the actuary - december 2014

The magazine of the actuarial profession

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DECEMBER 2014theactuary.com

Interview: Steven MendelThe power of social networks shaking up the insurance world

FinanceCentral bankers and the death of free markets

InvestmentRisks and gains of non-traditional assets

RiskCyber catastrophe: how bad could it be?

Split personalitiesManaging the complexities of model risk

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THE ACTUARY • May 2013www.theactuary.com

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

Get new insights on your business at uk.milliman.com.

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DECEMBER 2014

MORE CONTENT ONLINEAdditional content can be found at www.theactuary.com

WRITERS OF THE MONTHColin Czapiewski wins a £50 book token for his three-part series on the role of NEDs, courtesy of SIAS

AT THE BACK30 Puzzles

Try the latest cryptic crossword, plus Mensa puzzles solutions

38 Book review The Improbability Principle by David

Hand, reviewed by Matthew Edwards

39 StudentJessica Elkin recreates her own Christmas Carol with past exam results, present swapping and future prospects after embarrassing party evidence

40 Actuary of the future Richardt Hechter of Discovery Limited

ONLINE 12 Days of Christmas puzzles

For your chance to win an iPad mini, and an array of other great prizes, visit: puzzles.theactuary.com

Review: Capital in the 21st century Ian Thomson and Ian Reynolds off er their

own perspectives on French economist, Thomas Piketty’s best-selling book on wealth concentration and distribution.

FEATURES16 Interview: Steven Mendel The social network entrepreneur talks

to Richard Purcell and Gemma Gregson on revolutionising insurance

19 GI: Greater than the sum of the parts

Information and knowledge sharing between actuary and underwriter can have a positive eff ect, says Rob Barritt

20 Finance: Rise and rise of the central banker

Detlev Schlichter explains why central bankers’ control can lead to the death of free markets

22 Investment: Navigate risk to harness opportunity

Gareth Mee, Gareth Jones and the non-tradional assets working party provide an update on the risks and gains of NTAs

31 Careers: Almost on board Colin Czapiewski considers the many

functions of a non-executive director

36 Risk: Cyber catastrophe Andrew Coburn, Simon Ruffl e and

Louise Pryor ask how bad could it get?

UP FRONT10 IFoA news

14 People/society news

OPINION5 Editorial Kelvin Chamunorwa off ers food for

thought on the future of the actuary

6 Letters Actuaries on changing times, life and

death, and forecasting fallacies

7 President’s comment Nick Salter believes achieving value

from diversity will make you and your business succeed

8 Soapbox The IFoA can guide the 21st century

actuary by challenging the mindset, says Michael Tripp

16

“In our analysis, multiple perspectives on risk and modelling are considered legitimate, which market participants may not fi nd easy to express in public”34

EXTRA25 12 Days of

ChristmasPuzzles – enter to win one of many prizes

3December 2014 • THE ACTUARY

Contents

COVER: VINCE FRASER

22

n


We have put together 12 puzzles for you to

attempt as the year comes to a close.

As an incentive, there will be a prize draw

for correct entries to each puzzle. An iPad

Mini is up for grabs if you submit correct

answers to all 12 brain-teasers.

To enter, submit your answers at

www.puzzles.theactuary.com by 5 January 2015.

Only members of the Institute and Faculty

of Actuaries are eligible to win a prize.

I trust you will relish this festive challenge!

Seasons greetings to you all. Kelvin Chamunorwa

Editor

The ActuaryIn partnership with

British Mensa


The IQ style puzzle content is supplied by, and is

the copyright of, British Mensa Ltd. Puzzles cannot

be reproduced in any format without permission

from British Mensa. www.mensa.org.uk

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December 2014 • THE ACTUARY

OpinionEditorial

A recent highlight at The Actuary has been hosting webinars on emerging themes in the actuarial world. This is exciting as it introduces a diff erent mode of interaction with the magazine’s readers. Our webinar in September was about big data and analytics and the three speakers revealed practical insights into their work in this area (bit.ly/1BQ4nQf).

The panellists dispelled the analogy coined by Dan Ariely, a professor at Duke University, that big data is like teenage romance – “everyone talks about it, nobody really knows how to do it, everyone thinks everyone else is doing it, so everyone claims they are doing it”.

Enterprise risk management is another area where the actuarial profession is expanding the reach of its skill set. However, some in the profession feel that our focus should be just on pension schemes and insurance companies – actuaries’ widely renowned forte – and preserve the levels of our remuneration. I view actuaries’ strengths to be analytical rigour, the ability to communicate

uncertainty with a commercial outlook, and high professionalism. This applies to valuing the liabilities of a defi ned benefi t pension scheme as much as it does to assessing emerging risks within the enterprise risk management framework of an online retailer.

Michael Tripp shares his opinions on the future of

the actuary in this month’s soapbox and considers key questions about exams and regulation, topics which have been debated this year in The Actuary (p8).

I am optimistic about the success of the profession’s diversity agenda. Some actuaries have been successful in developing novel business models to help the public manage its risks. A case in point is our interviewee this month, Steven Mendel. He is chief executive and co-founder of Bought By Many, an intermediary which connects individuals with similar insurance needs to negotiate better terms as a group (p16).

There is power in numbers, and when coupled with diversity of background, skills and experience the possibilities for success are boundless.

PublisherRedactive Media Group17-18 Britton Street, London EC1M 5TP +44 (0)20 7880 6200

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Published by the Staple Inn Actuarial SocietyThe editor, The Institute and Faculty of Actuaries and Staple Inn Actuarial Society are not responsible for the opinions put forward in The Actuary. No part of this publication may be reproduced, stored or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission of the copyright owners. While every effort is made to ensure the accuracy of the content, the publisher and its contributors accept no responsibility for any material contained herein. Important information for contributors to The Actuary By submitting content for publication you confirm that: (a) You (and/or other named contributors) are the sole author(s) of the content submitted;(b) The content you submit is original and has not previously been published (unless you specifically advise us to the contrary);(c) You haven’t previously licensed the use of the content you submit; (d) So far as you are aware, the content submitted will not infringe any third-party rights, be defamatory or in any way illegal.

© SIAS December 2014 All rights reserved ISSN 0960-457X

Branching out

Subscriptions For subscriptions from outside the actuarial profession, UK: £90 per annum/£8.50 per copy. Europe: £110 per annum, rest of the world: £130 per annum. Contact: Alison Jiggins, The Institute and Faculty of Actuaries, Staple Inn, High Holborn, London WC1V 7QT. T +44 (0)20 7632 2100 E [email protected] on actuarial science courses may join and they will receive The Actuary as part of their membership. Apply to: Membership Department, The Institute and Faculty of Actuaries, Maclaurin House, 18 Dublin Street, Edinburgh EH1 3PP. T +44 (0)131 240 1325 E [email protected] Changes of address should inform the membership department as above. For delivery queries, contact: Rachel Young E [email protected]

Circulation 25,331 (July 2013 to June 2014)

In this fi nal edition of the year, Kelvin Chamunorwa provides food for thought on the future of the actuary

[email protected]

“Some actuaries have developed novel business models to help the public manage its risks”

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6www.theactuary.comTHE ACTUARY • December 2014

MORE LETTERS ONLINEMore letters are available online atwww.theactuary.com/opinion

OpinionLetters to the editor

The editor welcomes readers’ letters but reserves the right to edit them for publication. Please email [email protected]. The deadline for receiving letters for the January/February issue is 19 January 2015.

[email protected]

I am sitting reading the latest The Actuary magazine here in the English village of Abbots Leigh and have seen the article on SoNIA or the Society of Northern Ireland Actuaries (The Actuary, November, bit.ly/ 1uvGKtd). This was my fi rst inkling of its existence and reminded me of my experience.

After a BSc in economics at Queen’s University Belfast, I trained at Standard Life, specialising in investment, qualifying in 1968. Along with David Kingston and Peter Derby, I believe we may have been the fi rst generation of Ulster actuaries, although someone will no doubt prove me wrong. We all qualifi ed in Edinburgh in the late 1960s.

I spent most of my career as the investment manager of Imperial Group Pension Fund, then a big conglomerate, of

which Imperial Tobacco is the last element left. My fi rst boss was George Ross Goobey, who is famous for being the fi rst real proponent of equities for pension funds. I am still chairman of the Pensioners’ Association, a sort of pensioners’ trade union.

At 77, my last paid role is appointed investment adviser to Cornwall Council Pension Fund. They seem to prefer the devil they know, as I regularly suggest retiring. Anyway, please excuse these ramblings of the elderly. I was a founder member of the Bristol Actuarial Society around 1970, having been one of three actuaries in the city when I came here in 1968, so I know the problems of keeping an actuarial society going. Best of luck to this ‘young’ organisation. Norman Ferguson 7 November

Top 10 Forecasting Fallacies (The Actuary, November, bit.ly/1F2Puvs) was an excellent article. I have seen most of these things happening – in particular, modelling based on past experience without asking if that is relevant.

It would be a great article to re-read when involved in some

modelling. I also feel, from my experience of when I did the exams, that there was too little focus on these types of assumptions.

I hope that the exam syllabus has progressed and includes these and similar issues. Robert Kerr 11 November

Life and death questionsI have a few technical queries around the article Risks of mis-estimating mortality by Stephen Richards (The Actuary, November, bit.ly/1xP2UrG).

I thought that the article was very well written and useful, particularly around Solvency II and risk pricing.

First, on the correlations between the two parameters:● Were these calculated from the data? If so, do you think some of the very small values (for example -1%) are spurious and should be modifi ed to zero?

Richards: They were calculated from the log-likelihood, which itself was calibrated to the experience data. So, the data is involved, but indirectly, via its contribution to the log-likelihood.

The small values certainly support the assertion that some parameters are uncorrelated. Whether you set these to zero, or whether you use them unmodifi ed, will make very little diff erence.

● Do you believe that correlations between the parameters would vary by scheme? It seems more intuitive to me that these correlations should be a feature of mortality, and not vary by scheme, whereas the actual parameter values themselves should vary by scheme. If so, do you think these could be set using a much larger dataset?

Richards: Yes, because diff erent portfolios exhibit diff erent correlations (and often diff erent risk factors).

Second, on the generation of parameter sets for each portfolio valuation:● Did you generate these assuming that the parameters formed a multi-variate normal distribution?

Richards: Yes. This assumption is well-grounded for joint maximum-likelihood estimators.

● Do you think a copula-type approach, potentially allowing for tail dependence, could give diff erent results and do you think this could be more appropriate?

Richards: It would give diff erent results, but I don’t think it would be more appropriate. The multi-variate normal distribution assumption is a well-founded asymptotic feature of maximum-likelihood estimators.

Matthew Roche 17 November

Best of luck, SoNIA, from an old hand

Modelling bias

JASON BENNION

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OpinionPresident’s comment

What does your grandma have to do with the way you work? Probably more than you realise. We all learned a lot from our grandparents and their lessons on life – maybe subconsciously – or from our parents, who in turn learnt from theirs – and so we fi nd ourselves back to grandma. Her wisdom and quirky expressions shape our unconscious beliefs, as Laura Liswood, a world-renowned expert in diversity, told the IFoA Council in October. These lessons provide us with a point of view that in turn informs our perspective of others and ourselves.

But when grandmas come from diff erent parts of the world, as many of our members do, their wisdom needs to be seen through a diff erent lens for us as business professionals, to really understand and harness its true meaning and benefi t. Take for example the loudest duck in China, the squeaky wheel in the USA, and the nail that sticks out in Japan.

Lost in translation Laura’s book, The Loudest Duck, brings grandma, the duck, the wheel and the nail to life in a way that brings home the real issues we face with diversity, and how we bring our own preconceptions into the workplace unconsciously.

Diff erent grandmas say diff erent things. In the US she says that the squeaky wheel gets the grease, in China the loudest duck gets shot, and in Japan the nail that sticks out gets hit on the head.

You will have probably already come to a conclusion as to what these aphorisms tell us. You might be thinking that what they all have in common is that they ‘stand out’ and possibly, by extension in our day-to-day professional lives, the person who stands out gets recognised, listened to or promoted faster. Well yes, in a sense you could be right, they do all stand out in their own way, but do they all get recognised in the same way? I’m not sure the answer to that question is yes. Speaking out doesn’t always get rewarded; in some cultures it is positively discouraged.

So why is this important to us as actuaries and business professionals? In the culturally diverse world in which we, as actuarial professionals work, grandma’s duck, wheel and nail are far from uncommon. We need to

embrace this diversity and use it to our advantage to drive success in all that we do.

You may well say: “What has this got to do with me and where I work?” The best way to explain is to recount a story told to Council by Laura, which described from the duck, wheel and nail’s perspective how a box ticking approach to diversity doesn’t work.

I am sure the story will resonate with many of you. You are a manager in a business and you have built a small team of people with diverse skills, personalities and from very diff erent backgrounds. Some might argue that you’ve metaphorically ticked the diversity box, but you need to recognise that perhaps what you have done is employed a duck, a wheel and a nail.

You and the team are hard at work solving the problem of the day. Now, I’m not a betting man, but the chances are that the wheel is getting all the attention because they are doing all the talking. Meanwhile, the duck and the nail are quietly getting on with the task in hand without joining in the verbal gymnastics because grandma told them not to speak up.

As the manager, you have probably unconsciously listened to all the wheel’s great

ideas, and come to the conclusion that the duck and the nail have nothing of value to contribute, and ultimately promote the wheel for all his or her good ideas.

So having carefully hired the diverse groups, all you are getting are the wheels talking and everyone else listening. At best, you haven’t achieved the real cognitive diversity that your business needs to truly succeed, and at worst the ducks and the nails are likely to be unfairly evaluated and probably disadvantaged.

And that’s my point. As a profession we need to not only listen to grandma, but listen to what she says through a diff erent, diversity lens, if we are to attract, motivate and benefi t from the wheel, duck and the nail sitting on one of

our volunteer committees and boards. Equally, as a professional body, we need to promote the value that each can bring to the businesses in which they currently work, and may expand into in the future.

My most profound thanks go to Laura Liswood for such an excellent presentation to Council, which brought all this to light in such an innovative and engaging way. a

›

NICK SALTER

Achieving value from diversity will make you and your business succeed, says Nick Salter

“In the culturally diverse world in which we work,

grandma’s duck, wheel and nail are far from

uncommon”

Nick Salter is the president

of the Institute and Faculty

of Actuaries

On ducks, wheels and nails

p07_dec_pres_comment_FINAL•CT.indd 7 25/11/2014 15:29

www.theactuary.com8 THE ACTUARY • December 2014

OpinionSoapbox

Since 1981, I have watched with interest the changing nature of GIRO as my employment has varied between actuarial consulting and senior insurance leadership. In 33 years, the overall membership of the IFoA has grown from 3,500 Fellows to around 12,000.

Where the actuarial profession progresses next is a topic all corporate boards should be discussing at least once a year. The focus on mathematics associated with the actuary’s key role is being aff ected by technology, analytical logic tools and the overall desire to chart the risk profi le of the global consumer. So will the perfect future actuary be a double fi rst in maths, or would an Oxbridge philosophy, politics and economics (PPE) student or PhD in computer sciences have a more rounded understanding of the unknown risks on the horizon?

Where are we now?● Currently, the IFoA base is focused on the domains of pensions, life insurance and general insurance, with some investment interests and a broadening enterprise risk skill set.● Following the Morris review, there is a robust governance structure, with clear professional standards and a quality assured framework that accepts peer review as normal.● Mathematics remains the core discipline, and aspects of fi nancial modelling and predictive tools are critical.● The reputation of an actuary remains high, and with corporate governance more prevalent at board and non-executive director levels, actuaries play an important part in the regulatory framework of all companies. ● Actuaries remain relatively diverse personality types. Although, in terms of the Myers-Briggs personality indicator, they are typically slightly introverted, analytic and orderly thinkers, many are highly strategic.

Where do we want to be?A narrow scenario could see the profession 20 years from now consisting of 20,000 Fellows still focused on pensions, life and general insurance. Some would dabble in the risk management space, but clearly domain expertise would remain vital. Occasionally an actuary would become a chief executive or other C-suite member. Exams and CPD would be technical and target specifi c subject areas, underpinned by targeted research.

Actuaries would comment publicly on a limited range of topics but in a manner admired

and trusted by the public, and there would be investment in research to deepen the analytic skill base for specifi c fi nancial modelling.

