The Actuary April 2015

APRIL 2015 theactuary.com

Interview: Otto Thoresen

The magazine of the actuarial profession

The NEST chairman on achievements and ambitions

Pensions How to explain the complexities of life expectancy

Big data Avoiding measurement madness

Arts The Actuary

Enter the world of Sherlock Holmes and forensic science

Net April 2015

Using value in force monetisation as an eective capital management tool

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Appointments

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THE ACTUARY • May 2013 www.theactuary.com

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APRIL 2015

Contents

26

22 “Solvency II will focus minds more firmly upon the need to optimise an insurer’s capital, liquidity and risk positions”

17

UP FRONT

FEATURES

AT THE BACK

10 IFoA news

17 Interview: Otto Thoresen

32 Arts

14 People/society news 16 SIAS events

The chairman of the National Employment Savings Trust speaks to Richard Schneider and Helen Lau about the many challenges facing the

OPINION

pensions industry

20 Pensions: Don’t you rock my boat 5

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Editorial

Norbert Fullerton talks about the dark

Kelvin Chamunorwa considers divided opinions and encourages healthy debate

pensions clouds on the horizon and

Letters From bankers, bonuses and bad management to being better late than never on career average revalued earnings in pensions

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President’s comment Nick Salter urges members not to be apathetic about voting for their choice of Council members

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Soapbox Liberal democrat parliamentary candidate and actuary Paul Kennedy outlines his campaign strategy

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

COVER: CHRIS DUNN

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how you might navigate towards a sunnier outlook

26 Big data: Measurement madness Dina Gray, Pietro Micheli and Andrey

Anastasia Aboim dusts off her magnifying glass at the Museum of London’s Sherlock Holmes exhibition

34 Puzzles Try the latest cryptic crossword and Mensa puzzles, plus solutions

37 Student Jessica Elkin urges caution on sharing exam information after the event

38 Actuary of the future David McKniff of Deloitte

ONLINE

Pavlov discuss the drawbacks of relying on too much data

28 Pensions: Illuminating longevity Hilary Salt offers advice on how

Pensions: appetite for change Simon Willes and Alex Barrell discuss why value at risk may not be a healthy option for setting risk appetite

actuaries should explain life expectancy

Reportage

following the UK pension reforms

For daily news, visit www.theactuary.com

30 Spotlight on: Hidden charges Darryl Boulton argues that concealed fees in any area of business is the coward’s way to make a profit

WRITERS OF THE MONTH Hilary Salt wins a £50 book token for her article on explaining the complexities of life expectancy, courtesy of SIAS

April 2015 • THE ACTUARY www.theactuary.com

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Appointments

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THE ACTUARY • May 2013 INS3244 www.theactuary.com

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Opinion Editorial theactuary.com

Publisher Redactive Media Group 17-18 Britton Street, London EC1M 5TP +44 (0)20 7880 6200 Publishing director Joanna Marsh Sub-editors Kathryn Manning Caroline Taylor News editor Will Green +44 (0)20 7324 2742 will.green@redactive.co.uk News reporter Cintia Cheong +44 (0)20 7324 2743 cintia.cheong@theactuary.com Digital assistant Tania Forrester tania.forrester@redactive.co.uk Sales manager James Condley +44 (0)20 7324 2750 james.condley@redactive.co.uk Display sales executive Vlad Harmanescu +44 (0)20 7324 2726 vlad@redactive.co.uk Senior recruitment sales executive Emmanuel Nettey +44 (0)20 7880 6234 emmanuel.nettey@redactive.co.uk

editor@theactuary.com

Internet The Actuary: www.theactuary.com Staple Inn Actuarial Society: www.sias.org.uk Institute and Faculty of Actuaries: www.actuaries.org.uk Managing editor Sharon Maguire +44 (0)20 7880 6246 sharon.maguire@redactive.co.uk Editor Kelvin Chamunorwa editor@theactuary.com Features editors Contact: features@theactuary.com Jeremy Lee, pensions, investment, ERM, banking

Kelvin Chamunorwa considers divided opinions and encourages debate

Richard Purcell, life, health and care Richard Schneider, life, Solvency II, mortality/longevity, modelling and software Helen Lau, GI, reinsurance, environment, careers Gemma Gregson, pensions, GI People/society news editor Yvonne Wan social@theactuary.com Student page editor Jessica Elkin student@theactuary.com Arts page arts@theactuary.com

Senior designer Gene Cornelius

IFoA news editor Alison Jiggins +44 (0)20 7632 2172 alison.jiggins@actuaries.org.uk

Picture editor Akin Falope

SIAS representative Mark Gorman

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Editorial advisory panel Peter Tompkins (chairman), Naomi Burger, David Campbell, Matthew Edwards, Martin Lunnon, Sherdin Omar, Nick Silver, Andrew Smith

Print William Gibbons

Big talk, small talk

Circulation 25,331 (July 2013 to June 2014)

Subscriptions For subscriptions from outside the actuarial profession, UK: £95 per annum.

Europe: £125 per annum, rest of the world: £150 per annum. Contact: Alison Jiggins, The Institute and Faculty of Actuaries, 7th floor, Holborn Gate, 326-330 High Holborn, London WC1V 7PP. T +44 (0)20 7632 2100 E alison.jiggins@actuaries.org. uk. Students on actuarial science courses may join and 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: Rachel Young E rachel.young@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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I am sure that many of you came across ‘The Dress’. If not, Google it – it divided the internet some weeks ago. At first, when I was invited to a colleague’s desk where a handful of other workmates were already gathered, it seemed that Friday afternoon banter had degenerated to debating the colours of a dress. It turned out to be an optical illusion but it was fascinating to see how difficult it was to change someone’s view.

The political world is also not black and white. In the run-up to the UK general election next month, the voting public is largely divided across a number of the political parties, so there’s a high possibility of no outright majority. I recently came across a debate on the radio about the appropriate number of kitchens in the home of a prime minister, in what seemed like a far-fetched effort to differentiate the candidates.

Paul Kennedy, an actuary running for a seat as an MP in these elections, writes on poll matters with more substance. He discusses how he tackles the challenges of changing opinions in his favour, and how his actuarial background has been relevant when addressing the various issues his constituency faces (p8).

Darryl Boulton’s last two articles in The Actuary have stirred a number of responses from readers, two of which are included in the Letters page overleaf.

I’d be interested in your thoughts on Boulton’s latest instalment, about hidden charges (p30).

The Actuary is a great conduit for discussion across the global actuarial profession, and also for those with an interest in the work we do.

On a personal note, my two-year term as editor concludes in December and so the search for a successor begins. If this opportunity interests you, I would encourage you to get in touch to explore what the role entails. For me, it has certainly been a fascinating experience so far – one that I will look back upon with fond memories. In the meantime, let’s continue debating.

“Paul Kennedy’s actuarial background has been relevant when addressing the issues his constituency faces”

Kelvin Chamunorwa Editor

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JOIN US ON LINKEDIN www.linkedin.com/groups/Actuarymagazine-UK-Group-3751335

April 2015 • THE ACTUARY 5 www.theactuary.com

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Opinion Letters to the editor editor@theactuary.com

Coffee and the actuarial control cycle

Have your say online

More comments are posted online about news stories published on www.theactuary.com.

The haves and have-nots There are two major issues that Darryl Boulton misses completely in his article Bankers and Bonuses (The Actuary, March, bit.ly/1LwCoNO). First, it is wrong, but a sad part of our culture, that various, but quite small groups, of our society get ridiculously large remuneration (which they then show off ). At the same time there are so many others, indeed the majority, who are doing equally valuable jobs but paid low wages.

By valuable, I speak of their contribution to society.

Boulton ignores this very critical point.

Second, he claims that most jobs are suited to quantitative assessment. That may be the case with many jobs in the City of London, but it is certainly often not the case outside. I have spent a lot of time at hospices where staff and nurses seek to give dying patients as comfortable a death as possible. They gain satisfaction from seeing the reactions from patients and carers. But it is not possible to measure a good death objectively. There are lots of other jobs to which, in my view, this applies – probably the majority of jobs.

Boulton also talked about his team of 12 graduates and said everyone was a winner. Clearly, that was not the case because they had quite different productivity and got different pay. Maybe with better and more empathetic management, there might have been more equality, more satisfaction and better productivity.

My overall concern on this subject relates to the size of this remuneration inequality, which is driving increasing divisions in our society and leading to unsettlement and strife between those who have and those who don’t.

Hugh Scurfield 7 March

Economic quandary I was surprised to see in the article Impact of Falling Oil Prices (The Actuary, February, bit.ly/17uqotm) that US interest rates could be raised to avoid the dollar rising in value against other currencies. Wouldn’t that have the opposite effect?

Apart from that, my congratulations to the team on another edifying edition of the magazine.

Samuel Jackman 23 February

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

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I was delighted to have my attention drawn to Darryl Boulton’s article Wake Up and Smell the Coffee (The Actuary, February, bit.ly/1A2Q1gq). The idea that actuaries “can do things other than insurance” – and, more important, that the next generation should be confident in that ability – was central to the restructure of Australian actuarial education in the mid-1990s. This was based on the recognition that there was an “actuarial control cycle” at the core of what we do. Understanding the philosophy of the control cycle (widely recognised by engineers and previously – in a specific application – the subject of a seminal paper by Jeremy Goford) enables actuaries to address a wide variety of problems in a multitude of contexts.

Readers of The Actuary may be interested to know that there is a standard textbook, used in Australia and North America and in enlightened corners of the UK, that uses the actuarial control cycle to explain fundamental actuarial concepts. As it happens, the second edition, published in 2010, illustrates each of these concepts with reference to a coffee shop.

Dare I now start to hope for a decent long black next time I’m in the UK? Richard Lyon 6 March

Better late than never Although long retired, I take a bit of interest in current developments and I have been intrigued by the changes of public-sector pensions to career average revalued earnings, especially for the British Armed Forces, because of the example I used in my presidential address to the Faculty of Actuaries in 1991.

What I said was: “I am on record in our transactions as not being particularly enamoured of final salary schemes. Why should the salary of a person for a very short period before retirement be so important and determine a pension for years thereafter?” I quoted that a general gets a much bigger pension than a lieutenant general, a lieutenant general gets a much bigger pension than a major general, but in each case the person only holds the more senior rank for about two years or so.

What did I say I would like? An average salary scheme revalued in some way by cost of living or earnings seemed good to me.

It took a quarter of a century to get the change!

Alistair Neill 5 March

The editor welcomes readers’ letters but reserves the right to edit them for publication. Please email editor@theactuary.com.

The deadline for receiving letters for the May issue is 20 April 2015.

THE ACTUARY • April 2015 www.theactuary.com

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Opinion President’s comment

Nick Salter is the president of the Institute and Faculty of Actuaries

NICK SALTER

Be a part of shaping our future I was reading an article the other day on how voter apathy has been a growing issue in the UK elections in recent years and how, years ago, one grandmother in a small village in Wales had a sure-fire method for battling it. She made sure that everyone in her village voted by setting herself up at a strategic location and ticking everyone’s name off as they walked by, exhorting them to vote.

Those she didn’t catch were called on at their home by her daughter, and summoned to get over to the polling station forthwith. It was successful it seems, as no one wanted to suffer the repercussions from an angry Welsh gran.

I think it’s important that we all exercise our democratic right, and so in the UK, with the general election upon us next month, the issue of voter apathy is one I’d hope to see addressed – although possibly not by grandmas sitting in the street ticking names off a list.

In recent times, voter apathy has been plaguing elections, not just in the UK but in many countries around the world. Polls suggest that negative campaigning can be a particular contributor. Opposing political parties create adverts attacking their opponent’s character or policies and this, in turn, results in a large part of the electorate becoming alienated by the whole process and not voting at all.

In the US, negative campaigning by use of attack adverts has been blamed for disenchanting voters over the years, and turnout there is now down to 55% of the voting age population.

Although such tactics haven’t historically been used in the UK, voter turnout has been declining here too in recent years. Figures had fallen from a high of 84% in 1945 down to 59% in 2001, although, encouragingly, the last two general elections have seen turnout climb back up to 65%. Interestingly, the Scottish independence referendum last year saw an election turnout of 85% – something our 1945-era voters would have been proud of.

Losing influence I’m sure I’m ‘teaching granny to suck eggs’ (my columns seem to be populated with grandmas, and this phrase is one my own used) by stating the obvious; low voter turnout can potentially allow a small portion of the population to have an undue influence over the policies and direction of the whole country, rather than

Nick Salter urges members not to be apathetic about voting for their choice of Council members representing the wishes of the entire population as was originally intended. The chosen voting system can have that effect too, regardless of how many people vote, but that’s another story.

We also have elections at the IFoA and I’m keen that, as a profession, we don’t suffer from our own version of voter apathy. The good news is that we don’t have the problem of negative campaigning. However, the numbers don’t look so good. Last year, we had an election turnout for the choice of Council members of just over 13%, a drop of 5% from the previous year.

I understand that as we all become increasingly busy in our day jobs, it can be difficult to make time to ensure the professional body we qualified with and, I hope, are proud of, remains reflective of its members and is a true representation of their wishes. It is something we need to do for that to happen.

I’m asking everyone to exercise their right and make sure their voice is heard. Soon you will be asked to vote for the candidates you would like to represent you on Council in the coming term, if we find there are more candidates than vacancies. I would encourage everyone to please consider the information

about each candidate carefully and use this facility to vote.

Fellow members who have been nominated to run for Council have generously offered to give up their free time for a number of years to volunteer for the IFoA and shape our vision, policy direction, strategic objectives and ensure good governance.

I would ask all Fellows and Associates to consider if this is something they could volunteer for at some point in the future, if they haven’t already. The healthiest membership body is one where all members have the opportunity to represent it and contribute to its future direction.

Speaking of volunteers, I’d also like to take this opportunity to thank all the IFoA volunteers who are continually working to improve actuarial science, whether it is on the Council, on one of our Boards, or on our working parties, in our regional societies, or in any other capacity. The IFoA couldn’t exist without the hard work that all our volunteers put in and their time is very much appreciated. And, so far as I am aware, they didn’t even need to be threatened by a grandma with a clipboard! a

“We have elections at the IFoA and I’m keen that, as a profession, we don’t suffer from our own version of voter apathy”

April 2015 • THE ACTUARY www.theactuary.com

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Opinion Soapbox

PAUL KENNEDY

Politics needs actuaries When I was selected to stand for parliament in the general election, I wondered what the people of Mole Valley constituency in Surrey would make of an actuary on their doorstep.

I needn’t have worried. With two insurers in Dorking and another in nearby Kingswood, and consultancies in nearby Reigate, Epsom and Guildford, to say nothing of retired and current commuters to London, this is one part of the world where the word ‘actuary’ is met with an unsurprised “oh yes” rather than a puzzled “you what?”.

But life as a parliamentary candidate is very different. You are a press officer, team leader and organiser, strategist, fund-raiser, motivator and mediator, social worker and troubleshooter. Evenings and weekends do not exist.

Liberal Democrat parliamentary candidate and actuary Paul Kennedy describes his campaign strategy

Issues at the door There is plenty of political interest here for actuaries. Nearly a quarter of Mole Valley’s population are pensioners, and there is considerable debate about the coalition government’s reforms. I helped develop the policies being implemented by pensions minister Steve Webb, so feel relatively well prepared. But it was still sobering to receive a half-hour critique of FCA guidance from a pensions manager at a major insurer when I knocked on a door in Leatherhead recently.

Another issue is the cost and availability of insurance. The River Mole was badly hit by the 2013-14 floods, and a number of residents have found it harder to get home insurance. Many elderly residents are loyal policyholders disadvantaged by inertia pricing.

Actuaries could help improve healthcare too.

There are no acute care services or walk-in centres in the constituency, and it’s difficult to receive care at short notice. One man who needed a nurse to change a dressing on his finger was sent to Tooting in London, where he had to wait for eight hours in A&E.

Psephology For all its faults, the disproportionate impact of ‘first-past-the-post’ makes for fascinating campaigning. Mole Valley is a ‘safe’ Conservative seat, with Liberal Democrats second. In 2010, the result was Con 57%, Lib Dem 29%, Lab 7%, UKIP 5%, Green 2%. So I have three main challenges. First is to identify

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my supporters so we can remind and encourage them to vote, checking for example whether they will be away and need a postal alternative. This is the purpose of ‘canvassing’ by political parties – to achieve enhanced ‘differential turnout’ by their own supporters.

Second is to identify and persuade Labour and Green supporters to continue to vote for me as the best chance of beating the Conservative ‘squeeze’. UKIP supporters have a variety of motivations, so you often need to talk to them at length to work out which of the two main contenders they would vote for.

Lastly, in order to achieve the 14% ‘swing’ to win, I need to persuade moderate Conservative voters – who are willing to consider voting Liberal Democrat on an issue such as staying in Europe, concern for the environment or saving a local hospital – to ‘switch’ on the basis that there is no danger of ‘letting in’ Labour here.

Other constituencies have different dynamics. In Labour-Conservative marginals, both parties are trying to ‘squeeze’ Liberal Democrat voters and ‘switch’ each others’ supporters. These results tend to vary uniformly in line with national opinion polls.

Contests where the main challengers are the Lib Dems, UKIP, the SNP, the Greens or a popular independent are more volatile.

Politics is local We have a close contest in local elections too, with 17 Lib Dem to 26 Conservatives on the two councils in my constituency. There are many ‘split’ voters who back Liberal Democrats locally but Conservatives in national elections. I need to keep them thinking locally when media attention is on the national contest.

In rural seats, an integrated election campaign is a series of local battles.

A parliamentary candidate uses their higher profile to support, encourage and recruit local candidates and campaigners. Last summer, I found a local candidate for a council by-election in an area we had not campaigned before, and helped him win. He is now persuading his supporters, many former Conservatives, to back me at the general election.

“Nearly a quarter of Mole Valley’s population are pensioners, and there is considerable debate about coalition reforms”

Paul Kennedy is an actuary and Liberal Democrat parliamentary candidate

THE ACTUARY • April 2015 www.theactuary.com

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May 2013 • THE ACTUARY 9 www.theactuary.com

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News IFoA NEWS UPDATES FROM THE ACTUARIAL PROFESSION

Upfront Opinion CEO’s comment The future of the profession depends on you – and, crucially, your vote, writes Derek Cribb

Have your say: Council elections Derek Cribb is the chief executive of the Institute and Faculty of Actuaries

President’s Comment column this month, we are very keen for IFoA members to be fully engaged with the Council election process. We want members all around the world to have a say in the strategic direction of the IFoA, and the easiest way for you to make your voice heard is to take the time to vote for your elected representatives. The higher the voter turnout, the more democratic the process. We really do want to reach out to all voters, so what is the IFoA executive doing to ensure that this voting process is as accessible and straightforward as possible for voting members?

Well, as usual, the Council elections will be taking place online and will be managed externally for us by Electoral Reform Services so that it is fair and impartial. However, we recognise that we need to do more to make the whole of the election process more relevant to the membership, including ‘pre-vote’ activity. Indeed, this was discussed at the February meeting of the IFoA’s Council, as the elections are vital in ensuring that our Council is truly representative of our membership.

As a result, this year we are introducing a number of initiatives aimed at improving voter engagement. We plan to use an online engagement platform, which provides a dedicated website where all relevant documentation will be stored. This will provide easy and secure access to information about who is standing for election before the voting takes place. In addition, this platform will include a discussion area where voters can submit their questions to candidates, making the process much more interactive than in previous years. We are also exploring whether we can put candidate video clips on the platform.

Crucially, we will also be seeking feedback on the ballot process, so that we can continue to make improvements in the coming years.

Currently, fewer IFoA members vote in the Council elections than volunteer their time for the IFoA. This is about the future of your profession – please do take the time to vote.

If you have any questions on how to stand for Council, or have views on how we can improve the election process, please contact the IFoA’s newly appointed corporate secretary at kimberley.russell@actuaries.org.uk

DEREK CRIBB

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As Nick Salter explains in his

Make sure you’re ready as the end of the 2014/2015 CPD year approaches As the end of the continuing professional development (CPD) year for categories 2-6 (30 June 2015) is rapidly approaching, we have listed below the requirements for each category as a helpful reminder.

