The Actuary International Supplement 2014 by Redactive Media Group

Foot on the ladder

Man with a plan

An overview of the Certified Actuarial Analyst qualification (CAA) as it continues to gain global interest

Students take on the world

Nick Salter, president of the Institute and Faculty of Actuaries, tells about his international focus

Students from many countries report on their study plans and how actuaries are viewed in their region

JULY 2014 theactuary.com

INTERNATIONAL SUPPLEMENT the magazine for the actuarial profession

Fantastic voyage

Expanding the horizons of the actuarial profession

February 2012 â&#x20AC;˘ THE ACTUARY 35

Opinion Editorial theactuary.com

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Whistlestop tour Kelvin Chamunorwa highlights the international appeal of actuarial skills and considers the expanding geographic reach of the profession According to Robert Peston, economics editor for BBC News, Arsenal’s Emirates football stadium in London could seat every actuary in the world. This is hardly scoop of the year, but it is a striking fact when I consider the wide geographic reach of our relatively small, but growing, profession. One of the furthest places from London, Wellington in New Zealand, is home to many actuaries and I recently found out about an actuary doing work in Ouagadougou, Burkina Faso. The buzz of the World Cup has been unavoidable, though unlike in 2010, it’s not because of the sound of the controversial vuvuzelas! It is fitting, therefore, that in this World Cup year, the articles in The Actuary this month cover topics in each continental region that is represented by the teams taking part in the tournament. This includes contributions from a number of actuarial students on our website – each future actuary provides insight into the local matters they face in their work and how they find study and life in their country of residence. Actuarial skills travel, and they are being applied to address financial risk issues all over the world. In the case of the Institute and Faculty of Actuaries, membership is increasing and the pace is faster outside its UK base. I believe that this will be compounded by the new Certified Actuarial Analyst technical qualification that was launched in May. One of the aims of the new IFoA president, Nick Salter, is testament to the need to adequately serve an increasingly dispersed membership. I interviewed Salter to find out more about his plans for his term as president and asked for his thoughts on a range of other important issues for our profession (page 17). Wherever you are, I hope that you enjoy reading the material in this edition, including the international supplement online (www.theactuary.com/is2014).

“Actuarial skills travel, and they are being applied to address ﬁnancial risk issues all over the world”

Kelvin Chamunorwa Editor

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July 2014 • THE ACTUARY 5 www.theactuary.com

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On my agenda features@theactuary.com

Nick Salter, the new president of the Institute and Faculty of Actuaries, tells Kelvin Chamunorwa about his international focus for the year ahead and comments on the profession’s strategy in a number of other areas The beginning of the interview with Nick Salter does not go to plan. Before I can ask the first question, the new president of the Institute and Faculty of Actuaries turns the tables and asks about a member interest group for southern African actuaries which I’m involved with. The reason for his interest soon becomes clear, however, as he points out that a key focus of his year as president is to ensure a thriving international membership. The affable and very well-spoken Salter tells me: “With 40% of our members now based outside the UK, it is important that we keep up to speed with what’s going on elsewhere in the world, to ensure that what the

Man

with a

plan Sam Kesteven

On my agenda features@theactuary.com

“People save too little. They underestimate their life expectancy and also underestimate the impact of inﬂation, because it has been relatively low historically”

profession does is relevant to our members, wherever they are based.” But how can the IFoA make this happen, with such a wide geographical spread of members? He explains: “One way is through better use of the internet – for the exam system and through a virtual learning environment for example.” “We are not there yet, but we are working towards that. It’s also very important that we meet and talk to our members and make the effort to meet those in far-flung places too. Then we can find out what’s really interesting our members and how the profession can support them.” Salter assumed the presidency in June, taking over from David Hare. He graduated from Cambridge University in 1978 with an Economics degree and qualified as an actuary in 1986. In 1989 he was one of the founding partners of Barnett Waddingham and is now senior partner, specialising in advising trustees and companies on pensions. He is also on the Court of the Worshipful Company of Actuaries and chairs its Finance Committee. I press the new president for his thoughts on some of the IFoA’s other strategic objectives, starting with education. Are the exams set at the right level – so that they are challenging while not so tough that able students choose alternative career paths? Salter jokes that “the exams have become easier since I sat them”, then suggests that the key is the expected time to qualification rather than the difficulty of the exams. He says: “What I’d like to see is exams that are testing, but actuarial students should be able to see the end when they start. When I started the exams, the expected time to qualification was seven years, which was too long. Three or four years would be ideal, otherwise you just put people off. “We could have another level of exams after qualifying as an actuary, and those exams would be done out of choice.” His personal view is that it could be achieved under the current framework. He suggests that “the majority would go for the Associate qualification, with a few going further to complete the exams required for Fellowship if they aspire to specialise and hold a reserved role”.

I raise the topic of regulation and highlight to Salter some members’ fear that current proposals for additional actuarial standards could ultimately be of detriment to actuaries, for example those competing with nonactuaries for clients and staff. Salter pauses; his response is considered: “The proposals should be embraced. I think that any substantive piece of work should be peer reviewed, and I don’t think that should be limited to actuarial work. If there is no sense check of the appropriateness of a piece of advice, there is a potential danger to the user of that advice and also to the person giving the advice. In principle, peer review is a good thing.” But does it need to be made compulsory? Salter reinforces his earlier point: “Mandating actuaries to peer review is difficult, but I still think it’s a good thing.” He adds: “Maybe a phased approach to implementing the regulations would have been better: a light-touch review first to get members to understand the value of it.” Salter believes members should see the proposals in a positive light. He says: “If an actuary does a piece of work, which has been through the necessary rigour and has been peer reviewed, a positive statement should be made about it to the client. If I’m an actuary working in a non-reserved role and I am pitching for work against a non-actuary, I might be perceived to be at a disadvantage if my work costs more because it needs a peer review. But we have to be prepared to highlight the benefits of it.” Salter takes a similar stance on continuing professional development, which I gather is a subject that’s top-of-mind, as he raises it before I have the opportunity to. “It upsets me that some see CPD as a tick-box exercise. Rather than one sitting at the back during a conference on their BlackBerry, one should see the value of continuous learning, and be prepared to demonstrate that to their clients – that they are keeping abreast of market developments. I don’t think CPD is being seen for its true value by some.” I ask Salter whether he thinks the public have the right view of the actuarial profession. He suggests that the perception is currently narrower than it should be. “I think actuaries are seen as very competent technicians in pensions and insurance. This is true, but it does not paint the whole picture. Actuaries have a set of competencies, which are currently applied in pensions and insurance, but could be used in a number

THE ACTUARY • July 2014 www.theactuary.com

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of other areas too. We should get this view out to people.” I am keen to find out more about Salter’s background, and what led him towards the actuarial profession in the first place. He points out that he developed a talent for maths at school and that his grandfather worked in the insurance industry. “My father suggested that I explore an actuarial career. I didn’t have a clue what that was and at that time it was very difficult to find out. While at university, I arranged to talk to the actuary linked to it. At the time it was Peter Clark, who went on to become president of the Institute of Actuaries some years later. I asked him what an actuary was. His response didn’t put me off. “I also had the arrogance of youth and thought I’d give it a go and if it didn’t go well I’d just try something else.” I remark that it seems to have gone well. “I’ve muddled along,” he quips. It’s the same go-getter spirit that seems to have led him to co-found Barnett Waddingham. He recalls the difficult decision he had to make 25 years ago. “At the time I was reasonably senior at Mercer, working in its London office, relatively well-paid and my wife was heavily pregnant with our daughter. She was rightly concerned about the timing. I decided that I would leave my job in a way that would allow me to knock on the door if it didn’t go well. Fortunately I never had to test that.” The UK pensions landscape has seen many changes since that time, with this year’s Budget bringing the most recent of such reform. I ask what he foresees for the industry over the next 25 years. Salter thinks that defined contribution is not the universal solution. “People save too little. They underestimate their life expectancy and also underestimate the impact of inflation, because it has been relatively low historically. We won’t go back to defined benefit, but I think we’ll end up somewhere in between, with some sort of risk-sharing arrangements.” He adds: “There is a tremendous opportunity for actuaries to innovate in this space, with solutions that cater to different employers’ appetite for risk on their balance sheet.” So how does he juggle his various leadership roles? “There is a lot to do. Fortunately, I have a strong team at work who look after my clients day-to-day and know when to involve me. It’s the same with the team here at the IFoA. I also have a very good PA, and an extremely understanding wife.” a

SAM KESTEVEN

www.theactuary.com

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General Insurance Takaful

Eastern promise features@theactuary.com

Faisal Zai examines how Islamic Takaful insurance is growing as the burgeoning economies of MINT countries begin to make their mark

According to a recent Wall Street Journal, Amazon has patented an â&#x20AC;&#x2DC;anticipatory shippingâ&#x20AC;&#x2122; system which will use predictive analytics to deliver products to customers before they place an order. Though Amazon has not announced any plans to implement this service it shows why they are considered a pioneer in internet commerce. Innovation is essential for business leadership particularly when faced with a changing economic global structure. Many believe that the future world economic growth will be driven by the BRIC (Brazil, Russia, India and China) and MINT (Mexico, Indonesia, Nigeria and Turkey) nations. Most people are aware of BRIC, but few people are familiar with MINT. Despite the current political and social turmoil, the MINT nations have favourable demographic structures giving them an economic edge compared to developed nations which are facing aging populations. Sustainable pensions, affordable insurance, and related businesses depend on having favourable demographic structures. The demographic dividend theory considers the ratio of nonworking to working age groups i.e. the

dependency ratio. As the dependency ratio falls, given the right public policies, disposable income grows thus spurring economic growth. Pensions, insurance and related businesses should thrive as people realise that they will not have the traditional family support to rely on in the future. Three of the four MINT countries, Indonesia, Nigeria and Turkey, are Muslim concentrated countries where conventional insurances are incompatible with Islamic beliefs. Given the current low insurance penetration rates in these countries, insurers and reinsurers should probably have MINT countries on their new market radar, and develop compatible Islamic insurances, otherwise known as Takaful.