A wider scenario might see the profession double in size to 40,000 Fellows, and the IFoA would be part of a clear global alliance with two or three other actuarial bodies.

The actuarial domain would stretch well beyond insurance to any industry where fi nancial and predictive modelling are key. The profession’s reputation would be built on deep-seated mathematical and technological skills coupled to process engineering; and there would be soft-skill development. Creating two streams of qualifi cation, one based on maths and one on analytic logic skills, may be the answer.

Whichever of these future visions is considered – narrow or wide – the gap between where we are and what we want to achieve varies.

The IFoA needs an ambitious vision and this poses major questions.● Where does maths lie in the future vision – should the profession be pursuing deeper, forward-looking techniques?● Is maths the only bedrock? Actuaries have a penchant for critical thinking, yet there are analytic minds who just don’t do maths! ● Is our modelling skill base adequate?● Is the balance right between being a learned society and a business-based profession?

● Is the profession too risk averse?● Should the IFoA become more active in public debates?● Is domain expertise a strength or restriction?● Should the IFoA have a purely regulatory role?● How does the profession move faster without compromising standards?

DiversityIt is an overused word but, in this profession, it means protecting our mathematical skill base and investing in it, while at the same time widening beyond it.

At our core could be risk and fi nancial modelling, but including behavioural expertise and wider process engineering skill sets.

Actuarial disciplines can be developed through the learned society approach, with more planned research using a variety of tools in the new social media channels. Regular comments on a variety of topics can be expressed.

Yes there is a risk – actuaries could lose their technical reputation, but

there is also a risk in not changing. Competition is high from technology and

new platforms – it’s up to the IFoA to fi ght to remain active and relevant.

Michael Tripp is partner and head of actuarial services at Mazars

›

MICHAEL TRIPP

Bridging the gap

“Competition is high from technology

and new platforms – it’s up to the IFoA

to fight to remain active and relevant”

The IFoA can guide the 21st century actuary by challenging the mindset, says Michael Tripp

p08_Dec_soapbox_FINAL•CT.indd 8 25/11/2014 15:36

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NewsIFoA

UpfrontNEWS UPDATES FROM THE ACTUARIAL PROFESSION

As I write this month’s article, I can hardly believe that 2014 is already drawing to a close. The year has fl own by, and as we reach the end of another busy year for the IFoA, as usual I’d like to highlight some of

the key activities we’ve undertaken to support our strategic objectives.On education, we held the fi rst Certifi ed Actuarial Analyst (CAA)

exam session, which saw entries from 20 countries. Financial fi rms and regulators increasingly rely on having strong technical skills embedded within staff at many levels of their organisations, and the CAA will ensure that these professionals have access to a qualifi cation – and professional body – which is relevant to their career needs.

We have piloted the new Quality Assurance Scheme, which promotes greater engagement with actuarial fi rms and has attracted attention from many national actuarial societies around the world. While it is exciting to do something completely new, we will listen carefully to the feedback from the pilot to ensure that we get this right.

It is hard to highlight just one of our member events over the year, so I’ll double up with the Life and GIRO conferences. Securing great speakers and content, aligned with expert execution, resulted in having around 2,000 attendees across the pair, and feedback from delegates confi rms that the conferences continue to go from strength to strength.

Our work with UK regional actuarial societies continues to gain momentum. A recent survey of committee members within these found that, while there’s more to be done, most felt supported by the IFoA.

We continue to build our public aff airs profi le. We were approached by Chatham House, the Royal Institute of International Aff airs, to partner on its global climate change conference. This is a real step

forward for the IFoA, as it demonstrates how leading groups in the public aff airs arena are recognising the contribution that

actuarial knowledge can make to their work.I am delighted that we have been able to appoint

Professor Mark Cross as the fi rst lay chair of the new Research and Thought Leadership Committee. His extensive experience of research and its application will be invaluable as we drive our agenda forward.

Highlights of 2015 promise to include the IFoA’s fi rst cross-practice residential conference, in Beijing in May, and the launch of our new website.

Wishing you all the best for the festive season.

Series of fi rsts ina successful year

OpinionCEO’s comment

Derek Cribb evaluates the IFoA’s activities in 2014 and looks at what the new year has in store

DEREK CRIBB

Derek Cribb is the

chief executive of

the Institute and

Faculty of Actuaries

We were delighted to present Professor Karel Van Hulle (pictured below) with his Honorary Fellowship at the Life Conference in November.

Professor Van Hulle received his Honorary Fellowship in recognition of his contribution to the actuarial community. Through his work at the European Commission he has ensured

that regulators across Europe adopt approaches that refl ect a quantifi able risk-based approach that is consistent with an actuarial assessment of risks.

A friend of the actuarial profession in the widest sense, he has ensured

that there is a good dialogue between the

European Commission and actuaries across Europe, which has helped ensure that, at

its heart, regulation refl ects the public

interest that is part of the IFoA charter.

Friend of profession honoured for EC dialogue boost

Symposium highlights new mortality insightsIn September, the IFoA Mortality Research Steering Committee welcomed world-class experts to the International Mortality and Longevity Symposium to highlight research and exchange views on mortality projection. Delegates had the opportunity to hear from eminent speakers in the fi elds of biogerontology, longevity, health and health data, and mortality forecasting. One delegate captured the aims of the symposium perfectly, saying: “A new language is emerging to explain the transition from expert knowledge to dependable assumptions for the future.” A publication summarising the emerging

themes, plenaries and workshops is available at bit.ly/1xrTjHU

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11www.theactuary.com


‘Guinea pigs’, unlike their small furry namesakes, play a vital part in the IFoA exam process. Each year, 100 members are needed to test, review and provide feedback on new exam papers. In 1994, Fiona Layton was one such volunteer, but at that time did she have her sights set on becoming chair of the Board of Examiners? Here she discusses her journey from ‘guinea pig’ to the chair person’s role

Q. What enticed you into applying for the guinea pig role? A. I was asked, and having had some unhappy exam times while qualifying I was keen to try and improve the system. It was strange seeing things from the other side, but I can confi rm what many examiners say: some students don’t read the questions carefully enough!

Q. What did you do next and why?A. There was a natural transition to become an assistant examiner, which involved marking scripts, followed by ‘promotion’ to an examiner, which added question setting to my role. As a pensions consultant it was fun to convert my clients’ problems into questions for the applications exam. Later, with this experience, I became principal examiner for the pensions exams.

Q. Which of your professional development and responsibility (PDR) roles prepared you most to become chair of the Board of Examiners?A. The principal examiner role; it involved me directly in the work of the Board of Examiners beyond my ‘own’ subjects, maintaining standards, reviewing the syllabus and core reading for the subjects.

Fiona Layton: from ‘guinea pig’ to chair of examiners

Q. How do you balance work and volunteering?A. I couldn’t have managed things without the support and good humour of other examiners, the Registry teams in Oxford and the education actuaries, and, of course, my employer.

Q. So what sold the role of chair of the Board of Examiners?A. It’s an honour to chair such a dedicated board of volunteers. Their willingness to work hard so that there is a continuing supply of qualifi ed actuaries never fails to impress me. This area is about being a part of the future, infl uencing change that will determine the pathway of the members of the IFoA.

Q. Describe a typical day as chair of the Board of ExaminersA. I’m pleased to say that there isn’t such a thing as typical day. I can be attending meetings with students or the Education Board or other interested parties, reviewing future exam papers, reacting to exam-related issues that arise or just generally keeping up to date with education matters. It is a much more varied role than I had anticipated.

Q. What do you hope to achieve in your two years as chair?A. To maintain the standards and integrity of the current exam systems and to support its adaptation to refl ect the changing role of actuaries both in the UK and overseas.

Q. What advice would you give to others considering taking on a PDR role?A. It is a brilliant way to meet people at other organisations and pleasing to be part of the team that ensures the future supply of

actuaries; but it is not all down to altruism. In my professional life, this is the most rewarding thing that I have done, everybody says thank you; it is so nice to receive this recognition. Did I mention there are even opportunities to gain some CPD!

Q. Looking to the future, what next for a retired chair of the Board of the Examiners?A. I could stay with the exam system I know and get involved in exam counselling, or look to help the profession by being a link with one of the IFoA’s accredited universities, which off er courses leading to exemptions. For this, independent examiners are used to ensure that the standard is equivalent, and I believe it is important that these standards are maintained.

Over 500 PDR volunteers support education in a variety of roles. If you are one of the 2014 guinea pigs, where will your journey take you? For further information, email [email protected] or visit bit.ly/10QSdIQ

CPD and professional skills audit: what to expectThe IFoA’s membership team will begin their annual audit of continuing professional development (CPD) records this month. For the fi rst time, however, completion of the Stage 3 professional skills training (PST) requirement will also be monitored.

The membership team will randomly select from the following categories:● 10% of all Category 2 members; and ● 10% of all members who were expected to complete Stage 3 of the PST requirement in the 2013/2014 reporting year.

If selected, you will be asked to provide written evidence of your participation in activities that meet your minimum requirements. If you have recorded more than your minimum hours, you will not be expected to produce evidence for each activity.

Some examples of acceptable evidence are:● a signed register of attendance; ● a communication from the organiser of an event, which confi rms your attendance; ● a certifi cate vouching for completion of a course or activity;

● hard copies of lectures or presentations delivered by you;● articles or papers written for publication;● written note from another Fellow of the IFoA vouching for your attendance at or completion of an activity; and● confi rmation from the provider of an online resource.

If you have any questions about the monitoring process or acceptable forms of evidence, please email the membership team. [email protected]



NewsIFoA

NEWS UPDATES

The IFoA Life Conference 2014, which took place at the ICC in Birmingham, was a roaring success, with 978 delegates and speakers in attendance. It began with Nigel Wilson, chief executive at Legal & General, sharing his thoughts on recent budget announcements and other regulatory changes.

On day two, the UK economy and the outlook for bond yields was discussed by Andrew Roberts, co-head of European economics, rates and CEEMEA research at RBS, and Ross Walker, senior UK economist

at RBS. The Professional Content Development Working Group saved the day, when it stepped in for Plenary 3 and presented an entertaining and thought-provoking Professional Skills session to ensure the audience received one of their required CPD hours.

Delegates received technical updates from workshops that included: Solvency II; the Budget and its implications for the retirement income market; with-profi ts issues; annuities; and asset management and investment.

There was more excellent content on day three, with Jasmine Birtles, fi nancial journalist and founder of Money Magpie, giving her views on personal fi nance. Steve Webb MP, minister of state for pensions, closed

the conference with an honest and engaging session on the Budget reforms and changes to pension policy. All in all, it was a packed, thought-provoking programme.

A diverse range of companies supported the event by sponsoring or taking an exhibition space. Many attracted delegates to their stand with interactive competitions and prize draws. Roulette, jet skiing and golf putting were among the stand activities, which encouraged networking and healthy competition! Three of these companies have positively endorsed their experience by booking to exhibit at Life 2015.

The Hollywood-themed conference dinner was a night of glitz and glamour that saw LA’s fi nest out in force. From Sinatra to Marilyn, our conference delegates were transported back in time for an evening of enchanting elegance and sparkling style. In true Hollywood tradition, Oscars were presented to the best-dressed male, Jonathan Goold, and best-dressed female, Rhian Brown. They were also awarded to the table with the best fi lm knowledge after completing the cinema-inspired quiz.

Congratulations to the Life committee and IFoA events team for a fantastic event. To view the photographs of the conference

dinner, visit bit.ly/1udNCI4 Save the date: Life Conference 2015 will take

place from 18-20 November at the Convention Centre, Dublin.

Hollywood stars come to Life 2014

Professional Standards Directory updatedThe Professional Standards Directory (bit.ly/IWaytE) is designed to permit members and others to access the IFoA Actuarial Profession Standards, together with the current Financial Reporting Council Standards. Update 32 was issued to members on 24 October.

Actuarial Profession Standard X3: The Actuary as an Expert in Legal Proceedings The IFoA consulted upon a proposal to introduce a new Actuarial Profession Standard (APS) relating to actuaries instructed as expert witnesses or expert advisers in legal proceedings. We have now approved the introduction of the standard and the accompanying guide.

Version 1.0 of APS X3 (bit.ly/1tySzL5) comes into eff ect on 1 January 2015. This replaces the

existing Information and Assistance Note: The Actuary as an Expert Witness, which will be withdrawn at the same time.

The APS is accompanied by a detailed guide (bit.ly/1uWJ2oz), which is intended to assist those who are instructed as expert witnesses or expert advisers, as well as those thinking about accepting such instructions. The guide is focused primarily upon UK legal proceedings, but we anticipate that the guidance might be useful in other jurisdictions as well. If you have any questions about the

introduction of APS X3, please email [email protected]

Annual subscription fee reminderMembers who have not yet paid their annual subscription fee for 2014/2015 are reminded the fee is due and should be paid by 31 December 2014 to avoid default of membership. You can pay your subscription fee by logging onto the member’s area of the website or contacting the membership team at [email protected] or on +44 (0)131 240 1325. If you wish to cancel your membership, please ensure you let us know, as allowing your membership to default could aff ect future reinstatement costs.

Overseas members who haven’t submitted their yearly application for partial regulation (bit.ly/18xetu2), should send their completed certifi cate of eligibility (bit.ly/1qACbdh) to the membership team without delay.

Members who intend to apply for a reduced rate subscription should return their completed reduced rate application (bit.ly/1u25Z7M) as soon as possible.

the consession

onfi nMope



December 2014 • THE ACTUARY 13

EVENTS AND CONFERENCES

Masterclasses are a series of

live events that have been

created to help actuaries achieve

success in all areas of the

business world. Developed by

experts within the fi eld, these

classes are aimed at supporting

those who would like to improve

specifi c business skills that are

not always covered in formal

training. Book all four

Masterclasses and receive a

£100 discount.

Infl uencing Others9 December, London09.00-13.15Great communication is all about the power to infl uence – not the infl uence of power. Learn how to infl uence diff erent people in diff erent situations and add several more strings to your bow as a communicator. Book your place online: bit.ly/1EDZE3s

Diffi cult Conversations9 December, London13.00-16.45Diffi cult news can be even more diffi cult to deliver, requiring you to

manage emotions and information sensitively. This course teaches you how to clearly convey an important message while maintaining the relationship with the other person. Book your place online: bit.ly/1EDXf8Y

Public speaking/presenting13 January 2015, London09.00-12.45Take the pain out of presenting with simple and practical techniques that will enable you to come across as articulate, prepared, confi dent and intelligent. Book your place online: bit.ly/1pZ26R2

Motivating and Inspiring Others13 January 2015, London13.00-16.45Great speakers and leaders provoke energy and commitment because they inspire and motivate their audience into action. Here you will learn techniques to help you be an inspirational leader. Book your place online: bit.ly/1sMvBRK

2015 Call for SpeakersSee details of upcoming events and submit your proposals online: bit.ly/1iqhmRO

Nominations for IFoA Honorary Fellowships and for the Gold and Finlaison medals are now being sought. The closing date is 19 December.

Honorary FellowshipMembers are invited to nominate for an Honorary Fellowship candidates who have made a signifi cant contribution to the profession, and who have an active and ongoing involvement with the IFoA. Notable Honorary Fellows include former parliamentary commissioner for standards Sir Phillip Mawer and economist Sir Andrew Dilnot and, stepping back into the mists of time, eminent persons such as computer science pioneer Charles Babbage and medical statistician William Farr. For more information and to complete the

nomination form, visit: bit.ly/1ufH3JL

Gold and Finlaison medalsThe IFoA is also seeking nominations for the Gold and Finlaison medals. The Gold Medal has been awarded to IFoA members in recognition of work “which is of pre-eminent importance, either in originality, content or consequence, in the actuarial fi eld” since 1919 and it is our most prestigious and long-established award. The Finlaison medal was fi rst awarded in 1985, and recognises services to the actuarial profession, in furtherance of the objectives set out in our Royal Charter: “… in the public interest, the advance of all matters relevant to actuarial science, and to regulate and promote the actuarial profession”. For details and to nominate a member for a

Gold or Finlaison medal, visit bit.ly/S7ZLuV

Your call: who will you nominate? CAA exemptions window now open The IFoA opened an exemptions window on 3 November to allow those students who have relevant passes in the Fellowship exams to gain exemptions from modules on the Certifi ed Actuarial Analyst (CAA) pathway.

This is in recognition of the fact that the career aspirations of some students on the Fellowship pathway may be better served by the IFoA’s new CAA qualifi cation.