If you have any questions about your CPD category or requirements or what they mean for you, please visit the CPD pages of our website (bit.ly/1CknQba).

Alternatively, contact the membership team (cpd_feedback@actuaries.org.uk).

Fully regulated Fellows and Associates – Category 2 ● At least 15 hours of CPD. ● Five hours must be obtained at external events. ● Stage 2 or 3 of professional skills training, as

relevant (professional skills training counts towards your overall CPD requirement).

Partially regulated Fellows and Associates – Category 3 ● Must comply with the CPD requirements of

your primary regulator. ● Must also complete either Stage 2 or 3 of

professional skills training, as relevant.

Certified actuarial analyst – Category 4 ● At least 15 hours of CPD. ● Five hours must be obtained at

external events. ● Two hours must contribute to your

understanding of ethical behaviours in relation to your role.

Student member – Category 5 ● No technical skills requirement. ● Must complete Stage 1, 2 or 3 of professional

skills training, as relevant.

Student actuarial analyst – Category 6 ● No technical skills requirement. ● Must complete Stage 1 of professional

skills training by the end of your first CPD year.

THE ACTUARY • April 2015 www.theactuary.com

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Newly qualified Tian becomes 2,500th person to earn CERA credential

Nobel Memorial Prize winner to speak at IFoA Asia Conference

By Cynthia Yuan, chair of the first IFoA Asia Conference (pictured right) As the programme chair, it is my great pleasure to welcome you to attend our inaugural IFoA Asia Conference in Beijing from 13-15 May. This is a landmark event for the IFoA, not only because it is the first conference that we have hosted in the region but because it is also the first truly cross-practice conference for members at all levels, stakeholders and those with an interest in actuarial science.

Reflecting the calibre of this conference, we are delighted to announce our outstanding keynote speakers: Myron Scholes, economist and winner of the Nobel Memorial Prize in Economic Sciences for a method to determine the value of derivatives; Dr Yulong Zhao, deputy director of the Finance and Solvency Department of the China Insurance Regulatory Commission; Wei Wang, chairman of China Mergers & Acquisitions Association; and David Hare, immediate past president of the IFoA. Continuing with the theme of diversity, the conference programme has been meticulously crafted by its committee members, whose expertise and fundamental knowledge have all contributed to make this an exceptionally strong programme. With committee members coming from across Asia and representing Aviva, China Re, Sunshine Life, KPMG and Ping An Asset Management, it is an exhilarating time for us to

join together and promote the actuarial skill that unites business and public service.

Offering a variety of significant and inspiring topics, you will discuss why risk is actually good for you, the pros and cons of global pension reforms and key requirements of preparing for International Financial Reporting Standard Phase 2. Immerse yourself in the China Risk Oriented Solvency System, the economic environment and new regulation changes. Get an overview of personal injury litigation in Asia, how insurance companies can react to these developments and the opportunities and risks facing health insurers in China.

Offering plenary sessions and back-to-back workshops, there is also a unique student networking afternoon on 16 May dedicated to our actuaries of the future. Allowing you to meet opinion leaders, new clients and potential partners, this is an opportunity not to be missed.

Come to see the beautiful city of Beijing in early summer. The Forbidden City and Great Wall await, as does the world’s most active market. Exciting times lie ahead for the IFoA and I look forward to sharing them with you.

Book your place at bit.ly/1zyZ57U For sponsorship opportunities and details on becoming an official conference partner, please contact amanda.davey@actuaries.org.uk

Disciplinary Tribunal Panel: Mr Michael James Asher On 10 November 2014, 18 December 2014 and 23 February 2015, the Disciplinary Tribunal Panel considered a charge of misconduct against Mr Michael James Asher, relating to non-compliance with a monitoring exercise carried out by the IFoA and for not retaining sufficient records to prove participation in the continuing professional development (CPD) events entered on his CPD record in respect of CPD year 1 July 2010 to 30 June 2011.

The panel found that the IFoA had not provided a sufficiency of evidence to allow the panel to determine that the respondent was in paid work during the 2010/2011 CPD year. For the same reason, the panel found that there was no requirement in that year for the respondent to demonstrate that he had undertaken appropriate and sufficient CPD. However, the panel felt that, in respect of the monitoring exercise, the respondent had not

complied with his professional requirements and that he had therefore breached Principle 4 of the Actuaries’ Code. In doing so, the respondent had frustrated the IFoA in its important role of monitoring members’ compliance with the CPD Scheme. The panel felt that the respondent had ample opportunity to explain to the IFoA that he was not in paid work for the relevant CPD year and, had he done so at the appropriate time, there may have been no need for the subsequent extensive investigation and resulting disciplinary proceedings. The panel found that the respondent was guilty of misconduct in terms of Rule 1.6 of the Disciplinary Scheme.

The panel imposed the sanction of a reprimand and determined that the respondent should make a contribution of £5,000 inclusive of VAT towards the IFoA’s costs.

The full determination, including the panel’s full reasoning, is available at bit.ly/1Bs92s6

The CERA Global Association (CGA) is pleased to announce that Tian Chen Pan is the 2,500th person to earn the prestigious chartered enterprise risk actuary (CERA) credential.

Tian is a member of the IFoA and works as an investment product actuary for Old Mutual Wealth in Cape Town, South Africa.

Frank Sabatini, chairman of the CERA Global Association, congratulated Tian and recognised this step forward for risk management. “There is a global demand for skilled enterprise risk management professionals. CERA is one of the most comprehensive, rigorous qualifications available. A chartered enterprise risk actuary, with their training and experience, can assess and manage the entire risk spectrum of an organisation, including financial, operational and strategic risk. Tian and the other CERAs across the globe add value, making them the best equipped to provide a 360° view of an organisation’s risk profile.”

Tian said: “I feel very blessed and relieved to have qualified. I actually had no idea about the number of CERAs there are and feel great to be part of the group now. Being number 2,500 feels like winning a competition, so I feel very lucky!

“Financial risk was always one of my main interests when I was studying. When Lehman Brothers failed in my third year at university, my interest in financial risk grew further. So when the ST9 exam was launched I decided to try it out. I feel that, given today’s economic and financial environments, risk management will be a critical part of any business going forward and that I can contribute more being a CERA. “The CERA qualification trains us to look at a wide spectrum of risks and equips us to contribute our skills in various areas of actuarial practice, including investments in my case.

I work mostly on investment product development, and managing the various risks of all stakeholders is one of my primary tasks, so being a CERA adds significant value. Whether I continue to work with investment products or risk in another area, I feel my enterprise ente management training will always tr my work.” add value to m For details on becoming a chartered en enterprise risk actuary or on how employing benefit your business, one can bene www.ceraglobal.org or visit www.ce contact the IFoA’s CERA marketing project mar leader via email at lea dawn. d mcintosh@ actuaries.org.uk

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News IFoA NEWS UPDATES FROM THE IFOA

Defined contribution investment in the post-Budget world Bobby Riddaway of the Finance and Investment Board considers the impact of the budget changes announced in 2014 on the provision and management of defined contribution schemes and looks at the issues that trustees and providers should be considering

In summary, the majority of retirees from defined contribution (DC) schemes will have three choices at retirement. These options include, but are not limited to: ● taking 100% of their accumulated fund as cash (note that 25% of this amount can be taken as a tax-free cash lump sum, with any balance over this amount incurring tax at the member’s marginal rate); ● purchasing an annuity; or ● a combination of the above, including leaving cash invested and drawing down cash in tranches.

The current situation compels the vast majority of members to purchase annuities with 75% of their fund. For trust-based DC schemes, the overriding objective for trustees is to ensure the best outcomes for members. In addition to meeting their fiduciary duties, trustees must operate within the boundaries of their scheme’s trustee deed and rules. Trustees can help members achieve the best outcomes by concentrating on good communication throughout the scheme’s term.

One of the overriding factors that will affect outcomes is a member’s investment strategy. A balance needs to be made between having too many options that members won’t be able to decipher and having too few, restricting the choices members can make. Typically, between 80% and 90% of members will invest in the default strategy offered rather than the self-select funds on offer.

In general, the self-select range of funds should not be too extensive, as this could dramatically increase the trustee governance requirements. However, the additional flexibility that members will now have at retirement means that current default strategies, which typically target taking cash and purchasing annuities at a normal retirement age, will not be appropriate for some of the choices that members will make. In addition, income drawdown has not generally been offered within schemes, and most schemes probably will not want to administer it in the future.

What has been or should be the immediate response to this? Most, if not all, default strategies have been designed to target the purchase of an annuity. If, as expected, a significant portion of those funds that were historically used to purchase immediate annuities are now

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used for other means, the default strategy is inappropriate. While it is not possible to predict member decisions, an analysis of the demographic and financial position of the membership can assist in the choice of an appropriate default strategy. It may therefore be appropriate to review both the membership of the scheme and the investment options available – including the default. Trustees should be aware of potential resource issues if large numbers of schemes are trying to complete DC reviews at the same time. This could affect the ability of both advisers and providers to meet deadlines.

Members should have flexibility and choice to tailor their saving plans to their specific risk appetites. However, budgets are constrained and greater scrutiny is being placed on scheme governance – not least by the Department for Work & Pensions, The Pensions Regulator and workplace pension NEST, which have all been promoting the importance of DC governance. A chairperson’s statement will have to be available on an annual basis, covering default funds and trustee knowledge and understanding. Trustees may rebalance their budget to focus on

governance at the expense of other items, such as active investment management.

A typical membership analysis can establish the proportion of members who are willing to engage in their investment choices, either fully or in a limited way, and those that will always go for the default. As the choices are now three-fold, the proportion of members taking the default is expected to decrease. Going forward, an analysis of a scheme’s membership will naturally dovetail with reviewing a scheme’s investment strategy; both in terms of the number of options to offer, and which options are most appropriate.

The analysis will also help to determine what changes are required for current default strategies and how this should be communicated to members. While it is unlikely that a full review can be performed and communicated before April 2015, it is important to communicate to members the objectives of the current default strategy and what it was designed for. It would also be advantageous to find out which members could be affected in the short term, ie those close to normal retirement date or those close to age 55.

Additional strategies could be considered as long as they are communicated effectively – but it is unlikely that smaller schemes will have the governance budget for this. It is even more important, therefore, that they focus on communicating the objectives of the current default and signposting the options available to members at retirement. A priority for trustees should be to make default strategies more robust to handle all three retirement choices.

In the medium term, the market will continue to evolve and the experience of members’ decisions will be forthcoming.

Trustees should recognise that anything they do now should be reviewed in two to three years once this extra information comes in and potential extra products have been launched.

Recent regulatory changes now mean that it is important for trustees to consider the process through retirement – even if they do not offer any facilities ‘in scheme’ post-retirement. It is also important to recognise that pensions form part of a member’s long-term savings and tax planning. Employers may wish to place great emphasis on member communications and take the opportunity to look more holistically at pensions in the context of total reward.

In conclusion, from April 2015, members will have greater flexibility at retirement and trustees will need to reassess the objectives of their scheme from first principles. They have a duty to ensure best member outcomes, so an analysis of the membership and a change to the investment strategy will probably be appropriate. DC pensions are no longer pensions – they are long-term saving plans and members should take charge of them alongside their other finances.

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CPD Audit survey feedback sets pace for 2015 To help us continually improve the experience for our members, we conducted a short survey after the 2012/13 continuing professional development (CPD) monitoring exercise was complete. Of 665 members who were audited and 360 members who took part in the survey, the following summarises their key responses. ● More than 90% of respondents found the overall experience very good, good or satisfactory, with 81% agreeing that the membership team was helpful. ● 66.5% of respondents didn’t feel that we could do any more to improve the experience.

However, 21% thought the experience could be improved upon, and 12.5% said it could be partly improved.

Next steps This year we have improved upon the initial communication sent to members regarding the annual audit of CPD records, ensuring that clear process guidelines are provided. We will no longer ask for specific events to be verified; members will be able to choose the events for which they send evidence to meet the minimum requirement.

We will continue to take a pragmatic approach when considering evidence presented by members who are selected for monitoring.

However, if you are in any doubt about the evidence you have of your attendance at an event, please contact the membership team. cpd_feedback@actuaries.org.uk

IFoA Honorary Fellow Election: have you voted yet?

Fellows, Honorary Fellows and Associates are reminded to cast their vote in the Honorary Fellow Election 2015. Voting is open and will close on 13 April at 23:59.

Thomas Béhar, Karel Goossens, Andrew D Smith and Dave Pelletier have all been approved by Council to be put forward for election.

Further information on this year’s Honorary Fellow nominees can be found at bit.ly/1MpCdAV

Monica Allanach Lecture Monica Allanach was a much respected member of the actuarial community. She was committed and strong willed, especially in her support and representation of women in the profession and as the first female Council member. She recognised the need in the 1950s for support networks and initiated informal ways in which female Fellows and students could meet.

To recognise her achievement, the IFoA and Prudential UK & Europe are hosting a lecture in her name at Staple Inn Hall, London, this summer.

We are inviting members to nominate actuaries who, like Monica, are unique in their inspiring attitude and innovative in their thinking.

Please send nominations, along with your reasons, to memoria.lewis@actuaries.org.uk by 22 April Read a full obituary at bit.ly/1xoZbh7

EVENTS AND CONFERENCES Current Issues in General Insurance (CIGI) 22 April Royal College of Physicians, London A one-day seminar that offers education, entertainment and debating forums, CIGI provides an excellent line-up of speakers, each providing their insight and knowledge on a range of topics.

Hear about the aviation insurance market, underwriting, the role of the appointed actuary and much more.

Book your place at bit.ly/1Bu1txq

Securing Pole Position in Risk Management 29 April Inmarsat Global Ltd, London Attend this one-day event that explores the use of technology in risk management. Valuable to actuaries working across all levels and practice areas, various themes such as rise of big data, corporate security and emerging risks will be covered.

Hear from Marc Priestley, former McLaren pit crew member, and Martin Smith, authority on counter-terrorism, counter-fraud and e-business security strategies.

Book at bit.ly/1Gn4Fzn

Current Issues in Life Assurance (CILA) 30 April 30 Euston Square, London CILA is the largest life CPD event after the annual conference and is aimed at practising life actuaries from life offices, consulting firms and other employers of actuaries.

The programme will cover a number of topical subjects, including recent consultation processes, industry change and the impact of last year’s budget announcement on choices at retirement.

The panel discussion will provide delegates with the opportunity to contribute to the debate on the ongoing role of the chief actuary; questions for the panel are

you will also have the opportunity to attend introductory sessions on both risk management and investment for those delegates looking to broaden their knowledge Health and Care Conference in new areas.

6-8 May The IFoA is delighted to welcome Grand Harbour Hotel, Professor Richard Werner, Southampton economist; Andrew Hitchcox, chair Join Lord Robert Winston and of the Risk Management Board; and Dr Ros Altmann as they deliver the latest industry updates and trends in Ian Rogers from KPMG, among the health and care market. Book at others, as speakers for this popular conference. The keynote speech will bit.ly/1vXzaut be delivered by Joe Simpson, author Risk and Investment of Touching the Void, which Conference describes the story of his amazing 3-5 June survival, having shattered his leg and Celtic Manor, Newport been left for dead in a crevasse high This cross-practice conference is in the Andes. beneficial for all actuaries working in With a range of workshops, panel risk, investment, life, pensions, discussions and conference health and general insurance. highlights, take advantage of the Covering a variety of topics and early bird fee and book your place at providing a diverse selection of keynote speakers, professional skills bit.ly/1HtTK8c to attend one of the most informative and popular and technical continuing professional development (CPD), conferences of 2015.

encouraged and may be submitted in advance. For further information and to book, visit bit.ly/1KQu2Aj

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

News People & Society

LMSG hears expert observations

By Holly Deakin On 20 January 2015, the London Market Student Group (LMSG) welcomed speaker Barnabas Hurst-Bannister, a former chair of the London Market Group with 40 years of experience in the London market. He is currently a non-executive director at Talbot, Price Forbes, Torus, Charles Taylor and the Standard Club, as well as formerly sitting on the Council at Lloyd’s.

During his presentation, Hurst-Bannister observed that the advent of greater discipline within the insurance industry has led to much more specialist underwriting. He believes the lack of generalist underwriting could be an issue

and suggests that the recent softness will persist over the next few years. When claims once again cause underwriting losses, capital will be sucked out of the market, and yet the cyclical nature of the business will continue.

Moving onto the topic of Solvency II and how it is a great source of work for many actuaries, Hurst-Bannister said the main issue with Solvency II is that the regime is trying to fix something that is not broken. When he first started work in the 1970s there was very little regulation, he revealed, adding that it is an important control but needs to be proportional to the situation.

To conclude, Hurst-Bannister gave his opinion on various aspects of actuarial work. He praised the intelligent and disciplined actuarial approach to pricing and raised the issue of using best-estimate reserving, as conservative reserving can lead to underwriters failing to take proper advantage of business offered.

A suggestion given to loosen the actuarial culture of prudence is to further understand the effect that an overly prudent estimate has on underwriting.

If you would be interested in learning more about the LMSG or attending our events, please email Cian at:

cian.ocriodain@xlgroup.com

Bristol dining club is still shipshape

By Andrew Gustar Actuaries in London or Edinburgh have a wide range of dining clubs catering for all tastes, but similar clubs also exist elsewhere. Bristol Actuaries Dining Society (BADS) dates from the late 1970s when several life offices moved to the city, and it is still going strong almost 40 years later.

The society meets five or six times a year in restaurants – ranging from fine dining to country pubs – voted for by the members. Most of the 60 members are based around Bristol, but some come from further afield (including Manchester and Seattle!) and visitors working in Bristol on temporary contracts are always welcome. There is a mix of working and retired actuaries – including two of the original founders – representing a range of employers, areas of work and fields of interest.

February’s dinner, fortuitously coinciding with ‘Pie & Pint’ evening aboard Bristol’s popular Grain Barge, saw a lively debate including the Friends Life/Aviva takeover, the presentation of stochastic models to non-actuaries, a comparison of European railways, and fair terms for exchanging free pints of beer for orphaned pies with a neighbouring table.

Dining clubs like BADS serve both a social and a professional purpose. It is good for local actuaries to get to know each other and to share ideas and experiences. We can learn a lot from both the older and younger generations of actuaries, and from those in different fields.

Dining clubs might not be as popular as they once were, but they are

still relevant, providing useful contacts within the actuarial community and the chance to bounce ideas around, not to mention being a great excuse for a night out enjoying good food and drink with a group of interesting people.

www.bristolactuaries.org/BADS.aspx

ǯ Ƥ Non-Life Actuarial Student Football League.

Over the course of six weeks, four teams will compete every Tuesday with two six aside games taking place from Tuesday 5th May to Tuesday 9th June.

For more details please contact ben@hfg.co.uk or call 020 7220 1106 Limited places are left so book yours today!

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LIKE US ON FACEBOOK www.facebook.com/ TheActuaryMagazine

FOLLOW US ON TWITTER @TheActuaryMag @ActuaryEditor

JOIN US ON LINKEDIN www.linkedin.com/groups/Actuarymagazine-UK-Group-3751335

How the ‘other halves’ live

By Jacky Pendleton

Modern conference for SAS

By John Watret Heriot-Watt welcomed distinguished guests to present at this year’s Students’ Actuarial Society (SAS) Conference on 11 February. The conference offers students the chance to gain insight into the field of actuarial work and to interact with those in the profession. The title this year was ‘The modern actuary’, referring to the changing nature of the subject and the wide range of positions actuaries are found in today.

The first speaker, Craig Turnbull, from Moody’s Analytics, presented the history of actuarial thought on investment strategy, highlighting the change in life office practices in the UK over time.

This was followed by Dr Gordon Woo from RMS, who spoke on the risk management of emerging epidemics. He explained the economics of epidemic control and how insurance companies can play a bigger role in

helping prevent damage caused by outbreaks.

A third talk from Emma MacKenzie (RBS) and Mark Byrne (Accenture) was about big data and how it is possible to use key information to provide better services. They explained that deciphering the useful parts is a challenge.

