up to £50k + bonus + benefits

NON-LIFE LONDON

STAR1605

NON-LIFE SOUTH EAST

STAR1652

Brilliant opportunity for a part-qualified pricing actuary with strong technical and communication skills to take up an exciting role within a London Market company.

Global reinsurance broker has an exciting opportunity for an enthusiastic part-qualified actuary with a strong personality to play a key role within a cutting-edge and fast-paced environment. Contact us now for more details.

Seeking a talented individual with strong experience in insurance pricing to play a key role in driving the pricing agenda, as well as the planning and communication of key strategic projects.

BUSINESS DEVELOPMENT CONSULTANT

INVESTMENT CONSULTANT

ACTUARIAL PENSIONS - NEW YORK

up to £110k + bonus + benefits

up to £85k + bonus + benefits

$ excellent + bonus + benefits

INVESTMENT LONDON OR SOUTH EAST

STAR1574

INVESTMENT LONDON OR SOUTH EAST

STAR1532

PENSIONS NEW YORK

STAR1614

Global professional services company seeks a talented investment consultant with strong influencing skills to develop and execute client strategies.

This is an unrivalled opportunity to join this specialist investment team where you will design, model and implement bond and derivative-based liability hedging solutions.

Industry-leading financial services company is seeking qualified and part-qualified pensions actuaries to help companies address the specific compensation benefits and equity issues that surround a transaction.

INVESTMENT RISK SOLUTIONS

CLIENT STRATEGY & RESEARCH MANAGER

MANAGEMENT CONSULTANCY

£ excellent + bonus + benefits

up to £65k + bonus + benefits

£ excellent + bonus + benefits

INVESTMENT YORKSHIRE

STAR1650

Leading financial services firm has an exciting opportunity for a qualified investment actuary to provide strategic advice, helping clients to determine the appropriate mix of risk and return and the optimum use of capital.

INVESTMENT LONDON

STAR1606

Part-qualified investment actuary required for a major asset manager. Primary responsibilities include designing investment strategies, constructing liability-driven investment solutions and building client relationships.

PENSIONS BIRMINGHAM

STAR1377

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

Star Actuarial Futures Ltd is an employment agency and employment business

HEAD OF RISK

www.staractuarial.com DIRECT ENTRY PARTNER

DIRECTOR LEVEL PENSIONS

IN-HOUSE PENSIONS

£ excellent package

£ excellent package

up to £100k + bonus + benefits

INVESTMENT LOCATION UPON APPLICATION STAR1654

PENSIONS LOCATION UPON APPLICATION

We are working on a direct entry partner opportunity for an investment consultant of the highest calibre. Please contact us for more details.

We are currently working on an exciting opportunity for a talented and driven indivdual to take the next step in their pensions consulting career. Please contact us for more details.

STAR1653

PENSIONS LOCATION UPON APPLICATION

STAR1610

We are currently working on an in-house role for a high-quality pensions actuary. This is an exciting opportunity to join a passionate and award-winning team of professionals so contact us now for more details.

Antony Buxton FIA Anton

Lance Randles MBA La

Paul C Cook

Clare Roberts

MANAGING DIRECTOR MANAG

ASSOCIATE DIRECTOR AS

SENIOR CONSULTANT

SENIOR CONSULTANT

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

ACT.10.13.050-051.indd 51

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

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

October 2013 • THE ACTUARY www.theactuary.com M +44 7714 490 922 E clare.roberts@staractuarial.com

51

24/09/2013 11:48

United Kingdom

United Kingdom General Insurance Head of Capital London Rick Davis £125,000 + Bonus + Benefits An established Lloyd’s Syndicate requires a qualified Actuary to take ownership of the capital modelling function. Managing a small team you will oversee all aspects of the capital model. You will also work with the board to help define business strategy.

Group Reserving Actuary London Sarah Robins £120,000 + Bonus + Benefits A globally renowned insurance group requires a qualified Actuary to play a key role in the reserving process for their UK and International business. This is a highly visible position in which you will interact regularly with the board and manage a team.

Pricing Analyst London Rachel Kelly Up to £60,000 + Bonus + Benefits A well-established Lloyd’s insurer seeks a part qualified Actuary to work on a variety of pricing, model development and underwriting risk analysis. This broad role is perfect for those wanting to gain new experience as all backgrounds will be considered.

London Market Reserving Analyst London Ben Pitt Up to £55,000 + Bonus + Benefits Leading London market insurance business seeks two ambitious actuarial students for their reserving team. The openings have been created due to growth and will provide the opportunity to work across specialty lines and reinsurance.

Contracts - General Insurance Pricing Actuary North West Elise Salter £700 - £900/day A qualified Pricing Actuary is required to manage the team within a GI business. The role holder will influence the strategic plan and P&L account for the GI business. Strong communication skills and man management experience is essential.