Are insurers MINTed?

Takaful insurances have been rapidly growing globally over the last few years, but it is still very small in comparison with conventional insurance. Global Takaful premiums are a mere 2.5% of conventional global insurance premiums. According to a report by E&Y in 2013 global Takaful premiums grew by 22% per annum between 2007-11 and a further 16% in 2012 which was considered a bad year. In contrast, global insurance premiums for conventional insurance grow by a mere 2.4% according to the Sigma 2012 study by Swiss Re and was considered a good year. The last time conventional insurance saw an annual growth of 15% was in the 1980s. The first Takaful company in modern history was set up in Sudan in 1979. There are now over 130 Takaful companies globally. The population of Muslims has been rising. Muslims account for 23% of total world population according to a Pew Report in 2010 and this is expected to grow to 27% by 2030. This has been coupled with growing spending power in the Muslim countries over the last few years, and GDP per capita grew faster at 6.8% pa than its global counterparts of 5% over the period 1990-2010.

Know your Arabic

Although there is not much difference in the actuarial calculation kernel between Takaful and conventional insurance, there are fundamental philosophical differences. Islamic finance differs from conventional finance as it derived its principles from religious philosophy dating back more than 1400 years. The prime

US population pyramid

US median age

Great Britain population pyramid

US dependency ratio

China population pyramid

China median age

Great Britain dependency ratio

Indonesia population pyramid

China dependency ratio

Nigeria population pyramid

Nigeria median age

Great Britain median age

Indonesia median age

Indonesia dependency ratio

Turkey population pyramid

Nigeria dependency ratio

Turkey median age

Turkey dependency ratio

Charts show projected population pyramids from 2015 to 2050, their median population age and their dependency ratios. Those developed nations shown (US, Great Britain) and the BRIC nations shown (China) are facing an impending ageing population and increasing dependency ratios. This is in contrast to the MINT nations shown (Indonesia, Nigeria, Turkey), which have a signiﬁcantly more favourable demographic structure and dependency ratios. Data source: World Bank

tenet of Islamic finance is the prohibition of usury (or riba in Arabic). This prohibition is common to all three Abrahamic faiths – Judaism, Christianity and Islam. Whereas the prohibition in Judaism only applies to transactions amongst Jews, it is universal when it comes to Christians and Muslims. However, a 16th century reinterpretation under the Protestant Reformation led to a reclassification of usury whereby only high rates of interests were considered usury. In Islam however all forms of interest are considered usury. Insurance plays a major role in personal finance, but most fall foul of the core Islamic Shariah concepts. These include: ● riba – usury/interest based transactions; ● gharrar – (deceptive) uncertainty and unclear terms of contract; ● maysir – excessive risk taking or gambling; and ● haram investments – unethical investments such as alcohol, pornography or gambling. Gharrar is generally considered acceptable as long as the contract does not lead to a party profiting over the other unfairly. Insurers generally have favourable information bias and can profit from higher premium rates. Maysir exists in an insurance contract when a policyholder contributes a premium in the hope or gamble to gain a larger sum. Endowment assurance policies promising a guaranteed return also contravene the riba principle. These concepts are hard to avoid for insurers. Takaful insurance is structured to avoid riba and haram investments and policyholders share their own risks collectively rather than transferring to shareholders, the elements of gharrar and maysir are thus avoided. This forms a mutual cooperation.

ISTOCK

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The insurance fund in a Takaful company is owned by the participants or policyholders. The risks are pooled and shared amongst the participants. The shareholders, known as the Takaful operators, provide capital for the business, operate as an agent and are not directly exposed to the investment or underwriting risks. The operators can charge a fee which is deducted from the premium contributions and in return is exposed to the expense risk. This structure is in complete contrast to conventional insurance where the risk is transferred to the shareholders who are then exposed to all the expenses, investments and underwriting risks. In the event that a Takaful fund runs into a deﬁcit, the shareholders are required to provide an interest free loan. This loan is to be repaid before any surplus can be distributed. Any surplus belongs wholly to the participants and is distributed amongst the participants, and in some cases, is shared with the shareholders in a predeﬁned proportion to create an incentive for the operator to actively manage the investment and underwriting risks. All of this is overseen by an independent Shariah Board.

Next destination There are numerous challenges for Takaful companies. The most striking is the political and social turmoil in the populous Muslim nations where Takaful insurances operate. There are also issues of negative perception. Muslims have been told for some time that insurance contradicts their faith and Shariah rulings about Takaful have not pierced the perception. Knowledge about the beneﬁts of insurance is low and individuals generally prefer to rely on family support systems. The chronic lack of skilled

resource has meant that there is very little product innovation. There is also a lack of regulation and standardisation in the Shariah compliant Takaful models, although Malaysia has taken steps to develop the industry and as a result Malaysia is considered by far the most advanced Takaful market in the world. Finding long-term Islamic assets is also tricky. Sukuks, the Islamic equivalent of bonds are generally oversubscribed and not traded frequently. A lack of derivatives markets also poses issues for risk management. In essence Takaful remains an exciting business proposition and many major insurers and reinsurers already have some presence. Companies and governments will have to make greater eﬀorts to develop a sophisticated resource pool and educate customers. Innovative thinking is required to overcome the challenges of the growing Takaful insurance. This brings us back to Amazon. What happens if Amazon’s anticipatory shipping system delivers an item which is unwanted by the customers? Well, the item can be returned but Amazon said it might consider discounts or converting the delivery to a gift to build customer goodwill and reduce return costs. a

FAISAL ZAI is a

founding principal at Peraspera Consulting and a specialist in quantitive modelling and business strategy

July 2014 • THE ACTUARY 23 www.theactuary.com

24/06/2014 10:34

Pensions Australia superannuation features@theactuary.com

Can the tide turn for Oz pensions?

Australia’s system of superannuation has wide coverage but often provides an inadequate level of retirement income. Stephen Huppert says that government, regulators and the pension industry need to work together to improve the situation

Discussions about retirement systems often look to Australia. It is the world’s fourth largest system at over A$1.8trn (£1trn), 105% of GDP and is expected to quadruple in size within 25 years. Figure 1 shows both historical and projected total assets under management. Australia has a three-pillar retirement system: 1. Age Pension is a universal means-tested pension provided by the Federal Government and paid from consolidated tax revenue each year. Currently the pension commences at age 65 – eligibility age will gradually increase to 70 in 2035. 2. Compulsory superannuation contributions are made by employers, currently at the rate of 9.25% of salary. This rate will gradually be increased to 12% by 2022. 3. Voluntary superannuation contributions can be a mixture of pre-tax (salary sacriﬁce) and post-tax contributions. As the system is mandatory, with no opt-out provision, coverage is very high. Over 98% of all employed Australians are covered by superannuation and 75% of self-employed. However, the vast majority of assets are in

defined contribution schemes where members receive a lump sum at retirement. This means that having a superannuation account does not imply an adequate level of retirement income. The superannuation industry is far from homogenous with a number of distinct segments chasing the money (see Figure 2). The industry and self-managed superannuation funds may be the least familiar to readers in the UK. The government decided not to establish a government-run scheme and so industry funds were established as an alternative to bank and insurance company options. They usually focus on particular industry sectors such as teaching, construction, health and public sector to name a few, and some of the funds position themselves as multi-industry. These funds are not-for-profit and the trustee boards consist of equal representation from union and industry groups. Self-managed superannuation funds (SMSFs) represent the fasted growing segment. An SMSF must have fewer than five members and all members are also trustees. These are very much DIY superannuation funds and there are more than half a million of them.

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“We are world-class at getting money into the system, but there is signiﬁcant work to be done at the other end”

The structure, governance regime and size of the Australian system result in it consistently being rated highly in both the Mercer Global Pension Index and the Allianz Pension Sustainability Index. However, by certain criteria, it has a number of major challenges that must be addressed – for example, we are world-class at getting money into the system, but there is signiﬁcant work to be done at the other end.