Qualifying as a Certifi ed Actuarial Analyst will provide you with a professional qualifi cation from the IFoA, equipping you with strong technical skills and knowledge and opening the door to a wide range of career options.

The CAA will help you to stand out from the crowd in a competitive fi nancial job market. If you work in the wider fi eld of fi nancial services it will allow you to develop analytical skills that can be added to your current business knowledge. If you have any questions or would like

further information about the CAA, please email [email protected] or visit bit.ly/1Ext4Ch

Legal changes reduce motor insurance claimsFor the fi rst time in 10 years, IFoA research shows a reduction in third-party motor insurance injury claims. This reduction in claim frequencies appears to directly correspond with legal changes that were enforced in 2013 – most signifi cantly, the Legal Aid, Sentencing and Punishment Off enders Acts (LASPO) – and a 35% reduction in the number of claims management companies (CMC). Research shows that there continues to be a link between claims hotspots and CMC locations. Our research has also shown that, on average, the cost of a third-party motor insurance premium has dropped by 19%, the frequency of third-party injury claims has fallen by 10%, and there has been a 5% reduction in the average cost per claimant – from £5,000 to £4,750.

Now is your chance to nominate a modern-day fi gure to follow in the footsteps of Charles Babbage and become an Honorary Fellow, or to put them forward for a Gold or Finlaison medal


www.theactuary.com14 THE ACTUARY • December 2014

NewsPeople & Society

If you have any newsworthy items for these pages please email [email protected]

By Patrick ByrneOn Thursday 14 August, the Student Society held its annual BBQ in the beer garden of DTwo, on Harcourt Street. A crowd of 140 students were in attendance and good weather added to the atmosphere. This event was run in conjunction with Acumen Resources, who kindly donated an iPad as a spot prize.

The excellent food on off er on the night included steak burgers, pork sausages and was supplemented by a salad bar, all washed down with a few complimentary drinks.

On arrival each member was given a raffl e token, and eight lucky people were chosen at random to battle it out in a question round to decide the lucky winner of the iPad.

The questions provided the fi nalists with a tough test of their knowledge; sample questions

included “How many zeros in a googol?” and the equally challenging “How many goals were scored in the 2014 World Cup?”

At the end David Coulter (left) proved a worthy winner and became the proud recipient of the iPad. Jenny Johnston of Acumen Resources was in attendance to present the prize.

With the formalities completed, it was left to the members to enjoy the rest of the night.

A great night was had by all, and it was fantastic to see the annual event so greatly supported by such a large number of the student body.

The current committee would like to thank all its members for their support over the year. Keep a watch out for upcoming events after the exams from the new committee.

Remembering a summer feast

The Company of Actuaries’ Annual Carol Service, which is open to all actuaries and their families, is at 6.15pm on Wednesday 17 December at St Lawrence Jewry Church in Gresham Street.

The service is free. There is no need to book. We look forward to seeing you there.

If you wish you can join us for supper afterwards in Armourers Hall, just a few

minutes’ walk away.The supper costs £70 per

person with wine included, children of 12 and under are half price.

Following the meal, a talented trio will provide entertainment and lead us in more carol singing. For further details please email David Johnson at: clerk@actuariescompany.

co.uk or Martin Miles at [email protected]

Join the annual Christmas carol service

By Anique BuddhdevThe ever-popular SIAS pool tournament was held on Thursday 23 October at Riley’s in Victoria, with 44 teams battling it out to win the pot of glory. The fi rst round involved a group stage where each team competed to be crowned table-winner and proceed to the next stage. It did not take long before the action heated up with the rule book being brought into question on many occasions.

The night became more intense as the knockout stage followed, with each player in contemplation for several minutes before taking a shot, as one mistake could end the

tournament for their team. For those eliminated at the group stage, this

did not mean the end of the night as many made a trip to the bar, enjoyed a variety of burgers, and played friendly games of pool while the tournament progressed.

As the population of best ‘pool-playing actuaries’ was slowly whittled down, we entered the best-of-three cup fi nal. This was a tense aff air where Liam Hollywood and Mark

Hoare from Premier were up against Shareen Patel and Ben Sheldon from Catlin. It was a high-quality game, but after about an hour, the boys from Catlin were crowned as this year’s worthy winners.

Thanks to all the entrants and spectators for another enjoyable tournament. In particular thank you to Adrienn from Rileys for helping to organise the event. I look forward to seeing all of you at the next SIAS Pool

Tournament for a re-match.

Births: Paul Greenwood: (RSA Insurance)

and Susan Greenwood

(Mercer) would like to announce the birth of their

daughter Ellen Alice, on

24 September.

n

P

ShIt wancr

st

Tourn

A great pool of talent

p14_15_Dec_soc_news_FINAL•CT.indd 12 25/11/2014 15:33

www.theactuary.com15December 2014 • THE ACTUARY

By Martin Miles (Master 2014-15)It has been a busy month for the Actuaries Livery Company. I represented the Company at the Garden of Remembrance Service in the Churchyard of St Paul’s Cathedral on 3 November – a magnifi cent occasion – marking the centenary of the start of the Great War.

As well as representatives of the Armed Forces and various military bands, the Masters of 102 livery companies were there, all planting crosses of remembrance. Only 101 of the Masters had remembered to bring a coat or umbrella, but luckily for me the rain held off until just before the end. A few days later, actuaries with family and friends were kindly invited to watch the Lord Mayor’s Show from the balcony of Barnett Waddingham’s Cheapside offi ce.

Peter Thompson and Michael Tripp joined me to represent the Actuaries Company along with representatives of other livery companies on Float 100 – an interesting number, being the smallest perfect square which can be expressed as the sum of nine consecutive primes.

I suspect we were not the main attraction of the show, even for those on BW’s balcony, as we heard several people in the crowd asking, “What’s an actuary?”.

Then on 12 November Sir David Spiegelhalter accepted our invitation to give the annual Company of Actuaries Lecture. Sir David is the Winton Professor of the Public Understanding of Risk at the University of Cambridge, and many senior members of the City dined with us at Staple Inn to hear him. He fi rst came to the public’s attention with the BBC documentary Tails you Win, and he spoke very amusingly on common misconceptions in risk and statistics. If only we had had the lecture in 2007, perhaps the banking crisis might have been averted.

Also in the audience was one of our honorary members, Johnny Ball. Johnny is one of the few other mathematicians to have tasted TV fame. Some of the older readers might remember his Think of a Number series from about 30 years ago.

A cavalcade of events

We would be delighted to hear from you if you have any newsworthy items for these pages. Please contact Yvonne Wan at [email protected]

Meaningful workBy Mandi KupakuwanaOn 13 October, the London Market Student Group (LMSG) hosted Susan Dreksler, director at PWC, and the current chair of the Solvency II Technical Provision (TP) working party.

In her presentation: Being Meaningful, Diversity and Solvency II Technical Provisions, Dreksler described the state of the market in 2010 when she joined the TP working party:

“The industry was spending a lot of time and resources focusing on capital modelling, while arguably the biggest most uncertain number on an insurer’s Solvency II balance sheet is most likely to be TPs,” she explained.

In light of this, the TP working party was formed with the mandate to raise awareness and shift some of the industry’s focus towards TPs, given they are “probably the most important part of the Solvency II calculation”, according to a CEIOPS QIS5 presentation.

The working party’s directive included devising pragmatic ways of implementing the various principles and rules that form the Solvency II directive for TPs.

Dreksler’s talk focused on the challenges faced by the industry when calculating TPs. Up to 2014, EIOPA had not provided clear guidance on how to make allowances for future RI recoveries and future RI renewals on obligated business at the valuation date.

This was challenging for the Lloyd’s market, and not allowing for future RI recoveries on existing and future RI policies would result in major strains on a syndicate’s balance sheet.

She then explained how, in May 2014, EIOPA published updated guidance that requires insurers to take full credit for the cost of future RI renewals, but prohibits them from taking full credit for the inuring RI recoveries on all future business.

This new approach goes against the ‘fair value’ principle underpinning the Solvency II Directive as full recognition cannot be taken for future RI recoveries.

To learn more about the LMSG or attending events, email: [email protected].

By Ant HartOn the 30 October, a JLT EB team took part in the Risk First fi ve-a-side football tournament. The team, led by James Melsa, beat PwC, Punter Southall, Xafi nity, SEI and Risk First to take home the trophy.

Although they started slowly, fi nishing third in their group, the team came alive in the knockout stages, beating Punter Southall 4-2 in the quarter fi nals. They then set their sights on SEI and demolished them in a 6-1 semi-fi nal victory.

The fi nal against First Risk, which was rather

one sided in JLT EB’s favour, eventually ended in a 1–1 draw and sudden death penalties. James and Phil scored, and First Risk missed their second penalty, leaving JLT EB to slam home the winner, and cue the wild celebrations.

The winner’s shield is being engraved with the team name, which they will get to keep until they defend it again next year. The team, made up of James Melsa, Karl Moln Page, Chris Gawke, Phil Greenland and Jonathan West were truly superb, and worked extremely hard to ensure the JLT EB victory.

Football win for JLT EB

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New year pub quizTo help SIAS members get over their post-Christmas blues, the 2015 pub quiz is due to be held on 29 January 2015.

Tickets will be released on 5 January 2015. Look out for more information at: www.sias.org.uk.

s ago.

r eventually ended

p14_15_Dec_soc_news_FINAL•CT.indd 13 25/11/2014 15:33

crowding glory

THE ACTUARY • December 201416www.theactuary.com

Mendel is not your conventional actuary. So it seemed fi tting that our meeting with him was a little out of the ordinary too. Making the most of the unusually warm October weather, he invited us up to the rooftop gardens of his offi ce in Farringdon. Basking in the autumn sunshine, he spoke to us about his early career as an actuary, his former roles at Close Brothers, Barclays Wealth and Christie’s, and the start-up of his latest venture, the pioneering online insurance resource, Bought By Many. Mendel also outlined his ambitions for the company, and off ered some tips for aspiring entrepreneurs.

You have had an interesting and varied career, but you started out as a more ‘traditional’ actuary. Can you tell us how it all started? It was an article in The Sunday Times about being an actuary that fi rst caught my attention when I was just 14 years old. So when I was a bit older I did a summer internship at an actuarial fi rm, Duncan C Fraser, which is now part of Mercer. I found that I enjoyed it and so decided to do maths at university. When I graduated I then found an actuarial position in pensions at Clay & Partners, now part of Aon Hewitt.

You have worked in strategy consulting, banking and art fi nancing. What took you into these diff erent roles?At Aon we saw an opportunity to off er asset-based advice to pension funds worth tens to hundreds of millions of pounds, a segment of the market that we thought was not really being

catered for. I led the newly created function and it was this experience that opened my eyes to the diff erent possibilities out there.

After a time I considered an MBA. But one piece of advice I was given was that it’s better to get some fi rst-hand experience if you can. So I ended up joining McKinsey. It gave me great exposure and I travelled lots.

Ultimately I thought consulting wasn’t what I wanted to be doing in

the long term, so after a spell as a director at Barclays Wealth, I got involved with setting up an art fi nance business for Christie’s. Basically, we were focused on any form of fi nance centred on art, whether it was insuring art works or helping people looking to borrow against pieces of art. It was an interesting time and unusually I found the wealthier the clients got, the more I dealt with them. That’s probably the opposite of the corporate world, where the wealthier people become, the more they are surrounded by advisers. I think that’s due to art being a real passion for such clients, and it meant I met some really interesting people along the way.

After a time at Close Brothers you then decided to go into business for yourself. What led you to set up Bought By Many?I looked at the insurance industry and thought that there has been no real innovation for a long time. My grandfather was a door-to-door salesman for Pearl for more than 40 years and when you think about it we are still buying largely the same products today. Not only has the industry not innovated but

On my [email protected]

Steven Mendel is leading the way in harnessing the powers of social networks and big data to shake up the insurance industry. The actuary turned ‘social insurance’ trailblazer shares his story with Richard Purcell and Gemma Gregson

AKIN FALOPE

p16_18_dec_interview_mendel_FINAL•CT.indd 16 25/11/2014 15:37

December 2014 • THE ACTUARY 17www.theactuary.com


it’s also not good at putting the customer fi rst or at using data eff ectively. If you think about your experience with retailers, we now expect them to use what they know about us to provide more discounts or off ers relevant to us. I think there is an opportunity to use data more smartly in the insurance industry.

Can you tell us about the Bought By Many business model?We help people to fi nd insurance that they can’t get on their own, or to negotiate a lower price. We do this by pooling similar people or risks together. If, for example, you have a pug as a pet, then getting pet insurance for this breed of dog can be expensive because of the high risk of theft associated with this breed. However, by grouping similar risks together, an insurer can more eff ectively underwrite and manage the risk, so it can provide insurance at a lower cost to the consumer. We can also use this approach to identify demand for insurance products that may not even exist today.

Do customers come to you or do you fi nd them?We fi nd it’s a bit of both. Using our own analysis of internet search data and social media groups we uncover pools of demand for diff erent things, for example, student gadget insurance. So using this information we may set up groups which people will then come across when searching online. Some customers also set up their own groups.

Providing the groups are large enough, we then pair them up with insurers who then can off er better terms than they could to individuals.

Does this model appeal to customers and insurers?We have seen a lot of interest from potential customers since we started in 2012, with about 35,000 members registered on our site and about 5,000 new members every month. We are also working with an increasing number of insurers as they see the value of being able to fi nd specifi c groups of risk to write on their books. For them, it can be a distribution channel and a risk management tool.

Where do you see the business in fi ve years?I hope that we will have grown the scale of the business. Not just in the UK, but also operating in international markets, off ering a wider range of insurance. I also hope we can form a market place for insurers to ‘buy risk’. Where we can’t fi nd ways of fi lling the demand from the various groups by working with traditional insurers, we may consider trying to insure them ourselves.

Why do you think insurers don’t operate like this themselves?With traditional insurers there is a real nervousness to change, and a fear of the unknown and getting things wrong. Recruitment is an issue. We are not trained to recruit, so we tend to just hire people ‘similar’ to us in the way we think. This makes for a lack of diversity of thought within the industry. We need to be bold and hire people that work in a diff erent way to us and have diff erent skills.

Would you say that your actuarial skills have come in useful when setting up Bought By Many?

It’s diffi cult to diff erentiate between my actuarial grounding and my experience as a management consultant at McKinsey. For example, my time at McKinsey helped hone my skills in being able to simplify complex problems. However, being an actuary certainly gives you the training to think through problems logically. I’ve also found being an actuary opens doors – it gives you the permission and authority to talk about insurance with some people, and that has been important when talking to insurers about what we are doing here at Bought By Many.

What would be your tip to anyone thinking about starting their own business?Setting up your own business is really, really hard so you have to really want to do it. There are a lot of logistical hurdles to overcome; even setting up a bank account for a new business can be diffi cult. Plus there are the fi nancial pressures it can create. But it can be very rewarding. In order to be successful I think you need persistence and the experience to harness the opportunities that are presented to you. a


AKIN FALOPE

“We need to be bold and hire people that work in a

diff erent way to us and have diff erent skills”

On my [email protected]




[email protected]

In the late 1980s and early 1990s, non-life insurance actuaries mostly held reserving roles. Since then, however, areas of involvement have expanded – particularly following the soft market of the late 1990s, events of 9/11 and now Solvency II. Actuaries are employed in underwriting, fi nancial reporting, business planning, risk and capital management.

Numeracy, technical modelling, ability to interpret large quantities of data, and a rigorous, logical thought process are also skills ascribed to actuaries. Underwriters are likely to be considered more entrepreneurial and instinctive, with their strengths lying in the assessment of individual risks, wider market and commercial awareness, communication and negotiation. It is arguable that all of these skills are needed in the process of risk selection, product design, portfolio construction and strategy. The market is changing and those who do not adapt risk being left behind, or selected against. Clients and brokers are now sophisticated in understanding risks to their businesses, and wanting to address ever-more complex risk transfer requirements with fl exible, value-for-money products.

We recently conducted an internal prediction survey that broadly found, given a generic insurance-related problem, both actuaries and underwriters used similar thought processes and rationalisation. There was no statistical evidence that either group tended to be more pessimistic

or optimistic. Indeed, the outcomes were more closely related to individual interpretation of the data.