Afterwards, Russell Borland and Thomas Chalmers, from Leading Figures, spoke about leading your career. As coaches, their job is to help clients achieve their goals. Prominent figures such as past president of the IFoA Dr David Hare, and Fraser Smart, president of the professional services group, Xerox, sent encouraging messages on their careers and on the qualities needed to succeed as an actuary.

This year, the IFoA kindly sponsored a prize for the best questions asked, presented by Suzanne Vaughan from the Scottish Board.

The prize was split between two students, Jack Wiggins and Jason Eber.

Teeing off with the Masters The annual Master’s Golf Day of the Worshipful Company of Actuaries will be held at the Mid-Herts Golf Club on 1 June. Any member of the IFoA may play. The cost is £70 per person to include afternoon golf (teeing off from 1.45pm) plus dinner and wine – and modest prizes!

It will also include a pre tee-off snack.

For more details, please email Martin Miles at: martinwmiles@yahoo.co.uk

Marathon for maths funding

By A Alan Smith This year’s London Marathon, taking place on 26 April, will see Gary Anderson (left) from CPRM running on behalf of the Company of And Actuaries Charitable Trust (CACT). By way of reminder, CACT is the Act charitable arm of the Worshipful Company of Actuaries whose cha primary aim is to support mathematical education in the UK. pri For Fo example, this year CACT is supporting the Royal Institution Maths Master Classes, in particular extending the reach of these M classes in secondary schools. c CACT is also starting a funding initiative to encourage schools with w a strong maths focus to develop outreach programmes so that their expertise can be used for the benefit of the wider community.

Gary would welcome your support in his attempt to raise at least £2,000 for CACT. You can sponsor Gary via his Virgin Money Giving site which can be found at: bit.ly/1L2b89D You can also keep up to date with Gary’s training regime on his “running actuary” blog: therunningactuary.blogspot.co.uk

For those of you with an actuary as a partner, wife or husband, you will know that part of their actuarial life involves attending various seminars coupled with dinners and events.

‘The Other Half Club’ offers you the same opportunity for socialising with like-minded people and making new friends, all of whom understand what it’s like being the other half of an actuary. We welcome new members to our club, which contains a variety of personalities.

In the past year, we have held three dinners on the same evenings as actuarial dinners and seminars, a guided tour of Smithfield Market, a visit to the theatre to see War Horse, a visit to the London ice sculpting festival, a guided tour with dinner at the Old Bailey, lunch at The Clink restaurant at Brixton Prison and a visit to the Bank of England.

We are planning a guided tour of the Chelsea Physic Garden and Royal Hospital Chelsea, a boat trip to the Thames Barrier, a visit to the Guildhall School of Music & Drama theatre and a guided tour of Chislehurst Caves, as well as our normal dinners at the Café du Marché on evenings coinciding with actuarial events.

If you are interested in joining us or for further information on the club, please do get in touch. Email: theotherhalfclub@gmail.com or phone Jacky Pendleton (chair) on 07768 200539 or Lesley Birse (secretary) on 01689 836392.

Getting a good SCOR On 6 November 2014, the annual SCOR UK actuarial awards were presented by chief executive Denis Kessler and Alistair Darling, MP and former chancellor of the Exchequer, to Luiz Bueno and Xinrong Li, from Cass Business School, City University, London, for their dissertations entitled respectively: Brazilian Long-Term Care Plan: An Evaluation Based on the Singaporean Model and Catastrophe Model Suitability Analysis: Quantitative Scoring.

The winners are selected by a jury of international researchers and insurance, reinsurance and finance professionals for command of actuarial concepts, quality of analytical methods, and originality of research in terms of scientific advances and potential practical applications to risk management.

To read the award-winning dissertations, please visit: bit.ly/1b57pYN

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

April 2015 • THE ACTUARY www.theactuary.com

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the hot seat

The Actuary magazine is a monthly publication produced on behalf of SIAS for members of the Institute and Faculty of Actuaries, in the UK and overseas.

With a print readership of more than 26,000 and a strong and ever-growing online presence of more than 30,000 unique visitors each month to www.theactuary.com, it is the key platform for analysis, opinion, news and jobs for the actuarial community.

The Actuary is also read by many non-actuaries with an interest in actuarial topics.

The current Editor is due to step down at the end of 2015 following a successful two-year term, so SIAS is looking for a highly motivated and enthusiastic successor to lead the experienced publishing staff and specialist editors of the magazine from January 2016. Do you have the energy, dedication and skill set to take a role in guiding an expanding specialist production team? Do you have the creative flair, yet the eye for detail, to preside over a high-quality publication?

This is a challenging role and we require a candidate with strong communication skills, an ability to work under the pressure of meeting publishing deadlines, and the commercial awareness to take the magazine forward.

A detailed description of the role may be found at: bit.ly/1GujTmp If you have got what it takes, please submit your expression of interest, including a CV, to Mark Gorman at actuarymagazine@sias.org.uk no later than 30 June 2015.

Please contact Mark in advance of this date if you have any questions.

TUESDAY 12 MAY

Incorporating trends into historic financial analysis: the value of change points when looking at historic data Matt Modisett Staple Inn Hall High Holborn London WC1V 9QJ 5:30pm start

AGENDA

Whenever you look at historic data, trends seem obvious to the eye. Yet, we generally assume a random walk hypothesis, ignoring trends when creating models. Is it possible to incorporate the intuitively obvious presence of trends within our models in an objective way?

Yes, it is possible. The basic idea is to assume that markets have ‘regimes’. Within a regime we assume a random walk with a constant trend and volatility – however, with the regime changes, the parameters for trend and volatility are reset. The difficulty is how to determine objectively where the regimes change historically in order to calibrate a regime-changing model.

As it turns out, there is a well developed methodology for determining regimes in historic data: change points. This tool/methodology calculates the best-fit times of regime change, the so-called ‘change points’.

This talk introduces change points in the context of incorporating trends into a financial model.

However, change points are useful in a wider context and may be a valuable addition to the actuarial arsenal of tools.

Refreshments will be served from 5:30pm and the lecture will start promptly at 6pm. There is no need to register in advance for this meeting and non-members are welcome. There will also be live tweeting available via #SIASMay15 during the talk – please do get involved with any comments and questions for the speakers.

THURSDAY 21 MAY

Mystery event Venue and start time: see SIAS website

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

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SOCIAL EVENT

Tickets for the mystery event go on sale on 27 April – look out for the big reveal at www.sias.org.uk soon!

SIAS will not offer refunds on tickets/entry fees after the payment deadline date. Refunds may be offered prior to the payment deadline date if we are able to re-sell the ticket/entry fee. Where a non-SIAS member ticket/fee is sold on to a SIAS member, only the SIAS member price will be returned. All refunds will be at the discretion of the SIAS Committee.

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

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A

On my agenda features@theactuary.com

bold enterprise Otto Thoresen, newly appointed chairman of the National Employment Savings Trust, talks to Richard Schneider and Helen Lau about the many challenges facing the pensions industry Congratulations on the new role. How is it going?

It’s going very well. Since I joined, I’ve been taking the time to get to know the organisation well and the people within it. I’ve travelled to India to meet the Tata consulting team, who do a lot of work for us on service delivery and the technology side of things.

After five weeks, I’ve got a good feel for what our objectives are. The thing that has really struck me is the positive attitude and energy of all the people here. Everybody thinks about the auto-enrolment pension reform agenda and the role the National Employment Savings Trust (NEST) has to play.

How do you find the move from representing industry to working for a government body?

As chairman of the board of trustees, I have to look after the members’ interests, so I don’t feel that I work for the government. Of course, the government has got a very healthy interest in what we do and how we do it.

I’ve had a number of previous roles that brought me very close to government. In 2008, I did an independent review for the Labour government on how to provide generic advice, which actually led to the creation of the Money Advice Service. My role as director-general of the Association of British Insurers (ABI) was one that brought me into contact with senior ministers from different departments almost every week.

PETER SEARLE

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On my agenda features@theactuary.com

The mixture of skills that gave me is quite a good basis on which to step into a world like this.

To what extent do you look internationally in shaping your strategy, for example Australia, where a similar scheme includes income protection and other benefits?

Do you see NEST as being a rival to private pension providers, or more of a public service filling any gaps left by industry?

We spend a lot of time looking across the world at the different pension solutions that exist. Thinking ahead to the world post the budget reforms that come into effect shortly, as a matter of course we would look at the different ways other countries are dealing with this.

Our chief executive is actively involved in a number of forums internationally, where he gets to represent the UK, but also learns about what other people are thinking in trying to address these things. So considering how to extend the model from pension saving to other parts of social welfare is important, but we have to focus on the immediate challenge.

We have to deal with the thousands of small and micro-employers who go through staging over the next three years, and then to start to think about how we can encourage employees to begin to save more for their long-term retirement needs.

I think you have to start with the public service obligation, which is what NEST was created to fulfil, and that’s about making sure that pension reform could work. You couldn’t make the reform agenda work without a confident answer to the question: “Are all employers going to find someone who will provide the pension arrangement that they need?”

NEST’s existence means that can happen.

What’s also been happening though, is that, because of the particular focus NEST has on making pensions accessible to people who previously would never have thought of pensions as being part of their world, there are many areas where it has shaped the market. Communication, for example, by promoting simplicity of language and reducing jargon; investment in technology that makes it easier for employers to get on board without paperwork getting in the way of the process; pricing, where the annual charge across the defined contribution (DC) market is now down to roughly 50 basis points, which wouldn’t have happened so quickly without NEST. There are many ironies about my appointment as chairman. Back at the time of the Turner Commission, I was very much part of the conventional pensions industry, thinking that it could deal with reform on its own.

One could speculate over what would have happened had NEST not existed. On the wall we have a timeline showing the staging requirements for small and micro-employers who over the next three years will enter the auto-enrolment process. These are the people that we’re talking about, who have never been involved in the pensions market before, and NEST is a critical part of making that market work.

So there has been a significant impact of NEST on the market as a whole, while it is fulfilling its public service obligation. I think there are very challenging times ahead for the pensions industry and for the pension reform agenda – for example, in ensuring adequacy of contribution levels – so we should resist the temptation to declare victory. I sense another chapter opening in pension reform, and in NEST’s future, and I’m really excited about having the opportunity to be part of it.

How can NEST cope with the growing number of employers coming on board?

The amount of scaling up is not such a demand for NEST, because of the self-service pension concept. This means we can rely on the existing technology that is already built and widely used by our clients. The key is to remain flexible in our approach and make sure the solutions built are adaptable to those who are not yet on board.

Through discussions with our employers we have created a brand new solution, NEST Connect, which allows a delegated third party, such as the employer’s accountant, who has a greater familiarity with the scheme, to do the administration.

It is a great process that allows flexibility, achieves greater slickness in the process for employers and makes their, and our, jobs easier.

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You mentioned the pension reforms announced in last year’s budget. What was your initial reaction when you heard the chancellor’s speech?

It was a complete shock to the insurance industry and to everybody, I think, although there were many components that we had anticipated in the industry. For example, the raising of the level below which you could take advantage of trivial commutation, effectively taking cash instead of pension, has already been argued for by the industry. What was different was that the regime that had been in existence was being removed, and it was not at all clear what was going to take its place.

One thing very clear today is that the annuity itself was designed for a very different time, a time when interest rates were higher and people didn’t live as long as they do now.

There was a fundamental challenge to the construction that forced people into fixed income investment, on the basis that they couldn’t revise their investments for a 30-year period, and took on the costs of providing longevity guarantees for 30 years ahead. What we should have been doing was thinking about how annuity products needed to evolve to be sustainable and effective in today’s world – that is something the industry should have done more quickly.

Sadly, most of the pot sizes of people retiring from DC in the next 12 months will be fairly small, and, mostly, taking cash will be the best thing to do. If you look through that to the pension reform generation, they are going to arrive at retirement with larger pots and still wanting certainty of being able to cover their long-term income requirements.

So the idea that you can just switch people onto the drawdown solution isn’t going to be enough.

There is clearly a need for retiring DC members to have a high-quality, default option. NEST recently ran an international consultation process around what retirement solutions should look like going forward, and based on this we have published six guiding principles. These include recognition that living longer than expected and running out of money is the key risk in retirement, the need for stable income in retirement, and so on. We’ll be doing a full report on the consultation later in the year.

PETER SEARLE

24/03/2015 09:15

Sounds like an annuity!

(Laughing) It’s not quite the same, as we won’t be asking people to make debt investment decisions for the 30 years before they die. In the annuity world, because you are making an investment guarantee over 30 years, the regulator demands, reasonably, that you carry solvency capital to cover investment risk, which is another drag on the return that you can offer. The market needed to change, but as yet the market hasn’t decided what the solutions are.

So is NEST looking to enter the retirement income space?

What we’re saying is that everything we’ve done in this organisation is based on understanding the needs of employers and their employees, and then building solutions that are designed to meet those needs. There is a fantastic opportunity to take our well tried-and-tested marketing methods and apply them to retirement income.

We’re not saying that NEST should be out there offering retirement solutions, but we have a responsibility to our members to make sure that when they get to retirement, options are available to them which meet their needs, like transfer of longevity risk.

What has been NEST’s greatest achievement to date?

Building the enterprise. The Turner Commission suggested that the industry was able to deliver all pension reforms, but this was evidently proved too difficult, and as a result a new enterprise, NEST, had to be built.

The development of a new company from scratch is always difficult, not to mention the time constraint we were faced with in complying with the pension reforms. However, thanks to good project management, not only was NEST built in a minimalist way, it also built reliable technology to

sustain the portal of 1.9m employees and 13,000 employers.

If you build a pensions company from scratch in two years, that’s outrageous. What we did was impossible. We must not credit ourselves too early though, because the next few years are crucial as we expect more employers to come on board to NEST. The current numbers look small when you consider the level of activity coming up in the auto-enrolment space – 45,000 employers this year and 45,000 employers a month next year. It’s mind-boggling.

As an actuary yourself, do you think we do enough to ensure positive customer outcomes?

Early in my career I was lucky enough to have opportunities to get involved in marketing and product brochure writing.

I was able to utilise my skills of translating a complex problem into consumer terms. Explaining and communication is always complex. Actuaries need to do more of this to ensure positive outcomes for the customer. I’m also involved in pension and long-term care research. Few professions can get involved in matters of social policy. Actuaries tend to fear speaking out – it comes with experience, so we need to start now and be more involved in these matters.

What do you do when you’re not helping people to save for their retirement?

I am a trustee on the board of a charity called Young Enterprise, which helps school kids think about the world of business, and prepares them for the working environment.

I am also involved in a charity called Step Change, which provides debt advice to individuals. Being Scottish, I have a passion for golf, and play every Saturday come rain, sun or snow. I have a handicap of 9.9 which I’m working on. I also have a personal trainer who beats me up twice a week! a

April 2015 • THE ACTUARY www.theactuary.com

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24/03/2015 09:15

Pensions Investment risks features@theactuary.com

Don’t you

rock

my

boat Norbert Fullerton talks about the dark pensions clouds on the horizon and gives some advice on how to navigate towards a sunnier outlook

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THE ACTUARY • April 2015 www.theactuary.com

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SUPERSTOCK

24/03/2015 09:16

NORBERT FULLERTON

is a partner at Mercer

Bob Marley was one of the most innovative and well-known reggae musicians of all time.

He had a passion for social change and, with a stroke of genius, got his fans to dance their troubles away. Although some were love songs, much of his music dealt with the struggles of the poor and the powerless. He would have been of pensionable age now at 70 years old.

So as a fan of his, I sometimes wonder what he would think of modern times and the new economic threats that face us.

So much trouble in the world Speaking of the poor and powerless, the pensions poverty trap in the UK is very real and imminent. A report by Age UK says that 1.6 million pensioners in the UK are living below the poverty line, and are “floundering” on low incomes. In addition, according to a YouGov study, almost two-thirds of working adults in the UK are worried about a lack of money in retirement. This is staggering.

We also know that the world economy is not in good shape. The news from the US and the UK has been reasonably positive, but Japan’s economy is struggling and China’s growth is now slower than at any time since 2009.

Unpredictable dangers, including stagflation, deflation, wars, terrorism and epidemics, such as Ebola, are rife.

Europe is one of the biggest economic threats by far. The Eurozone is on the verge of tipping into its third recession in six years.

The European Central Bank recently announced a massive quantitative easing programme to stimulate spending and avoid a deflationary trap but it is unclear whether, and to what extent, it will be successful. Bob Marley once sang “One good thing about music, when it hits you, you feel no pain”.

Have the intermittent market recoveries in recent years dulled the painful memories of the crises and hindered pension fiduciaries from taking precautionary actions?

The big picture is sometimes forgotten; when running a defined benefit (DB) pension plan, the main aim is to ensure that members’ promised pensions are secure and adequate, irrespective of the strength of the economy. Workers need to be able to retire with the amount of money they expect to have. Pension plan fiduciaries should focus on the things that matter – for example, setting realistic and aligned funding and investment goals, managing risks properly, and doing all it takes to have appropriate governance procedures in place to implement changes quickly. These steps are crucial in order to

survive the ‘new normal’ world that we live in.

Falling bond yields and rising expected inflation are still the main liability risks within most DB pension plans. However, the risk of deflation is raising its ugly head and employers and trustees are increasingly worried about the impact of members living longer than expected. These risks must be managed appropriately. What is appropriate differs for each DB plan and is largely driven by the extent to which an employer’s covenant can withstand even larger deficits.

Focusing on the above risks in isolation would help, but it’s not enough. The Pensions Regulator’s updated UK code of practice on funding defined benefits stresses the need to take a more integrated approach to funding, investment and covenant. The code also stresses the need for trustees and employers to be more collaborative. A lot of time and effort is usually spent debating the DB funding assumptions. However, they mainly affect the timing of employers’ contributions – more money now and less later, or vice versa. More attention needs to be paid to the investment strategy that directly affects the pension cost to the employer. The strength of the employer’s covenant is also quite often not properly taken into account. Reviewing investment strategy at the same time as the triennial valuation is no longer optional, it’s a basic requirement to ensure fiduciaries are doing all it takes to align the key components that matter.

The focus now has to be on ‘strategic risk management’. This involves managing the main asset, liability and employer covenant risks and putting the necessary measures in place to reduce them. It may not be glamorous, but the pain that we feel on the downside can be a lot more intense and longer-lasting than the thrill that we feel on the upside. After all, members are panicked by the doomsday scenario in which there is a big funding hole in their pension plan and their employer can no longer support it.

Stand up for your rights It seems odd that many employers are not very actively engaged with DB pension plan investment decisions. Employers should take the initiative, conduct independent investment strategy reviews and formulate their own opinions. Agreeing an appropriate investment strategy with the trustees will help the employer meet its objectives of managing the variability of accounting disclosures and maintaining an

efficient capital allocation process within the business. The trustees will also benefit from a well-governed DB plan, ensuring any agreed combined funding and investment strategies, including contingent assets, will increase the chances of retaining the employer’s support, while increasing security for members’ benefits.

Improving governance is also important. In his research, Keith Ambachtsheer, director emeritus of the Rotman International Centre for Pension Management at the University of Toronto, shows that the difference between good and bad governance can be worth between 1% and 2% of additional return per year. For some, increasing the frequency of meetings between a focus group of trustees and their advisers works well. For others, it may be more appropriate to delegate the implementation of investment strategy and day-to-day investment decision-making to either an in-house or outsourced team. It is also becoming more attractive to outsource some of the investment functions as increasing complexity means more time and expertise is required.

Some trustee boards and/or investment committees without a good risk management framework end up waiting on infrequent meeting dates to make critical investment decisions. On many occasions, this means that they can’t respond quickly to favourable market opportunities or imminent dangers.

High tide or low tide Despite the gloomy backdrop, DB pension plan trustees and employers can do a lot to minimise the potential damages.

Don’t lose sight of the big picture. Set up a strategic risk management framework that looks at funding, investment and covenant issues together.

Keep track of how the above and other important risks develop over time.