Figure 2: Share of superannuation assets, 31 July 2013

Corporate 32%

Corporate 4% Industry 20%

Investment choice About 85% of Australia’s superannuation assets are in defined contribution schemes and the majority of Australians are in the default investment option of their employer’s default superannuation fund. These default investment options are typically 70/30 balanced funds. Funds do offer a range of alternative investment options and members do have choice, but less than 20% of members exercise this choice. Unfortunately, when members do switch investment options it is often to chase returns and leads to worse rather than better outcomes. We also see younger members shifting to more conservative options not understanding the concept of an investment time horizon. Almost all retirees receive their benefit on retirement as a lump sum. If they want an income stream in retirement they must purchase one. Apart from a small number of defined benefit members, there is no default transition to an income stream. Australia has a very small market for annuities, either term certain or lifetime. For the 85% in DC schemes, the most popular option is an allocated annuity. This is an account-based pension that provides a series of

Retail 28%

Self-managed fund 16%

Source: Australian PRA, Deloitte Actuaries & Consultants

A$bn

regular payments. The payment amount is subject to minimums described as a percentage of the account balance and the member can take lump sum amounts out. The debate about compulsory annuitisation does surface from time to time but there is nothing to suggest it will occur in the foreseeable future. There is signiﬁcant industry support for changes to tax legislation to make deferred annuities more competitive. Since the introduction of compulsory contributions, the message has been that these contributions are deferred salary. Employees are told that it is their money. Anything other than account-based pensions will be a hard sell politically and commercially. There are two dimensions to sustainability of a retirement system: national and individual. Like in all countries, improved longevity and other demographic pressures have led to signiﬁcant tension between these Figure 1: Historical and projected total assets under management (A$) two dimensions. The two major ways 8,000 the Commonwealth Government helps 7,000 retirees are the Age 6,000 Pension and superannuation tax 5,000 concessions. Treasury 4,000 estimates that tax 3,000 concessions on superannuation cost 2,000 around A$30bn each 1,000 year. It is claimed that almost half of the tax 1997 2002 2007 2012 2017 2022 2027 2032 concessions go to the Source: Australian Prudential Regulation Authority, Deloitte Actuaries & Consultants top 12% of income

GETTY

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STEPHEN HUPPERT

is a partner at Deloitte Australia

earners. There is heated debate about the equity and effectiveness of these concessions. Despite the compulsory contributions and tax concessions, only 20% of Australians are completely self-sufficient in retirement and, of this group, only half manage to stay self-sufficient with the balance eventually relying on the government age pension. The other 80% receive full or part pensions from the Commonwealth Government. Most projections do not see the overall percentage changing significantly though the proportion receiving full pension is likely to decrease.

Politics and self-interest It is not surprising that successive governments are torn between the value of these concessions for encouraging self-funding of retirement and their need to balance the Federal Budget. Various think tanks and interest groups have their views on the social and economic benefits of the tax concessions within superannuation. The constant changes to tax and other legislative aspects over the history of the system have led to significant complexity. This results in costs to providers and lack of engagement by consumers. The average Australian’s reaction when the topic of superannuation is raised is that it is all too difficult and the rules keep on changing. This is a disincentive for members to be suitably engaged in saving for their retirement and discourages them from making voluntary contributions. Furthermore, the very public, and often ugly, debate about the future direction cannot help. There are many well-run superannuation funds that are constantly looking for better ways to improve the retirement outcomes of their members. But it is difficult to be overly optimistic about the future of the system as a whole. Australia does have the foundation of a good retirement system, but significant work is required to better prepare and provide for the post-retirement phase. This should include finding ways for members to make the right decisions at the right time, a better range of efficient post-retirement products and improved integration between superannuation systems, state pension and long-term care. This will require cooperation between the government, the regulators and the industry. Past experience suggests that this will not be easy. a

July 2014 • THE ACTUARY 27 www.theactuary.com

24/06/2014 10:36

Time to return to our roots... Dawid and Tanya share their experience on coming back to South Africa after 8 years in the UK.

WHAT ARE YOUR BACKGROUNDS? We are both qualified actuaries who graduated in Actuarial Science from the University of Stellenbosch in 2005. After we graduated, we decided to move to the UK where we started our careers – Dawid at P-Solve Asset Solutions and Tanya at Munich Re UK. We lived in London for 3 years and then moved to Easton, a small village just outside Winchester. Dawid spent 6 years at P-Solve and then 2 years at LCP in Winchester. Tanya joined Aviva Health UK in 2010 after spending 4 years at Munich Re. WHY DID YOU LEAVE SOUTH AFRICA IN THE FIRST PLACE? We wanted to travel a lot and work to fund our trips. The plan was to return to South Africa within two years. 8 Years later, we have travelled a fair amount, qualified as actuaries, got married and started our family. WHAT WAS YOUR REASON FOR RETURNING TO SOUTH AFRICA? Our family. Although, we both had good jobs, good friends and a relatively uncomplicated and comfortable life, we missed our family a great deal and with our children getting bigger and missing out on knowing their grandparents and extended family that we were privileged to know, we decided it was time to return to our roots. WHAT WERE THE CHALLENGES INVOLVED IN GETTING A JOB IN SOUTH AFRICA? ANY RESTRICTIONS? When we first started job-hunting, we were still in the UK, which made things a bit difficult. However, with modern technology, almost anything is possible and we were able to have interviews telephonically and via Video Conferences. The fact that we were determined to live in Cape Town, close to our families, narrowed the options a bit too and then we were obviously restricted by not being BEE candidates. However, we both found jobs that we’re passionate about and really enjoy – so we believe that if you have the right skills (and a bit of patience) you will find something that is right for you. WHERE DO YOU SEE THE GREATEST DEMAND FOR ACTUARIES? The Life Insurance Market definitely provides the most opportunities in the Western Cape. We have also noticed that businesses look for actuaries with all-round skills rather than just being technically adept.

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HOW DOES THE SOUTH AFRICAN CULTURE DIFFER FROM UK CULTURE IN THE WORKPLACE (AND IN EVERYDAY LIFE)? We have found the office environment a little more relaxed and friendly, especially in Cape Town. At the same time, everyone seems to be very conscientious and works as a team. We miss the UK public transport system though – Cape Town traffic takes some getting used to! HOW DO THE SALARIES AND COST OF LIVING IN SA COMPARE TO THAT OF THE UK? Salaries are lower than in the UK, especially if you take into account the current exchange rate. The cost of living, however, is also lower in South Africa. We were pleasantly surprised by the difference in child care costs – which was a major expense in the UK, as we are both working parents. WHAT DO YOU DO IN YOUR SPARE TIME? We spend time with our family. I think we’re trying to catch up on the time lost during the past 8 years. We also enjoy everything our beautiful country has to offer - everything we’ve missed so much: the weather, the sea, the mountains, good food, good wine and lots of sunshine. HOW DO YOU SEE BLACK ECONOMIC EMPOWERMENT IMPACTING THE JOB MARKET? BEE has definitely significantly impacted the professional dynamics in companies and has empowered many people to rise above significant obstacles. WHAT IS THE BEST THING ABOUT WORKING IN SOUTH AFRICA? Lots of things – working with a diverse group of people, having the opportunity to take on increased responsibilities at a fairly early stage of one’s career and also having the opportunity to develop all-round skills as opposed to being solely technically focused. ANYTHING ELSE YOU WANT TO SHARE? Our country is certainly facing some significant challenges, even 20 years after achieving democracy. However, we have such a wonderful country with so much to offer. We need to stand together to achieve peace and prosperity in our beautiful country.

24/06/2014 09:59

South African Actuaries Abroad

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

0ɄɄȰȨȽȝ ȘɄɑ Ǹ ȽȐɬ ȃȣǸȵȵȐȽȝȐѵ

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

Henda (FIA, FASSA) qualiﬁed in 2001 and has 12 years experience in the industry. She worked in life and health insurance in South Africa and Australia before joining our team in 2009. Her hobbies include reading, running, herb gardening and going on 4x4 trips with her husband and children.

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

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

CREDIT AND MARKET RISK MANAGER

Johannesburg Our large client requires a suitably experienced senior actuarial student or newly qualiﬁed actuary to take ownership of the credit and market risks relating to their business while leveraging the bigger group’s capabilities. A minimum of 5-8 years of risk management experience in the banking / asset management sector is required and a FRM qualiﬁcation would be an advantage.

SENIOR HEALTH SPECIALIST

Johannesburg Our client is searching for a senior health specialist to provide advanced statistical analytical services for a wide range of products. Experience in the medical scheme or managed health care industry will be beneﬁcial.

GI ACTUARIAL PRICING SPECIALIST

Johannesburg A position for a newly qualiﬁed actuary has become available in our client’s short-term business. We are looking for a candidate with relevant short-term pricing experience and good technical skills to become involved in pricing and product development.

LIFE VALUATIONS SPECIALIST

Johannesburg/Cape Town We have various positions for candidates with previous life valuations experience at all levels. Positions range from valuations actuaries to actuarial analysts and involve the delivery of all the company corporate actuarial deliverables.

LIFE CONSULTING ACTUARY

Johannesburg /Cape Town Our client requires a nearly or newly qualiﬁed actuary to take a senior role in their Cape Town or Johannesburg ofﬁce. Responsibilities will include the full spectrum of actuarial services across a range of companies and include exposure to leading technical developments in the industry. A previous valuations or technical life insurance background is required.

PENSIONS CONSULTING ACTUARY

Johannesburg/Cape Town The Employee Benefits business of our client requires an actuarial specialist with previous pensions experience to join their team. The team is responsible for delivering a comprehensive list of actuarial consulting services to a portfolio of retirement funds (defined benefit and defined contribution) and to deliver client-specific solutions to large employers.