CollaborationChanges in business mix, underlying exposure, policy coverage, claims handling or case reserving philosophy are often important to factor into projection analyses. The results of this work should also be challenged and validated; underwriters can apply sense checks based on broader market knowledge, alternative estimation methods and common-sense logic. It is of great benefi t to companies where underwriters and actuaries are able to work together in a constructive way. The challenge for actuaries is to build these relationships and demonstrate their ability to add value – particularly in areas where they have traditionally been met with scepticism.

Personal lines and SME businesses have been quicker to incorporate statistical pricing methodologies given the extensive data available. By contrast, specialty lines business is neither high volume nor tightly defi ned and in many cases pricing may attempt to incorporate potential causes of losses that have never occurred. The characteristics of the more instinctive, technically minded specialty underwriters operating in the London Market are also diff erent with their strong

GREATER THAN THE SUM OF THE PARTS

Actuaries and underwriters operate diff erently, but the positive eff ect of their complementary skills is undeniable, says Rob Barritt

ROB BARRITT is

a general insurance

reserving and pricing

actuary at Aspen

entrepreneurial traits. Successful outcomes in this market are dependent on actuaries tailoring their approach. This involves a bigger picture vision together with greater fl exibility and pragmatism, as well as a focus on the areas where they can be most eff ective.

Actuaries can help to increase value by focusing on stakeholders’ requirements in the decision-making process. It is important for actuaries to explain the risks and uncertainties in their estimates and projections. Any projected result will rely heavily on the data inputs, assumptions and the quality of the underlying models. Giving an answer that is not suffi ciently qualifi ed can be damaging if it causes overconfi dence in the result. It is healthy for both actuaries and users of actuarial work to have a level of scepticism over the results of any model – the natural tension between actuaries and underwriters can be of benefi t as it stimulates wider debate.

Actuarial inclinationLondon Market specialty business is inherently volatile, skewed by the potential for extreme outcomes. An actuarial ‘mean best estimate’ is intended to represent the average of all possible outcomes, even those which may be considered highly unlikely. It will not necessarily be the single outcome that is most likely to happen (the mode), or the mid-point of an ordered list of outcomes (the median). Actuaries consider the mean to be a more appropriate way of averaging because it explicitly allows for the shape and size of all other possible outcomes.

Management of insurance companies will seek to avoid shocks, particularly in terms of quarterly performance, though given the volatility it is clear that specialty business is better assessed over a longer time horizon. A sudden material erosion of and/or a signifi cant under-pricing issue can dramatically aff ect results and raise questions of actuarial techniques. There is also a detrimental eff ect if, conversely, cautious reserving leads to an over-capitalised company, or conservative and uncompetitive pricing leads to a loss of profi table business. There will always be diff erences in the way that actuaries and underwriters operate within insurance companies, but the two disciplines off er complementary skill sets and diff erent perspectives which, when combined, should have a much greater positive eff ect than the two operating in isolation. a

Philby Illustration / Ikon

General insuranceUnderwriting

p19_dec_aspen_sums_FINAL•CT.indd 19 25/11/2014 15:38

GETTY20www.theactuary.comTHE ACTUARY • December 2014

Rise and RISEof the central banker

After years of unlimited fi at money,

central bankers are fi rmly in control

of the world’s fi nancial systems.

Detlev Schlichter explains why this is

leading to the death of free markets

p20_21_dec_fiat money_FINAL•CT.indd 20 25/11/2014 15:38



FinanceCentral [email protected]

DETLEV SCHLICHTER

is the author of Paper Money Collapse – The Folly of Elastic Money

In the 1980s and 1990s, bond traders and investment bankers appeared to be the ‘masters of the universe’, but today the undisputed rulers of the fi nancial cosmos are central bankers.

They have become, without doubt, the most powerful people in the fi nancial system, the ultimate pullers of strings, setters of trends and movers of markets. Their decisions directly and indirectly aff ect the pricing of trillions of dollars worth of assets, and their every word is scrutinised for the slightest hint at what may come next. The new power elite may not as be as colourful and glamorous as its predecessors, who featured in such bestsellers as Liar’s Poker and Bonfi re of the Vanities. Usually modest in demeanour and less lavishly paid, these civil servants make less suitable targets for envy and gossip. But their power and infl uence is truly immense. They have even started to coin their own iconic phrases. If Gordon Gekko’s “Greed is good” defi ned the 1980s, Mario Draghi’s “We will do whatever it takes” may yet be the motto for the new era of central-bank-managed markets.

The rise of the central banker began long before the recent crisis, but the crisis greatly accelerated the process. After housing bubbles in various countries popped in 2007 – bubbles that, some critics say, had been infl ated by ‘easy money’ from the same central banks in the early 2000s – all felt compelled to cut interest rates to zero and fl ood the banking system with vast amounts of new liquidity. The generally accepted view was that without these measures we may have faced an even worse crisis, maybe even the collapse of the banking system. None of the policy measures taken were new in principle, but certainly in degree. The crisis is over, but the infl uence of the central banker has stayed – and expanded.

Purchasing large chunks of previously privately held assets with newly printed money and transferring them to the central bank’s balance sheet is now known as ‘quantitative easing’ (QE). At fi rst, this policy was intended to stabilise the banks, but once the worst of the crisis was over, QE was redeployed as a tool for managing the wider economy. Lifting prices of specifi c assets via targeted QE, and changing their yields and risk premiums boosts lending and thus overall growth. The latest round of QE by the US Federal Reserve was offi cially aimed at lowering the unemployment rate. Every major central bank has introduced some form of QE.

Of course, fi xing certain interest rates, in particular those at which banks lend to each other, has always been the prerogative of the central bank. But their infl uence now extends much further than would have been imaginable just 10 years ago. The US-Federal Reserve and the Bank of England are now the largest holders of their respective country’s government debt. Their massive buying has reduced the available supply of high quality, long-duration assets for

private investors, and has forced insurance companies and pension funds into corporate bonds, equities and other, riskier, instruments. More recently, the Fed has become one of the biggest active participants in the repo-market, a market for collateralised, short-term lending among fi nancial institutions. Under its new ‘targeted’ lending facility, the European Central Bank tells banks who to lend to, and the central bank’s new QE programme is big enough to acquire practically all outstanding euro-denominated asset-backed securities.

Central banks have made it their remit to target the shape of the yield curve, the risk margin on mortgage loans, the borrowing costs of the government, and the size and liquidity of specifi c credit markets. Their policies of zero interest rates and ample liquidity have

meanwhile been the dominant force behind booming asset markets globally.

What we are observing is nothing short of the bureaucratisation of fi nance and the socialisation of capital markets. As Sir Michael Hintze, founder of hedge fund CQS, put it to the Financial Times: “The beauty of capital markets is they are voting systems, people vote every day with their wallets. Now voting is fi nished. We’re being told what to do by central bankers – and you lose money if you don’t follow their lead.”

The rise of pseudo-marketsSuch a situation is evidently no longer capitalism. Government-directed markets are not real markets. The free market is, if correctly understood, a powerful tool – the only tool available to society – for eff ectively co-ordinating the economic activities of a multitude of people with diverse personal goals, frequently confl icting and constantly shifting. Uninhibited price formation is essential for the market to work, and any form of price fi xing or price manipulation, however well intended, is ultimately poison for any functioning market.

Yet, criticism of the kind that Hintze expressed so well appears to be rare in the fi nancial industry. One reason is that the fi rst concern about ultra-easy money, namely that it would cause infl ation, does not appear to have materialised yet. Or rather, easy money has lifted the prices of fi nancial assets and real estate more than those of consumer goods, and such asset price infl ation is conveniently called a ‘bull market’. Furthermore, many observers still seem to expect that present policies only constitute cyclical measures taken in response to the Great Recession, and that once self-sustaining growth has returned, the central banks will retreat.

I consider this unlikely. These phenomena are ultimately systemic in nature, not cyclical. Having replaced gold as an anchor at the core of the monetary system with unlimited fi at money under the control of central banks, we have exchanged a fairly inelastic but stable system that constrained money creation and enforced a strict discipline on borrowers and lenders alike, with an entirely elastic system, allowing for extended periods of ‘easy money’, in which interest rates are artifi cially low and extra bank credit creation is encouraged. As we have seen many times, this type of credit creation may boost growth in the short term but only does so by mispricing various assets and misallocating capital, which in due course must cause a recession. ‘Easy money’ does not lead to lasting growth but to boom and bust.

Such business cycles may also occur under gold standard arrangements whenever private banks expand credit, but the inelasticity of the monetary core – gold – means these cycles are shorter, and any imbalances are liquidated more or less completely during occasional recessions. This is diff erent in a system of unlimited, fully elastic fi at money. Central banks can always shorten or abort the correction by injecting more money and by suppressing interest rates further.

Instead of periodic painful liquidation, the economy experiences an apparently never-ending boom, but at the price of growing underlying imbalances and an increasing dependence on the drug of cheap money.

After 43 years of unlimited fi at money globally, we have reached a point where central bankers around the world have to plug their fi ngers in a growing number of holes to stop the bloated and overly indebted system from leaking to maintain the appearance of stability. Every market sell-off now has the potential to turn into an existential crisis. Plus the accumulated imbalances and the system’s fragility make it harder to generate meaningful growth. A lasting ‘normalization’ of policy and lessening of central bank interference appears unlikely. Elastic fi at money and modern central banking are fundamentally incompatible with capitalism – and worryingly, capitalism is losing. a

“‘Easy money’ does not lead to lastinggrowth but to boom and bust”

p20_21_dec_fiat money_FINAL•CT.indd 21 25/11/2014 15:38

InvestmentNon-traditional [email protected]

The choice of assets used by life insurers to back their liabilities is a key driver of fi rms’ profi tability, capability to price new business attractively and fi nancial strength. Historically, relatively ‘vanilla’ investment strategies proved suffi cient for success, however insurers now increasingly need to broaden their horizons in order to maintain their ability to price business attractively, and maintain returns to shareholders.

In the past few years – partly driven by regulation – traditional bank lenders have

become increasingly reluctant to tie up liquidity by lending for long durations. This reduced supply of long-dated credit has tended to increase the returns available in the market on some asset classes, with which insurers may hitherto have had little involvement. Insurers are typically subject to less pressure on liquidity than banks, which may allow them to fi ll the void in the long-term debt market, taking advantage of attractive pricing.

As more insurers adopt such strategies, the pressure on others increases to match levels

of profi tability or competitive pricing of products, such as annuities. While the opportunity to generate further yield is clear, the risks of managing some non-traditional assets are not trivial, and need to be carefully considered as part of the investment appraisal process.

A working party on ‘non-traditional assets’ was set up in late 2013 to research both the opportunities and the potential risks.

The working party aims to release a sessional paper in early 2015, a taste of which is provided here.

Available assetsThe working party has considered the universe of potentially interesting assets to UK insurers, and has attempted to identify common features, where possible, to group similar investments. The sub-groups considered are set out in Table 1 (left) with examples of specifi c assets within them.

Potential returnsWhile there are many potential reasons for insurers wishing to invest in non-traditional assets, including increased diversifi cation or increased security/collateral, the opportunity for potential return is a key factor.

Some sample returns for the broad asset categories listed, which demonstrate the potential attraction for insurers in exploring the opportunities further, are illustrated in Figure 1 on page 24.

Specifi c considerations for creating cashfl ow certaintyThere are a number of options available to insurers wishing to transform investments in order to make them more favourable in some way. An obvious consideration is eligibility for the matching adjustment, which is likely to be a key focus for annuity writers. Some may have options within the group, whereas smaller stand-alone insurers will have to rely on third parties.

In considering such options, an insurer

Ahead of a sessional paper release early next year on the potential risks and

gains of non-traditional assets, Gareth Mee and Gareth Jones give an

update from the IFoA working party to address these questions

Navigate risk to harness

opportunity

Table 1: Broad asset classes considered by the working party

Sub-group Examples

Infrastructure debt

■ Utility companies■ Airport/port companies■ Private fi nance initiatives

Real estate-backed debt

■ Loans against residential and commercial property■ Equity release mortgages■ Student housing loans

Other asset-backed debt

■ Residential and commercial mortgage-backed securities (UK and overseas)■ Collateralised loan obligations■ Transport fi nancing

Unsecured debt ■ Emerging market debt■ Private placements■ High-yield bonds

Other assets ■ Insurance-linked securities■ Hedge funds■ Private equity


22 IAN NAYLOR / IKON

p22_23_dec_NTAssets_FINAL•CT.indd 22 25/11/2014 15:41

InvestmentNon-traditional [email protected]

GARETH MEE chairs the IFoA non-traditional

assets working party and is a director at EY.

GARETH JONES is a member of the working

party and a senior actuarial manager at MGM

Advantage.

needs to think about the following factors.● The impact on the annuity insurer.● The impact on the insurance group – for example, does the solution still help when the annuity insurer is consolidated into the group?● The impact on the counterparty – is the counterparty a suitable holder of the risks, and what will be its capital treatment?

There are a number of potential structures currently being looked at in the industry. Many rely on transferring the assets to an SPV that issues a blend of equity and debt, the latter of which is intended to be matching adjustment eligible. The split between them is balanced to maximise the value in the debt while retaining a suffi cient credit quality.

Alternatively, some have looked at leaving the assets on the balance sheet with an overlay derivative or reinsurance to provide greater certainty of cashfl ow.

While there is potential in such solutions, fi nal interpretation of the regulations has not been confi rmed at the time of writing and great care needs to be taken.

In addition to all this, emergent risks can be hard to predict on long-term business – property-backed lending in Scotland could possibly end up being secured by an overseas asset, despite it being domestic when the contracts were fi rst written.

Flooding in one part of the country could aff ect assets disproportionately if proper geographic diversifi cation wasn’t in place, which can be a challenge for large-scale infrastructure projects.

There can be signifi cant value released by investing in non-traditional illiquid assets, but the care and management needed should not be overlooked.

We hope this article, presentations at recent and forthcoming conferences, and the upcoming sessional paper on this topic will go some way to shedding light on both the opportunities and challenges involved. a

The views expressed in this article are the views of the members of the working party, and not of their employers

Figure 1: Indicative returns on alternative asset classes

Table 2: Key considerations for investment in non-traditional assets

Consideration Reason

Sourcing Sourcing illiquid assets can be a diffi cult job in itself, and often the availability of an asset will drive analysis of its suitability rather than the search being made after a selection process.

Lot size has a large impact as, for example, small insurers are unlikely to be able to make signifi cant direct infrastructure investments. On the other hand, large insurers may view some deals as too small to make a genuine impact on their balance sheet. Assets to back new business will need to be continuously, or at least periodically, available for investment otherwise insurers will be required to ‘warehouse’ assets in advance with implications for capital.

Management Ongoing management includes valuation capability, likely to require bespoke model development as no, or little, liquid market will exist in similar structures. There will also be a need to monitor and respond to other actions bespoke to the asset class such as changes in credit ratings, changes in borrower circumstances, borrower optionality or changes to loan terms.

Currency

matchingSome assets will be denominated in foreign currencies. Given the potential for default in the assets there is no risk-free way to hedge this. Choosing to remain unhedged leaves the insurer open to the currency risk, whereas a full hedge with each future expected cashfl ow converted into domestic currency at outset provides the necessary risk mitigation but creates a contingent exposure to currency shifts in the event of default.

Certainty of

cashfl ows

Some assets may prove attractive economically but provide challenges from a capital and reserving viewpoint, although there are options for insurers to restructure cashfl ows as discussed in the article.

Format Non-traditional investments are generally in loan format, which gives rise to the challenges set out above. Bond and equity formats are sometimes available which can alleviate the challenge of ongoing management, as can the use of third-party fund managers with dedicated resources.

Liquidity The liquidity of these assets tends to be very low. While the premium received for illiquidity is sought, insurers are being asked to more carefully manage liquidity risk through the implementation of recovery and resolution plans as well as through Solvency II.

Capital charges By its nature, the Solvency II Standard Formula represents a generic approach to setting capital requirements that does not cater well for the nuances of non-traditional assets. On the other hand, internal model fi rms have the opportunity to properly refl ect the risks on the assets.

High yield bond

Private placement loan

EM debt

Social housing loan

Infrastructure loan

Par gilt curveStudent housing loan

CMBS AAA

UK RMBS AAA

Ground rent

Residential mortgage loan

Indicative modified duration

Re

tur

ns

p.a

.