Reserving Actuary London Elise Salter FTC up to £90,000 Our client, a specialist reinsurance business is seeking a Reserving Actuary to join their team on a 12 month fixed term contract.

You will support the Solvency II technical provisions and reserve risk process development. ResQ experience desirable.

Life Insurance Group Capital Actuary David Parker

London £120,000 + Excellent Benefits

A global market leader seeks a Senior Risk and Capital Actuary for their city based head office. You will be experienced in managing qualified actuaries and have excellent interpersonal skills to liaise with high profile stakeholders. Unrivalled benefits package.

Pricing Actuary London Clare Nash £75,000 + Market Leading Package EXCLUSIVE APPOINTMENT. My client seeks a nearly/newly qualified Actuary with a pricing background to join their market leading team. You will enjoy technical work as well as client facing responsibility. Highly visible across the group.

Actuarial Manager - Valuations London Richard Howard £80,000 + Car Allowance + Bonus Excellent opportunity for a qualified Actuary to manage a team of five for this leading life insurer in the South East. Responsible for reinsurance, actuarial systems and pricing review work. Must be a qualified Actuary and an excellent man manager.

Prophet Modelling Actuary South Richard Howard £60,000 - £100,000 + Bonus + Benefits Excellent opportunities for actuaries with experience within prophet modelling and development to join these leading life insurers in the South. Applicants with specific ALS experience would also be of interest.

Contracts - Life Project Actuary South East Rob Bentham Up to £900/day Our client is looking for a Project Actuary to join one of their busy actuarial teams for an initial three month role. The role will focus on development and testing of the business’ new systems testing tool. Broad life product knowledge would be desirable.

52

Reporting Actuary South West Rob Bentham Up to £600/day Our client is looking for a Reporting Actuary to join one of their busy valuations teams for an initial six month role. The role will focus on carrying out year end reporting and managing a small team. Previous management experience is desirable.

General Insurance - UK

Contracts - GI - UK

Life Insurance - UK

Paul Francis 0207 649 9469 Rick Davis 0207 649 9353 Sarah Robins 0207 310 8552 Ben Pitt 0207 310 8719 Rachel Kelly • October0207 THE ACTUARY 2013 310 8579

Elise Salter

Clare Nash David Parker Richard Howard

0207 649 9355

Contracts - Life - UK

0207 649 9350 0207 310 8649 0207 649 9356

Rob Bentham 0207 649 9351 Please contact one of the team for further information on any of the opportunities above or visit www.ojassociates.com/jobs

www.theactuary.com

Ben ACT.10.13.052-053.indd 52

24/09/2013 11:52

United Kingdom

Europe International Annuities Manager London/Surrey/Hilversum Niels van Nieuwkerk £70,000 - £110,000 + Benefits Our client is seeking to recruit an Annuities Manager to further develop the annuity activities within the Dutch market. The Annuities Manager is responsible for the strategy and implementation.

You will work both in UK and NL. Dutch language skills required.

Deputy Head of Pricing - Life Paris Emérique Opou €80,000 + Bonus You will join the pricing team of a reinsurance company and will be in charge of a team of three life actuaries. You will be dedicated to the French market. You must be an experienced Actuary with life pricing expertise and management experience.

Senior Actuary - Reinsurance Germany Manuel Lovell Up to €100,000 Base My client is looking for a Senior Actuary to join the corporate actuarial team in its reinsurance arm. You will be involved in reserves calculations, profitability analysis and discussions with senior management as well as business planning/steering.

GI (Solvency II) Consultant North Rhine - Westphalia Emina Biscevic €€€Competitive Currently seeking a GI Consultant to join one of the world´s leading consultancies. You will be responsible for the design, development and implementation of ERM frameworks for reinsurers and evaluate existing risk management arrangements against SII.

Actuarial Consultant Laurence Baken

Appointed Actuary Switzerland Switzerland Audrey Dresen Highly Competitive Exclusive role with reinsurance start-up. Looking for a qualified, senior Actuary with 10+ years’ experience, covering Pricing, SST/ Reserving. You must be independent, an initiative taker and a good communicator. You will be working closely with Underwriters.

Luxembourg Attractive Package

A chance to join a leading financial and actuarial consulting company in Luxembourg. Life insurance experience required to work in SII implementations & IFRS conversions, audit support to insurance companies and insurance risk management consulting.

Asia Hong Kong Life Actuary - Head of Portfolio Management £££Competitive Gary Rushton We are looking for an experienced Actuary to lead and drive the execution of the technical aspects to manage all the in-force portfolio for my clients Life and Health business across Asia. Strong stakeholder management with extensive PQE. High profile role!!