GI CONSULTING ACTUARY

Johannesburg We have a number of clients who require experienced GI actuaries wanting to work in consulting. Responsibilities will include the full spectrum of actuarial services across a range of companies. Previous reserving or capital modelling experience will be advantageous.

www.sa3.co.za

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24/06/2014 09:59

Education CAA qualiﬁcation features@theactuary.com

Foot on the ladder Jenni Hughes provides an overview of the Certiﬁed Actuarial Analyst (CAA) qualiﬁcation as it continues to attract global interest

On 21 May the IFoA opened registration for the first CAA exam session. It has been many years since the IFoA offered a new membership qualification and its aim is to provide an internationally recognised credential for professionals working alongside actuaries, and to extend actuarial knowledge to a broader reach of technical and analytical roles in the financial services industry. As well as a level of technical expertise, the qualification develops wider skills such as communication and professionalism. It provides a level of assurance through ongoing professionalism and personal development

requirements, within the regulatory framework and membership requirements of a globally respected professional body. Within a month of launch, the IFoA had already seen interest from more than 30 countries, serving to conﬁrm the global appeal of the CAA. You can see the breakdown by region in Table 1 below.

Table 1 Interest in CAA by region UK 41 Africa 72 South Asia 71 Rest of world 17

Who should consider the CAA? Over the past few years there has been an increase in the number of analysts working in professional technical roles in financial services, and we recognise that the Fellowship qualification may not be relevant for all roles within the actuarial arena. It helps employers to broaden the scope of relevant qualifications that may be applicable to the wide range of roles that their employees perform worldwide. The qualification would be suitable for school leavers: candidates with strong maths skills interested in starting their career and learning on the job without having to undertake

THE ACTUARY • July 2014 www.theactuary.com

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25/06/2014 09:21

“Pursuing the CAA is an opportunity of a lifetime. I think it will go a long way in ensuring people have the necessary skills to work in all spheres of actuarial, finance and risk management” Grainne Burke was the first candidate to register for the CAA. She is based in Dublin, Ireland. “I started working with AXA as a business support analyst in September 2013 and quickly found that I really enjoyed the work I was involved in. The next natural step forward for me was a professional qualification related to my position. When I researched the CAA, I realised this was a technical qualification that would be hugely beneficial and highly relevant to my role. “Being a member of such a prestigious and recognised professional body with a global community means that my CAA qualification will be recognised worldwide. I will have gained a greater understanding of insurance and the calculations of premiums that need to be charged. The work-based skills part of the qualification will also assist me in improving my communication and professionalism skills. “I believe this qualification will help me to move forwards with my career. The technical and communication skills I will gain will enable me to become a more successful analyst and will assist me in taking on a more senior analytical role. The communication and professionalism skills I think are necessary in order for me to progress into more managerial positions. “The next step for me is to pass the Module 0 exam in August and then continue to complete the CAA qualification. After that I would like to take on more responsibility within my present role and eventually work towards progressing to a teamleader position.”

Moses Chege works as a life and investment consultant at JW Seagon & Co Ltd in Kenya. “I am proud to be associated with the IFoA and more so through the newly introduced CAA qualification. I am keen on qualifying as a CAA and much more so here in Kenya, where the market, though competitive, is growing to be a leader in Africa. “I graduated in May 2013 with a BSc in Actuarial Science from Dedan Kimathi University of Technology. But before that, I had started working at JW Seagon & Co Ltd as an intern in the Life and Investments department. After a three-month internship I was confirmed as a full-time Life and Investment consultant. “At first, I was involved in the day-to-day activities of the life department, but was soon allocated a group of clients on our international medical portfolio, as well as generating new business and updating our clients on the investments side on how their offshore investments are performing. “This year, I wanted to pursue another professional course, but one with a blend of insurance, finance and investments. CAA was the first to come to mind. I decided to approach my employer with the proposal on whether I could be fully or partially sponsored and fortunately enough, I got the go ahead. “Pursuing the CAA is an opportunity of a lifetime, and am thankful to my employer and most of all the IFoA for this new qualification. I think it will go a long way in ensuring people have the necessary skills to work in all spheres of actuarial, finance and risk management. I am excited to be an IFoA student and cannot wait to qualify as a CAA in the near future.”

Tony Carter is a risk analyst and statistician and works for SLE Worldwide Australia in Sydney. “I work for SLE Worldwide, a managing general underwriter that has grown to be Australia’s largest independent, privately owned business of its kind. Our portfolios are now of a size where they would benefit from regular and detailed actuarial analysis. “I already hold a Masters in biostatistics and previously researched in public health for over a decade, so I’m fairly comfortable with the mathematics, statistics and modelling required for the CAA course and the insurance industry in general. “Nonetheless, the actuarial approach has traditionally dominated analytics in insurance. So as a relative newcomer to insurance, I see the CAA qualification as complementary to my skills, in that I’ll have a solid grounding in the actuarial standards and methods specific to insurance. “With a blend of statistics and knowledge gained via the CAA qualification, I’ll have the skills to answer the questions that keep not only the chiefs but also the underwriters awake at night, and provide an evidence base to guide their strategic decisions. “I was asked what my next steps were: as the old Buddhist saying goes: ‘Before enlightenment, chop wood and carry water. After enlightenment, chop wood and carry water’.”

a degree; degree-level candidates who have left university and are interested in actuarial work; those who already have a professional qualiﬁcation and are looking to add an actuarial dimension to their current skillset; and current employees of an actuarial organisation – who perhaps are working in an analytical support role or who has started the Fellowship exams but feels their skills are better served by a more technical qualiﬁcation.

They explain in their own words above why the CAA is of beneﬁt to their work and careers.

details for the Pearson VUE website where they can book the venue, date and time of the Module 0 exam. The exam will be taken at one of Pearson VUE’s test centres available in hundreds of locations around the world. a

Why would candidates take the CAA? All kinds of people are interested in the CAA.

GETTY

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What should I do if I want to complete the CAA? Registration for the ﬁrst exam session closes on 18 July. To help you prepare for the exam, you can access study material and tool kits such as the resource guide, syllabus and specimen exam paper for Module 0 on the IFoA website. External study support is also available. After registering with the IFoA and paying for the exam, candidates will be given login

Jenni Hughes is careers marketing leader, IFoA. If you and/or your colleagues would like to arrange a meeting with the IFoA to hear more about the CAA and how it can beneﬁt you or your business, email: caa@actuaries.org.uk; or visit the website: www.actuaries.org.uk/ becoming-actuary/caa

July 2014 • THE ACTUARY 31 www.theactuary.com

25/06/2014 09:21

Singapore

festivals through public holidays. This diversity is at the heart of what makes Singapore a tolerant and all-encompassing place to live.

Why Singapore? Why Now?

Cuisine – With the multi-cultural backdrop comes an array of food. Dining, along with shopping, are often seen as the national pastimes of Singapore. From the hawker centres on street corners to the Michelin starred restaurants in stunning locations overlooking the City, there are dishes available for every budget. Chilli crab is famed in Singapore and if you can overcome the smell, durian is the “national fruit”.

According to a recent report by Boston Consulting Group, private wealth in Asia-Pacific (excluding Japan) jumped 31% to $37 trillion last year. As the 4th largest financial centre behind New York, London and Hong Kong, Singapore is well placed to capitalise on this boom especially within the insurance industry. As a major insurance recruiter in Asia, a question we are frequently asked is “why move to Singapore?” The answers we give include the following:

Insurance Hub Ravi Menon, the Managing Director of the Monetary Authority of Singapore (MAS) recently described Singapore as a “Global Insurance Market Place”. It is recognised as a regional Reinsurance hub with 16 of the top 25 Reinsurers in the world having regional

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offices there. By 2020 the vision is to accept global risks, with serious headway already being made in some areas; for example Singapore is ranked second to London in structured credit and political risk. This will expand across all sectors as insurance is expected to increase 8% per annum, with Asia predicted to account for 40% of the global insurance market by 2020. With a wave of regulatory change, new products and the concentration of catastrophe risk in the region, there are plenty of job opportunities for Actuaries.

As a place to live Of the 5 million people living in Singapore nearly 2 million were born overseas. This creates a vibrant mix of cultures, cuisine and languages.

Culture – Singapore recognises major Chinese, Western, Malay and Indian

Language – Singapore has four official languages: English, Malay, Mandarin and Tamil with English being the business language. That being said, everyday you will hear languages from around the world being spoken.

Travel in & around Singapore Singapore is ideally located for travel; with the beaches of Bali

24/06/2014 10:07

or the temples of Myanmar a short flight away. There are plenty of budget airlines who have affordable and well timed flights in and out of Singapore making short trips to idyllic locations quick and cheap. This is made even easier by the the fact Changi Airport was rated the World’s Best Airport in the 2014 World Airport awards. Within Singapore it is just as simple to get about. Taxis are reasonably priced with a daily taxi to work often being cheaper than a Zone 1 London tube ticket. Public transport is straightforward; both the bus and the MRT (ie. the tube) are efficient and air conditioned with tickets costing less than £1. Unlike most other major cities, there is no need to own and drive a car.