0 5 10 15 20 25 30

Aviation bond

Equity release mortgage loan

CREloans6%

5%

4%

3%

2%

1%

0%

As of 31 March 2014. Source: IFoA Non-Traditional Working Party, PIMCO


24



We have put together 12 puzzles for you to

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Editor

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109

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27

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P N R L F S B G

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U W I M R A C O

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E I U H R N E

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Bridge puzzle provided by David Lampert

Mensa puzzle 607ANSWER 25. The sum of the two numbers on the left is squared to give the number on the right.Congratulations to this month’s winner – Melvin Brandman

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Bridge puzzle 48ANSWER

Congratulations to this month’s winner – Louisa Coughtrey

N

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p30_dec_crossword_puzzles_without.indd 30p30_dec_crossword_puzzles_without.indd 30 15/12/2014 11:5315/12/2014 11:53


CareersNon-executive directorship

[email protected]

Previous articles in this series introduced the concept of a non-executive director (NED) and highlighted the areas where actuaries have not been involved traditionally. Now we consider the actuary in his or her most likely scenario as a NED in more detail. Before starting out on this role, I would emphasise that a discussion with an experienced NED is essential to obtaining a fuller understanding about what is involved in practice. I was extremely lucky in this regard.

Duties and responsibilitiesIn their individual role and as a member of the team of directors on the board, the NED must understand the main tasks that they should be doing. The board should determine the strategy and objectives of the company, and monitor the progress in achieving these. In addition, the board will be accountable to various parties for its activities, such as shareholders and regulators. Finally, the board is responsible for ensuring that all fi nancial information is accurate and that the systems and controls of the company are adequate, particularly in relation to risk management.

More specifi cally, the NEDs should monitor the performance of the executive management. The role involves a balancing act of encouragement, participation and constructive criticism. They should ensure there is suffi cient succession planning and that the remuneration is appropriate.

The performance of the board and the board committees must be scrutinised regularly and objectively, and improved upon to attain the required standards. Self assessment is a necessity and a fundamental role of boards and particularly for NEDs. There are also statutory duties in respect of the company in general, but also in a personal capacity as a NED.

The Companies Act 2006 sets out generic duties of directors, including that they:● act within the constitution of the company;● promote the success of the company;● exercise independent judgement, reasonable care and skill;● avoid confl icts of interest;● decline benefi ts from third parties;● declare any interests.

ApprovalIt is necessary to be approved before becoming a NED. The increasing importance of NEDs is highlighted by the regulators’ growing interest in them. Both the PRA and the FCA are likely to interview prospective candidates, and more specialised regulators such as Lloyd’s may also become involved when a NED joins the board of a managing agency.

Many actuaries will be familiar with the approval process in relation to controlled functions under the Financial Services and Markets Act 2000 (FSMA 2000). These relate to individuals that have signifi cant infl uence function

Almost on board In his last article in the series, Colin Czapiewski considers the many functions of the actuary in the new role as a non-executive director

COLIN CZAPIEWSKI

is an independent

actuarial, insurance

and risk management

consultant

(SIF) roles within fi rms, and some can have more than one.

Work style and commitmentIt often appears at fi rst sight that the number of hours required to perform a NED role is low. Board meetings may be four per annum and the numbers of other board committees are limited. Do not be fooled. To perform the role of a NED effi ciently, much time is needed.

It would take another article to describe the diff erent roles of the committee in detail, but a brief description is outlined below.Audit committeeAppointing external auditors, monitoring their activities and performing the statutory audit-related roles seems fairly basic, but the committee must watch the audit process carefully, and the NEDs should hold a private meeting with the audit partner once a year. Risk committeeThis is an absolutely ideal role for actuarial NEDs. Assessing the risk-related aspects of the business is right up our street.Investment committee In fi nancial companies the investment return may comprise a signifi cant area of the profi tability of the company. The balance of risk and return must be carefully managed.Remuneration committeeA diffi cult role not usually involving actuarial skills, but actuaries sometimes get involved.OthersVarious other board committees are dependent on the types of business involved.

Preparation for the roleIs the above what you expected a NED to do ? Clearly, more reading is necessary, but this should give you a fl avour. If you are still keen to enter this fi eld, then seek out a helpful NED and listen to him or her. The role of a NED really can be very satisfying. a

p31_dec_non_exec_FINAL•CT.indd 31 25/11/2014 15:46

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p32-33_ACT.12.14.indd 33 24/11/2014 16:35


34

[email protected]

The IFoA’s Model Risk Working Party refl ects on the cultural aspects of model risk

The practice of modelling can enlighten and frustrate us in equal measure. We are pleased by our insights and technical advances. But the more we use and refl ect on our models, the more we become aware of their limitations – the roughness of approximations to complex problems, the sensitivity of results to assumptions that cannot be validated, and the reliance on past data when our concern is the future.

A stock response to such frustration is: “Well, a model is just a model; you cannot expect it to be always right!” The Federal Reserve’s guidance on model risk management warns against inappropriate use of models and emphasises the need to understand limitations and assumptions. The authors of The Dog And The Frisbee paper, presented by Bank of England executive director Andrew Haldane in 2012, went further, arguing that the complexity of fi nancial risk requires simple and robust metrics, rather than elaborate models.

Such reasoning, while justifi ed, does not settle the argument. It implicitly assumes model outputs drive decisions in a straightforward manner, such that errors in assumptions directly translate to errors in decisions. But this is not necessarily how, in our experience, decisions happen. As for restricting the use of models to those applications where likely errors are insubstantial: that should reasonably

S P L I T PERSONALITIES

p34_35_dec_model_risk_FINAL•CT.indd 26 25/11/2014 15:48

VINCE FRASER

“In our analysis, multiple perspectives

on risk and modelling are considered

legitimate, which market participants

may not fi nd easy to express in public”

December 2014 • THE ACTUARYwww.theactuary.com

35

exclude the calculation of ‘1 in 200 year’ losses – an actual requirement under Solvency II – from the scope of internal models. And that is not something we would bet on happening!

In fact, a variety of responses to models and uncertainty can be observed. Figure 1 shows the mean and 99.5th percentile of an annuity value distribution for seven diff erent models, each fi tted to the same data. It is clear the sensitivity to model choice dominates the variability refl ected within any given distribution.

Faced with such uncertainty, diff erent responses are plausible, each rational in its own way. Business cannot just stop; some will say “let’s pick the likeliest model and run with it”. Others may fi nd that one particular model corroborates their intuition and legitimises their plans. There will also be those who solemnly declare that “more research is needed on this important topic”. Meanwhile, the sensitivity to model choice will confi rm the beliefs of some, that “longevity is just too hard to model” and that “we should not have taken on such risk in the fi rst place”. They all have a point and they will never agree.

Alternative perceptions Diff erent ways in which modelling and its use in decision making are perceived within an organisation are categorised in the image on page 34 (left). The horizontal axis refl ects the perceived legitimacy of modelling: in the right half-plane, models should be used in decision making; in the left half-plane, they should not. The vertical axis refl ects concern with uncertainty: stakeholders in the top half-plane are confi dent in their processes leading to good decisions; in the bottom half-plane they are not so sure.

Using, or indeed not using, models in a way consistent with each quadrant generates diff erent sorts of risks. At top-right, Confi dent Model Users are keen to optimise decisions, a process that can and should be driven by modelling. But such agents are likely to ignore for too long evidence discordant with their models. In this quadrant, the main risk consists of model inaccuracies driving wrong decisions. This is indeed the kind of model risk that the Federal Reserve’s guidance seeks to address.

At bottom-right, we fi nd Conscientious Modellers, for whom technical expertise and professionalism are of paramount importance. Model uncertainty can be quantifi ed and the fi tness for purpose of models clearly defi ned. But such agents can be obstructive in putting models to business use, by delaying model

releases or limiting the scope of their applications. Furthermore, the overall scientifi c paradigm they use – no matter how necessary for their deliberations – may be fl awed.

Uncertainty Avoiders populate the bottom-left corner. In their view, all risks that matter are ever-changing and interconnected. Paradigms constantly shift and modellers are like the proverbial “general fi ghting the last war”. Decisions should be robust to model uncertainty; but such decisions will usually be highly suboptimal. The position of Uncertainty Avoiders can become diffi cult in an organisation focused on delivering profi t, but they may fi nd a friendly home in, say, an emerging risks committee.

Lastly, Intuitive Decision Makers don’t see why models should be used in the fi rst place. Gut instinct and market knowledge will always trump mathematical abstraction. Whether a model is correct or not is for them an issue of no relevance. The immediate risk with such an attitude arises from ignoring the information and insight that a model can bring; human intuition cannot always cope with the full complexity of the problems that we often have to tackle.

Intuitive Decision Makers may, nevertheless, feel compelled to demonstrate the use of a model (by perceptions of best practice or by regulatory stricture). Then they will show strong preference towards a model whose results align with their views and corroborate their position. Modellers may be given incentives to generate the ‘right results’. The major risk here is loss of accountability: if intuition fails, will it be recognised as such — or will models, and modellers, take the blame?

We believe that all four perspectives need to be represented in – and responded to by – model governance, with each required to challenge and respond to the others. Hegemony of a single perspective is self-defeating. Conscientious Modellers, possibly to their chagrin, need the operational focus of Confi dent Model Users (to attract investment in the model), the scenarios imagined by Uncertainty Avoiders (to challenge long-held wisdoms) and the survival instincts of Intuitive

Decision Makers (to ensure model use does not lead to commercial disadvantage).

At the same time, Conscientious Modellers can use the model to challenge Intuitive Decision Makers, by demonstrating “what you have to believe” for the model to be consistent with intuition. Such a challenge reveals management’s implicit assumptions and enhances accountability.

In our analysis, multiple perspectives on risk and modelling are considered legitimate, which market participants may not fi nd easy to express in public.

For instance, would the following statement ever be acceptable in the context of regulatory model review? “Assumptions are consistent with empirical evidence and best modelling practice. Model uncertainty remains high. The precise model calibration is such that standard outputs are also consistent with senior management’s perspective of a commercially reasonable capital requirement.” For many, that may be too much candour to stomach. But when uncertainties are deep and stakes are high, risk can no longer be the exclusive domain of technical experts.

By pretending that modelling is a purely scientifi c exercise, we create conditions of self-censorship and unaccountability. Good governance, as well as good science, requires transparency. For this we need more, not less, politics, with all the noise and uneasy compromises that engaged dialogue involves. a

Model Risk working partyThe working party group members include Andreas Tsanakas, M Bruce Beck, Tim Ford, Michael Thompson and Ivy Ye

Mean14.0

13.5

13

12.5

12.0

11.5

99.5th percentile

LC DDE LC(S)Gompertz spline

CBD CBD P- APC 2DAP

Figure 1: Mean and 99.5th percentile of annuity value for a 70 year old male, discounted at 3% p.a, for seven different models

p34_35_dec_model_risk_FINAL•CT.indd 27 25/11/2014 15:48

[email protected]

Cyber attacks are featured as one of the top technological risks in the World Economic Forum’s 2014 Global Risks Report, but understanding the risk of cyber-infl icted damage on businesses and economies is still in its infancy.

The benefi ts of investing in increased levels of IT security cannot be measured unless the risk can be assessed. Cyber risk management needs a proper risk framework.

Insurers are still reluctant to off er commercial cyber attack coverage because the risk is not well understood. What concerns insurers most is not at the level of individual loss events, such as disgruntled employees, targeted security penetrations or technology accidents that damage the affl icted company. Rather, it is whether individual loss events are manageable across a whole portfolio of policies if they occur.

Cyber catastrophes have the potential to be large correlated loss events, and it is the uncertainty over which portfolios have the potential for a large loss across multiple policies, as well as how to segment books of business into aggregation silos to manage the risk, that concerns insurers. Insurers are still haunted by the multi-billion-dollar asbestos claim losses that ruined the profi tability of general liability insurance in the 1980s. So, to off er commercial cyber insurance, insurers must understand the full potential of the risk to be able to assess its probable maximum loss, and must know which sectors of its insured portfolio are at risk of a single cyber event.

One way of evaluating cyber risk is to adapt well accepted catastrophe-modelling methodologies. The insurance industry is already using catastrophe models to manage the risk of correlated property and casualty loss from natural catastrophes. For cyber risks, experts at the Centre for Risk Studies, Cambridge University, supported by RMS, have begun to provide a robust scientifi c foundation to understand how models could be used to manage cyber risk.

The fundamental anatomy of a catastrophe model is derived from the earthquake and hurricane engineering risk frameworks of the 1980s. These have been successfully applied to model extreme weather events, such as hurricanes, fl oods and windstorms, in addition to terrorism risk, infectious disease pandemics, and other tail-risk perils. The framework of the models is made up of a large taxonomy of both historical and simulated scenarios of varying magnitudes and frequencies, a hazard model that provides the footprint of each scenario, and the vulnerability of the assets at risk, which together generates an estimate of the potential fi nancial loss.

However, while a similar framework can be applied to model cyber catastrophe risk, developing an overall risk framework for assessing cyber threats is not easy. Part of the challenge is the limited data on cyber loss experience.

Geography of cyber economyCyber threats have only existed for a few decades and so data is sparse, particularly for extreme events. Few companies are willing to publicise security breaches to their IT systems unless required to do so by law. In addition, developing a catalogue of past events is made more diffi cult because a defi nitive loss fi gure cannot be applied to a disruptive incident. What is the true cost of a virus that infects millions of computers, or of having a denial-of-service attack on popular websites? And to compound the challenge there is a constant stream of new insights into threats, security measures, and vulnerabilities that must be continually incorporated into the framework.

The major challenge however is the complexity of cyber risk – it is highly interconnected. Shocks to one part of a network can quickly cascade throughout the whole system. Further, there is no commonly agreed magnitude scale for a cyber event. The footprint of a cyber scenario is not a geographical region;

it is a set of relationships and commonalities of businesses and government organisations. The chief ‘geography’ of cyber correlation risk comes from the common IT technology platforms that share the potential for exploitation and are used by businesses across many industries.

The technology companies that provide these common IT platforms have become so embedded in global business productivity that they could be termed ‘systemically important technology enterprises’ (SITEs) to the global economy. This is analogous to the term ‘systemically important fi nancial institutions’ (SIFIs) in the world of fi nancial risk, which identifi es banks that are so interconnected to others that their failure would cause problems to the whole network. Any cyber attack that exploits vulnerabilities in the products and applications of these SITEs will permeate the global economy.

To fully understand how a cyber catastrophe could aff ect the balance sheet of many companies, we need to map the cyber economy to track how the SITEs could aff ect international corporate productivity.

A network model of the cyber economy which has been developed by the Centre for Risk Studies shows how the big name suppliers like Microsoft, IBM, Oracle and SAP permeate the corporate economy with their IT products and software applications. The way in which these companies connect to other parts of the economy is represented by commerce value connections between them.

The size of the attackThe scale of a cyber catastrophe is dependent on how many companies are penetrated by a single attack, such as an ‘exploit’ (as in a vulnerability) in a commonly used technology platform, combined with the severity of damage from the penetration.

Figure 1 summarises these two dimensions. Some attacks could result in a high degree of penetration across corporations – for example,

Andrew Coburn, Simon Ruffl e and Louise Pryor are developing

frameworks for cyber catastrophe analysis. They explain how mapping the

cyber economy enables risk modelling of systemically important IT providers

CY B E R CATA S T R THE ACTUARY • December 2014www.theactuary.com

36

p36_37_dec_Cyber catastrophe_FINAL•CT.indd 36 25/11/2014 15:51

O P H E

a vulnerability in the Microsoft Windows operating systems that run on over 90% of corporate computers. Most IT departments are prepared for this scenario, however, and the breach would result in only mild disruption.

Other attacks can be extremely destructive if they are targeted on specifi c control systems; however, each dedicated system is only used by a handful of specialist companies. The vulnerability of IT systems to specifi c attacks is reasonably well understood, but not the overall vulnerability of an organisation’s balance sheet to the consequences of cyber security failure.

The exact mechanisms for potential failures are less important than the penetration levels of common IT applications, and there are various types and severity levels that could result from diff erent types of technology failures. While many cyber attacks to date have not been malicious – data compromises, algorithmic errors, process defects and other information technology problems – some of them have still resulted in multi-billion-dollar losses.

In the future, there is a real possibility of a

HOW BAD COULD IT GET?

severe correlated cyber loss across thousands of corporate giants. If we are to truly understand how badly society would be aff ected by a severe cyber attack then fundamental questions must be answered. For example, how severe could a major event be? What could it do to the global economy? How would it aff ect a portfolio of cyber insurance policies? The Cambridge Centre for Risk Studies explores some of these questions in its recent report Sybil Logic Bomb Cyber Catastrophe Stress Test Scenario, and proposes a stress test scenario that can be used for cyber insurance accumulation management.