Life Actuary - Capital Modelling Singapore Philip Chau £££Competitive A unique opportunity to apply your technical skills within a nontraditional environment! You will work as part of a high calibre team of investment bankers and actuaries working across capital management projects covering assets and liabilities portfolio.

Hong Kong Life Actuary - Senior Risk Actuary £££Competitive Jonny Plews A leading international insurer is currently looking for a senior qualified Actuary to support the regions CRO to spearhead the risk assessment of their liability risk. The successful candidate will be technically sound in pricing and/or capital management.

Singapore Life Actuary - Head of Client Management £££Competitive Joanne Lim One of the leading global insurance groups is currently looking for a commercially minded senior Actuary with strong technical pricing experience to lead the business and pricing strategy for APAC region. No Asia language skills required.

Consulting Actuary Hong Kong Toby Weston £££Competitive My client is a top tier consulting firm who are looking for a NNQ GI Actuary. Working across exciting projects within reserving, capital and risk management this person will lead smaller projects and be responsible for the development of analysts.

Lead Actuary Hong Kong Toby Weston £££Competitive European insurer seeks a qualified Mandarin speaking Actuary with a 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.

Europe Benjamin Moses Helger Wiese Emina Biscevic Audrey Dresen Laurence Baken

Asia +44 207 310 8793 +31 20 262 0280 +49 89 3803 8965 +41 43 508 0444 +32 24 012 249

Patrick McMahon Niels van Nieuwkerk Julien Fabius Emérique Opou Manuel Lovell

+353 1 685 2413 +31 20 716 8327 +31 20 716 8450 +33 1 76 77 46 30 +49 8922 061 003

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

ACT.10.13.052-053.indd 53

Jonny Plews +852 5804 9200 Gary Rushton +852 5804 9223 Toby Weston +852 5804 9042 Joanne Lim +852 5804 9225 Clémence Laupie +852 5804 9265 October 2013 • THE ACTUARY 53 Philip Chau +852 5804 9287 www.theactuary.com Leanne Leung +852 5804 9070

24/09/2013 11:52

Reflecting on the Future - Advice for Actuarial Students

By Ben Pitt “Communication - the human connection - is the key to personal and career success.” – Paul J. Meyer

be felt for a long time and could have a profound effect on your career.

It’s that time of year again... where does the time go? No sooner have you finished your exams in April then the September sitting comes around! Two weeks of exams preceded by months of hard work and study. Now they’re finished - for some hopefully permanently, for others a postponement until next time. Either way, finally you have some time to yourself in the run up to the end of the year and, dare I say it, Christmas…

So what steps can you take to ensure you’re in the right role and heading in the right direction? Well, the first step is to pick a destination… sounds simple, right? Give yourself a long term plan by setting yourself a goal and then working back through it. Want to be a Chief Actuary? Then find out what skills you need and how you can get them. See yourself as a CRO one day? Find out which path you need to take to get from here to there.

It is at this time of year that we receive a lot of calls from actuarial students about their career plans. With the multiple stresses of study routines, quarterly workloads, holiday plans, team reshuffles and other such things it’s only natural that career minded individuals use this breathing space to take stock and assess their current situation. My advice is simple - don’t act in haste. Hasty decision making can lead to some pretty disastrous results, which is why it’s important to talk things through with someone who is well positioned to give you an impartial, objective and well informed view of things.

This is where we can offer the most help. As a business and as individuals we’ve seen the paths your CRO’s, Chief Actuaries, Managing Directors, partners and other leading figures have taken.

We know a lot of them personally and will have helped more than our fair share. We can talk confidently about how they’ve got to where they are now and are happy to share this knowledge with you so that you can make the best decisions possible for your long term plans. If you’re not sure where you’re heading then it’s just as important, if not more so, to have these conversations now as we can give you some guidance should you require it.

As the actuarial profession becomes more widely recognised in the financial services community there are going to be a lot more varied and interesting opportunities for actuaries in the future. The impact of moving roles or, in many instances, not moving, can

If you want to have a confidential discussion about your career please get in touch with one of the team.

Ben Pitt 0207 310 8719 ben.pitt@ojassociates.com David Parker 0207 310 8649 david.parker@ojassociates.com

GIRO Conference 2013 - Our Biggest Competition Yet!

By Rick Davis As many of you will know, Edinburgh 2013 marks the 40th anniversary of the GIRO conference and exhibition. Oliver James Associates is proud to be a long-standing supporter of the conference, and the General Insurance Actuarial team are especially delighted to confirm our attendance once again in this special year.

This is always a highly enjoyable week for our consultants as it represents an opportunity to meet new people on an informal basis and catch up with the many valued contacts we already hold in the market.