Cost of living This year Singapore was named the most expensive city in the world in a 2014 report from the Economist Intelligence Unit. This is largely

driven by rent and cars. However once you arrive and start looking there is a huge variation in what you can get for your dollar. 20/30 minutes away from the City centre rental prices become more palatable. You also get a lot more for your money with most properties being securitised condominiums with large swimming pools, on-site gyms, tennis courts and in some cases climbing walls! Shopping around is essential and the process can become complex. If you can go direct or if you’re sharing, join Facebook groups or websites like EasyRoomMate.com to find the best deals. Cars are deliberately expensive to avoid congestion and restrict numbers to stop Singapore becoming the traffic jam of neighbouring Asian cities. To buy a car in Singapore you have to buy a licence which can be as much

as the car itself. Therefore most rely on the excellent taxi and public transport system. The benefit of Singapore is its low tax, equating to around 15% of annual earnings for a normal taxpayer. This makes saving money a lot easier with an increased disposable income compared to London. Also has anyone told you how safe and clean Singapore is?

Making the move If you have ever contemplated a career move within insurance abroad and would like to explore Singapore a bit further please contact us. In addition to having substational information with regard to the Asian insurance job market, we can advise you on much more including housing, schooling, banking and relocation. The good news is that work permits for skilled professionals are easy to receive although new rules will apply from August 2014 so please email us today to get the latest information. We look forward to hearing from you. CLARE BETHELL DIRECTOR - HFG

www.hfg.com.sg clare@hfg.com.sg +65 6829 7153

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24/06/2014 10:07

It’s a student’s life...Q&A Australia

Neeharika currently lives in Sydney, working at Ernst & Young in the banking and capital markets team within actuarial services. She has spent most of her life in Canberra where she studied for her exams at the Australian National University. She is a member of the Actuaries Institute (Australia).

Neeharika Prasad

What are your views on the role of an actuary, both now and in the future? I believe actuaries will become more involved in risk management, especially as enterprise risk management is becoming more popular with companies.

Sydney comes alive day or night, all year round

Which actuarial fields are the most popular in Australia and why? The most popular field is general insurance. While it is a relatively new field for actuaries – as compared to Life Insurance – it has grown very quickly and general insurance actuaries are in high demand. Can you tell us a bit about the industry or market that you work in? Working in banking and capital markets, we specialise in valuing complex derivatives and risk modelling. More recently the work includes quantitative operational risk modelling, and renewable energy modelling. What led you to choose to study for an actuarial qualification? I wanted to pursue my love of statistics and finance. Which of the actuarial exams do you consider the most difficult and why? The Commercial Actuarial Practice (CAP) exam is probably the most difficult. This is an eight-hour exam which requires you to analyse a complex situation, model it and write a report. It aims to simulate a day at work, but it requires a lot of practice before the exam, so in my opinion, it is the most difficult exam.

A supplement to The actuary • July 2014 www.theactuary.com

In how many years do you expect to qualify? I hope to qualify in two to three years. What kind of support do students typically get in your company? Study days which are generally between 1012 per subject, and access to a shared drive with past students’ materials. Is there an actuarial student society in your area, and what kind of activities does it organise? The Young Actuaries Program, run by the Actuaries Institute, organises seminars, workshops and discussion forums for young members to help with their careers. What would you say are the ‘hot’ topics in your industry? The hot topics include: The introduction of IFRS 13 – Fair Value Adjustment, credit valuation adjustments for derivatives contracts; Operational Risk Model Validation; and Enterprise Risk Management. How are actuaries regarded in Australia? Actuaries have a good reputation among the people who know what they do. However, most people still don’t really understand what it is we do!

In the UK the skill set of an actuary is becoming recognised across many other disciplines, is this also true of the Australian market? Yes, this is definitely true. In banking and capital markets, we work mostly in nontraditional industries such as risk management and providing advice to banks. Data analytics and ‘Big Data’ are another two upcoming and rapidly developing industries, which actuaries are also becoming more involved in. How would you describe a typical day at work? Valuing derivatives, writing reports, some programming and obviously lots of Excel! What were the influences that shaped your career decisions to date? The most important influences have been friends and high school teachers. I had no idea what to study at university, but talking to my friends and teachers helped me to realise where I could pursue my passions. Could you tell us about your immediate and longer term goals? Immediate goals are to learn as much as possible and pass the actuarial exams. In the long term I haven’t thought much about my goals yet, but possibly starting up my own firm. What do you say when asked, “What is an actuary”? Mostly I say that actuaries use statistical and analytic skills in insurance industries, helping with the pricing of premiums, even though this is very different to what I actually do. How will you celebrate the day you qualify? Celebrate with family, friends and colleagues and vow never to study again!

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Its a student’s life...Q&A Malaysia

Yvette is from Malaysian Borneo and now working as an actuarial executive in Kuala Lumpur. Her hobbies include listening to jazz and reggae. Her favourite activity on the weekend is exploring the city, and enjoying the many relaxing beaches and islands that Malaysia has. She is a member of the IFoA.

Yvette Law

Kuala Lumpar has evolved into a 21stcentury metropolis

Which actuarial fields are the most popular in Malaysia and why? Pricing and valuation within conventional life insurance business are most popular in Malaysia due to a long history and sufficient experience in this field. Can you tell us a bit about the industry or market that you work in? I specialise in valuation reserving and reporting. I am currently working in the life sector within the Takaful business function. Takaful is an Islamic version of insurance which provides cover to Muslims in conformity with Islamic principles. The concept in Takaful is to share responsibility and mutual assistance. Premiums received from policyholders are divided into two portions, one for investment and the other for Tabarru’. Tabarru’ is a donation to help policyholders who fulfil the required conditions to receive assistance such as in the case of death or eligibility. What led you to choose to study for an actuarial qualification with the IFoA? I had studied other actuarial courses in the UK, therefore it was a natural choice to study for an actuarial qualification with the IFoA. Which of the actuarial exams do you consider the most difficult and why?

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I found CT4 (Models) the most difficult of all the exams I have attempted. There are a few ‘scenario’ questions which were never my favourite as they take time to envisage and answer. In how many years do you expect to qualify? I am hopeful that I can finish all the exams in the next four years. What kind of support do students get in your company and the market in general? In Malaysia, most companies will offer study leave and exam fees. Is there an actuarial student society in your area and what kind of activities does it organise? Yes. The Malaysia Actuarial Society organises events such as seminars, badminton tournaments, discussions and training. What would you say are the ‘hot’ topics in your industry? The Risk-Based Capital framework. What’s the reputation of actuaries in your country? Qualified actuaries have a very strong reputation as Malaysia is in short supply of experienced actuaries.

What are your views on the role of an actuary, now and in the future? Most of the qualified actuaries in Malaysia are attached to a life insurance company. With the introduction of risk-based capital models, it has become mandatory for all insurance companies to employ qualified actuaries to undertake certain tasks. The change in regulations has boosted the demand for actuaries with the right skills to handle technical assessment and enhance risk management practices. In future the actuarial market in Malaysia will not just involve traditional functions, but also gradually move towards other sectors such as general insurance, insurance under Islamic regulations (Takaful), risk, pensions, healthcare and so on. Is the skill set of an actuary becoming recognised across many other disciplines, in the Malaysian market? The skill set of actuaries remains recognised in the insurance sectors. However, with the risk-based capital coming into effect, the demand for skill in risk management is increasing. How would you describe a typical day at work? The valuation department was established as I joined. Therefore, many projects were set-up from scratch. My typical day is very challenging and involves many meetings with external consultants to fine-tune the projects. Could you tell us about your immediate and longer term goals? My immediate goal is to pass the exams and try different types of projects. My longer term goal is to work overseas and gain international experience. What do you say when asked, “What is an actuary?” We are helping economic growth and we work smart. How will you celebrate the day you qualify? I will take three months off to travel.

July 2014 • A supplement to The actuary www.theactuary.com

It’s a student’s life...Q&A India

Saunak is from the city of Kolkata in the eastern part of India. He works as an actuarial analyst for RSA India. He describes himself as fun-loving, and enjoys spending time with friends and family, travelling to new places and is football mad. He is a member of the IFoA and the Institute of Actuaries of India.

Saunak Dutta

They are held in high regard as they are very few in number. What are your views on the role of an actuary, now and in the future? At present the role of an actuary in India is limited to the insurance and pensions sector. However, actuaries can use their skills in many sectors such as investment, risk management and banking in the Indian market.

Kolkata is the principal commercial and educational centre of East India

Which actuarial field do you specialise in? I specialise in the general insurance pricing domain. Which actuarial fields are the most popular in India and why? Actuaries in India mainly work in life insurance and pensions which are traditionally very popular. However, in the last five years general insurance – especially health insurance – has received much attention due to the huge growth potential of this business segment. Can you tell us a bit about the industry or market that you work in? The general insurance market in India is developing, and insurance companies are trying to consolidate their position in lieu of greater market share. Health insurance is expected to be the biggest line of business for most general insurance companies in the near future. What led you to choose to study for an actuarial qualification with the IFoA? Having graduated in statistics, I was fascinated by data modelling and analysis and I had followed the insurance market closely after the subprime crisis in 2008. When I heard about actuarial science from a senior colleague, I was thrilled to have found my calling.