Put in place a fit-for-purpose governance framework. Keep it simple. Have an action plan for how to react quickly if events turn out to be materially better or worse than expected.

Bob Marley’s song So Much Trouble in the World sounds appropriate for the recent dark clouds of economic crises, wars, terrorist activities and epidemics around the world.

The global market outlook might be positive in some places, but there are looming dangers and things can go from bad to worse very quickly. Sponsors and trustees need to collaborate more and take action to improve the financial security of those that rely on their decisions. a

April 2015 • THE ACTUARY www.theactuary.com

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24/03/2015 09:16

Solvency II Value in force features@theactuary.com

Catching early cashflows

Solvency II allows recognition of expected future profits on insurers’ balance sheets, and, as a consequence, some may expect a reduction in value in force monetisation transactions. But they can still be attractive, say Craig Gillespie, Chris Lewis and Scott Mitchell Value in force (VIF) monetisation transactions – arrangements that allow insurers to exchange expected future profits for a capital sum today – have been utilised by life insurers for more than 10 years, with recent periods in particular showing ever-higher levels of market activity.

Solvency II will focus minds more firmly upon the need to optimise an insurer’s capital, liquidity and risk positions. VIF monetisation is likely to remain one such viable option to help achieve these objectives.

Structural considerations These transactions, in their simplest form, allow insurers to cash in the future value expected to emerge from the run-off of a life insurance portfolio. Capital suppliers typically extend a lump sum amount to the insurer at outset, based on an agreed price, which in turn is influenced by their own views on the future value. There are a number of ways this can be achieved with varying degrees of complexity.

The most common arrangement observed recently has been full quota-share reinsurance with an upfront commission payment to the insurer. Alternative methods include contingent loans and securitisations.

An insurer interested in exploring VIF monetisation must, as a first step, carefully

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THE ACTUARY • April 2015 www.theactuary.com

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consider the portfolios of business that it has available as the basis for a transaction.

A primary requirement is that there is a sufficiently large amount of VIF in the portfolio to make the transaction worthwhile for all counterparties. Secondary considerations focus upon the risks underlying the portfolio.

Portfolios are likely to contain a mix of product types, each with their own combinations of demographic, behavioural and market risks.

The extent to which these risks can be transferred as part of a VIF monetisation will depend mainly upon a provider’s risk appetite.

Generally there has been robust provider interest in the area from reinsurers, investment banks and private equity houses. Each provider will have specific expertise in assessing some or all of the risks underlying portfolios considered for VIF monetisation.

The provider’s risk appetite will to some extent determine both feasibility and appeal of the transaction terms to the insurer. It may be the case that in order to secure the most attractive terms the transaction may be structured with multiple counterparties, each assuming the run-off of different risks.

Allocating risks between capital suppliers demonstrates the flexibility available to meet the needs of the insurer. The definition of the

exact surplus transferred under the transaction can also be tailored to achieve the appropriate balance of risk transfer and reward to capital suppliers. Objectivity in defining the surplus transferred is essential to allow insurers and capital suppliers to fully understand what is in and out of scope of the transaction.

Operationally, this can also enhance the ongoing management of the transaction, facilitating straightforward verification and settlement of payment amounts.

Flexibility in the final structure of a VIF monetisation must be balanced in light of the execution risks that accompany any large transaction. As such, the importance of engagement with regulators and auditors to assess acceptability of any such transaction cannot be underestimated. Capital suppliers will aim to complete comprehensive due diligence prior to execution in order to fully clarify the risks being transferred under the structure.

Transaction drivers Prudent regulatory reserving and capital regulations have been a consistent driver of demand for VIF monetisation solutions worldwide. For example, in Europe, existing Solvency I rules fail to recognise the VIF asset

CHRIS DUNN

24/03/2015 09:16

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24/03/2015 09:17

Solvency II Value in force features@theactuary.com

on an insurer’s balance sheet, making a monetisation very compelling in order to allow the insurer to access and utilise this asset.

Solvency II rules due to take effect in 2016 will recognise the VIF asset as core tier-one capital, perhaps removing some of this impetus for completing a VIF monetisation. While this undoubtedly acts to dampen interest, there remain several other key reasons for continued use of VIF monetisation.

Effects of market turmoil have previously driven insurers’ interest in VIF monetisation, and demand in future may still arise from such circumstances. While the VIF asset will be recognised under Solvency II, it is inherently volatile and can be affected by market turmoil, for example, falls in unit funds directly reducing the value of fund management fees.

This places insurers in a position whereby the VIF asset diminishes in value at the same time as the need for capital may be greatest.

Monetisation remains a valid approach to stabilise the value of the asset and aid management of economic capital positions through partial solvency capital requirement (SCR) relief.

The stability brought about by VIF monetisation is usually achieved through the upfront payments taking the form of a relatively more liquid asset than the VIF itself. Liquidity enhancement is another driver of demand as it may allow the insurer to deploy these liquid assets more strategically to grow its business.

This may be either to fund organic growth of new business sales or inorganic growth through mergers and acquisitions activity.

As insurers develop their business across product lines and amass portfolios of in-force liabilities, VIF monetisation can be used as an efficient means of achieving scale in risk transfers of complete portfolios.

This warehousing approach can be considered as a substitute for more traditional reinsurance programmes that provide risk transfer at point of sale. It may be particularly useful where an insurer ceases to write a certain product or becomes saturated with an accumulation of specific risks.

VIF monetisation allows the insurer to achieve risk transfer, recognising the value of the portfolio while allowing the insurer to maintain the relationship with the underlying consumer. Other areas of Solvency II present interesting opportunities: ● Contract boundaries indicate that where a contract is subject to some review or alteration at a known future date, the insurer may be unable to recognise associated economic value of the business beyond this. VIF monetisation may be a solution, allowing insurers to manage this issue and recognise value beyond contract boundaries that would otherwise be lost.

24

Figure 1: Illustration of potential benefits of VIF monetisation on the Solvency II balance sheet

If deal is cashbased then liquidity improves

VIF asset is implicit in realistic liabilities

VIF asset is significantly hedged via quota-share structure

Own Funds can increase due to risk transfer and reduced risk margin. Volatility reduced significantly due to ‘VIF hedging’ effect

VIF proceeds

Surplus Own Funds

Surplus Own Funds

SCR SCR

Market value of assets

Risk margin

Realistic liabilities

Solvency II balance sheet before monetisation

Market value of assets

Reinsurance liability Risk margin

Reduced SCR due to risk transfer Liability reflected on balance sheet*

Realistic liabilities

Solvency II balance sheet after monetisation

Reduced risk margin due to risk transfer

Depending on price, Solvency II surplus can increase via risk transfer, especially where contract boundary restrictions can be reduced

*

Presentational purposes only. In practice, the reinsurance liability will be a negative asset on the Solvency II balance sheet.

“VIF monetisation has been a popular capital management tool allowing insurers to achieve important business aims” ● Ring-fenced funds may also limit the degree to which a VIF asset can support liabilities in other funds, whereas other assets may be more easily transferable. For example, some mutuals could be subject to restrictions as a result of applying the Prudential Regulation Authority’s recent Supervisory Statement SS1/14.

There may also be further restrictions on portfolios that are subject to the matching adjustment. To better illustrate some of the benefits we have discussed, Figure 1 sets out the Solvency II balance sheet pre- and postVIF monetisation through original terms reinsurance.

Market activity The past few years have featured significant activity across Spain and Portugal driven by

pressures arising from the Europe-wide sovereign debt and banking crisis. While the frequency of these transactions has reduced, there has continued to be an active deal flow across other jurisdictions, such as the UK and Ireland. Based on publicly available information, we note three recent transactions (counterparty in brackets where disclosed): Prudential, Royal London 360° (Munich Re) and St James Place (Swiss Re).

VIF monetisation has been a popular capital management tool that has allowed insurers to achieve a number of important business aims – not least, effective management of capital, liquidity and risk. Regulatory change may change things in Europe. However, the many positive drivers, with robust provider interest, are likely to ensure transactions continue. a

CRAIG GILLESPIE is capital solutions

actuary at Swiss Re in London.

CHRIS LEWIS is a consulting actuary, and SCOTT MITCHELL a principal,

in Milliman’s life insurance practice in London

THE ACTUARY • April 2015 www.theactuary.com

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24/03/2015 09:17

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May 2013 • THE ACTUARY 25 www.theactuary.com

19/03/2015 10:48

Big data Measurement features@theactuary.com

Data danger

Big data benefits organisations, but there are important drawbacks. Dina Gray, Pietro Micheli and Andrey Pavlov explain how relying on too much data can lead to measurement madness

The proliferation of data has exploded in recent years. A recent Harvard Business Review article stated 2.5 exabytes of data are created each day, and more is sent across the internet every second than was even stored 20 years ago.

The likes of Walmart collect 2.5 petabytes (2.5 quadrillion bytes) of data every hour from their customers. To get a feel for what this means, consider that a million seconds is 11.5 days, a billion seconds is 32 years and 2.5 quadrillion seconds is 80 million years!

‘Big data’ is a welcome business development, promising to process larger quantities of data, from variable sources, ever more quickly.

It enables an organisation, through the use of mathematical algorithms, to find patterns and relationships that would be otherwise impossible to discover. The promised advantages are many, from reducing costs to improving the quality of products and services, to identifying new customer segments or uncovering hidden societal needs.

Big data is certainly changing the way organisations operate; our capacity for planning, budgeting and forecasting, as well as the management of processes and supply chains has radically improved. However, greater availability of data is also being accompanied by two major challenges: first, many managers are now required to develop data-oriented management systems to make sense of the phenomenal amount of data their firms and partners are producing. Second, while the volume of data we now have access to is certainly seductive and potentially very useful, it can also be overwhelming. Therefore we need to ask whether or not we are getting better at gaining insight from big data or whether we are simply measuring more?

Mad science It is not only the scale of big data that is fascinating top executives; indeed, any performance indicator, financial or nonfinancial, forward-looking or lagging, is gradually taking over much of organisational life. Data has a strange tendency to make managers believe their decisions are based on science, and therefore measurement becomes addictive. This property of measurement is at the root of many companies’ woes and one of the chief culprits of measurement madness.

Tim Ambler, recently retired senior fellow at London Business School, writes: “Important as financial metrics are, they distort reality and provide the illusion of control. Cannabis does much the same thing.”

Collecting large volumes of data to provide insight is laudable, but the datasets have to be

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DR DINA GRAY is a strategic business consultant, lecturing on Cranfield University’s executive education programmes

relevant to today’s business environment.

One anecdote is of an organisation that was, until recently, one of the largest manufacturing companies in the UK. At one of their production sites was a hut near a river, which housed a piece of machinery used to measure the height of the water in the river. For decades the data had been regularly collected, recorded, and dutifully reported up the chain of command. A newly appointed manager queried why this data was being collected, as it did not appear to have any obvious relevance for the manufacturing operations at the site. The ensuing investigation revealed that the measure had been introduced during World War II, when a bomb, which exploded in the river, had temporarily raised the height of the water to a threatening level.

Decades had passed and the water had receded, yet the measure remained present and was still unquestioningly tracked and reported.

So the problem is not only the introduction of an excessive number of measures collected but also the fact that measures tend to stick, unless questioned and revised. Priorities change, new drivers of performance emerge and different operating models are employed.

It would therefore make sense that the big datasets are also revised to reflect these changes as the resulting complexity makes decision making harder rather than easier and reduces the overall relevance of the measurement system itself.

Another question that needs to be asked is whether or not the data in our big datasets have been collected on exactly the same basis. On first coming to power, the current government made a bold pledge to reduce the number of heart-related deaths in the UK, as a benchmarking study had shown the British were woefully behind other European countries in this area, especially France. On face value this appears to be a fair comparison. After all, countries in Europe have similar demographics, similar standards of living, and, more often than not, similar standards of social health care.

Why then, in comparison, are heart-related deaths so high in the UK? After all that wonderful French cheese, you would expect this statistic in France to be comparable. Although many observers have labelled this phenomenon the ‘French paradox’, on closer inspection it

DR PIETRO MICHELI is associate professor of organisational performance at Warwick Business School

appears it can be attributed to the way the data is recorded. In the UK, when someone dies and the doctor is unsure of the underlying reasons, the physician will officially record heart failure as cause of death. However, in France, there is a category for unknown cause of death, and only when the doctor is sure do they record the death as heart failure. Therefore, making important decisions about the allocation of valuable public funds based on flawed comparative data is not wise.

Defining role Precise definitions of the underlying data are crucial for any form of comparison. However, it is also as important to understand the methodology used to interrogate the datasets. For example, there are numerous league tables, published in national papers, which attempt to compare the performance of universities within individual countries and across the world. However, the results of the published league tables can vary widely, even though they are based on the same data.

The more reputable compilers do attempt to address this problem, carrying out robust comparisons by taking into consideration the different sizes of institutions, the demographics of their intakes, even the quality of the beer in the students’ union bar, and adjusting the score so as to make it comparable. More often than not, however, only the final figure is reported, keeping the process of compiling the league table far away from the reader’s reach.

No amount of number crunching will eliminate the possibility that we are only being presented with a selection of data that delivers a particular message. Over the past decade, governments around the world, along with the scientific and popular press, have paid increasing attention to global warming.

The argument that the average temperature of our planet’s atmosphere and oceans is steadily rising has polarised expert opinion, even though the hard data is compelling.

Sceptics, however, were fuelled by the actions of the Climatic Research Unit (CRU) of the University of East Anglia, which plays a leading role in compiling UN reports and tracks

“Important as financial metrics are, they distort reality and provide the illusion of control. Cannabis does much the same” GETTY

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DR ANDREY PAVLOV is a

lecturer in business performance management and a director at Cranfield School of Management

long-term changes in temperature, when the CRU refused to publish the underlying data. It was of no surprise when, in November 2009, we awoke to reports that hackers had broken into the CRU database to show the data could be interpreted differently. The infiltrators were keen to expose that eminent scientists had discussed, via email, the potential biases of the outcomes. However, it wasn’t the climate scientists manipulating the data to support their messages; it was the hackers who were selectively releasing the data owned by the CRU. By filtering the emails and selecting the ones that supported their viewpoint, they were able to build a credible case against the CRU, on which questions were asked in the highest political offices. This selective disclosure gave the impression of impropriety because the data had not been publicly available. Investigations into these claims examined email exchanges to determine whether there was evidence of suppression or manipulation of data by the researchers in the CRU. Eventually, the scientists were vindicated, but the hackers were not.

Despite performance measurement advances, much of the madness we encounter in firms is due to the human behaviour it engenders.

Unfortunately, the claim of minimising the ‘human element’ by providing objective insight through hard data and sophisticated analytical tools is largely unfounded. Far from eliminating behavioural issues, big data amplifies them.

No amount of processing can provide a substitute for clarity of thinking and a concern about the impact of measurement on people.

Also, analysing larger volumes of data may mean including unreliable external datasets, potentially disconnecting data from the processes and people they are supposed to support, and basing decision-making processes on data that may be scarcely comprehensible, but is nevertheless treated as authoritative.

The ability to analyse and examine so many data points may mask what is important, while at the same time giving us the impression that we can manage resources and processes in a purely mechanical way. When analytics are treated as a way to avoid the hard work of managing people and organisations, bigger data may well lead to ever greater madness! a Dina Gray, Pietro Micheli and Andrey Pavlov are the authors of Measurement Madness: Recognizing and Avoiding the Pitfalls of Performance Measurement

April 2015 • THE ACTUARY www.theactuary.com

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24/03/2015 09:18

Pensions Communication features@theactuary.com

Illuminating

longevity Pensions minister Steve Webb has said that people should be given information on their life expectancy as part of the guidance provided at retirement. But how can actuaries help to explain the uncertainties and complexities surrounding longevity?

These are a few thoughts to help actuaries approaching this communication.

In light of UK pensions reform, Hilary Salt offers advice on how actuaries should explain to people the complexities surrounding their life expectancy

Words to use It’s better if we stick to talking life expectancy rather than longevity, but either is certainly better than mortality. It’s also important to concentrate on the future. People will probably, at best, think about the life expectancies of their grandparents – and so will be two generations behind in their thoughts – so concentrating minds on future life expectancies rather than past ones might help.

“An annuity is a very serious business; it comes over and over every year, and there is no getting rid of it” – this is the view of Jane Austen’s cold-hearted Fanny Dashwood. But the responsibility of drawing down an income without the comfort of an annuity is perhaps even more serious.

Taking effect imminently in the UK are wide-ranging reforms to the way income is drawn from defined contribution (DC) arrangements and it is clear there is already a movement away from buying annuities.

Figures to use As actuaries, we are comfortable concentrating on mean life expectancies when thinking about the duration of a collection of liabilities.

When talking to individuals, there are strong arguments that the figure should be

£5,204

£5,313

£5,256

£5,436

£5,372

£5,577

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£5,924

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£6,140

£6,028

£6,394

£6,000

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£7,260

£8,028

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£8,348

£9,592

£10,000

£9,120

£10,779

£10,139

£12,000

£12,452

£14,000

£11,538

Chart 1 Annual income if you spread payments equally to each age, with an original pot of £100,000

£4,000

£2,000

5 10

10 1 10 2 10 3 10 4

99 10 0

97

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£0

the median and not the mean. Explaining that, of 100 people like the member, 50% are expected to die before age 90 and 50% are expected to live beyond 90 is probably more easily grasped – and lends itself to further explanations in pictures.

But for individuals, averages are not really helpful. If an individual assumes they will live for the average life expectancy, they are as likely to run out of money as to have surplus cash left at the end. So a single figure life expectancy number is probably very unhelpful to them. The later section about pictures shows how expected ranges might be incorporated into advice.

The mortality table to use is not obvious.

It may be possible to say that, in the short term at least, the mortality of those with DC pots will be similar to members of defined benefit schemes whose mortality underlies the S1 and S2 tables and to those who would previously have purchased an annuity. After all, these people will generally be members of an occupational pension arrangement.

But as time passes and auto-enrolment takes hold, the pool of people who will have DC pots to spend will broaden. Given that many may not have a relationship with a pension scheme or provider once they enter drawdown, the collection of mortality statistics for these individuals will become more difficult. It may make more sense to move to using a whole population table with some adjustment. In the same way that we need to think about median expectancies, our focus should be on lives-weighted tables in future, rather than amounts-weighted.

Conversation with a member The way we explain figures to members might go something like this: “You have a large cash sum available and to work out how much you might spend now and how much you need to save for later, you need to have an idea of how long you might

Life expectancy

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live. Unfortunately (or perhaps fortunately), it’s never possible to say how long you will live for. Even if we allow for all the factors we know affect life expectancy – things like your smoking status – there is always an element of chance left over. And we also need to bear in mind that while we know rates of mortality for current 80-year-olds, we don’t know how these will change in the period between now and when you reach 80. So the best we can do is give you a range of ages for your projected life expectancy. If we show them in a graph, it will look like this (Chart 2, right): “Your median life expectancy is age 88 – that means that if you imagine 100 people your age, 50 of them will die before 88 and 50 of them will die after 88. So spreading your money over the period to age 88 won’t necessarily give you the right amount of annual income. In fact, going back to those 100 people, just under six can expect to live to age 100. So if you want to be 94% sure you’ll have enough money, you need to spread your payments over a period to age 100.

“The more certain you want to be that you will never run out of money, the longer you need to assume you’ll live for. But bear in mind that, at the highest ages, your state pension might be sufficient without any top up from your private pension savings. “The slider (Chart 3, above right) allows you to play

ALAMY

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Chart 2 Range of ages for a projected life expectancy

Chart 3 Adjusting for chance of exhausting funds

Life expectancy: 88.2 100%

75%

50%

23.9% chance 25%

0% 65

70

75

80

85

90 95 Age

100 105 110

115

around with different levels of certainty. For example, if you want to be about 75% sure you won’t run out of money, you need to assume you’ll be here until the age of 94.

“Of course, the longer you spread your payments over, the lower your annual income. Chart 1 (p28, left) shows your annual income assuming you spread your payments to each age. We’ve assumed you start off with a pot of £100,000.

“If you use the 75% chance of having sufficient money to see you through, you would plan to draw down around £6,000 per year.