The past 12 months have been an exciting time for our business, during which we have seen continued growth in our GI Actuarial offering at home and overseas. Alongside our established UK business we now have large actuarial teams operating successfully in the Asia-Pacific region (based in Hong Kong with further office openings planned in 2014) and across continental Europe (based from Amsterdam).

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overseas opportunities, the challenges of building global teams, regional salary benchmarks or any other business matter.

We are also running our most ambitious competition yet so we would be equally pleased to simply give you the opportunity to win one of three BIG prizes should you be taking a break from “work talk”.

Please stop by and say hello to the team, we look forward to seeing you there.

This global coverage and local knowledge gives Oliver James a unique insight into the worldwide GI actuarial market.

Contact Details:

If you are going to be attending then we would be delighted to welcome you to our stand and either discuss UK market trends,

Rick Davis Paul Francis

General Contact Details

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actuary@ojassociates.com www.ojassociates.com

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0207 649 9353 0207 649 9469

rick.davis@ojassociates.com paul.francis@ojassociates.com

24/09/2013 11:55

United Kingdom

Meet some of the team...

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

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CLARE NASH Life & Investments, Actuarial & Risk clare.nash@ojassociates.com +44 207 649 9350

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

RICK DAVIS GI Actuarial & CAT Risk

RICHARD HOWARD Life & Investments, Actuarial

rick.davis@ojassociates.com

richard.howard@ojassociates. com +44 207 649 9356

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

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

+44 207 649 9353

Our consultants have developed an indepth technical understanding of the intricacies of the actuarial profession and can offer sound and confidential career advice.

On this page you can take a closer look at some of our team, however for a full list of consultants and more detail on their individual specialisms please visit our website. www.ojassociates.com/actuarial-team.

ELISE SALTER GI, contract elise.salter@ojassociates.com +44 207 649 9355

Europe

SARAH ROBINS GI Actuarial sarah.robins@ojassociates. com +44 207 310 8552

+44 207 310 8719

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AUDREY DRESEN Switzerland, Actuarial, Risk & Compliance audrey.dresen@ojassociates.com +41 43 508 0444

JULIEN FABIUS Benelux, Actuarial

BENJAMIN MOSES European, Actuarial

EMINA BISCEVIC Germany, Actuarial

julien.fabius@ojassociates. com +31 20 716 8450

benjamin.moses@ojassociates.com +44 207 310 8793

emina.biscevic@ojassociates.com +49 893 803 8965

EMÉRIQUE OPOU France, Actuarial & Insurance Risk emerique.opou@ojassociates.com +33 1 76 77 46 30

LAURENCE BAKEN Belgium & Luxembourg Actuarial laurence.baken@ojassociates.com +32 2401 22 49

Asia

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

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

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

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

LEANNE LEUNG Actuarial leanne.leung@ojassociates. com +852 5804 9070

JOANNE LIM Actuarial joanne.lim@ojassociates.com +852 5804 9225

General Contact Details

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www.the-arc.co.uk

The Actuarial Recruitment Company

A fresh approach

Pricing Actuary London

General Insurance £Six figures

Reserving Analyst London

General Insurance to £50K

This role with an international insurance and reinsurance business will be based in their London pricing team and be involved across property, casualty and specialty lines of business. The scope of the work will include individual risk pricing, pricing model development, rate monitoring, underwriting risk assessment and business planning. A London Market background is essential as well as strong interpersonal and managerial skills but candidates without directly relevant pricing experience may be considered. Ref: ARC26232

A part qualified actuary is needed for a reserving role within a

Capital Analyst London

Actuarial Analyst London

General Insurance to £85K

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 for ICA and Solvency II requirements. The client is looking for an individual with excellent communication and technical skills as well as extensive previous experience in capital work and a sound knowledge of Solvency II. A Remetrica background would be preferred for the role although strong candidates with other capital software experience may be considered. Ref: ARC26211

medium sized Lloyd’s managing agency. The client is looking for someone with 1 to 4 years of general insurance experience, ideally from either a London Market or commercial lines retail background.

There is scope to be involved in other areas and to support pricing and capital work within the business as well. Good academics and strong interpersonal skills needed. Ref: ARC26231

General Insurance £Very good benefits

This varied role for a part qualified actuary in a London Market team will have a focus on pricing and reserving but will also have scope for input to the capital modelling. The client is looking for an academically strong candidate, mid way through the actuarial exams with ideally a London Market background and a preference for previous pricing experience. Very good interpersonal skills are vital as there will be a lot of underwriter interaction. Ref: ARC26233

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

0781 333 7891 0781 398 9016 0771 122 8449

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

The Actuarial Recruitment Company is an employment agency 56

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