A supplement to The actuary • July 2014 www.theactuary.com

Which of the actuarial exams do you consider the most difficult and why? CA1 (Actuarial Risk Management) and CT8 (Financial Economics) due to the sheer volume and the difficulty of the topics. In how many years do you expect to qualify? In five to six years. What kind of support do students get in your company and the market in general? Study leave for exams along with salary increment for passing actuarial exams. Is there an actuarial student society in your area and if so what kind of activities does it organise? The Institute of Actuaries of India has created the Society for Cultural and Youth Affairs. It is a platform for student interaction and helps in communicating the challenges faced by actuarial students. What would you say are the ‘hot’ topics in India? Health insurance, general insurance (both personal & commercial lines) and micro-insurance. What’s the reputation of actuaries in your country?

In the UK the skill set of an actuary is being recognised across many disciplines, is this true of the market you work in? That scenario is not yet apparent in the Indian market as actuaries are yet to venture away from traditional roles. How would you describe a typical day at work? My day starts with checking emails and prioritising deliverables. I then work on pricing for different products and communicate the results to the underwriting team enabling them to make better risk selection. What were the influences that shaped your career decisions to date? My education in statistics has been a big influence on my decision to pursue an actuarial career. Could you tell us about your immediate and longer term goals? My immediate goal is to gain experience in general insurance pricing. In the longer term I would like to qualify as a pricing actuary, and contribute to the development of the Indian actuarial profession. What do you say when asked, “What is an actuary”? A risk assessor with the necessary skill set to solve complex problems. How will you celebrate the day you qualify? I will go for a nice date with my wife and try to make up for all the missed dates due to actuarial exams.

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It’s a student’s life...Q&A United Kingdom

Adhnan was born and grew up in Edinburgh. He currently works for Ernst & Young in the general insurance sector specialising in reserving, capital modelling and Solvency II. He describes himself as sporty, enjoying climbing, and more recently scuba diving with friends. He is a member of the IF0A.

Adhnan Chaudhry

What’s the reputation of actuaries in your country? The profession is highly regarded. Although many people still don’t know exactly what an actuary does!

Edinburgh, capital of Scotland, is a vibrant, cosmopolitan city

Which actuarial fields are the most popular in the UK and why? The general insurance industry has grown rapidly in recent times and there are many areas still developing. This has led to more opportunities for actuarial involvement. On the other hand the pensions industry has been in decline as defined benefit schemes are being phased out in favour of defined contribution schemes. The life insurance industry is well-established and fairly stable. Can you tell us a bit about the industry that you work in? I have primarily worked on projects with London Market companies. The London Market is one of the oldest insurance markets in the world and specialises in writing insurance for large and unique risks, such as major property developments and sea vessels. What led you to choose to study for an actuarial qualification with the IFoA? After studying maths at university I wanted to continue to use the analytical skills I had developed. Actuarial work seemed like a natural choice. Which of the actuarial exams do you consider the most difficult and why? I think CA1 (Actuarial Risk Management)

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is one of the more difficult exams, mainly because there is a very wide range of topics that you could be tested on. In how many years do you expect to qualify? Hopefully I will qualify this summer, making it about three years. What kind of support do students get in your company, and in the market in general? We can take a day off from work each week between the exam sittings. We also get the cost of all our study material and exam registration covered. This is fairly standard across the market, with some variations within companies. Is there an actuarial student society in your area, and what kind of activities does it organise? Yes in the UK we have the Staple Inn Acturial Society (SIAS). It organises events such as talks on important industry developments, and social activities such as football, poker, and boat parties. What would you say are the ‘hot’ topics in your industry? There are a number of such topics at the moment, including the implementation of Solvency II and how to treat customers fairly.

What are your views on the role of an actuary, now and in the future? Actuaries are required to evaluate the past in order to understand potential outcomes in the future, whether in regard to legislative changes or to assist insurers to better understand and use the information they have on their policyholders. There will also be a need for them in an increasingly broader context. In the UK the skill set of an actuary is being recognised across many disciplines. Do you agree? Yes. Insurers have a wealth of information that is not used to its full potential. Actuaries can help in the field of analytics, to identify trends and provide insight into an insurer’s data. In banking, for example, regulatory changes mean that more detailed analysis is required on the way risk is assessed and managed. How would you describe a typical day at work? I work in a consultancy so each day varies. I prioritise my day as I might be working on a number of projects at once. I also attend meetings to talk about non-client based work, such as research and development. What were the influences that shaped your career decisions to date? An interest to learn and be stretched in order to develop new skills. Right now I am in an environment that encourages this. Could you tell us about your immediate and longer term goals? My immediate goals are to finish my exams. In the long term I would like to specialise in a particular area, which I haven’t decided on yet! How will you celebrate the day you qualify? Probably something that I will regret later.

July 2014 • A supplement to The actuary www.theactuary.com

It’s a student’s life... Q&A France

Brice is a 23-year old French actuarial consultant working for the Pericles Group (Paris). His interests include travel and watching American and Asian cinema. He is a member of the English Drama Association and is co-treasurer of “Les Actuaires De Dauphine”. He is a member of the Institut des Actuaires.

Brice Balagourou

Dauphine, which organizes many events for students such as conferences or sport events. There is also the association ‘Kaktu’Z’, which organizes ‘La nuit des actuaires’ – an annual ball open to every French actuary and student. Once students have qualified, they can benefit from free events organised by the Institut des Actuaires, such as conferences on topical issues.

Paris, France, is described as the City of Light

Where do you work? I finished my actuarial education at University of Paris Dauphine last year, after my six-month actuarial internship at Aviva in France. I’m currently a consultant at Périclès Group (Paris). Which actuarial fields do you specialise in? I specialise in Solvency II (particularly economic capital calculation), ALM and the profitability notions.

What led you to choose to study for an actuarial qualification? It is a dream for me to be an actuary. It is an opportunity for me to use the mathematics and statistical notions that I learnt at university in a practical business context. Moreover, by being an actuary, it offers more opportunities other than mathematics or statistics fields, such as risk management or insurance.

Which actuarial fields are the most popular in France and why? These would include Solvency II, as this regulatory reform will take effect in 2016, and actuaries are aiming to improve and automate the process created. Another is the ‘Euro-croissance’ product, which will be launched at the end of this year. Plus dependency risk work, due to the significant rise in the French population over 65 years in the next few decades, and increasing life expectancy.

Which of the actuarial exams do you consider the most difficult and why? The most difficult actuarial exams are the Solvency II exam, the ALM exam and the extreme value theory exam, because these courses have many useful technical notions, but students have very little time to acquire all of these theories in depth. However, these three courses are the most interesting for me.

Can you tell us about the industry or market you work in? The actuarial industry has undergone major changes during the past 10 years. Today, an actuary’s role is more diversified, working in a range of disciplines. These include: longevity and mortality risk, operational risk and catastrophe risk.

Is there an actuarial student society in your area, and what kind of activities does it organise? There isn’t a student society in France like the Staple Inn Actuarial Society in the UK. However, the Institut des Actuaires has an association of actuaries related to the school. At the University of Paris Dauphine, there is Les Actuaires De

A supplement to The actuary • July 2014 www.theactuary.com

When do you expect to qualify? I expect to become a qualified actuary in 2017.

What is the reputation of actuaries in France? People who work in insurance or financial services may be familiar with the actuarial profession, but actuaries are not well known by the French population. This is largely due to a lack of coverage in the media. I have noticed in American or British movies and TV, that there are now characters who are actuaries. What are your views on the role of an actuary now, and in the future? The role of the actuary has changed quite considerably in the last 10 years, and I hope that it will continue to do so in the future. In the UK the skill set of an actuary is being recognised across many disciplines, is this also true in France? Initially actuaries were only recognised within the insurance sector. However, the skill set of an actuary is now also recognised in risk management. In the future, it will be used across many other disciplines. How would you describe a typical day? As a young consultant like me, I think it’s difficult to have a typical day. Every day I am learning new skills, trying to exploit data, challenging different hypothesis and interpreting results. What were the influences that shaped your career decisions to date? The most important factor that shapes my career decisions is my curiosity and desire to add value to my work as an actuary. How will you celebrate the day you qualify? It will be a very happy day when I qualify, as it will be one of the major steps of my career.

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It’s a student’s life...Q&A

Portugal

Hélio was born in a small town in Torres Vedras, 30 miles from Lisbon. He currently works for the Insurance and Pension Funds Supervisory Authority of Portugal. Despite his fanaticism for Lisbon, he enjoys travelling and discovering new cultures and customs. He is a member of the IFoA.