Cyber catastrophe is a concentration risk. Companies need to employ a robust diversifi cation strategy to mitigate this risk to their business. By reducing the reliance on ‘industry standard’ software applications with diversity and competition in IT providers, companies can be better fortifi ed against the threat of cyber disruption. Developing risk models that identify how these commonalities can be used to structure accumulation limits will make it possible for insurers to safely increase their capacity for cyber insurance, and provide the risk protection that companies are looking for from the insurance market. a

Targetedkineticattacks Insidious

logicbombs

Powergrid

disruptionCorruptedstandard database

Internal employee

attack

Manual website hacking

Number of companies affected

Seve

rity

of lo

ss to

an

affec

ted

com

pany

BotnetDOS

attacks

Worms and

viruses

Microsoft Windows

exploit

A mapping of the cyber economy shows the leading corporations and their value connections, with an example of the footprint of their relationship to Oracle, a systemically important technology enterprise. Other big providers of software systems and business technology can be mapped in a similar way

Figure 1: Attack and severity of penetration


Left to right: ANDREW COBURN, senior

vice-president at RMS, SIMON RUFFLE,

director of technology research and

innovation, and LOUISE PRYOR, risk

researcher, both at the Cambridge

University Centre for Risk Studies

p36_37_dec_Cyber catastrophe_FINAL•CT.indd 37 25/11/2014 15:51


38

PUBLISHER: Bantam PressISBN-10: 0593072812RRP: £20

BOOK REVIEW

Bookshop browsers will have noticed the emergence of a completely new section over the past few years – ‘smarter thinking’. The shelves are the habitat of books such as those by Kahneman – Thinking Fast and Slow, Taleb – The Black Swan, and Malcolm Gladwell – Outliers, The Tipping Point. These books generally take an unusual and interesting subject, and shed new insights on its underlying dynamics.

The choice of subject is clearly key to the success of the bestsellers mentioned above, but a major contribution is made by the atmosphere generated by the authors: the reader feels brought into a small group of ‘illuminati’, where only a few well-informed initiates know the secrets unveiled on those gilded pages. There is a subtle and constant fl attering of the reader’s intelligence.

The Improbability Principle by David Hand, emeritus professor of mathematics at Imperial College, is a recent addition to this range of books. Its primary objective is to demonstrate that

incredibly improbable events happen much more often than would intuitively seem likely.

Hand explains this by setting out fi ve laws related to probability. He starts with the “law of inevitability, or “something must happen”. For instance, somebody – not previously specifi ed – will win a particular lottery. Next is the “law of truly large numbers”. Given enough opportunities, something apparently extraordinary is likely to happen, such as somebody winning a lottery twice.

Then we have the “law of selection”, whereby retro-fi tting your analysis completely distorts the apparent likelihood of the event – for instance, the selection bias involved in publishing the results of pharmaceutical trials.

The “law of the probability lever” deals with how slight changes to circumstances can have disproportionately large consequences, especially where the assumed independence of events is violated – as in, for instance, the heart-rending case

of Sally Clarke’s imprisonment for her sons’ cot-deaths. Finally, the “law of near enough” considers the assumed equality of very slightly diff erent events.

Hand generally writes clearly, but his explanations are, understandably, aimed at those with little mathematical knowledge. Most readers of The Actuary will fi nd this assumed starting point irritatingly low. Much of the material in the book consists of examples of Hand’s various ‘laws’, for example, cases involving the same set of winning lottery numbers reappearing, or individuals hit by lightning more than once.

Of all the incidents described, the most astonishing is that recounted in the fi rst page of the book. In the summer of 1972, the actor Anthony Hopkins (left) was signed to play a leading role in a fi lm based on George Feifer’s novel The Girl from Petrovka, so he travelled to London to buy a copy of the book. Unfortunately, none of the main London bookshops had a copy. Then, on his way home, waiting for an underground train at Leicester Square tube station, he saw a discarded book lying on the seat next to him. It was a copy of The Girl from Petrovka.

As if that was not coincidence enough, more was to follow. Later, when he had a chance to meet the author, Hopkins told him about this strange occurrence. Feifer was interested. He said that in November 1971 he had lent a friend a copy of the book, but his friend had lost the copy in Bayswater, London. A quick check of the annotations in the copy Hopkins had found showed that it was the very same copy that Feifer’s friend had mislaid.

After this incredible story, all the subsequent coincidences related feel rather humdrum. For instance, the book’s epilogue – which is not really an epilogue, but simply a three-page summary of the whole work – provides as a supposedly extraordinary coincidence, somebody drawing the letters of their surname in a game of scrabble (what is the opposite of OMG?). The Improbability Principle unfortunately shares one other characteristic of many ‘smarter thinking’ books – by the end, it leaves the reader, at least this one, thinking little more than ‘so what?’.

● Matthew Edwards is a senior consultant at

Towers Watson

“The law of the probability lever deals with how slight changes to circumstances can have disproportionately large consequences”

MORE ONLINELatest reviews at www.theactuary.com/opinion

PHOTOSHOT

The Improbability Principle by David Hand

p38_dec_book_review_FINAL•CT.indd 38 25/11/2014 15:52


39

StudentAt the backStudent

[email protected]

PHIL WRIGGLESWORTH

’T IS THE SEASON

Santa’s little Elkin on past exam results, present swapping and future prospects of facing up to embarrassing party evidence

Christmas time, mistletoe and wine. It’s a time for ice skating, cracker hats and ‘quality family time’. Curling up with a hot cocoa as the windows steam up and all our favourite TV ads on tap. The time for Pete from the offi ce to receive yet another ‘I heart spreadsheets’ mug to add to his collection. Not to mention the traditional gifts of ‘unmentionables’, of course.

As a special Christmas present this year, some exam results are out earlier than usual. They haven’t arrived in November since I joined the profession, and the later results day is usually only a week before Christmas, but the nice people at the IFoA have seen fi t to gift us with their availability early.

The release of exam results has been a contentious issue. Many have wondered why it takes so long – although a look at the IFoA’s website will explain just how much is involved in the post-exam process. The actual time of day when they are released has changed over time. Recently, it switched from 8pm to 5pm, ostensibly for the reason that no one wanted to wait around to press the button. But the idea that results would come out while many of us were sitting at our desks was a little unappealing, so following feedback it has now been moved back to 6pm.

The surprisingly early release date this session may well be the result of online marking, which was introduced to expedite the movement of papers between markers

by removing the need to physically courier them around. It has the added bonus of improved security, although this will probably not be at the forefront of most students’ minds.

If you’re unlucky, the results will land smack bang in the middle of festive events, especially the offi ce Christmas shindig. This season it will happen to me twice. Still, at least you have a chance to forget about any unfortunate news and celebrate the good with your colleagues, whom you hopefully like. Probably while doing some embarrassing dancing.

Getting merryFestive offi ce events are fascinating

things, ones that break etiquette boundaries in a way that might

get you a disciplinary on any ordinary day. They are attended by a rare

breed of people who can simultaneously resemble professionals with sophisticated palates and teenagers drinking alcohol for the fi rst time.

Secret Santa is a strange one as well. There is a voracious collective thirst for presents that are off ensive or just embarrassing, particularly if the gift can be worn – think mankini, or ‘Santakini’ – as I witnessed a while back. If you have to buy for someone you don’t know, there is the risk of pushing things too far. I once had to buy a gift for a pregnant colleague. Others recommended I buy her some condoms, but I wimped out and gave her chocolates and a face mask. Now, that’s not going to lead to any hilarious escapades or memorable photos, is it?

Collateral damageThere is a tradition at my fi rm for the new graduates to organise the departmental Christmas party. It’s a nice way of team building that introduces them to the company and puts them on the social map.

In my year, we did a deal with the party venue that meant we had a bottle of wine per person, spread out amongst heavy drinkers and responsible one-glass types alike. We did not realise how ridiculous this was until the very end of the evening, and we were left trying to consume the remaining volumes of

plonk. This, unsurprisingly, did not end well.

The day after the party you have to ignore that sinking feeling and return to

face your colleagues, either having seen photographic evidence of your own

humiliating antics – if the owner was cruel enough to share it – or just being aware that it exists.

Some people will probably try not to look each other in the eye. There

may even be apologies.The best description of offi ce Christmas

parties appeared in The Guardian, which called them “the annual offi cially sanctioned opportunity for shame and ignominy”.

These occasions can be cheering, hilarious, fun, wild, embarrassing, or

dangerous. Or all of the above. The biggest upside to all of this mayhem?

At least no one’s thinking about exam results any more. a

p39_dec_student_FINAL•CT.indd 39 25/11/2014 15:52

www.theactuary.com40 THE ACTUARY • December

ACTUARY OFTHE FUTURE

Do you know an actuary destined for greatness?You can nominate an Actuary of the Future by emailing [email protected]

R I C H A R DT H E C H T E R

Employer and area of work: Discovery, technical marketing – South Africa.

How would your best friend describe you?

An idealist, with just the right touch of pragmatism.

What motivates you?

The hunger to never stop learning, growing, exploring and ultimately succeeding.

What would be your

personal motto?

If the wind will not serve, take the oars.

Name fi ve dream companions to be

stuck on a desert island with?

Jimi Hendrix – with his guitar slung from his shoulder, Christine Lagarde, Leonardo Da Vinci – armed with paper and pencil, Natalie Portman and, of course, William Golding.

What’s your most ‘actuarial’ habit?

Underwriting.

If you could learn one random skill, what would

you learn?

To understand and speak any language.

Favourite Excel function? hlookup – the hipster vlookup.

How do you relax away

from the offi ce? Waterpolo, whiskey, mates and a great book.

Alternative career choice?

Fighter pilot.

Tell us something unusual

about yourself

My penchant for a good suit is limited by my size-14 shoe requirement.

Greatest risk you have ever

taken? Dabbling in life’s great

pleasures, be it love, the pursuit of triumph,

www.hfg.co.uk

David Kirk (above) has been appointed as managing director, Africa, for Milliman. Kirk will be running Milliman’s fi rst actuarial consulting practice on the continent, based in South Africa. He was previously head of actuarial at KPMG South Africa.

Hymans Robertson has appointed Matthew Fletcher (above right) as senior longevity technical

consultant. Fletcher will be responsible for the delivery and development of longevity risk solutions. He joins from Towers Watson, where he was a senior consultant. He is a Fellow of the IFoA and sits on both the self-administered pension schemes and mortality projections committees.

PwC has appointed Tim Reay (above right) as a director

of its pensions team. He will be advising multinational clients on issues including global governance, benefit

strategy, plan design, financing, valuation and monitoring. He joins from Aon Hewitt and is also the treasurer and a

former chairman of the International Employee Benefits Association.

MetLife has appointed Sue Elliott (right) as head of product for UK employee benefits. Elliot joins from Just Retirement, where she was head of care solutions. She also worked at Towers Watson for eight years and then with M&G Re and Swiss Re in the UK and Canada.

Steve Sarjant is to join the board of Pension Insurance

Corporation as a non-executive director. Sarjant spent 20 years as a senior actuarial consultant at Towers Watson. Latterly, he was an independent member of the with-profi ts committee of Prudential Assurance Company.

Chris O’Brien (above) has retired from Nottingham University Business School, but he continues to research as senior associate, Centre for Risk, Banking and Financial Services. He is also staying on three IFoA committees.

MovesAt the [email protected]

SPONSORED BY

relocating or changing jobs – all equal risks, and ones worth taking.

If you could go back in history, who would you

like to meet? Tie – Leonardo Da Vinci and Nikola Tesla.

What’s your most treasured possession?

The A5 Moleskine I carry with me.

What are the top three things you would like

to achieve in your lifetime? One, to fi nd balance between being content and experiencing what life has to off er. Two, inspire others to be the best that they can be. Three, to look back on a life well lived.

If you ruled the world, what would you change

fi rst? I would pursue the ideal that people can be more accepting and tolerant.

p40_Dec_AOTF_FINAL•CT.indd 40 25/11/2014 15:53

41

www.theactuaryjobs.com


Appointments

A P P O I N T M E N T Swww.theactuaryjobs.com

To advertise your vacancies in the magazine and online please contact:

Emmanuel Nettey +44 (0) 20 7880 6234 or [email protected]

+44 (0) 207 337 8800 www.hfg.co.uk

Graduate Actuary £25k – £30k Basic, London

A leading Lloyds Syndicate are hiring from the bottom level and looking to secure a graduate. This role will give the successful candidate exposure to pricing, reserving and capital.

Eager to speak with recent graduates from a top tier university who have achieved a high degree from a numerical subject. For more information please contact: [email protected] REF: BH1204

Parameterisation Manager £70 – £100k Basic, London

A global Insurer is looking for an Actuary to lead their development of planning and parameterisation process. The right person should have a strong Actuarial background and ideally experience working in igloo. This is a unique role and a great opportunity for the right person to make a big difference to the Actuarial team. For more information contact: [email protected] REF: WG1201

Calling all Non-Life Students£30k – £60k Basic, London

I’m working on a range of different actuarial analyst roles within the London market (Re)Insurers. With a particular focus to students who come from a strong pricing or reserving background looking to move into capital modelling. A number of the London market Syndicates and Managing agents are building their capital teams in the lead up to the Solvency 2 deadline. For more information please contact: [email protected] REF: BH1203

Actuarial Analyst – Mixed role £45k – £65k Basic, London

A London Market insurer are hiring into their team. This multipurpose role covers the reserving and pricing actuaries with the opportunity for the capital to come in house in the near future. The relevant candidates will be part qualified having successful passed exams up to CA1, and will have a strong numerical related degree from a top tier university. For more information contact: [email protected] REF: BH1201

General Insurance Roles

Partner Competitive Package, London

A leading consultancy within the General Insurance Actuarial market is looking for a Partner to join their practise. This person should have a proven background and the gravitas within General Insurance to lead and develop the Actuarial practise. To find out more about the team and opportunity please contact: [email protected] REF: WG1202

Reinsurance pricing Actuary £70 – £110k Basic, London

After an internal restructure this Lloyd’s syndicate is seeking a qualified pricing Actuary to work within their Reinsurance team. The role will work closely with the capital and reserving Actuaries but the focus will be on Reinsurance pricing. The role will include some travel and daily interaction with the Underwriters. Contact: [email protected] REF: WG1103

Capital Modelling – Nearly Qualified £55k – £65k Basic, London

This global Insurer based in the heart of London is looking for a strong capital actuary near qualification to join them. Reporting directly into the Head of Capital with a dotted line to the CRO, this individual is likely to come from a strong Igloo or ReMetrica background with a few exams to go. The successful candidates will have 2-3 years experience in capital modelling. For more information contact: [email protected] REF: BH1202

WILLIAM GALLIMOREDirector+44 (0) 207 337 8826

[email protected]

RUPA PITHIYAContract+44 (0) 207 337 1200

[email protected]

BEN HICKEYGeneral Insurance+44 (0) 207 220 1106

[email protected]

Reserving Actuary £110 – £135k Basic, London

Leading Lloyd’s syndicate is looking for a Reserving Actuary to support the Head of reserving. The right person should have previous reserving experience and enjoy mentoring and developing other Actuaries. There will be a lot of exposure to the finance department and this Actuary should be comfortable communicating with them. To find out more about the team and opportunity contact: [email protected] REF: WG1202

Highlighting OpportunitiesFinding the right opportunity for you can feel like finding a needle in a haystack. HFG’s consultants specialise in matching you to the right role at the right company. Call us today to have a chat about your requirements, and to find out what opportunities are available.