65

70

75

80

85

90 95 Age

100 105 110 115

“It’s worthwhile re-doing this exercise every few years – looking at your current pot of money and thinking about how to spread it over the future – to make sure you are still on track.” a

HILARY SALT is a member of the General Pensions Working Party at the IFoA

April 2015 • THE ACTUARY www.theactuary.com

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Spotlight on... features@theactuary.com

HIDDEN CHARGES Darryl Boulton argues that using concealed fees in any area of business is the coward’s way to make a profit

Businesses largely exist to make profit.

Indeed, unless they have a monopoly there is nothing wrong with maximising this profit.

But how they maximise it does matter. So what is an ethical business? Is it green?

Does it treat customers fairly? Should it be a mutual perhaps?

What is green?

Should I wash my tin cans out before I pop them out for recycling? Has anyone thought about how much water you should use to do this and whether the energy saved by recycling surpasses the resources used to remove a stray baked bean? Perhaps more pertinently, if someone could explain why it makes sense for a 40-tonne lorry to drive about a mile down a country lane to pick up my six empty tins once a fortnight then I am all ears. Never mind, I digress.

Treating customers fairly There are, of course, many ways in which this could be interpreted. I would suggest a reasonable working definition would be to clearly explain all charges, not to deliberately mislead customers and not to take advantage of information asymmetries.

So who is guilty? Where do I start? ● Restaurants with service charges: A tasty keema naan may seem reasonable value at £2.95, however, when an extra 10% (or sometimes 12.5% if they are really rude) is added, I feel less comfortable. Having turned 50, I find the ever-increasing need to boost my eyesight with spectacles, but an extra strong pair is often needed to read the very small print covering the service charge.

30

Why not just add 10% onto the basic prices?

Well I can guess the answer to that – it may make it look too expensive. I never go back to a restaurant that levies a service charge. ● Foreign currency exchange: How often do you see adverts citing ‘nil commission’? Do those same adverts tell you how much of a margin is being taken on the exchange rate offered? Certainly not nil!

I expect the average actuary (and budding actuary) would have the common sense to just look at how many Euros (or whatever) you get for your £500. However, given the thrust of the adverts, I doubt whether this approach is common. Indeed, how many members of the public even realise there is an effective (very large) charge through the margin taken on the exchange rate used?

I have found the best rates are usually through taking cash abroad and using a (non-bank) money changer. That says it all. ● PPI: Dear [make up a name] Bank, I wrote to you in 2003 to complain about the PPI I believed you had missold to my then partner.

I pointed out that insurance companies had been hammered for misselling and that you were laying yourselves open to a similar problem that could cost you billions.

You wrote me a snotty letter back rejecting my claim and ignored my warning. Of course, you had the last laugh when my shares bombed out, but I do wish I had kept the correspondence.

My point here is that any inappropriate ‘piggy-back’ product is effectively a hidden charge and companies should be punished for such practices. ● 108% allocation: And, lastly, onto home

territory – misleading insurance or investment products. It would be rather pointless to ask insurers to detail every charge they make – from bid offer spread to mortality to rounding (although this information should be available for those who want it). What should be punished are product features that can only be there to mislead.

Several years ago, I recall a number of insurers ‘bidding’ to see who could offer the highest allocation for a lump sum investment product. I’m not sure if it was the winner, but I recall one company offering to allocate 108% of your money to your chosen fund. 108% really? Er, no, this just makes it look like we are giving you an extra 8%, when, in reality, a combination of the bid offer spread, early surrender penalties, actuarial funding (remember that?) and misleading statements ensured you never really had more than 100% allocated. I hope we have learned our lessons and that such shameful practice is behind us.

I think it is, unless you know better…

Avoid the cowards I admire profitable companies – they are boosting my pension. But I hope I never unwittingly support those who take the coward’s route to profit. a

DARRYL BOULTON

is an independent actuarial consultant

THE ACTUARY • April 2015 www.theactuary.com

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May 2013 • THE ACTUARY 31 www.theactuary.com

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arts@theactuary.com

Arts ELEMENTARY EDUCATION Anastasia Aboim dusts off her magnifying glass for a trip to the Museum of London’s exhibition dedicated to Sherlock Holmes, then on to the Wellcome Collection, for an exploration into forensics and crime analysis 32

THE ACTUARY • April 2015 www.theactuary.com

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Becoming a sleuth in real life may only be a pipe dream, but there are other ways in which to stimulate your powers of deduction.

Running until 12 April 2015, The Museum of London salutes the world’s favourite consulting detective, in Sherlock Holmes: The Man Who Never Lived and Will Never Die. An exhibition about a fictional character shouldn’t be as odd as it sounds – after all, we hold other characters such as Harry Potter or folklaw hero Robin Hood in high esteem.

Yet Sherlock Holmes is celebrated in quite a unique way. Baker Street is his home, the deerstalker his hat of choice, and the debate over whether he ever actually uttered the immortal words “elementary, my dear Watson” ignores the minor technicality that, as a man who never actually existed, Sherlock never really said anything.

It is because he has been written about and portrayed so vividly, on both stage and

screen, that we feel we know him and want to join him in his mission to solve crime and attain justice. Quite clearly, we have a long-standing affection for the emotionally unavailable, obsessive, yet highly intellectual individual, and the Sherlock exhibition is a great way to remember how and why he affects us so.

The real face of Sherlock Being greeted by original artwork from the films and plays and hearing the array of voices that have elevated Sherlock to a pop-culture icon really makes you feel the character’s strong charisma and identity.

Putting the many actors that have played him out of mind – which is hard to do when surrounded by the film and TV screens on show – the truest face of Sherlock was by illustrator Sidney Paget (above). Seeing his sketches of the fabled detective’s stern

MUSEUM OF LONDON / SHUTTERSTOCK

24/03/2015 09:19

At the back Arts

Far left and left: A view of the Strand looking West c1890 (George Washington Wilson); and the tools of a forensic scientist on display at the Museum of London exhibition

images capital was imag ag are no longer forbidden on television, and the plethora of TV establishing itself telev crime dramas speaks for itself. as an industrial crim However, no case, fictional or powerhouse, with H factual, was as infamous as the majestic buildings, fac so called Whitechapel murders, that were cuttingusually ascribed to the edge in every way. us unidentifi ed character, Jack Images of Hansom un the cabs and steam trains th Ripper, between 1888 and 1891.

The victims were all depict the urban 1 women from a similar modes of transport w background, murdered in a vividly described in b similar way. The killings his stories. The foggy were splashed all over the capital is the perfect papers of the time, yet, backdrop for the despite extensive enquiries, complex world of a lack of forensic Sherlock Holmes.

Above: Sir Arthur Conan Doyle knowledge and technology Photographs and meant the culprit evaded capture. Tools of paintings mirror family scenes from his In demand the day were restricted to pen and paper. many different cases. Famous hotels and Whether Doyle was fond of his creation or Police would reconstruct crime scenes with sites in Holborn and the Strand are not, he had trouble moving on in a literary sketches and crude drawings. Jurors would mentioned in A Study in Scarlet. John sense. In an attempt to be taken more meet to discuss cases in public houses, as Anderson’s stunning landscape, seriously as a historical writer, Doyle killed seen in an extract from Charles Dickens’ Westminster Bridge, Houses of Parliament off his most famous character, but was later Bleak House. Dickens would often point out and Westminster Abbey seen from the River, forced to revive him by popular demand. flaws in the system of the time. is as dramatic as any movie scene. The It is thought that 20,000 people priceless hand-written drafts and threatened to cancel their subscription to fascinating facts will enlighten avid The Strand magazine, which published Bring up the bodies Sherlock fans.

Sherlock’s adventures. It appears this same Our fascination with death seems to have At the second exhibition, Forensics: The enthusiasm for Sherlock endures today. followed us throughout the ages. The Anatomy of Crime by the Wellcome As well as his trusty sidekick, Dr Watson, morgue room begins with a public display of Collection, a newspaper headline the exhibition highlighted a third character unidentified bodies in turn-of-the-century announces Doyle’s meeting with the ‘French in Doyle’s stories; London. At the time, the France. It contains some of the first studies Sherlock’, criminalist Edmond into decomposition and pathology. Notable examples include the beautifully macabre Visit the Wellcome Collection for the history of all things forensic Locard. This neatly demonstrates that Sherlock’s Japanese kusôzu or ‘images of the nine popularity and progress in crime stages’ of the deterioration of a noble analysis went hand in hand. woman’s corpse.

The public’s love of a good There is a slightly comical sketch from the crime thriller was, and still is, Middle Ages – The Wounded Man, which fuelled by the press. The papers illustrates the various lacerations a person not only peddled gossip but also could suffer in battle or by accident. brought forensic advances like The exhibition’s forensics timeline of fingerprinting to the fore. In the crime-solving technology takes you from Dr Buck Ruxton trials, forensic the Metropolitan Police’s first camera evidence linked Ruxton’s through to virtual autopsy 3D scanning. Fact movements with the timing of or fiction, there is always progress to be the murders (maggots found on made for a better way to crack the case. the bodies are on display).

Similarly, evidence against Dr Sherlock Holmes: The Man Who Never Lived and Will Crippen led to his conviction.

Never Die is at the Museum of London until 12 April, Over the decades our lust for and Forensics: The Anatomy of Crime is at the gore has grown; harrowing Wellcome Collection until 21 June. features and Victorian demeanor, he is not unlike the self-portrait of Sherlock’s creator, Sir Arthur Conan Doyle, down the hall.

Behind every great character there is a great author, and Doyle’s success made him one of the giants of Victorian literature.

Doyle – who originally trained as an eye doctor – had a passion for science and demonstrated acute vision and observation.

Sherlock’s character may well have been a reflection of Doyle’s own rational, analytical personality.

Parts of the exhibition are also dedicated to influencers Edgar Allen Poe and Doyle’s tutor at Edinburgh, Dr Joseph Bell, on whom he based some of Sherlock’s quirky mannerisms.

April 2015 • THE ACTUARY 33 www.theactuary.com

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24/03/2015 09:19

At the back Coffee break

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

puzzles@theactuary.com

Puzzles

PRIZE PUZZLTE TO H BROUGU BY YO AN MILLIM

THE FINAL FRONTIER The across clues in this crossword all have links with exploration in a particular area and adventures into the great unknown 1

2

3

4

5

8

7

9

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12

6

11

For a chance to win a £25 Amazon voucher, please email your crossword solution to: puzzles@theactuary.com by Wednesday 22 April

Across 8 9 10 11 12 14 16 18 20 21 23 24 26 27

Independent news reflection covered by maps showing old island (8) Astronomer has blister with mutated head (6) Come in to reward outspoken concern (10) Direction of spread when leader departs (4) Open article displayed on repository (4) Dance ideal for development (9) Seesaw fastened to little foundation? (7) Shortly overcome depression seen in undergraduate (7) Have a shot with rifle over a dune (9) See 1 Bush involved in peace resolution (4) Reformer introducing retrograde measure as provocateur (10) A maths problem causes shortness of breath (6) Bishop (first class) reflected on pass with honours attained in foreign Country (8)

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Down 15

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1,21 2 3 4 5 6 7 13

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© Nylfia

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Laurel outlined modern description of Apostle (2,6) Course content to scare Erica (6) Drug secure in storehouse... (5) ...another reveals short craving (7) These cope surprisingly with enclosure (9) Remembered when comment passed (8) Cleaners go crazy very near... (5,5) ...Rock Star having change behind small room (American city) (6,4) 15 Old plantation owner, perhaps, to perform vocal arts (9) 17 Divine rule others used to install Chief (8) 19 Can rude criminal entertain imprisonment? (7) 21 Achiever recalls divers in celebration (6) 22 Stallone disembowelled lady in secret (5) 25 Polish revolutionary movement? (4)

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24/03/2015 09:20

PRIZE PUZZLTE TO H BROUGU BY YO AN MILLIM

HAVE YOU GOT WHAT IT TAKES? For information on IQ testing in your area, visit www.mensa.org.uk For a chance to win a £25 Amazon voucher, email your solution to puzzle 619 to: puzzles@theactuary.com by Wednesday 22 April

Coining it in Mensa puzzle 619

Lacking a letter Mensa puzzle 620

A shopping bill totals £13.12. Cash payment is made in four different denominations of coins. The largest denomination is 50p and there is exactly the same number of each coin.

What letter is missing from the sequence?

How many of each coin is there and what are their values?

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.

U

K

S T

S

?

M

C

Spice island Mensa puzzle 621 Take one letter from each sector to give the name of an island nation. Take another letter from each sector to give a type of dessert. The remaining letters will give a spice.

What are the three words?

E E

M A

D M

N I

A R

E M

U V R D

G

L N

I A

I

All square Mensa puzzle 622

Bridge puzzle 51 What does it mean?

Move from square to touching square to find the longest possible word.

What is it?

1.

You are South and hold: ♠ 862 ♥ QJ1052 ♦ 105 ♣ 764

The bidding has been: East West 1♣ ♦1 2NT Pass

North Pass X

The bidding has been: East West 1♠ 2♣ 3♠ 4 NT (1) (2) 5♠ 6♠

North 2♥ Pass X

(a) What does the double mean? (b) What do you lead?

2. This time you hold: ♠2 ♥ K2 ♦ 7543 ♣ 976432 (a) What does the double mean? (b) What do you lead?

(1)

Roman Key Card Blackwood

(2)

2 of the 5 ‘Aces’ +Q♠

Bridge puzzle provided by David Lampert These puzzles are sponsored by:

SHUTTERSTOCK

p34_35_apr_crossword_puzzles_FINAL•CT.indd 35

April 2015 • THE ACTUARY www.theactuary.com

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1

2

3

4

puzzles@theactuary.com

SOLUTIONS FOR MARCH 2015

11

N E M B U D D H A

13

L M A L

B E M

6741 7214

T R A C H I T E S R B A C K V E R O A K D F O U R L E A F K I L O B I O D I V E R S N A I D G R E E N Y C 17

24

9872

Bidding

♠ Q10

♥ K7

♥ 92

♦ J953

♦ J9732

♣ 1075

♣ K1085

(a) After three passes, Partner opens 1♥. You naturally bid 1♠.

Partner now bids 2♦. You prefer diamonds and are not that weak, so you bid 3♦. Partner now bids 3♠.

1. What do you expect Partner’s shape to be?

3 spades, 5 hearts, 4 diamonds and 1 club. If he had 4 spades, he would have supported them immediately.

2. What is the likely strength?

Better than minimum. Not strong enough to force initially but strong enough to bid again after your diamond support.

8432

7535

Having a ball Mensa puzzle 616 Which number is the odd one out?

ANSWER 6741. In each group, the first and second digits are multiplied to give the third and fourth digits.

3. What do you do now? Pass.

R

T L I M N D I G R U F O R E F A E J A

L E

15

18

22

23

25

L I L O V E

S

19

I S N S T I D E E R

Congratulations to this month’s winner – Kara Wilson of Punter Southall

Against the tide Mensa puzzle 615 A ship is battling against a strong tide to get to safety. It uses 6 gallons of fuel every hour and sails at 17mph in still conditions. The ship is 24 miles from safety and the flow against it is 8mph. The ship has 16 gallons of fuel remaining.

How much will there be when it reaches the shore?

ANSWER None, it will require all the remaining fuel.

Congratulations to this month’s winner – Melvin Brandman

Shuffle about Mensa puzzle 617

ROVER CRAB LIMP DOE

(b) Partner opens 1♥. You bid 1NT. Partner now bids 2♣.

2. What is the likely strength?

A minimum opening bid, probably no more than about 14 points.

27

E L D

9109

3. What do you do now?

Although you have only a 4-3 fit in spades, your hand looks much stronger than your 9 points.

You have a high honour in Partner’s first suit, 2 of your 3 losing clubs can be ruffed. Bid 4♠.

1. What do you know about Partner’s shape?

He does not want to play in NTs, so probably has a singleton. He is likely to be either 1-5-3-4 or 3-5-1-4.

26

5315

L T E R A

12

14

16

21

Bridge puzzle 50 Am I in good shape?

♠ KQ62

7

10

20

(b) You hold

6

8

9

(a) You hold

5

G R E T N A C A L L O W R N E R M A H C A R D W O O D P E C K E R

© Nylfia

At the back Coffee break

Missing by miles Mensa puzzle 618 How many miles should it be to Turkey on this signpost?

ANSWER 2025. The alphabetical values of the first and last letters are placed together to give the miles.

Turkey ?

PIES Switzerland 1904 When each word is rearranged, one of them can be used to suffix all the others to give four longer words.

Morocco 1315 Peru 1621

What are they?

ANSWER Overrode, barcode, implode and episode.

Bridge puzzle provided by David Lampert

36

THE ACTUARY • April 2015 www.theactuary.com

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SHUTTERSTOCK

24/03/2015 09:21

At the back Student student@theactuary.com

Student Jessica Elkin describes the sort of sticky situation students can find themselves in at exam time if not vigilant about regulations

A CAUTIONARY TALE Once upon a time, there was an actuarial student living and working in India.

Following an exam, she sent a message to some of her actuarial pals about it – she’s one of those people, like me, who prefers to talk about an exam afterwards rather than delete it from memory. If only to check what others’ approaches would have been to the harder questions.

One of her mates who replied was UKbased, and pointed out that he had not sat the exam yet. His sitting was the next day.

Whoops – the exam in India had been brought forward by one day, and the first student had not realised that the same change hadn’t been made elsewhere.

She apologised for her error and that was the end of that. As far as she was concerned.

The information contained in her text message was generic and not especially helpful; the sort that told you a topic that you were already expecting would appear in the paper. The student who had just learned this information told a couple of friends anyway.

Whether he believed this would help him and his friends is uncertain given the bland nature of the information. Maybe he was relaying the anecdote.

Guilt by omission One of the friends shrugged, figuratively if not literally. The new insight didn’t change anything, and the papers probably weren’t the same anyway.

Perhaps he figured that exams not sat at the same time would always be different. In any case, it didn’t affect the

PHIL WRIGGLESWORTH

p37_Apr_student_FINAL•CT.indd 37

areas he knew he needed to concentrate on, and he’d assumed the topic would come up.

He dismissed the call from his mind, went back to his studying for the exam the next day and got an early night. The topic did appear in the paper.

The second friend was not comfortable with the situation. He decided to bring the events up with a senior colleague at work, and the events escalated. After a disciplinary hearing over two days, the student who had sent the text and the student who had not said anything were not punished but had to cover the IFoA’s fees regarding their cases.

The student who had called up friends to

convey the information was suspended from the IFoA for a year, as well as having to pay fees.

What would you do?

This is a true story; or, at least, the basic details are true. I find it tricky to think about because I empathise a little with all of these people; or, at least, can see how these events could come about.

If the information had been actual answers to the exam, or some sort of detailed information, my reaction would be far more in the ‘moral outrage’ camp. But I can understand how a text message is accidentally sent to the wrong person – which has caused many social headaches over the years – and how you might casually mention something to your mates without thinking it’s that harmful. Having received the information, you might decide to ignore it and, of course, take the ethically staunch position of reporting the wrongdoing. It must take some courage to report your friends.

My opinion of the IFoA’s reaction to the events and the ‘sentences’ passed is that they made the right call, with a decent balance between punishment and leniency, and with some consideration of the severity of the consequences and the intent behind the actions. But it was certainly food for thought on the importance of care and consideration in all that we do, and the importance of whistle-blowing.

Having looked a bit more carefully at past student disciplinary tribunals at the IFoA (details are published online), they are usually a bit more cut and dried. People discussing answers in exams, or copying, or even taking notes in with them. These intentional transgressions are probably what spring to mind when we consider cheating, so it is easy to separate ourselves from the possibility of wrongdoing. But, as in the case outlined above, even inaction can land you in a sticky spot.

As we get to qualification and beyond, the sort of vigilance displayed by the last member is ever more important, with whistleblowing a key duty of an actuary.