Hélio Silva

In addition to this, younger actuaries seem to have an interest in the development and implementation of internal models. What’s the reputation of actuaries in your country? I think necessary steps need to be taken in order to recognise the actuarial role as an important one. I sometimes feel that the work of an actuary is underestimated, but hopefully this will change in the future. Lisborn is one of the major economic centres on the continent

Which actuarial field do you specialise in? I am currently working in the general insurance and non-life business sectors, but my ambition is to become an expert in catastrophe insurance. Which actuarial fields are the most popular in Portugal and why? One of the principal insurance topics is the workers’ compensation product. It is mandatory and covers against accidents that occur during working hours. It is very similar to some of the health products but has a few peculiarities. For this reason, in order to model it, you are required to be an expert in both life and nonlife techniques, so it is usual for actuaries to specialise because of the complexity. Can you tell us a bit about the industry or market you work in? The Portuguese market is not a very big one, we only have 40 insurance companes, one reinsurance company and one mutual insurance company. What led you to choose to study for an actuarial qualification with the IFoA? My masters degree in actuarial science has an exemption agreement with the IFoA but not for all the CTs, so I decided to finish at least the CTs because I think that a qualification like

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this one is more appreciated and accepted across Europe. Which of the actuarial exams do you consider the most difficult and why? I have not attempted all the exams but the main obstacle is time. It can be difficult to manage the three-hour period efficiently during the exams. In how many years do you expect to qualify? Hopefully, I can finish all the exams in the next four years. What kind of support do students typically get in your company and elsewhere? My company fully supports me in this qualification, but I know that this is not the case for all insurance companies in Portugal. Is there an actuarial student society in the area? No, we do not have one here in Portugal. What would you say are the ‘hot’ topics in your industry? With the implementation of Solvency II, the hot topics are related to all the new requirements, both quantitative and qualitative, and the outlines and specifications of that work.

How would you describe a typical day at work? This would depend on the type of work I am doing, but the majority of my days I would define as a constant learning process, with the usual daily obstacles to overcome. What were the influences that shaped your career decisions to date? My main influence resulted from my studying for my bachelor degree in mathematics. This gave me a strong foundation, and introduced me to the actuarial world. For that, I am grateful to all my professors and colleagues. Could you tell us about your immediate and longer term goals? My immediate goal is to finish the actuarial qualifications of the IFoA. As for the future, my aim is to be considered as a professional of excellence. What do you say when asked, “What is an actuary?” I generally have two answers, the quick and the more elaborate – the quick version is, someone that uses mathematics to achieve prices for your insurance contracts. It can be difficult for a lot of people to understand what an actuary does, so I prefer not to talk about it too much. How will you celebrate on your day of qualification? I haven’t really thought about it, but when that day comes it will definitely be memorable. It will be an unforgettable day.

July 2014 • A supplement to The actuary www.theactuary.com

It’s a student’s life...Q&A Spain

Born in Portugal, Miguel is a 24-year old graduate in mathematics applied to economics and management, and an MSc in Actuarial Science, from the ISEG, University of Lisbon. He currently resides in Madrid working for AXA. His passions include live music and travelling. He is a member of the IFoA.

Miguel Seixas

What are your views on the role of an actuary, both now and in the future? Actuaries are considered to have an important role inside the organisation and are respected for what they do. More actuarial expertise is needed, especially in analysing new emerging risks and the challenges that companies will face with Solvency II.

Madrid, a beguiling city of energy and style

Which actuarial field do you specialise in? My final actuarial thesis at University was in the field of risk theory, in particular, ruin theory. Right now I’m working with an internal model for economic capital calculations in the risk management department.

Which of the actuarial exams do you consider the most difficult and why? I think that the CT8 (Financial Economics) will be the most difficult due to the fact that it covers topics in which my background is not very strong.

Which actuarial fields are the most popular in Spain and why? The most popular ones are still the more traditional ones, such as reserving and pricing.

When do you expect to qualify? Two years from now (as an associate).

Can you tell us a bit about the industry or market that you work in? I work in several markets and each of them has their own particularities. On one hand we have the more traditional and mature markets of Europe that are suffering from the European crisis, and where companies are struggling to maintain a position. On the other hand there are the markets in South America or the Gulf region which are very dynamic and competitive, and where insurance companies want to increase their position in the market. What led you to choose to study for an actuarial qualification with the IFOA? As I had done a Masters degree this gave me exemptions from some of the CT exams. Also the IFoA is a strong organisation with recognition all over the world.

A supplement to The actuary • July 2014 www.theactuary.com

What kind of support do students typically get in your company and elsewhere in the market? Studying for the IFoA exams is not common practice in the market. Therefore there isn’t as much support by companies here, as there is in the UK. You can receive support from your manager or HR. It is usual to obtain payment of exams fees and some study days. What would you say are the ‘hot’ topics in your industry? Naturally, the implementation of Solvency II is still a much debated topic. What’s the reputation of actuaries in your country? The first reaction is always “what is that?” but when I explain what I do, the reaction is usually positive. I don’t think that actuaries have a bad reputation in Spain.

Is the skill set of an actuary becoming recognised across many other disciplines, in the Spanish market? Yes, absolutely. We see more and more people with actuarial skills working in different areas. There is a realisation from other fields that actuaries have a good sense of the risks affecting those fields and can easily adapt to roles other than the ‘traditional’ actuarial ones. How would you describe a typical day at work? I start at 9.00am and as I work with groups across different time zones, there are usually pending emails from the previous day. We then have a team debrief so we can organize our work for the day. We also provide daily support on any specific needs others might have. My day ends around 6 .00pm. What were the influences that shaped your career decisions to date? My first line manager and a colleague that started working at the same time as I did. We would talk and debate about the work we do and possible career paths. Could you tell us about your immediate and longer term goals? I want to qualify and continue to learn, and work in a wide variety of actuarial fields. What do you say when asked, “What is an actuary”? A mathematician that primarily works on analysing risks affecting an insurance company. How will you celebrate the day you qualify? By drinking champagne

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Its a student’s life... Netherlands

Born and raised in the city of Almere, Jurgen is now based in Amsterdam working for Towers Watson, specialising in general insurance. During his studies in Groningen he did not hesitate to try his hand at lacrosse, a fast-paced and spectacular sport. He spends most of his free time with friends and family.

Jurjen Boog

mathematical, and being less social than the average Dutch person. Overall, I think there’s a respect for actuaries and the work they do. What are your views on the role of an actuary, both now and in the future? An actuary’s opinion is generally accepted without question. As more people come into the industry, and with the increasing complexity of products, it is essential to be able to convey the results to a wider audience. The actuarial department cannot remain an island within an organisation, but needs to be incorporated into the business as a whole. Amsterdam – city of culture and commerce

Which actuarial society are you a member of? Actuarieel Genootschap. Which actuarial fields are the most popular in the Netherlands and why? Historically, most actuaries work in the field of life insurance or the pensions industry. This is due to the large amount of premium earned compared to the other markets. Moreover, the Netherlands has a unique and extensive pension system. Can you tell us a bit about the industry or market that you work in? Due to the fall in premium volume in the life insurance market, insurers have focused more on the general insurance market. Competition is fierce, making accurate pricing and innovation essential. What led you to choose to study for an actuarial qualification with the Actuarieel Genootschap? It focuses on the development of soft skills necessary in practicing actuarial work. It is useful to develop these skills as well as the technical methods. Which of the actuarial exams do you consider the most difficult and why? As there is a focus on soft skills, there are no

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exams as such. Of the mandatory courses the Market Valuation Seminar is the most challenging. The material is not hard, but assumptions and methods are tested thoroughly, making it a demanding course. What kind of support do students get in your company? Towers Watson facilitates our education by adjusting targets, and being flexible when there is more time needed for study. Is there an actuarial student society in your area, and what kind of activities does it organise? Every city where you can study econometrics or actuarial science has their own study association. These typically combine social and academic activities. The associations collaborate for the National Econometricians Day, where students get the opportunity to listen to key speakers and meet potential employers. What would you say are the ‘hot’ topics in your industry? Hot topics include pricing (mainly disability insurance) and claims reserving. What’s the reputation of actuaries in your country? People think of actuaries as being highly intelligent as the exams appear difficult and

In the UK the skill set of an actuary is being recognised across many disciplines, is this also true in the Netherlands? The ability to analyse a problem and to translate it into a mathematical question (and back!) is a skill sought after in many disciplines. Actuaries and others trained in applied mathematics, are therefore in demand. How would you describe a typical day at work? There is no typical day for a consultant. At present, I am busy with a reserving review assignment and discussing results with the client. Other assignments typically involve spending time with a client. I also work on developing intellectual capital topics. What were the influences that have shaped your career decisions to date? My thesis was on disability insurance, so I have worked on a number of related assignments . I have also been able to develop my knowledge of the business at Towers Watson. Could you tell us about your immediate and longer term goals? In the short term I would like to develop my knowledge in the fields of pricing and reserving. In the long term I would like to learn about the more generic aspects of an insurer rather than becoming an authority on one topic. How will you celebrate on qualifying? There is a graduation ceremony for all new actuaries, and then a dinner with my family.

July 2014 • A supplement to The actuary 9 www.theactuary.com

Its a student’s life... South Africa

Maijabeen was born in South Africa and currently works as an actuarial analyst for Towers Watson in Cape Town. Her hobbies include painting, sketching and baking. She also enjoys hiking and spending time with her family and friends. She is a member of the Actuarial Society of South Africa (ASSA).

Maijabeen Datay

What would you say are the ‘hot’ topics in your industry? These would include: socially responsible investing, value investing, regulation 28 compliance, analytics, mobility and networking. What’s the reputation of actuaries in South Africa? Actuaries here are highly recognised and respected due to the depth of knowledge, expertise and skills of the individuals.