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Appointments


Assistant Manager - Consulting Hong Kong, Salary dependent on experience

A global consulting firm is looking for a nearly qualified non life actuary to join their team as an Assistant Manager. The candidate must have solid reserving or pricing experience with a good track record to actuarial qualification. You will be working on regional projects across Asia and developing a well-rounded skill sets. Asian language skills are highly desirable. Contact [email protected] REF: TY1201

Modelling Architect- Asia Hong Kong, Up to HKD $1.5m package

Opportunity to lead a global Prophet modelling project. Liaising with senior internal and external stakeholders worldwide, this role requires a technically astute, commercially aware actuary who has deepened expertise in Prophet. You will be instrumental in the architecture, development and delivery of each phase as it rolls out to each market they operate in. Contact [email protected] REF: CB1201

Strategy and BD Actuary Singapore, SGD 170,000 - 230,000

As the key regional strategy and business development Actuary this global reinsurer offers a genuinely rare opportunity. Working closely with the top tiers of senior management you will take the lead on key client engagement, regional strategic development and driving the diversification as well as growth of market share across the South East Asia region. Contact [email protected] REF: GB1202

Assistant Manager - EV Reporting Hong Kong, Up to HKD 700K package

Join the EV regional reporting team of this market leading life insurer in Asia at the Assistant Manager level. You will be actively involved in all aspects of Embedded Value reporting for the region and undertake ad hoc projects. The candidate will already have gained EV reporting skills and preferably Prophet experience. Local market knowledge is desirable Contact [email protected] REF: TY1202

Regional ERM Specialist Singapore, SGD 140,000 – 180,000 base + bonus

The Regional ERM Specialist is integral to the senior risk management team of this international Life insurer. Reporting to the Regional Chief Actuary you will be responsible for the development & implementation of the region wide ERM framework and best practices process. Responsibilities include reporting to the Risk committee and liaising with the CROs in Asia. Contact [email protected] REF:GB1201

Regional Actuary (GI) Hong Kong HKD $1m - $1.3m+ bonus

This exciting and varied role has a regional focus and will utilise a broad actuarial skill-set of pricing (personal lines), capital modelling and reserving. Representing one of the leading European insurers this opportunity will require the candidate to travel around the APAC region and act as an internal consultant for the business, therefore requiring superb stakeholder management and communication skills. Contact [email protected] REF: GB1201

Jason Sykes Managing Director EA Reg: R1333193Clare Bethell Director EA Reg: R1434590Graeme Braidwood Senior Consultant EA Reg: R1434568Tong Yu Consultant

www.hfg.com.sg+65 6829 7153

EA Licence Number: 14C7034

Quiz Time…A CA arpenter has a solid cube of wood, each edge of which is 12cm long. He wishes to cut ththe block in two, in suchhh a wa way ay tthat the hnew face on each of the two pieces can then be trimmed to a square of maximum possssible size. Wheere shosh uld hee mamake ke thethe cucut?t?

For your chance to win, please submit your answers to London@darwirw nrhodes.com

Capital AnalystLondon

Up to £65k + bonus + bene ts We are currently recrui ng for a globally renowned insurer who are looking for a capable Actuary to sit within Insurance Market and

Credit Risk. The role will involve suppor ng the building of the capital model with regards to SII requirements as well as suppor ng the risk framework for the Group worldwide. Experience using Igloo would be bene cial as well as experience with any credit risk por olio models.

For a con den al discussion please contact Victoria Cruickshank on 02079297667 / [email protected]

Quali ed Actuary either Life / Risk Background ExperienceLondon

Up to £60,000 baseFantas c opportunity for a Quali ed Actuary to join the Risk, Modelling and Consul ng Prac ce within one of the UK’s leading

pensions, investment and bene t consultancies. My client requires a high calibre, ambi ous individual to take on a diverse role within the life insurance team suppor ng Senior Consultants across - Risk Management, Solvency II, Capital Management,

Investment ALM, Internal Model Development, Reinsurance and Pricing/Product Development.

For a con den al discussion please contact Clinton Poore on 02079297667 / [email protected]

With Pro ts Repor ng ActuaryUp to £80,000

This is a fantas c opportunity to work in a well established actuarial department that o ers the chance to develop your actuarial, professional and personal skills in a challenging, exci ng and rewarding environment. We are looking for a Quali ed Actuary to

oversee the management of the With Pro ts business for a rapidly expanding client with o ces in London and the North of England.

For a con den al discussion please contact Adam Goodwin on 02079297667 / [email protected]

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November 2014 • THE ACTUARYwww.theactuary.com

London : Chicago : Hong Kong : Singapore : Shanghai

Senior Pricing Analyst - London

My client, one of the leading global insurers, is looking to

recruit a talented and ambitious Senior Actuarial Analyst to join their team. You will provide case pricing for large risks

within International Liability, together with the development and support of pricing models, portfolio analysis/

segmentation and interaction with the business planning process. Reporting directly to a senior manager, this is a great opportunity, which will give exciting development

opportunities as well as exposure to a wide variety of work. Previous pricing experience – ideally London Market - is required. You will have made good progress through the

actuarial exams and great communication skills in addition to actuarial and statistical pricing skills.

Contact [email protected]+44 207 481 8686

Senior Actuary / Structurer - Switzerland

Our client, a multinational property and casualty reinsurer, is looking to enhance their team with a Senior

Actuary to develop new business and solutions. As the senior team member you will have a responsible role

in deal teams and a focal point for internal and external stakeholders. Pricing and non-life reinsurance experience

Knowledge of either risk management or reserving would be a plus. Programming skills and experience

with software such as Remetrica or IGLOO would be


Senior Life Actuary - London Top quartile salary package

Our client, an established and successful international insurance company, is looking to develop its life/

grow actuarial expertise at senior management level. Based in London, key responsibilities are to lead and manage the reserving process in line with Solvency II governance; price new products; support statutory reporting; contribute to the management and leadership

with at least 5 years experience of managing a broad range of responsibilities within a growing life actuarial team. Familiarity with UK Gaap, US Gaap, Solvency II and good communication/commercial skills are essential.


Institutional CRM - London£80,000-130,000 + 100% target Bonus

Leading asset manager, looking to further enhance service to its largest clients, is seeking an experienced investment professional to manage all aspects of these complex relationships. Must be technically strong with a deep understanding of the needs of large funds and

and LDI. Exceptional client skills and a real commitment ensuring the highest levels of service are essential. This is a hugely varied role, where you are empowered to do everything possible to give the clients the outcomes they want in a fast growing business with huge potential for

management for an investment consultant.


IPS Group, Bevis Marks House, 24 Bevis Marks, London EC3A 7JB 020 7481 8686 Email: [email protected]

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44

Appointments


Your specialist actuarial recruiter in the UK, Mainland

Europe, and Asia-Pacifi c,with dedicated sector specifi c

consultants covering;Non-Life

LifePensions and Investments

For a confi dential career discussion please contact us on

+44 (0)207 332 5870 or [email protected]

theactuaryjobs.comis the official job boardfor SIAS and The Actuarial Profession.

To register for ourJobs by emailservice simply go to theactuaryjobs.com

Contact

Pensions & Investments | Non-Life | Life & Health UK | Europe | Asia Paci c www.eamesconsulting.com

We are a recruitment consultancy with a differenceBringing Talent Together

Head of Corporate Actuarial (Life)Location: London Salary: £110,000 - £125,000 base

This is a senior position within the UK senior management structure of a global reinsurance group co-ordinating key actuarial activities across the group and will therefore need to build relationships with stakeholders around the world. The role will involve the management of a team of quali ed and student actuaries as well as carrying out regular analyses of the performance of the business and communicating that to the group head of ce.

Rob BulpittHead of Actuarial, InsurancePensions Risk Management020 7092 [email protected]

Ian PoveyActuarial, Pensions & Insurance Risk Management020 7092 [email protected]

Of ce Number+44 (0)20 7092 3200

For current opportunities please visitwww.eamesconsulting.com

p44_ACT.12.14.indd 44 25/11/2014 16:05

41


November 2014 • THE ACTUARYwww.theactuary.com0207 337 8800 www.hfg.co.uk [email protected]

Risk & Capital Actuary£45k - £55k per annum basic, London

An opportunity for an actuarial student who is making good progress through the actuarial exams to join a top five Lloyd’s insurer in their risk and capital team. The ideal candidate will come from a capital modelling or validation background and be looking to diversify their experience by working within the second line of defence. The successful candidate will have a consultative personality and possess strong technical skills. [email protected] REF: EO1201

[email protected]

Head of Financial RiskUp to £100,000 per annum, London

A global P&C insurer is looking to appoint a strong risk professional to lead their Financial Risk team. The successful candidate will report to the CRO and be responsible for the design and implementation of the Financial/Investment Risk framework, and work closely with the CIO to ensure the Investment Committee is run in an effective way. You will be an aspiring individual who should be comfortable managing a team and liaising with senior stakeholders. [email protected] REF: JK1201

Life Insurance RolesCapital Management

Salary dependent on experience with excelllent bonus potential, London

The focus on Capital is evolving in the industry and developing very quickly. The role of the Capital Actuary plays a key role in the management of the balance sheet of the firm. Understanding the capital framework, capital strategy and subsequent delivery against objectives provides superb exposure for any ambitious individual. Working closely with the executive team, finance, risk and actuarial functions the Capital team are looking at possible transactions, strategies and regulatory developments in order to pursue appropriate opportunities when they arise. Under the new Solvency II regime this team will need to be close to the developing regulatory regime and undertake a capital optimisation plan that fits into the new requirements of the regulator along with the strategic ambition and direction of the organisation. To move into a capital focused role you will need to be technically strong and a good communicator who is comfortable assessing and managing the requirements of multiple stakeholders. Insurance, Credit and Market risk considerations will all need to be monitored and considered while looking to secure transactions that will move the balance sheet to a better and optimal position. A focus on Capital is a perfect opportunity for future CFO’s and the ideal background is a blend of actuarial, insurance and banking expertise with a commercial mindset. For more information please contact: [email protected] REF: MD1201

Contract RolesSolvency II Contractor

£1000 - 1500 per day up to 12 months, West of England

This leading non-life insurer is looking to recruit various contractors, more specifically a Solvency II actuary with internal model and regulatory interpretation experience. This is a role in which you will be expected to advise, develop and implement S2, across the whole business. To be successful you must have recent S2 regulatory experience, have experience in practical application, as well as being able to review challenging the model. [email protected] REF: RP1201

Risk Roles

JAMES KITTRisk Management+44 (0) 207 337 1202

[email protected]

SOPHIA CROSSMANLife Insurance +44 (0) 207 337 1207

[email protected]

ERIN O’DONNELLRisk Management+44 (0) 207 337 1202

[email protected]

Reserving Contractor £700 - £900 per day, 6 months, London

This leading Lloyd’s syndicate is looking for a qualified reserving contractor for an initial 6 months.

You will be involved with quarterly reserving as well as GAAP reporting and technical provisions work. Contact: [email protected] REF: RP1204

Pricing Contractors £800-1000 per day, 9 - 12 months, London

This leading insurer is looking for a pricing contractor for maternity cover. Working closely with the underwriters you will be involved with working across all classes, offering underwriting support, as well as developing and enhancing existing rating models.

To be considered you must have a commercial lines pricing experience. Contact: [email protected] REF: RP1202

Capital Contractors£700 - £900 per day, 6 months, London

This leading insurer is looking for a contractor, for an initial 6month period subject to extension to work within their actuarial team. You will be involved across the business pre-dominantly within capital modelling and be exposed to validation, parameterisation work. You will also be exposed to other teams and be expected to assist in ad-hoc risk, reserving and pricing work. Contact: [email protected] REF: RP1203

Prophet Developer £700 - £900/day, 6 months, Bristol

A market-leading life insurer is looking for a hands-on Prophet developer to code their internal model. This is a great opportunity for an experienced Prophet Developer to gain exposure across the entirety of the model. The ideal candidate will have in excess of 3 years coding experience in Prophet, working on models as well as some valuations work. Contact: [email protected] REF: GB1202

Capital Actuary £55k - £70k per annum basic, London

This niche life insurer is looking for a qualified life actuary to help support the Capital Management team. You will be working closely with the manager looking at the wider Capital implications in the business as well as Solvency II, Investment Risk and Regulatory Capital. The ideal candidate will have previous capital and risk exposure, although this isn’t essential. Contact: [email protected] REF: SC1201

Calling all Life Actuarial Students!

As you all know, the market is thriving across the Life insurers and consultancies and now could be your chance to move into a new team where you can try something new. Our clients across the market are looking for ambitious students who want to get exposure in a different area. If you are looking for a change and want to find out more about the opportunities, please let me know. [email protected] REF: SC1202

Senior Actuarial Analyst £800 - £1000/day, 6 months, Reigate

A life insurance company based in Reigate are looking for two senior actuarial contractors to join their team.

The ideal candidate will have excellent reporting skills and a good working knowledge of the reporting process and associated metrics. Contact: [email protected] REF: GB1201

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Appointments

THE ACTUARY • October 2014www.theactuary.com

Appointments

Antony Buxton FIAMANAGING DIRECTOR

+44 7766 414 [email protected]

ME

Paul CookSENIOR CONSULTANT


ME

Lance Randles MBAASSOCIATE DIRECTOR


ME

AntonMANAG

Paul CSENIOR

LaAS

Joanne YoungOPERATIONS DIRECTOR

ME


JoaOPER

LIFEHEALTHNON-LIFEPENSIONSINVESTMENT

PRINCIPAL

RISK PRICING MANAGERHEAD OF RISK

RESERVING ACTUARYHEAD OF MODELLING

RISK ACTUARIAL LEADHEAD OF PRICING

LEAD CONSULTANT

MANAGER - INVESTMENTSOLVENCY I I ACTUARY

DIRECTOR OF GI

HEAD OF LONGEVITY

SYSTEMS ANALYST

ACTUARIAL PRACTICE LEADER

SOLVENCY II ACTUARYSENIOR CORPORATE ACTUARY

PENSIONS & INSURANCE MANAGER

ACTUARIAL PRICING CONSULTANT

CATASTROPHE ANALYSTRISK PRICING ANALYST

RESERVING ACTUARYSTRATEGIC RISK CONSULTANT

CONSULTING ACTUARY

HEALTHCARE ACTUARYHEAD OF EXPOSURE MANAGEMENT

BULK ANNUITIES ACTUARY

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October 2014 • THE ACTUARYwww.theactuary.com


Louis MansonMANAGING DIRECTOR

ME


Irene Paterson FFAPARTNER

ME


LouMAN

IrePAR

Clare RobertsSENIOR CONSULTANT


ME

Peter BakerSENIOR CONSULTANT


ME

PeterSENIOR

We provide our employees with a market-leadingcommission structure, a supportive and flexible working environment, access to our technical expertise and a strong, well-respected brand on which to build their relationships.

£ market-leading commission structure

Star Actuarial Futures is seeking exceptional new consultants to expand its award-winning team. You will currently be working as an actuary or actuarial student in industry, with an actuarial recruitment consultancy, or in-house with exposure to actuarial recruitment. Candidates must possess a strong work ethic, the highest levels of integrity and a passion to deliver to a wide range of clients. You will become part of an honest, professional and successful team with a wealth of knowledge to share. You will be rewarded with a market-leading commission structure. This is an exciting time to join the business in a period of growth. Please contact Louis or Antony for a confidential discussion.

p46-47_ACT.12.14.indd 47 25/11/2014 10:16

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Appointments


STARVACANCIES

Antony Buxton FIAMANAGING DIRECTOR


ME

Paul CookSENIOR CONSULTANT


ME

Lance Randles MBAASSOCIATE DIRECTOR


ME

AntonMANAG

Paul CSENIOR

LaAS

Joanne YoungOPERATIONS DIRECTOR

ME


JoaOPER

REINSURANCE PRICING - SPECIALTY LINES

£ excellent package

STAR2140NON-LIFE LONDON

World-leading reinsurance firm has a fantastic opportunity for a qualified non-life actuary with specialty lines reinsurance pricing experience to make an impact within a dynamic and cutting-edge team.

RESERVING - PROPERTY AND CASUALTY

up to £80k + bonus + benefits

STAR2073NON-LIFE SOUTH WEST

Our client has an exciting opportunity for a part- qualified or qualified actuary with GI Solvency II reserving experience to develop market-leading technical provisions methodologies and provide key actuarial business planning insights.

Exclusive to Star Actuarial! Our client is looking to recruit a part-qualified GI actuary to their pricing team. You will ideally have previous pricing experience, and will be making good progress through the actuarial exams.

EXCLUSIVE: ACTUARIAL ANALYST - PRICING


STAR2209NON-LIFE SOUTH EAST

Our client is seeking a talented individual to be responsible for fulfilling statutory and regulatory responsibilities in respect of GI Technical Provisions, including developing and implementing best practice.

MANAGER - TECHNICAL PROVISIONS

£ excellent + bonus + benefits

STAR2141NON-LIFE LEEDS

Lloyd’s Syndicate has a unique opportunity for a talented capital modeller to provide cutting-edge support for the ongoing development of the Group’s ReMetrica-based calculation kernel.