But tales like the above serve to remind us that it’s certainly not anything to forget about in the meantime! a

April 2015 • THE ACTUARY 37 www.theactuary.com

24/03/2015 09:21

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Ǩ Ben Hickey Consultant +44 (0) 207 337 8859 ben@hfg.co.uk

William Gallimore Director +44 (0) 207 337 8826 william@hfg.co.uk

DAVID MCKNIFF Employer and area of work Deloitte – investment services.

How would your best friend describe you?

I hope they’d describe me as funny; kind; easy-going and genuine. Though I can’t say it’s a question I’ve ever felt the need to ask.

What motivates you?

Simple – happiness. Saying that, having a fast car, nice house and being able to go on holidays to exotic locations are also pretty motivational.

What would be your personal motto? #yolo.

ACTUARY OF THE FUTURE Name five dream companions to be stuck on a desert island with?

Nigella Lawson (everyone needs a good cook, surely?); Nicole Scherzinger (to lead the songs around the camp fire); Kevin Bridges (everyone needs a laugh); Lionel Messi (what a guy to have a kick about with – and I’m pretty sure Barcelona would send a search party for him!) and Bear Grylls (pretty sure he’d know what to do).

I worked in Hong Kong on an internship for two months before my final year of university – prior to that I hadn’t travelled outside Europe and I only knew one person there (from a one-hour telephone interview). It all worked out well though and I had a fantastic time.

If you could go back in history, who would you like to meet?

What’s your most ‘actuarial’ habit?

Nelson Mandela – his courage, bravery and humility are a lesson to us all.

Taking my yellow tables with me everywhere… just in case!

If there was a movie produced about your life, who would play you, and why?

If you could learn one random skill, what would you learn?

Rowan Atkinson – I don’t see it personally, but some people say we look alike. He doesn’t take himself too seriously, which is important too.

I’d really like to improve my Excel knowledge.

Favourite Excel function?

Sum.

How do you relax away from the office?

I’m a bit of a fan of soaps (particularly Holby City and Casualty) and enjoy socialising with friends. I’m also a football referee.

Alternative career choice?

Growing up I wanted to be an airline pilot.

What song best describes your work ethic?

It wasn’t me – Shaggy.

38

Greatest risk you have ever taken?

If you could be anyone else, who would it be?

I would have loved to have been in Neil Armstrong’s space boots when he stepped on the moon – who wouldn’t want to be the first man on the moon? Plus, it would make a pretty cool profile picture for the ‘actuary of the future’ page!

Do you know an actuary destined for greatness?

You can nominate an Actuary of the Future by emailing

aotf@theactuary.com

THE ACTUARY • April 2015 www.theactuary.com

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Appointments

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Highlighting Opportunities HFG’s consultants specialise in matching you to the right role at the right company. Call us –‘†ƒ› –‘ Šƒ˜‡ ƒ …Šƒ– ƒ„‘—– ›‘—” ”‡“—‹”‡Â?‡Â?–•ǥ ƒÂ?† –‘ ƤÂ?† ‘—– ™Šƒ– ‘’’‘”–—Â?‹–‹‡• ƒ”‡ ƒ˜ƒ‹Žƒ„Ž‡Ǥ Ben Hickey Consultant +44 (0) 207 337 8859 ben@hfg.co.uk

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Dave Curran Consultant +44 (0) 207 337 1201 dave@hfg.co.uk

General insurance roles Reserving, Capital and Pricing Actuary Í‹Í&#x;Í? ÇŚ ͙͋͘Í?Â? ÂƒÂ•Â‹Â…ÇĄ ‘Â?†‘Â?

Deputy Pricing Manager

‰”‘™‹Â?‰ •›Â?†‹…ƒ–‡ ‹• Ž‘‘Â?‹Â?‰ ˆ‘” ƒ Â?‡™Ž› Â“Â—ÂƒÂŽÂ‹Ć¤Â‡Â† …–—ƒ”› ˆ”‘Â? ‡‹–Š‡” ƒ ”‡•‡”˜‹Â?‰ ‘” …ƒ’‹–ƒŽ „ƒ…Â?‰”‘—Â?†Ǥ Š‹• ”‘Ž‡ ™‹ŽŽ ™‘”Â? ƒ…”‘•• –Š‡ –Š”‡‡ †‹ƥ‡”‡Â?– areas whilst reporting to the Actuarial manager. The person should be able to ƒŽŽ‘…ƒ–‡ –Š‡‹” –‹Â?‡ ƒ……‘”†‹Â?‰Ž› ƒ…”‘•• –Š‡ †‹ƥ‡”‡Â?– ÂƒÂ”Â‡ÂƒÂ•ÇĄ ™‘”Â? ™‡ŽŽ –‘ deadlines and have excellent communication skills.

For more information please contact: will@hfg.co.uk REF: WG0301

™‘”Ž† ”‡Â?‘™Â?‡† ‹Â?•—”‡” ‹• Ž‘‘Â?‹Â?‰ ˆ‘” ƒ Â“Â—ÂƒÂŽÂ‹Ć¤Â‡Â† ’”‹…‹Â?‰ ƒ…–—ƒ”› –‘ ™‘”Â? ™‹–Š –Š‡ …Š‹‡ˆ ’”‹…‹Â?‰ ‘Ƽ…‡”Ǥ Š‹• ‹• ƒ •—……‡••‹‘Â? ’ŽƒÂ?Â?‹Â?‰ ”‘Ž‡ ƒÂ?† –Š‡› envisage the successful person becoming CPO in time. Previous pricing experience is essential and a desire to mentor and develop a team is key.

For more information please contact: will@hfg.co.uk REF:WG0302

Š‹‡ˆ …–—ƒ”›

Reserving Actuary

Í‹Í™Í?͘ ÇŚ ͚͋͘͘Â? ÂƒÂ•Â‹Â…ÇĄ ‘Â?†‘Â?

Í‹ÍĄÍ˜ ÇŚ ͙͚͋͘Â? ÂƒÂ•Â‹Â…ÇĄ ‘Â?†‘Â?

Í‹Í&#x;͘ ÇŚ Í‹Í Í?Â? ÂƒÂ•Â‹Â…ÇĄ ‘Â?†‘Â?

™‘”Ž† Ž‡ƒ†‹Â?‰ Â?•—”‡” ‹• Ž‘‘Â?‹Â?‰ ˆ‘” ƒ Â“Â—ÂƒÂŽÂ‹Ć¤Â‡Â† ƒ…–—ƒ”› –‘ Ž‡ƒ† –Š‡‹” growing actuarial team. This is a high level role reporting to the CFO of this Â?ƒŒ‘” ‹Â?•—”ƒÂ?…‡ Ƥ”Â?ÇĄ •‘ –Š‡ ”‹‰Š– ’‡”•‘Â? Â?‡‡†• –‘ „‡ ƒÂ?„‹–‹‘—•ǥ …‘Â?Ƥ†‡Â?– ƒÂ?† Šƒ˜‡ ƒ ”‡ƒŽ •’ƒ”Â? ƒ„‘—– –Š‡Â? –‘ Ž‡ƒ† –Š‹• –‡ƒÂ?Ǥ Š‡ Ƥ”Â? …‘Â?–‹Â?—‡• –‘ ‰”‘™ ƒ– ƒ ”ƒ’‹† ”ƒ–‡ ƒÂ?† –Š‹• ƒ…–—ƒ”‹ƒŽ Ƥ”Â? ‹• Â?‘ ‡š…‡’–‹‘Â?Ǥ ‘ ƤÂ?† ‘—– Â?‘”‡ do get in touch.

For more information please contact: dave@hfg.co.uk REF: DC0301

A Lloyd’s syndicate is looking for a reserving actuary to join their highly regarded actuarial function. The role will be heavily involved in the analysis and direction of the technical provision on a worldwide scale. There is ƒ …‘Â?•–ƒÂ?– Â?‡‡† ˆ‘” ‹Â?–‡”ƒ…–‹‘Â? ™‹–Š Â?—Â?‡”‘—• „—•‹Â?॥ ˆ—Â?…–‹‘Â?•ǥ •‘ •–”‘Â?‰ communication skills are essential. The candidate will have experience in an actuarial capacity within the London general insurance market.

For more information please contact: dave@hfg.co.uk REF: DC0302

Reinsurance Pricing Analyst

ƒ’‹–ƒŽ …–—ƒ”› Č‹ ‡ƒ”Ž› Â—ÂƒÂŽÂ‹Ć¤Â‡Â†ČŒ

Í‹Í?͘Â? ÂƒÂ•Â‹Â…ÇĄ ‘Â?†‘Â?

Í‹ÍžÍ?Â? ÂƒÂ•Â‹Â…ÇĄ ‘Â?†‘Â?

A Bermudian reinsurance company are strengthening their actuarial pricing team. This role sits within the U/W function and works very closely with the senior pricing actuary. The successful candidate is likely to have cleared their CT’s and be halfway through the further actuarial exams. You will come from a pricing (re)insurance role and have a minimum of 18-24 months actuarial experience.

For more information please contact: ben@hfg.co.uk REF:BH0301

A leading Lloyd’s syndicate have expanded their capital team. This role acts ĥ ƒ Â?—Â?„‡” –™‘ –‘ –Š‡ ‡ƒ† ‘ˆ ƒ’‹–ƒŽ ƒÂ?† ™‹ŽŽ ‘ƥ‡” –Š‡ ‘’’‘”–—Â?‹–› ˆ‘” someone to move into a more managerial type role. The successful candidate ™‹ŽŽ Šƒ˜‡ •–”‘Â?‰ ‡š’‡”‹‡Â?…‡ ‹Â? ‰Ž‘‘ ‘” ‡ Â‡Â–Â”Â‹Â…ÂƒÇĄ Šƒ˜‹Â?‰ •’‡Â?– ƒ– Ž‡ƒ•– ͚Ȁ͛ years in a capital/reserving role.

For more information please contact: ben@hfg.co.uk REF: BH0302

…–—ƒ”‹ƒŽ Â?ƒŽ›•– Č€ ”‘Â?‡”

Capital Analyst

Í‹Í?͘Â? ÂƒÂ•Â‹Â…ÇĄ ‘Â?†‘Â? Č€ ˜‡”•‡ƒ• –”ƒ˜‡Ž

A global broking house is rapidly growing their actuarial department due to recent M&A and is looking for a number of actuarial analysts to join the team.

This role has great exposure to senior stake holders internal and external to the business. The successful candidate will have a superb actuarial exam pass rate and strong interpersonal skills.

For more information please contact: ben@hfg.co.uk REF: BH0303

+44 (0) 207 337 8800

Í‹Í›Í? ÇŚ Í‹ÍœÍ?Â? ÂƒÂ•Â‹Â…ÇĄ ‘Â?†‘Â?

A mid tier Lloyd’s Syndicate is hiring an analyst into their capital teams. This is a great opportunity for any new graduates who’ve been in their current actuarial role for 12 months and are eager to widen their skillset and learn capital modelling. If you are looking to develop your experience and have a solid background in general insurance please get in touch.

For more information please contact: ben@hfg.co.uk REF: BH0304

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April 2015 • THE ACTUARY 39 www.theactuary.com

Recruitment Apr15.indd 39

24/03/2015 10:48

Appointments Ground Floor Pellipar House, 9 Cloak Lane, London EC4R 2RU | 0207 332 5870 | actuarial@mansionhouse.co.uk www.mansionhouse.co.uk

NON - LIFE

NON-LIFE

Samantha Yee yees@mansionhouse.co.uk

DEPUTY CHIEF ACTUARY - REINSURANCE

REGIONAL CHIEF RESERVING ACTUARY

F e N %RQXV %HQHĆ“WV LONDON

e ([HFXWLYH 5HPXQHUDWLRQ 3DFNDJH LONDON

Going Live in April Global multi-line reinsurer is seeking an experienced Actuary to step into a Deputy position. The role is varied and will support the Chief Actuary in ensuring consistency across the Actuarial function, assisting with pricing RI deals, recommending and implementing changes to reserving and capital processes, as well as quarterly and ad-hoc reporting whilst managing more junior members of the team.

Unique opportunity within a world leading P&C insurer for a highly experienced Actuary to take overall responsibility for Statutory Reserving and related activities for the Internal Model across the EMEA region. Looking after a large team of Actuaries across multiple global locations, you will ensure that appropriate Actuarial techniques are employed across the whole region whilst working closely with the senior management team to ensure business needs are met.

Ref: sy/23077

NEARLY/NEWLY QUALIFIED ACTUARY e ([WUHPHO\ &RPSHWLWLYH %RQXV %HQHĆ“WV LONDON

LIFE

Martin Press pressm@mansionhouse.co.uk

Reinsurer seeks a Senior Pricing Actuary for a broad range of short and long tail business for Europe, Middle East and African markets.

Responsible for technical transaction pricing. At least 5 years of reinsurance pricing experience.

Ref: sy/23061

LIFE

GERMANY

Zainab Ali aliz@mansionhouse.co.uk

Ref: sy/23075

PRICING ACTUARY F e N %RQXV %HQHƓWV LONDON Lloyd’s Syndicate are looking for an experienced London Market Actuary to join their Pricing team. A fantastic opportunity for an ambitious and entrepreneurial individual who is keen to make a difference in an already highly regarded team. This role is extremely front facing and will work YKVJ VJG WPFGTYTKVGTU QP C FCKN[ DCUKU VJGTGHQTG ITCXKVCU EQPƂFGPEG and strong interpersonal skills must be second nature.

Ref: sy/23057

NEARLY/NEWLY QUALIFIED LIFE REPORTING ACTUARY

PART QUALIFIED PRICING ACTUARY

F e . %RQXV %HQHĆ“WV LONDON

F e . %HQHĆ“WV %RQXV SOUTH COAST

Our client, an established Life Insurer, is looking to expand their reporting team. Operating on a global scale, the role is ideal for a candidate looking to progress their career, and would suit an individual with experience in the wider European market. You will be a strong communicator with the highest standard of oral and written English. #U C SWCNKĆ‚GF QT PGCTN[ SWCNKĆ‚GF #EVWCT[ [QW YKNN JCXG ICKPGF TGNGXCPV Ć‚PCPEKCN TGRQTVKPI GZRGTKGPEG YKVJKP C NKHG DWUKPGUU

Ref: mp/20154

Must A leading UK Life insurer is now hiring for their pricing team at the PQ level. Assisting with the development and maintenance of tools and calculators to streamline pricing and validate data, you will possess strong data analysis skills and be technically competent in the use of Excel, VBA and other analytical tools. You will be making good progress through the CT series with a solid proven track record in life pricing.

Ref: mp/21504

QUALIFIED LIFE ACTUARY LIFE REPORTING ACTUARY F e . %HQHƓWV %RQXV LONDON A leading Insurer is looking for a non-life Actuary with around 5 years’ experience in the personal lines space (motor or home) to manage a team of 3 on the Retail Pricing team. Exciting future career development opportunities.

Ref: mp/21503

We are delighted to announce that Mansion House is recruiting for C )NQDCN #EVWCTKCN 2TCEVKEG KP UGCTEJ QH PGYN[ SWCNKĆ‚GF #EVWCTKGU KP the Northern UK region. Widely regarded as industry leaders, my client offers fantastic support and opportunities to its staff. Those with experience of ALM, Capital and Risk management, Quantitative Analytics or Economic Value Management are strongly encouraged to apply.

Ref: mp/17315

PENSION & INVESTMENTS

Ben Whalley whalleyb@mansionhouse.co.uk

F e . %RQXV %HQHĆ“WV NORTH/NORTH WEST/SCOTLAND

SPECIAL FEATURE We are delighted to announce the launch of our new website www.mansionhouse.co.uk and our partnership with Heeral Gudka, Integrated Life and Executive Coach.

Heeral can provide tailored coaching programmes and workshops. To find out more and to discuss your needs please visit: http://mansionhouse.co.uk/coaching.

During her career within insurance Heeral worked for one of the largest global consultancies, 2 prestigious London Market insurers, and the world’s largest run-off specialist at the time – living in London and Bermuda. Building relationships has always been Heeral’s strong point, and most recently she worked as the main contact between her previous employer’s CEVWCTKCN FGRCTVOGPV CPF VJG DTCPEJ QHƂEGU URTGCF CETQUU 'WTQRG INTEGRATED LIFE & EXECUTIVE COACH Heeral Gudka

40

actuarial@mansionhouse.co.uk THE ACTUARY • April 2015 www.theactuary.com

Recruitment Apr15.indd 40

Heeral’s coaching style is straight-forward and free of jargon, she builds trust with her clients and they rely on her to give honest and compassionate feedback. Heeral helps her clients deal with the stresses of the work environment, helps KFGPVKH[ QRRQTVWPKVKGU CPF QXGTEQOG EJCNNGPIGU 5JG QDUGTXGU CPF KFGPVKƂGU RCVVGTPU QH DGJCXKQWT CPF VJQWIJV RTQEGUU so that the client can decide which are helpful and which are hindering progress.

24/03/2015 10:49

London : Chicago : Hong Kong : Singapore : Shanghai : Zurich

www.theactuaryjobs.com

Senior Pricing Actuary - Zurich $WWUDFWLYH 6DODU\ %RQXV %HQHÂżWV

My client, a leading reinsurance company, is looking to recruit an experienced actuary to join their casualty pricing team with the main focus on modelling/pricing of reinsurance treaties. You will require extensive reinsurance treaty pricing experience ideally in casualty lines of business. Experience in capital modelling (Remetrica, Igloo) will also be an added advantage. This is a great opportunity to work in a highly visible role and you must have great communication skills in addition to actuarial and statistical pricing experience. French or German to at least business level would be a distinct advantage.

Contact phu.ngoc@ipsgroup.co.uk

Senior Pricing Actuary (ILS) - London 7RS 4XDUWLOH 6DODU\ %RQXV %HQHÂżWV

Our client, a leading investment manager, is looking to hire a non-life pricing actuary to further develop the insurance linked securities team in London. They are looking for someone with good technical skills in pricing deals and risk modelling to analyze investment RSSRUWXQLWLHV *RRG FRPPXQLFDWLRQV VNLOOV DUH LPSRUWDQW DV \RX ZLOO OLDLVH ZLWK FOLHQWV TXDQWLWDWLYH GHYHORSHUV RI WKH ÂżUP DQG SURYLGH OHDGHUVKLS GXULQJ LQIUDVWUXFWXUH GHYHORSPHQW <RX ZLOO EH GHDOLQJ ZLWK D GLYHUVLÂżHG SRUWIROLR RI OLIH DQG QRQ OLIH ULVNV DQG \RX LGHDOO\ ZLOO EH D TXDOLÂżHG DFWXDU\ ZLWK SULFLQJ ULVN H[SHULHQFH HLWKHU IURP D /OR\GÂśV V\QGLFDWH RU DQ ,/6 IXQG ([SHULHQFH RI 1DW&DW ULVN models would be an advantage. This role offers the real chance of joining an established business in a fast developing team.

Contact phu.ngoc@ipsgroup.co.uk

Investment Opportunities for Pensions Actuaries â&#x20AC;&#x201C; all levels - London Â&#x2026; Â&#x2026; %HQHÂżWV 7KLV IDVW JURZLQJ LQGHSHQGHQW LQYHVWPHQW FRQVXOWDQF\ DQG ÂżGXFLDU\ PDQDJHU LV KLULQJ DW DOO OHYHOV GXH WR VXUJLQJ GHPDQG 7KLV LV DQ increasingly rare opportunity to transfer from pensions to investment consulting as our client is more interested in technical aptitude and FOLHQW VNLOOV UDWKHU WKDQ LQYHVWPHQW H[SHUWLVH ZKLFK WKH\ FDQ WHDFK 7KH ÂżUP LV DOVR UHFUXLWLQJ IRU VSHFLDOLVW '& LQYHVWPHQW UROHV 7KH ÂżUP KDV DQ HQWUHSUHQHXULDO LQYHQWLYH FXOWXUH WKDW RIIHUV HDUO\ UHVSRQVLELOLW\ DQG EURDGHU H[SRVXUH WKDQ PD\ EH IRXQG LQ VRPH RI WKH ODUJHU ÂżUPV )XWXUH SURRI \RXU FDUHHU WKHUH PD\ QRW DOZD\V EH '% OLDELOLWLHV WR GULYH LQYHVWPHQWV EXW WKHUH ZLOO DOZD\V EH PRQH\ WR LQYHVW Contact david.higgo@ipsgroup.co.uk

In-House Pensions Operations Specialist - London &RPSHWLWLYH 6DODU\ %RQXV %HQHÂżWV 3DFNDJH 7KLV )76( SHQVLRQ VFKHPH LV ORRNLQJ IRU D SURMHFWV DFWXDU\ ZLWK XS WR \HDUV SRVW TXDOLÂżFDWLRQ H[SHULHQFH WR ZRUN ZLWKLQ the operational management team. He/she will work closely with the TPA on specialist projects and monitor the performance and effectiveness of service delivery. He/she will also be involved in projects managing corporate risks and governance, legal and regulatory changes and interface with the sponsor on operational issues. Candidates will have extensive projects experience either from a consulting environment advising both trustee and corporate clients of medium and large schemes or from another in-house scheme. They will have strong communication and presentational skills and enjoy working in a demanding but rewarding team environment.