Cape Town is a city of immense natural beauty and creativity

Which actuarial field do you specialise in? I currently work in the Investment field but my interests also lie in life insurance and gaining the Certified Enterprise Risk Actuary (CERA) qualification. Which actuarial fields are the most popular in South Africa and why? The insurance and retirement industries are traditional areas of specialisation. As the profession has started to grow the importance of actuarial skills has been recognised and they are being employed in a wide range of industries as well. Can you tell us a bit about the industry or market that you work in? The investment industry is a highly competitive and vibrant marketplace, and is very dependent on current local market conditions as well as the influence of global markets. Continuing professional development is very important in this industry so one learns a lot when completing day-to-day tasks. Individuals also need to ensure they abide by the code of ethics and standards and act in the best interests of the consumer at all times. What led you to choose to study for an actuarial qualification? I was the top achiever in mathematics at high school. This led me to pursue a career in

A supplement to The actuary • July 2014 www.theactuary.com

actuarial science as I realised it would be the best option to utilise my skills. I was also eager for the challenge ahead. Which of the actuarial exams do you consider the most difficult and why? The Actuarial Risk Management exam (CA1) is the most difficult as it has the largest syllabus. The specialist subjects also introduce a level of difficulty as well as broad spectrum thinking due to being structured different to the core technical subjects. When do you expect to qualify? I expect to qualify in the next two years. What kind of support do students get, in your company and elsewhere in the market Most students receive support in the form of exam and tuition fees which are paid for by the company as well as a number of stipulated study leave days based on the respective exam being written. Is there an actuarial student society in the area you work, and what kind of activities does it organise? Yes, the Association of South African Black Actuaries (ASABA) exists. It provides presentations by respected individuals in the industry, networking sessions, vacation work programmes and mentorship programmes.

What are your views on the role of an actuary, both now and in the future? As the world develops and the levels of risk in society changes and increases, so does uncertainty. Therefore actuarial skills are being used in many other fields other than the traditional areas. The role of an actuary in the future will become more prominent, and there will be a need to improve all competencies. How would you describe a typical day at work? No day is ever the same. Most involve reading up on current market trends, completing monthly and quarterly reports. Interaction among colleagues on an intellectual and social level occurs occasionally. Some days may also involve attending manager presentations and client meetings. What are your immediate and longer term goals? My immediate goal is to complete the exams and qualify as an actuary. My long term goals include gaining international exposure by working overseas, and giving back to society. What do you say when asked, “What is an actuary?” Many people think that actuaries are only good at mathematics and they are socially awkward. I usually describe an actuary as an expert who uses mathematics and statistical skills to analyse problems and determine solutions. How will you celebrate the day you qualify? I will celebrate with family and friends as they are the ones who have supported and encouraged me in my journey to become an actuary.

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It’s a student’s life...Q&A Canada

Besijana works at PricewaterhouseCoopers in Toronto, Canada. She is an avid long-distance runner and enjoys competing in trail running races. Another passion is playing classical music on the piano. Besijana speaks four languages and so favours watching foreign films, with her close circle of friends.

Besijana Mati

I believe that the actuarial role will become more influential in non-traditional fields in the financial services industry. It is an ever expanding and evolving role that is easily applicable and transferrable to new areas such as quantitative finance, for example.

Toronto – the cultural and financial capital of Canada

Which actuarial society are you a member of? I am a member of the Society of Actuaries – the professional body for actuaries in the US and Canada Where do you work? I work in the Audit and Assurance Group at PricewaterhouseCoopers in Toronto, Canada. I am a team lead in the confirmation centre which is part of the audit transformation program. Success in this leadership position is dependent on exceptional communication abilities and high conscientiousness. My educational background is in mathematics from the University of Toronto. Which actuarial fields are the most popular in your country and why? I believe that the most popular areas are life, pensions, property and casualty as those are the most well-established fields. Can you tell us a bit about the industry or market that you work in? It is exciting to be part of the audit transformation initiative, and to be able to provide input that directly aids in the optimisation of the confirmation process. The confirmation centre was established in January 2014, the same time that I happened to join the company.

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In the UK the skill set of an actuary is becoming more recognised across a wide range of disciplines, is this also true in Canada? Yes, a multidisciplinary approach is preferable and the deep knowledge and expertise that actuaries have is easily transferable to those areas. I think it also depends on the individual, whether someone in actuarial science is interested in learning more about those fields and where his or her interests lie.

What led you to choose to study for an actuarial qualification? A love for advanced mathematics mixed with a curiosity for economics and finance. Being an independent thinker, I enjoy the intellectual challenge that the actuarial exams present.

How would you describe a typical day at work? A typical day in my work place often presents competing demands that need to be prioritised. A high work ethic is essential and so is recognising the value of team work.

Which of the actuarial exams do you consider the most difficult and why? While later exams are more mathematically rigorous, I believe the challenge of the actuarial exams lies in the high standards required.

What were the influences that shaped your career decisions to date? I entered university in the economics and finance program, but I felt drawn towards taking mathematics courses and decided to transfer to that program. I discovered my interest in actuarial science by completing electives in this area and I have not looked back since.

In how many years do you expect to qualify? I expect to become an Associate of the Society of Actuaries (ASA) in the next four years as I continue to work full-time. Is there an actuarial student society in your area and what kind of activities does it organise? Yes, the University of Toronto has an actuarial society. It organises various networking and excel training events. What’s the reputation of actuaries in your country? It is a well-respected career. What are your views on the role of an actuary, now and in the future?

Could you tell us about your immediate and longer term goals? I am always striving to learn more. It is equally important that I gain experience in the work place as well as continue to study on my own. What do you say when asked, “What is an actuary”? I usually say that it is a term for a corporate mathematician. How will you celebrate the day you qualify? I will host a dinner party in order to celebrate my accomplishment with my friends.

July 2014 • A supplement to The actuary www.theactuary.com

It’s a student’s life...Q&A Brazil

Luiz was born and raised in São Paulo. He works as a life and health products actuary for Swiss Re. In 2013 he completed an MSc in Actuarial Science at Cass Business School, London. His interests include Portuguese and Brazilian literature, and good movies. He is a member of the IFoA.

Luiz Bueno

What are your views on the role of an actuary now, and in the future? The actuarial role needs to become more prominent in the Brazilian market. Companies need to realize that actuaries are experts in every business situation where risk is involved, not just pensions and life insurance.

São Paulo overwhelms the senses with its sheer size

Which actuarial field do you specialise in? Life and health. Which actuarial fields are most popular in Brazil and why? Pensions, life and health, due to the specific knowledge that actuaries acquire during their studies. In Brazil, to qualify as an actuary you must do an undergrad in actuarial science and sit a single yearly exam with the Brazilian Institute of Actuaries. Other popular fields include property, casualty, investments and risk. Can you tell us a bit about the industry or market that you work in? The Brazilian insurance market still needs development in process and innovation. Life insurance products, for example, are simple and do not offer many options. The expertise of international markets and institutions are essential to improve our industry as a whole. . What led you to choose to study for an actuarial qualification with the IFoA? I believe that studying for this international qualification will allow me to pursue better opportunities in my country. Which of the actuarial exams do you consider the most difficult and why? CA1 (Actuarial Risk Management), seems one of the more complex. First, because your strategic

A supplement to The actuary • July 2014 www.theactuary.com

study has to change by the time you reach the Core Applications. Second, language for non-natives can be a barrier at this stage. In how many years do you expect to qualify? I’m not in a hurry. I still have ten exams to go. If I pass them in four years it would be perfect. What kind of support do students get, in your company, and elsewhere in the market? International companies with actuarial students in other parts of the world are more open to support Brazilian students. Local companies, unfortunately, do not assist their employees in their international actuarial studies yet. What would you say are the ‘hot’ topics in your industry? The reinsurance market in Brazil was a public monopoly. In 2007 the market opened to international competitors, who are still managing to fit in with our market practices and regulation. Companies such as Swiss Re and Munich Re are good examples. Therefore, I would say that reinsurance is one of the biggest topics in Brazil. What’s the reputation of actuaries in Brazil? Most people don’t know what we do. When I explain it, they answer: “Wow! This looks complicated; you must earn a lot…”

In the UK the skill set of an actuary is being recognised across many disciplines, is this also true in Brazil? Yes, but maybe not as much as in the UK. Many undergrad colleagues are currently working in different fields such as entrepreneurship, risk management and banking rather than traditional actuarial fields. Can you describe a typical day at work? The exciting thing about working for a reinsurer is that no two days are the same. One day I could be working for a Critical Illness solution for the Chilean market, and the next, trying to implement simplified underwriting in Brazil. What were the influences that shaped your career decisions to date? I had wonderful mentors during my studies and early days in the profession. All of them were all convinced that learning international practices would boost the actuarial profession in Brazil. I knew then that pursuing an international qualification would fit with my career aspirations. Could you tell us about your immediate and longer term goals? I intend to assist in promoting an actuarial career in Brazil. In a longer term I expect to be a reference for actuarial professionals in Latin America. What do you say when asked, “What is an actuary”? Classic question! I always try to summarise it as an expert able to understand and measure risks in business on which potential losses are associated. How will you celebrate the day you qualify? By the time I obtain this achievement, it will be like a World Cup championship celebration.

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