Contact anthony.chitnis@ipsgroup.co.uk

Actuarial Analyst - London $WWUDFWLYH 6DODU\ %RQXV %HQHÂżWV 2XU FOLHQW D JHQHUDO LQVXUHU LV ORRNLQJ WR KLUH D 6HQLRU $FWXDULDO 6WXGHQW IRU WKHLU DFWXDULDO WHDP 'HSHQGLQJ RQ SULRU H[SHULHQFH WKH DQDO\VW ZLOO EH LQYROYHG LQ UHVHUYLQJ SULFLQJ DQG RU FDSLWDO PRGHOOLQJ 7KH LGHDO FDQGLGDWH LV D SDUW TXDOLÂżHG DFWXDU\ ZLWK H[SHULHQFH LQ WKH /OR\GÂśV 0DUNHW DQG ZLOO KDYH PDGH JRRG SURJUHVV WKURXJK WKH DFWXDULDO H[DPV *RRG FRPPXQLFDWLRQ DQG SURJUDPPLQJ VNLOOV would be advantageous.

Contact phu.ngoc@ipsgroup.co.uk /RQGRQ 2IÂżFH ,36 *URXS %HYLV 0DUNV +RXVH %HYLV 0DUNV /RQGRQ (& $ -% 7HOHSKRQH (PDLO DFWXDULDO#LSVJURXS FR XN

Recruitment Apr15.indd 41

April 2015 â&#x20AC;˘ THE ACTUARY 41 www.theactuary.com

24/03/2015 10:49

Appointments

CRITICAL RECRUITMENT NEEDS? PUT FENCHURCH TO WORK Backed by practising actuaries, we’re the true General Insurance recruitment specialists.

OUR EXPERIENCE, YOUR ASSET

RESERVING ACTUARY

PRICING ACTUARY

SENIOR PRICING

Global Insurance and Reinsurance group DUH ORRNLQJ IRU D QHDUO\ WR QHZO\ TXDOLþHG Reserving Actuary, reporting directly to the Head of Reserving. Ideally you’ll have at least 3 years’ experience and prior Lloyd’s Reserving experience including Technical Provisions.

$Q LQVXUHU VHHNV D QHZO\ TXDOLþHG 3ULFLQJ Actuary with Lloyd’s experience to support all lines of insurance written. Pricing for individual large accounts, working closely with underwriters to ensure proper use of the pricing models. Strong IT skills required.

An excellent opportunity has arisen for a Senior Pricing Actuary. You will provide high quality, cost effective actuarial services to customers as part of an actuarial team so as to contribute to the achievement of team objectives. To act as technical supervisor for more junior actuarial staff.

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London £60,000 - £85,000 PERMANENT

London £75,000 - £90,000 PERMANENT

London Up to £120,000 PERMANENT

WWW.FENASSOCIATES.COM

INFO@FENASSOCIATES.COM | +44 (0)20 7256 9777

Chief Actuary London – Life Insurance

Seni Se nio ni or Actuarial Ana n lyst Lo ond ndon on o n

A New Chief Actuary required to help support the company’s ambiƟous growth plans and in its transiƟon to Solvency 2. The jobholder will be responsible for managing and growing the actuarial process and leading iniƟaƟves and strategy in pricing, capital analysis and Įnancial planning.

Our u clien en nt is is a sm mall al co onsu su ulta ltanc ncyy wo n worki rki kiing ngg mai m nly ma nl within in n tth he Lloy o d’s ’s/Lo ’s /Londo /Lo ndo don mark don a et et. t Th T ey are a loo okin k g for ki or a seni nior An ni Ana nalys na l t to work lys work on n pr prici icing ngg prro rojec je tss wit with h some capit pital pital pit a an and n rese seervin vingg duƟ Ɵes es a o. als o The he id ideal al caandi didat d tee will pr dat p ese esent nt themse nt them mse se selve lvess lve an th and thee comp mpany any nyy weell, llll as weell as as hav avve tthe he c mu com co mun u iicaaƟon un Ɵo skillllss to bee abl ab e to to eembe mbeed theemse mselve elve lves succ uc es ess sssfully fulllyy wit w hin in n th heir eir cl clien ent’s t’s aact ctuarial teams ms.. TThey ms hey wi he willlll alsso be be prog ogres ressin re res sii g wellll sing sin with wit h exam exam xamss or willlll be be ne newly wly qu quali aliĮ ali Įed. d.

Wor orkin or k g with the Director off C ki Capi apital t Managgem emeentt and advissing ngg the exec x uƟ uƟve leadership team to idenƟ nƟ Ɵfy fy, develop fy p aand nd n implement acƟons to opƟ pƟ Ɵmi m see the Gr Gro oup’ss capital now and in th the future.

Th The he Capit he pital pit aM Man nageem men eent depa ep rtment en ensures the Group mai maint ma ntainss a rrob nta nt o ust us and adeq dequat u e capital possiƟon posiƟ n by developin pingg and pin n mainta tain ining tools to asssess, essss, monitor, and ess es nd man nd manage ag the capital posiƟon of the Gr Group.

For a con co onĮde on denƟ enƟal en al diiscu scussi sssion on ple lease ase contac con act ct Vict cttori or a Cruiicks ckk hank han an on 0 02 207 62 207 621 375 58 / v.c v crui v. u cks ui k hank@d kshan hank@d han @d darw arwinr inrhod h es. hod es.com es com om m

For a con Fo nĮdenƟ ĮdenƟ e Ɵal al di d scussion on n pl ple p lease contact Adam Ada m Goodwin win win n on 0207 7 62 621 3775 / a.ggoo a.g ood o win@da @da @ daarwi rrwi winrh n odes.c nr .com o

This is an ideal opportunity for an ambiƟous senior actuary looking to undertake their Įrst Chief Actuary posiƟon.

For a conĮdenƟal discussion please contact Adam Goodwin on 0207 621 3775 / a.goodwin@darwinrhodes.com

He ead of Ca Capi pita pi tall SSo ta oluƟons Lond Lo nd don o – Exp per e ie enc nced c Life QualiĮed d A tuary Ac

DARWIN RHODES QUIZ A carpenter has a solid cube of wood, each edge of which is 12cm long. He wishes to cut the block in two, in such a way that the new face on each of the two pieces can then be trimmed to a square of maximum possible size.

Where should he make the cut?

For your chance to win a prize please email your answers to London@darwinrhodes.com

42

THE ACTUARY • April 2015 www.theactuary.com

Recruitment Apr15.indd 42

24/03/2015 10:49

www.theactuaryjobs.com

Life Actuarial Perm ή͜​͜ ȋ͘Ȍ ͚͘͟ ͛​͛͟ ͠​͙͘͠ ̻ Ǥ Ǥ

Life Actuarial Interim ή͜​͜ ȋ͘Ȍ ͚͘͟ ͛​͛͟ ͠​͘͠͞ ̻ Ǥ Ǥ

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Life insurance roles Pricing Actuary

£70 - £90k Basic, Greater London

Financial Reporting Actuary £100 - £130k Basic, London

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Ǥ Ǥ ǣ ̻ Ǥ Ǥ ǣ ͙͛͘͘

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Ƥ ǡ Ǥ Ǥ ǣ ̻ Ǥ Ǥ ǣ ͙͛͘͘

Market Risk Analyst

Solvency II Pillar III Actuary

£25 - £35k Basic, London

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£450 / day, 6 months, North East England

Product Governance Actuary

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͚͛͘͘

Pricing Contractors

£800 - £1000 / day, 6 months London

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Reserving Contractor

£850 - £1000 / day, 6 months, London

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£400 - £800 / day,6 months, Southampton

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posure to the Pillar III workstream. ǣ ̻ Ǥ Ǥ ǣ

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£600 - £900 / day, 6 months, Bristol

Prophet Developer

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͛͛͘͘

£700 - £900 / day, 6 months, London

Capital Contractors

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Solvency II Actuaries

£750 - £1200 / day, 6 months, London

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Financial Risk Manager

£90 - £120k Basic, London

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Ƥ Ǥ Ƥ commercial interest. ǣ ̻ Ǥ Ǥ ǣ ͚͛͘͘

Syndicate Risk Manager

£55 - £65k Basic, London

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April 2015 • THE ACTUARY 43 www.theactuary.com

+44 (0) 207 337 8800 Recruitment Apr15.indd 43

www.hfg.co.uk 24/03/2015 10:49

Appointments

London

Head of Transaction Modelling London c. £120,000

Zurich

Hong Kong

Singapore

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ή͜​͜ ȋ͘Ȍ ͚͘͟ ͛​͛͟ ͠​͛͠͝ ̻ Ǥ Ǥ

Asia roles Risk & Capital Actuary

HKD $600k- $1.2m plus bonus, Hong Kong

Ƥ Ǥ ǡ Ǥ ǡ ǡ ǡ Ǥ ǣ ̻ Ǥ Ǥ ǣ ͙͛͘͘

Chief Actuary

44

HKD $1.5m - $2m, Hong Kong

Assistant Manager, Risk Analytics

HKD $540,000 base salary + bonus, Hong Kong

Ȁ Ƥ Ƥ ǡ ǡ Ǥ

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Regional Capital Actuary

HKD $900,000 - $1.2m, Hong Kong

Ǥ Ǥ ǡ Ǥ ǣ ̻ Ǥ Ǥ ǣ ͙͛͘͘

ǡ Ǥ ǡ Ǥ Ǧ ƥ Ǥ ǣ ̻ Ǥ Ǥ ǣ ͚͛͘͘

Corporate Actuary

Senior Manager / Director

HKD $1.2m - $1.4m + bonus, Hong Kong

India salary competitive, India

Ǧ Ǧ Ǥ ȋ Ȍǡ

Ǥ Ǥ ǣ ̻ Ǥ Ǥ ǣ ͙͛͘͘

Ƥ Ǧ Ǥ Ǥ

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EA Licence Number: 14C7034

www.hfg.com.sg | +65 6829 7153

THE ACTUARY • April 2015 www.theactuary.com

Recruitment Apr15.indd 44

24/03/2015 10:49

www.theactuaryjobs.com

Q&A with Mark Laidlaw, Group Chief Actuary at LV= Q What is so special about being an Actuary at LV=?

A

Q How do you provide and support career development for your Actuarial teams?

The interesting thing about working at LV= as an actuary is we are one of the few companies where you can do every piece of actuarial work. You can work in GI, Life or Investments, all in just one location.

Q More specifically, why be an Actuary at LV= in Bournemouth?

A

A

I sponsor the Actuarial Academy, which supports continuous professional development (CPD). We think it’s really important to keep on developing and invest a significant amount in technical training, developing advanced ‘softer skills’ and commercial awareness, across our Actuarial function.

If you’d like to talk through a career at LV=, feel free to email chelsea.bain@LV.com.

All of our key business areas are based here in Bournemouth and there’s a great work/life balance. We have beaches, the New Forest and outstanding schools.

Find out more about what we can offer you and your career, visit jobs.lv.com/actuarial.

HEAD OF INVESTMENT RESEARCH London £ Excellent

ACTUARIAL ANALYST Attractive salary plus benefits – Based in London MPS is the world’s leading protection organisation for doctors, dentists and healthcare professionals. We protect and support the professional interests of more than 290,000 members around the world.

Our in-house experts assist with the wide range of legal and ethical problems that arise from professional practice. This includes clinical negligence claims, complaints, medical council inquiries, legal and ethical dilemmas, disciplinary procedures, inquests and fatal accident inquiries.

As a mutual, not-for-profit professional organization, MPS is owned by – and accountable to – its members.

We are recruiting for an Actuarial Analyst to support the Company Actuary in producing the actuarial review of subscriptions for all major membership groups on a bi-annual basis and developing and integrating the data warehouse into this process as well as maintaining the MPS financial model.

Applicants must have a numerical degree or equivalent experience, have some actuarial and/or CII exam experience and ideally have experience of actuarial analysis of general insurance long-tail liability classes.

Applicants ideally should have experience of actuarial report writing, pricing and reserving for these classes of business and experience of financial modelling Benefits include a defined contribution pension scheme, 25 days paid holiday in addition to public holidays, private medical insurance and a health care cash plan.

If you think you are right for the role, tell us why in a covering letter and send it with your full CV to Samantha Bromige, HR Business Partner, Medical Protection Society, Victoria House, 2 Victoria Place, Leeds, LS11 5AE or Hr@medicalprotection.org.

For further details please visit our website at The closing date for this www.medicalprotection.org/uk/careers. role is 16 April 2015 MPS is an equal opportunities employer.

To find out more about us, please visit us at www.medicalprotection.org

In this newly created senior role you’ll be responsible for the delivery and development of the investment research, including the manager research programme. You’ll provide leadership across the business and be involved in a wide range of projects from: • Leading investment manager research, formulating views on managers and putting forward appropriate material to support views.

• Assessing new asset classes and product offerings and identifying suitable entry and exit criteria.

• Maintaining up-to-date knowledge of new product developments and regulations that may impact portfolios.

• Undertaking performance and risk assessments of portfolios.

• Researching and evaluating new investment ideas, whilst demonstrating commercial awareness.

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

1756 03/15

April 2015 • THE ACTUARY 45 www.theactuary.com

Recruitment Apr15.indd 45

24/03/2015 10:49

Appointments N ON - LI FE RI S K

"$56"3*"- 1045 3&$36*5&3 0' 5)& :&"3 t t

We are delighted to welcome Jo and Jan to Star. They both bring a wealth of experience in actuarial recruitment, and are a great ďŹ t for our award-winning team.

Joanne Young, Operations Director

Jo Frankham ASSOCIATE DIRECTOR Jo has over 13 years of experience recruiting actuaries on both a permanent and contract basis, whilst leading Life and Interim teams. Jo combines outstanding relationship-building skills with credibility, reliability and strong industry knowledge and has a history of being a trusted and preferred provider for many leading insurance companies.

M: +44 (0)7950 419 115 E: jo.frankham@staractuarial.com L: uk.linkedin.com/in/jofrankham

Jan Sparks FIA SENIOR CONSULTANT Jan is a qualified actuary and recruiter with 27 years of experience in the actuarial world. She has worked with clients and candidates from all actuarial sectors and has particular strength in the life, health and longevity markets. Jan has considerable mentoring and coaching skills and she enjoys bringing these into her recruitment work.

M: +44 (0)7477 757 151 E: jan.sparks@staractuarial.com L: uk.linkedin.com/in/jansparks

VISIT WWW.STARACTUARIAL.COM NOW TO SEARCH MORE THAN 46

THE ACTUARY â&#x20AC;˘ April 2015 www.theactuary.com

Recruitment Apr15.indd 46

200

CURRENT OPEN VACANCIES

24/03/2015 10:50

LI FE www.theactuaryjobs.com

RI SK PENSI ONS I NVESTM ENT

NUMBER OF YEARS EXPERIENCE WITHIN RECRUITMENT & ACTUARIAL

Antony Buxton FIA MANAGING DIRECTOR M +44 7766 414 560 E antony.buxton@staractuarial.com L uk.linkedin.com/in/antonybuxton

Louis Manson MANAGING DIRECTOR M +44 7595 023 983 E louis.manson@staractuarial.com L uk.linkedin.com/in/louismanson

Joanne O’Connor OPERATIONS DIRECTOR M +44 7739 345 946 E joanne.oconnor@staractuarial.com L uk.linkedin.com/in/joanneoconnor3

Irene Paterson FFA PARTNER M +44 7545 424 206 E irene.paterson@staractuarial.com L uk.linkedin.com/in/irenepaterson

Lance Randles MBA ASSOCIATE DIRECTOR M +44 7889 007 861 E lance.randles@staractuarial.com L uk.linkedin.com/in/lancerandles

Paul Cook ASSOCIATE DIRECTOR M +44 7740 285 139 E paul.cook@staractuarial.com L uk.linkedin.com/in/paulcook1

Peter Baker ASSOCIATE DIRECTOR M +44 7860 602 586 E peter.baker@staractuarial.com L uk.linkedin.com/in/petebaker1

Clare Roberts SENIOR CONSULTANT M +44 7714 490 922 E clare.roberts@staractuarial.com L uk.linkedin.com/in/clareroberts

Recruitment Apr15.indd 47

16 15 14 42 10 10 10 18

April 2015 • THE ACTUARY 47 www.theactuary.com

24/03/2015 10:50

Appointments N ON - LI FE RI S K

N O N - L I F E L IFE R IS K P E N S IO NS I NVESTM ENT NON-LIFE BANKING ACTUARY

NON-LIFE ANALYTICS LEADER

£ very attractive package

REINSURANCE PRICING ACTUARY

£ excellent + bonus + benefits

NON-LIFE LONDON

STAR2299

NON-LIFE LONDON

up to £120k + bonus + benefits STAR2253

NON-LIFE LONDON

STAR2358

Our client is seeking a modelling expert with deep technical knowledge, and non-life reinsurance pricing experience. Catastrophe risk experience would be an advantage.

Our client is looking for a qualified actuary with a strong track record in the non-life industry. In this highly visible role you will lead a team of insurance experts, collaborating and building relationships with multiple stakeholders.

Our client seeks a non-life reinsurance pricing actuary with specialty lines pricing experience.

The successful candidate will be a creative thinker with strong communication skills who can work well independently and as part of a team.

HEAD OF PRICING

TECHNICAL PRICING MANAGER

RESERVE THIS

£ excellent package

up to £100k + bonus + benefits

up to £100k + bonus + benefits

NON-LIFE SOUTH EAST

STAR2227

NON-LIFE SOUTH EAST

STAR2306

NON-LIFE LONDON

STAR2405

We have an excellent opportunity for a qualified non-life actuary to take a major role within the innovative pricing department of a leading insurance group. Contact us now for more information.

Non-life insurer seeks a Technical Pricing Manager to lead a team in defining and developing its pricing strategy. Working alongside the Head of Pricing you will deliver risk models across multiple lines of business.

Consider this opportunity to join the London team of an international insurance business as a reserving actuary. Motor experience would be an advantage.

ACTUARIAL MANAGER - NON-LIFE

CAPITALISE NOW!

RESERVING ACTUARY

£ excellent + bonus + benefits

up to £100k + bonus + benefits

£ excellent + bonus + benefits

NON-LIFE LONDON

STAR2338

NON-LIFE LONDON

STAR2404

NON-LIFE MIDLANDS

STAR2188

Global professional services firm is seeking a talented non-life actuary to provide a commercial perspective and practical solutions to clients for optimisation and streamlining of their internal controls, processes and models.

Our client is looking for a non-life actuary with capital experience to strengthen its team.

Opportunities exist for candidates seeking to mix capital with pricing or reserving.

An excellent opportunity for a qualified non-life actuary to take the lead on a range of reserving projects for a leading GI business. You will require strong technical, analytical, communication and influencing skills.

THE PRICE IS RIGHT

PRICING & RESERVING ACTUARY

INNOVATION AND PRICING IN PARIS

up to £100k + bonus + benefits

up to £80k + bonus + benefits

£ depends on experience

NON-LIFE LONDON

STAR2403

NON-LIFE SOUTH EAST

STAR2187

NON-LIFE PARIS

STAR2411

Global insurer seeks a non-life pricing actuary to join its London team. Motor insurance experience would be an advantage. Strong part-qualified candidates with relevant experience also considered.

High-calibre actuary sought to join a global leader in the non-life market. You will lead a team in the provision of technical pricing and reserving advice across the home and motor portfolio.

Major global insurer seeks pricing analysts and actuaries to join its team in Paris. The successful candidate will have excellent knowledge of statistical analysis and strong computer skills, along with experience working with large datasets.

PRICE UP YOUR NON-LIFE

CAPITAL ANALYST - LONDON MARKET

CAPITAL ANALYST - NON-LIFE

£ depends on experience

up to £54k plus bonus and benefits

£ excellent + bonus + benefits

STAR2392

NON-LIFE SOUTH EAST

Leading insurance group seeks part-qualified non-life pricing actuaries to join its Personal or Commercial Lines teams. There are excellent development opportunities and successful candidates will add value from the start.

STAR2380

NON-LIFE LONDON

NON-LIFE MIDLANDS

STAR2427

Leading international insurance group has an exciting opportunity for a part-qualified non-life actuary to contribute to the development and enhancement of capital models using stochastic and DFA modelling techniques.

Leading insurer seeks a part-qualified non-life actuary to support the calculation of its capital requirement, the development and implementation of new modelling techniques and the recommendation of reinsurance programmes.

SYSTEMS ACTUARY

SOLVENCY II ACTUARY - LIFE

LIFE REPORTING

£ excellent + bonus + benefits

£ excellent + bonus + benefits

£ excellent + bonus + benefits

STARVACANCIES LIFE LONDON

STAR2203

Our client would like to hire a qualified life actuary with Moses development experience and a proven track record in managing teams.

Excellent analytical, technical and IT skills are required.

48

LIFE LONDON

STAR2251

Leading client seeks qualified life actuary to take up a key role within its Solvency II workstream.

The successful candidate will review and interpret the Solvency II Directive and produce valuation modelling methodology papers.

LIFE LONDON

STAR2257

Major life insurance company seeks a qualified life actuary to provide support in the delivery of reporting requirements and risk capital metrics, including relevant aspects of business planning and actuarial management information.

Antony Buxton FIA

Louis Manson Lou

Joanne Young Joa

Irene Paterson FFA

Lance Randles MBA Lanc

MANAGING DIRECTOR MANAGI

MANAGING DIRECTOR MAN

OPERATIONS DIRECTOR OPE R

PARTNER PARTN

ASSOCIATE DIRECTOR ASSOC

THE ACTUARY • April 2015 www.theactuary.com M +44 7766 414 560 E antony.buxton@staractuarial.com

Recruitment Apr15.indd 48

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

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

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

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

24/03/2015 10:50

LI FE www.theactuaryjobs.com

RI SK PENSI ONS I NVESTM ENT "$56"3*"- 1045 3&$36*5&3 0' 5)& :&"3 t t HEAD OF ACTUARIAL - LIFE

up to £110k + bonus + benefits

up to £130k + bonus + benefits

LIFE LONDON

STAR2397

FINANCIAL RISK MANAGER - LIFE up to £90k + bonus + benefits

LIFE SOUTH EAST

STAR2082

LIFE RISK LONDON/SOUTH EAST

STAR2373

Major insurer seeks a qualified life actuary to shape the future of the firm's capital position.

Leading the assessment and implementation of strategic and tactical initiatives, you will have a strong knowledge of Solvency II.

Leading insurer seeks qualified actuary with proven management capability. You will have excellent communication skills, the ability to work effectively with senior management and a strong team orientation.

Leading insurer seeks qualified life actuary to lead the successful implementation of its ERM Framework. You will have strong communication skills and an excellent understanding of risk and capital management.

LONGEVITY ACTUARY - LIFE

RISK SPECIALIST - LIFE COMPANY

CAPITAL ACTUARY - LIFE

£ excellent + bonus + benefits

£ depends on experience + bonus + benefits

£ excellent + bonus + benefits

LIFE RISK EDINBURGH

LIFE LONDON

LIFE SOUTH WEST

STAR2425

STAR2337

STAR2359

Major global insurer seeks a qualified life actuary to lead, develop and manage its longevity proposition. You will have commercial acumen and experience pricing corporate longevity risk transactions.

Leading financial services group has an exciting opportunity for an actuarial specialist to take up a Senior Management role. Solvency II experience is desirable. Contact us now for more information regarding this challenging role.

Major life company seeks a qualified actuary with strong technical skills to join its capital team. You will develop and maintain tools to assess, monitor and manage the capital position of the group.

DEMOGRAPHIC RISK ACTUARY

PRICE OPTIMISATION - LIFE

LIFE ACTUARIAL OPPORTUNITIES

up to £70k + bonus + benefits

up to £70k + bonus + benefits

£ excellent + bonus + benefits

LIFE LONDON

STAR2381

LIFE SCOTLAND

STAR2406

LIFE NATIONWIDE

STAR2199

Our client has an exciting opportunity for a qualified life actuary to oversee the development of demographic risk assumptions, ensuring that they are accurate, relevant and innovative.

Take this exciting opportunity to lead the pricing transformation project of a major life insurance company, combining your price optimisation expertise with the team's experience in the protection market.

Leading professional services company has a number of exciting opportunities for life actuaries of all levels to join its offices across the UK. Contact us now for more information regarding these fantastic roles.

MODELLING & SYSTEMS

PLANNING & FINANCIAL SOLUTIONS

PART-QUALIFIED PENSIONS

£ excellent + bonus + benefits

£ excellent + bonus + benefits

£ excellent + bonus + benefits

LIFE SOUTH COAST

STAR2323

LIFE SOUTH COAST

STAR2321

PENSIONS NATIONWIDE

STAR2413

Our client seeks talented actuarial analysts to deliver recommendations and solutions to business problems and identify improvements to new systems and procedures.

Leading insurer has a number of exciting opportunities for part-qualified actuaries to take responsibility for establishing and then maintaining the systems used within the actuarial team.

Leading consultancy seeks part-qualified pensions actuaries to join its growing practice in multiple different locations across the UK. These are fantastic opportunities to take your career to the next level.

INVESTMENT RISK SOLUTIONS

HIGH-FLYING PENSIONS

INVESTMENT IN INSURANCE

£ excellent + bonus + benefits

£ excellent + bonus + benefits

£ depends on experience + bonus + benefits

INVESTMENT LONDON

STAR2185

Global consultancy seeks a high-calibre qualified actuary with investment consulting experience to join its market leading team.

Please contact us for more information on this role.

PENSIONS MIDLANDS

STAR2089

Leading financial services firm has a number of excellent opportunities for high-calibre part-qualified and qualified actuaries to join its growing team.

LIFE INVESTMENT LONDON

STAR2367

A superb career opportunity for a professional with investment experience gained in an insurance context. Together with a leading team, you will build propositions, develop the business pipeline, and deliver on projects.

Star Actuarial Futures Ltd is an employment agency and employment business

HEAD OF CAPITAL SOLUTIONS - LIFE

www.staractuarial.com PENSIONS LEADERSHIP - EXCLUSIVE

SUPERSTAR PENSIONS

PARTNER LEVEL INVESTMENT

up to £250k package

£ excellent career path

£ to attract the best

PENSIONS LONDON

STAR2369

Leading pensions consultancy seeks accomplished pensions actuary with strong client and project management skills to take up a leadership role within its growing business.

PENSIONS LONDON

STAR2355

Market-leading pensions consultancy seeks exceptional part-qualified and qualified actuaries to join its growing team delivering cutting-edge solutions to flagship clients.

Please contact us for more details.

INVESTMENT LOCATION UPON APPLICATION STAR2428 Leading client seeks investment expert to take up leadership role within its investment practice. Please contact us for further information on this career-defining opportunity.

Peter B Baker

Paul Coo Cook

Jo Frankham F

Clare Roberts Cla

Jan n Sparks FIA

ASSOCIATE DIRECTOR ASSOCIA

ASSOCIATE DIRECTOR

ASSOCIATE DIRECTOR ASSO

SENIOR CONSULTANT SE

SENIOR CONSULTANT SEN

April 2015 • THE ACTUARY 49 www.theactuary.com M +44 7860 602 586 E peter.baker@staractuarial.com

Recruitment Apr15.indd 49

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

M +44 7950 419 115 E jo.frankham@staractuarial.com

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

M +44 7477 757 151 E jan.sparks@staractuarial.com

24/03/2015 10:50

Appointments GENERAL INSURANCE - UK Capital Actuary - Standard Formula x 2 London Paul Francis Up to £120,000 + Bonus + Benefits

London Market Pricing Actuary Surrey Robert Gormley £90,000 - £120,000 + Package

My client is looking for commercially-minded actuaries familiar with SII / EIOPA guidelines, especially with regard to standard formula.

You need to be able to work independently between various nonactuarial stakeholders and manage the impact to the business. This is a very visible and rewarding commercial opportunity.

Leading international insurer seeks experienced Pricing Actuary as deputy to head of department, within a highly commercial London market pricing team. Ability to manage key relationships with senior internal/external stakeholders and customers. You will have exposure to all London market classes underwritten.

G.I. Capital Actuary Sarah Robins

Reserving Actuary Rachel Kelly

South West £80,000 + Bonus + Benefits

London £80,000 + Bonus + Benefits

My client is looking for a qualified actuary to join their capital department. You will be responsible for model development, model testing and model use. You will also contribute towards the IMAP. You must have a record of success in capital modelling and you must be proficient in Igloo.

My client is looking for a nearly/newly qualified actuary to be responsible for the full reserving cycle for one of their syndicates.

The role has excellent scope for business-wide interaction and senior management exposure. London market experience required.

Mixed Actuarial Opportunities London Ross Anderson £60,000 + Bonus + Benefits

Capital Actuary Ross Anderson

A number of prestigious London market clients are looking to add ambitious actuarial analysts to their successful teams. The businesses cover both insurance and reinsurance and the positions will primarily offer London market pricing and capital experience.

A desire to learn and develop is essential, though previous pricing experience is not.

Exclusive opportunity for a Capital Actuary to join a market leading London market insurer. Capital and risk management experience would be preferred and Igloo exposure advantageous. My client is keen to recruit somebody looking to develop both technical and management skills with aspirations to mentor junior members of the team. Part qualified to nearly qualified.

London £60,000 + Bonus + Benefits

CONTRACTS - GENERAL INSURANCE - UK Solvency II Consultants Elise Ogden

UK Wide £800 - £1,500/day

A number of our clients are looking for contractors with expert Solvency II knowledge. We are specifically looking for experience of internal model approval, technical provisions and establishing new reporting processes. Please call me to discuss.

Model Developer Elise Ogden

London / South East £800 - £1,200/day

I have a number of opportunities looking for strong model developers. Candidates will ideally have a background in ReMetrica but this is not essential. You must have previously built models from scratch and have knowledge of capital and reserving.

LIFE INSURANCE - UK Part Qualified to Chief Exec Market Leading Appointments Clare Nash

UK Wide £30,000 - £200,000

The life market is incredibly buoyant and is set to become more so throughout 2015. We have over 100 live actuarial positions across the UK, many exclusive to OJA. For a confidential discussion about the market and your career, please do make contact.

ALM Actuary Richard Howard

London £75,000 - £90,000 + Bonus + Benefits

Head of Models Clare Nash

South £90,000 + Benefits

Outstanding position within a global insurer. My client seeks to appoint a senior figure to play a leading role in industry leading model development, thought leadership and growth of the team.

Entrepreneurial position with well-defined career development.

SIPP Consultant Natalie Lightfoot

South East / Flexible £80,000 + Package

Excellent opportunity to join the ALM team of this leading organisation in London. You will have broad experience of related risk and capital work and a deep understanding of financial instruments such as derivatives.

Exclusive: My client is looking for a consulting pension expert to build a retirement proposition for their UK business. Candidates must have a deep understanding of the SIPP providers and previous pension consulting experience.

Annuities Pricing Actuary Hugo Chambers

London / Edinburgh Up to £80,000 + Package

Qualified Actuary - Risk Scotland Richard Howard £65,000 - £75,000 + Bonus + Benfits

An excellent opportunity to join a market-leading business in Central London or Edinburgh. My client is seeking a qualified actuary with a strong commercial background to support their continued growth.

A strong technical background within Annuities Pricing is essential, along with first-rate communication skills.

Exciting requirement for a Qualified Actuary to join a newly created team within this risk function. The role will support the team that provides oversight, challenge and support to the finance function and the wider business.

CONTRACTS - LIFE INSURANCE - UK Solvency II Actuaries Benjamin Moses

50

London £800 - £1,000/day

Several of my clients are currently looking to bolster their Solvency II teams in order to meet the work load demands in 2015 & 2016.

Qualified actuaries with extensive capital, risk and regulation knowledge should get in touch.

THE ACTUARY • April 2015 www.theactuary.com

Recruitment Apr15.indd 50

Actuarial Reporting Manager Ani Pannell

Bristol, UK £550 - £710/day

My client requires an experienced actuarial manager, with IFRS exposure to join the team for a long-term contract. The successful candidate will have experience working in a Sarbanes-Oxley environment, ideally will be qualified, and will have worked extensively in life insurance.

24/03/2015 10:50

www.theactuaryjobs.com General Insurance – UK

ASIA Regional Strategic Actuary - Asia Pacific Rhoda Rivera

Hong Kong Up to HKD2.5 million

Leading life insurer seeks a highly experienced senior actuary to join their regional senior management team. You will be qualified, with 15+ years’ experience. You must have commercial experience in product strategy, capital management and business propositions.

Head of Product Innovation Hamza Mush

Singapore Up to HKD2.0 million

Multi-award winning global insurance business rapidly expanding across the APAC region is seeking a top-percentile commercial actuary with a creative mindset and the ability to interface with multiple senior stakeholders and distribution channels.

Hong Kong Up to HKD1.6 million

Head of Products Philip Chau

Unique commercial products role within a leading direct insurer. Whilst reporting directly into the CMO, you will be leading a large team of qualified actuaries to develop high impact products to the market across the APAC region. You must be a qualified actuary with a minimum of 10 years’ experience in the products side.

Asia Solvency II Lead – Mandarin Speaker Rhoda Rivera

Paul Francis

0207 649 9469

Sarah Robins

0207 310 8552

Rachel Kelly

0207 310 8579

Ross Anderson

0207 649 9357

Robert Gormley

0207 310 8546

Contracts - G.I. - UK Elise Ogden

0207 649 9355

Life Insurance - UK Clare Nash

0207 649 9350

Richard Howard

0207 649 9356

Natalie Lightfoot

0207 310 8547

Hugo Chambers

0207 310 8642

Contracts - Life Insurance - UK/Europe Hong Kong Up to HKD1.6 million

Benjamin Moses

0207 310 8793

Top global life insurer seeks a qualified actuary to lead their regional Solvency II reporting strategy. Candidates must have at least 10 years’ experience with strong SII background.

MUST have native fluency in Chinese language (speaking and writing).

Ani Pannell

0207 310 8572

Dermott Bradley

+353 144 75159

Head of Special Projects Gary Rushton

Asia

Hong Kong Up to HKD1.5 million

One of the largest composite insurers in Asia are currently looking for a financial actuary who can lead the oversight of the IFRS 4 (Phase 2) implementation across the APAC region. Strong technical and business acumen a must.

Reserving - Assistant Manager Wynlim Wong

Hong Kong Up to £60,000

A leading general insurer in Hong Kong is looking for a senior reserving actuary to join them. The role involves managing a team of two juniors and assistance in a spectrum of projects. Cantonese is necessary and a minimum of four years’ experience.

Gary Rushton

+852 5804 9223

Toby Weston

+852 5804 9042

Philip Chau

+852 5804 9287

Hamza Mush

+852 5804 9048

Rhoda Rivera

+852 5804 9225

Wynlim Wong

+852 5804 9090

France

EUROPE Reinsurance Director Emérique Opou

Paris €120,000 + Bonus

Emérique Opou

+33 1 76 77 46 30

Agathe Ibazizen

+33 1 76 77 46 31

Audrey Arrighi

+33 1 76 77 46 02

Looking for a reinsurance expert to join an international consulting firm as director.

You will help develop their reinsurance operations and will have a central role in the consultancy. You will need to be able to work with actuaries and have experience in risk.

Ireland

Life - Product & Pricing Actuary Jack Lynch

Patrick McMahon

+353 1 437 0625

Jack Lynch

+353 1 695 0001

Dublin €100,000 - €120,000

Reporting to the VP actuary within our global life insurance client; you will be responsible for the product development and pricing activities in their EMEA business, ensuring that all related product and insurance risks are properly priced and monitored. Our client offer strong career progression and development.

Senior Pricing Analyst G.I. Niels van Nieuwkwerk

Den Bosch, Netherlands €60,000 - €90,000

My client is a leading car insurance direct writer, part of one of the largest international insurance groups. As a pricing analyst you will be responsible for an effective pricing strategy, development and continuous adjustments of tariffs.

Catastrophe Modeller Audrey Dadon

Zurich, Switzerland CHF120,000

EXCLUSIVE TO OJ: Experienced catastrophe modeller for dynamic reinsurer, all perils and world-wide, working directly with the global head of cat modelling. Must have experience with AIR, RMS and ideally three to five years in a similar role.

Capital Budgeting Manager Alessio Montaruli

Italy €€€Competitive + Bonus + Housing Benefits

Our client is searching for a senior actuary with capital allocation experience to lead an international team of analysts. You will be responsible for coordinating the solvency planning process at international level and monitoring the solvency position development vs. plan.

Senior Modelling Specialist Emina Biscevic

Dusseldorf, Germany €€€Competitive

You will be responsible for the aggregate management for the NatCat exposures and calculate the required solvency capital for the P&C catastrophe risk, including analysis and validation of results.

Recruitment Apr15.indd 51

Benelux Niels van Nieuwkerk

+31 20 29 000 33

Germany Emina Biscevic

+49 89 3803 8965

Erica Marriott

+49 89 2109 3339

Italy Alessio Montaruli

+39 02 3600 6810

Switzerland Audrey Dadon

+41 43 508 0444

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

General Contact Details:

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actuary@ojassociates.com

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Appointments www.the-arc.co.uk

The Actuarial Recruitment Company

A fresh approach

Senior Risk Actuary London

General Insurance £Significant

Pricing Actuary London

General Insurance Circa £130K

This developing London Market business is looking for a qualified

This role within a Lloyd’s managing agency will work directly with the

actuary to lead the actuarial and risk management functions. The ideal

underwriting team and be involved in pricing across a range of lines

candidate would have extensive experience in capital modelling,

of business. The scope of the work will include individual risk pricing,

Solvency II and reserving from a Lloyd’s or other London Market

pricing model development, rate monitoring, underwriting risk

background. Prospective candidates should be commercial and

assessment and input to the business planning. Pricing experience

strategic thinkers with excellent communication skills.

from a London Market background is essential as well as strong

Ref: ARC26280

interpersonal and managerial abilities. Ref: ARC26274

Reserving Actuary London

General Insurance Circa £80K

Consultant London

General Insurance £Depends on Experience

A nearly/newly qualified actuary or senior trainee is needed for this

This very different consulting role would allow an academically

reserving role working across all business lines for a major London

strong, motivated and entrepreneurial individual the opportunity

Market player. Candidates will be expected to have a number of

to work across pricing, capital, reserving as well as other varied

years of reserving experience, ideally from within a Lloyd’s or other

projects. Working within a small team of high calibre individuals this

London Market environment. Very good communication skills will be

role would allow far closer involvement with clients and the prospect

required as the roleholder will work with a number of areas of the

of providing a more value added service.

business including senior management. Ref: ARC26224

Ref: ARC25201

Call us anytime including evenings and weekends on 020 7717 9705 or email enquiries@the-arc.co.uk Andy Clark BSc FIA Roger Massey BSc MBA FIA

0781 333 7891 0781 398 9016

andy@the-arc.co.uk roger@the-arc.co.uk The Actuarial Recruitment Company is an employment agency

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