SYNDICATE CAPITAL MODELLER



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

HEAD OF PRICING

£ excellent package


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

PRICING & RESERVING ACTUARY



Seeking a part-qualified or qualified actuary to join the capital modelling team of a London Market insurer. Capital modelling experience preferred, but not essential. Contact us now for more information.

LONDON MARKET CAPITAL



Leading insurer seeks a high-calibre, part-qualified non-life actuary to join its pricing team. A first-rate academic background is required, although previous pricing experience is not.

LONDON MARKET PRICING



Our client seeks candidates with GI pricing experience to join its customer pricing team. You will lead pricing projects based on knowledge of demand modelling and optimisation gained within a personal lines setting.

SENIOR PRICING ANALYST



GI RESERVING


STAR2188 & STAR2028NON-LIFE MIDLANDS

Our client has an exciting opportunity for a part- qualified or qualified non-life actuary to provide support, solutions, recommendations and advice to the GI business on a range of reserving and other financial projects.

ACTUARIAL PRICING - NON-LIFE


STAR1946NON-LIFE MIDLANDS

Leading financial services firm has a unique opportunity for a part-qualified or qualified actuary to provide support and solutions to the GI business on a range of pricing projects.

LONDON MARKET RESERVING



We have a fantastic opportunity for a part-qualified non-life actuary with strong interpersonal skills to join the reserving team of a leading London Market insurer. Please contact us for more information on this exciting role.

SENIOR MANAGER - RESERVING



Seeking a non-life expert to ensure the GI businesses are adequately reserved by developing and implementing appropriate processes and methodologies for the Claims Control Cycle.

PRICING ANALYST

up to £60k, depending on experience

STAR2074NON-LIFE SOUTH WEST

Our client is looking for a part-qualified actuary with commercial pricing experience to strengthen its actuarial pricing team, deriving appropriate technical premiums and underwriting analytics to support the UK business.

NON-LIFE CONSULTANCY



Leading global consultancy is seeking part- qualified or qualified non-life actuaries to join its team. You will have reserving, risk or capital experience, along with strong leadership skills.

NON-LIFE LEADER

£ attractive package


A leadership role calling for strong influencing skills, sophisticated technical knowledge and deep understanding of the non-life industry. Please contact us for more details of this exciting opportunity.

With excellent technical abilities and in-depth experience gained in non-life insurance, you will assist with the development and shaping of tools and analytical capabilities in this broad role, offering superb career progression prospects.

NON-LIFE ANALYTICS

£ dependent on experience

STAR2204NON-LIFE RISK LONDON

NON-LIFERISKNON-LIFE LIFE RISK PENSIONS INVESTMENT

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Star

Act

uari

al F

utur

es L

td is

an

empl

oym

ent a

genc

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d em

ploy

men

t bus

ines

s

www.staractuar ia l .com

Louis MansonMANAGING DIRECTOR

ME


Irene Paterson FFAPARTNER

ME


LouMAN

IrePAR

Clare RobertsSENIOR CONSULTANT


ME

Peter BakerSENIOR CONSULTANT


ME

PeterSENIOR

Our client has an exceptional opportunity for a risk expert to provide mathematical and programming expertise to support risk management, enhance existing tools and assist in new initiatives.

MULTI-ASSET RISK MANAGER

£ depends on experience

STAR2152LIFE RISK EDINBURGH

One of the country’s fastest growing firms is looking for high-calibre life actuaries with a broad skill set to build on its international expansion.

LIFE IN THE FAST LANE


STAR2169LIFE SOUTH WEST

Are you a part-qualified or qualified actuary with exceptional quantitative skills ready to commence a new phase of learning? Do you have outstanding coding and model-building skills? If so, please contact us.

SUPERSTAR QUANTS


STAR2201LIFE PENSIONS INVESTMENT LONDON

Our client is seeking a talented individual with experience in asset-liability modelling to provide mathematical and modelling expertise to support risk management and optimisation of portfolios.

MULTI-ASSET ALM LDI MODELLER


STAR2151LIFE INVESTMENT EDINBURGH

Our client is seeking to hire a qualified actuary to manage and be responsible for the daily operations of its reporting team. Significant industry experience is required, along with proven team leadership skills.

SENIOR CORPORATE ACTUARY


STAR2182LIFE SOUTH EAST

Take the lead in the design, development, testing, validation and documentation of the Internal Model at this large life insurance company.

INTERNAL MODEL MANAGER - LIFE


STAR2219LIFE MIDLANDS

Our client would like to hire a qualified life actuary with Moses development experience and a proven track record in managing teams. Excellent analytical, technical and IT skills are required. Contact us now for more information.

SYSTEMS ACTUARY


STAR2203LIFE LONDON

Leading firm seeks exceptional life actuary, ideally with reinsurance and investment experience. Please contact us for more information on this unique role.

LIFE ACTUARY - BANKING


STAR2120LIFE INVESTMENT LONDON

Fantastic opportunity for an actuarial leader with strong technical and management skills to take up a key role in a growing and successful insurance business.

ACTUARIAL ANALYSIS MANAGER


STAR1756LIFE SOUTH COAST

Seeking a qualified life actuary and risk expertto deliver recommendations and solutions to business problems. Flexibility in approach and strong communication skills required.

RISK ACTUARY


STAR2079LIFE RISK SOUTH COAST

Take this opportunity to raise your industry profile. Our client is seeking a proactive and highly-motivated qualified Solvency II Life Actuary with knowledge and understanding of financial and insurance risks.

SOLVENCY II LIFE ACTUARY


STAR2123LIFE RISK LONDON

Amazing opportunity for high-calibre part-qualified and qualified pensions actuaries to move to life insurance with a leading firm. Please contact us for further information.

MOVE TO LIFE

£ excellent + benefits

STAR2184LIFE SOUTH WEST

Leading pensions consultancy seeks part-qualified and qualified actuaries to join a high-quality team providing project-based risk solutions to flagship corporate clients.

STRATEGIC RISK CONSULTING


STAR2165PENSIONS LONDON / MIDLANDS

Leading consultancy seeks a part-qualified pensions actuary with a strong modelling background and excellent knowledge of computer programming and/or statistical platforms. Contact us now for more information.

PENSIONS ANALYTICS


STAR2202PENSIONS LONDON

Global consultancy seeks a high-calibre qualified actuary with investment consulting experience to join its market leading team. Please contact us for more information on this role.

INVESTMENT RISK SOLUTIONS


STAR2185INVESTMENT LONDON

Leading insurer seeks an ALM actuary for a wide-ranging role within its investment team. This is an excellent opportunity to become involved in, or widen your experience within, the life insurance investment space.

ALM ACTUARY


STAR2156LIFE INVESTMENT LONDON & SOUTH COAST

Large financial services group seeks a qualified actuary to join its investment solutions consulting team and develop insightful, thought-leading and influential marketing material for target insurance clients and markets.

INVESTMENT SOLUTIONS


STAR2220INVESTMENT EDINBURGH

As Consolidation Team Actuary you will be responsible for production of Solvency II results on Internal Model and Standard Formula bases and reconciliation of these results to ICA and other relevant metrics.

CONSOLIDATION TEAM ACTUARY


STAR2157LIFE SOUTH COAST

LIFERISK

PENSIONSINVESTMENT

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Appointments


Risk Modelling Actuary

Paul FrancisLondon

£130,000 + Bonus + Benefits

My client is a large commercial risk bearer requiring an actuary

with good knowledge of capital/risk modelling. This is an extremely

lean organisation so you will have diverse duties from hands-on

modelling through to strategic M&A and pre due-diligence work.

Capital Actuary

Ross Anderson

London

Up to £60,000 + Bonus + Benefits

Exclusive opportunity for a Capital Actuary to join a market leading

London market insurer. You will be part qualified to nearly qualified.

Capital and risk management experience would be preferred and

Igloo exposure advantageous. Excellent career progression available.

GENERAL INSURANCE - UK

Senior Actuary

Rob Bentham

London (City)

Up to £130,000

An eminent London market business is seeking a Senior Actuary to

join their expanding team. The individual will get exposed to a mix of

pricing, reserving and capital work, as well as having management

responsibility for a junior actuary. Lloyd’s experience very desirable.

Capital Roles - Various

Graham Anderson

London


I’m recruiting for several capital opportunities at a leading

Consultancy. The roles provide exposure to a broad range of

projects with leading clients and excellent potential for career

progression. Please get in touch to find out more.

CONTRACTS - GENERAL INSURANCE - UK

Risk Actuaries

Elise Ogden

London

£800 - £1,100/day

A number of our clients are seeking actuaries with experience

of model validation and risk modelling to assist with short-term

regulatory work. Suitable candidates will have knowledge of

financial risk, insurance risk and ERM.

Capital Actuaries

Elise OgdenUK Wide

£800 - £1,200/day

A number of our clients are nearing submission of their internal

models; as a result we are seeking actuaries with previous

experience of IMAP and also Standard Formula. Previous

experience producing the ORSA is also useful.

Senior Manager - Actuarial Analysis

Natalie Lightfoot Edinburgh

Up to £95,000 + Package

Looking for an experienced actuary to join a newly created position

within the insurance financial planning and analysis team. You will

interact with senior directors and offer a high level review of the

business. Fantastic opportunity for an ambitious reporting actuary

with strong influencing capability.

Life Consultant

Hugo Chambers

London

Up to £80,000 + Package

An excellent opportunity to join a fast-growing, niche consultancy

in central London. My client is seeking a nearly / newly qualified

actuary with a strong commercial background to support their

continued growth. Strong knowledge of specialist area is essential,

along with first-rate communication skills.

LIFE CONFERENCE & EXHIBITION 2014 Clare Nash

It was a pleasure to meet many of you at the Life Conference in

November. The winners of our prize draw are as follows:

Stephen Baxter from Hymans Robertson - iPhone 6

Heather Ryde from Wesleyan - BOSE Speakers

Saurabh Agrawal from Prudential Group - Fortnum & Mason Hamper

Senior Reporting Actuary

Richard Howard

Surrey


Excellent opportunity for a qualified actuary to join the capital

management team of this leading life insurer in the South East. The

role will focus on economic capital metrics and involve interaction

with the risk management team. Must be a qualified life actuary.

Business Development Director - BPA

Natalie Lightfoot South East

£115,000 + Package

Fantastic opportunity for an experienced actuary to join the bulk

purchase annuity team as a Business Development Director. You will

negotiate longevity insurance transactions and support/develop new

and existing products. The ideal candidate will have consultancy

experience with a strong understanding of DB pensions and/or bulk

annuities.

LIFE INSURANCE - UK

Solvency II Capital Actuary

Kaylash Kukadia

South East

£800 - £1,000/day

I am looking for three NNQ + one Qual Actuary with Solvency II

experience to join my clients Solvency II project. Skills: Stochastic

Modelling of Assets and Liabilities.

Solvency II Actuaries

Benjamin Moses

London

£800 - £1,000/day

Several of my clients are currently looking to bolster their Solvency

II teams in order to meet the workload demands in 2014 and 2015.

Qualified actuaries with extensive capital, risk and regulation

knowledge should get in touch.

CONTRACTS - LIFE INSURANCE - UK

Capital Projects Actuary

Clare Nash

London (City)

£100,000 + Excellent Package

I am currently undertaking a retained search for a City based client.

They are seeking to recruit two qualified actuaries to work on market

leading capital related projects. You will have sound technical ability

and enjoy a highly visible role across the group.

G.I. Pricing Analysts - Managers

Sarah Robins UK Wide


We are currently working with a number of well-known personal

lines insurers across the UK. Opportunities exist for part qualified

Actuaries and Statisticians. Emblem and SAS is desirable. Please

get in touch for more information.

Personal Lines Pricing – London Market

Rachel Kelly

London


This is an exciting opportunity for a part qualified actuary to use

their personal lines pricing skills in a London market environment.

You will work on a new, high profile project to improve pricing

sophistication across high net worth business lines.

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51



Executive Director

Hamza Mush

Hong Kong/Singapore

HKD$1.5million - 2million + Bonus + BenefitsThe largest and fastest growing reinsurance business globally and here in Asia is seeking

a senior commercial and qualified actuary to join their high calibre business development

team to further develop the company’s client base, harness new business opportunities,

and drive efficient execution of transactions.

General Insurance – UK

Paul Francis 0207 649 9469

Rob Bentham 0207 649 9351

Sarah Robins 0207 310 8552

Rachel Kelly 0207 310 8579

Ross Anderson 0207 649 9357

Graham Anderson 0207 649 9353

Contracts - G.I. - UK

Elise Ogden 0207 649 9355

Life Insurance - UK

Clare Nash 0207 649 9350

Richard Howard 0207 649 9356

Natalie Lightfoot 0207 310 8547

Hugo Chambers 0207 310 8642

Contracts - Life Insurance - UK/Europe

Benjamin Moses 0207 310 8793

Ani Pannell +353 144 75975

Kaylash Kukadia 0207 310 8581

Asia

Gary Rushton +852 5804 9223

Toby Weston +852 5804 9042

Philip Chau +852 5804 9287

Hamza Mush +852 5804 9048

Rhoda Rivera +852 5804 9225

France

Emérique Opou +33 1 76 77 46 30

Agathe Ibazizen +33 1 76 77 46 31

Ireland

Patrick McMahon +353 1 437 0625

Rick Davis +353 1 685 9059

Benelux

Niels van Nieuwkerk +31 2090 0033

Britt Ootes +312 0290 0035

Germany

Manuel Lovell +49 89 2109 3362

Emina Biscevic +49 89 3803 8965

Alessio Montaruli +49 89 2109 3339

Switzerland

Audrey Dadon +41 43 508 0444

Please contact one of the team for further

information on any of the opportunities

above or visit www.ojassociates.com/jobs

Pricing Actuary

Toby WestonHong Kong

HKD$660k

High-growth MNC insurer in Hong Kong seeks a pricing expert with strong GLM and

SAS. Reporting to the chief actuary, this person will assist their emerging market entities

across the region on pricing of both personal and commercial lines.

Director, Pricing - Health

Rhoda Rivera Hong Kong

Up to HKD$1.4 millionTop global life insurer seeks a qualified actuary to work within their regional pricing team.

Candidates must have at least 10 years’ experience in pricing, product development,

reinsurance, valuation and reporting. Must have A&H or Life & Health (protection)

background.

Non-Life Actuary (Team Lead)

Audrey DadonZurich

From CHF130,000

International and well-established player in the insurance market is looking for a qualified

actuary to manage a project team. You will work on Solvency/ SST, reserving, capital and

strategic projects within this non-life insurance firm.

Group Head of Best Estimates Analysis

Alessio Montaruli

Germany

€100,000 +

Our client, a top tier insurance group, is looking for a senior life actuary to lead – at group

level – the team responsible for the analysis of Best Estimate results submitted by the

local business units according to SII framework. Working language is English.

General Insurance OpportunitiesPatrick McMahon

Dublin, IrelandUp to €95,000 + Bonus + Benefits

I have a number of excellent opportunities in Dublin for actuaries with general insurance

experience. These roles are across reserving, pricing, Solvency II and advisory work

and range from part qualified to experienced hires. These roles offer the opportunity to

progress your career and also obtain new skills and experiences.

Solvency II Actuary

Ani PannellDublin, Ireland

€700 - €850/day

My client, a global insurer, require a nearly/newly qualified actuary to bolster their Solvency

II team. The successful actuary will have strong Solvency II reporting experience and a

good knowledge of Solvency II regulations within a life company.

ASIA

EUROPE

E [email protected]

W www.ojassociates.com

@OJAssociates

oliver-james-associates

General Contact Details:

Senior Pricing Actuary

Audrey DadonZurich

£££Competitive

Fast-growing reinsurer looking for Long-Tail Actuary to work on all types of casualty treaty

lines of business. In addition to pricing you will design and implement the necessary

tools, work closely with underwriters and attend client visits when needed.

Senior Casualty Pricing Actuary

Agathe IbazizenParis

£££Competitive

My client, an international reinsurance company is looking for an experienced non-life

actuary. You will provide actuarial pricing support to the casualty underwriting teams

internationally. English is the required language and French would be a plus.

Asia Head of Structuring

Gary Rushton Hong Kong

HKD$2million - 2.5 million + Bonus + LTI’s

Highly commercial and senior individuals with extensive experience of structuring

complex financial solutions from IB or ins required. The role will have full P&L and

strategic oversight across Asia.

Chief Actuary

Philip Chau

Hong Kong

HKD$1.8million - 2.2million + Bonus

Exceptional opportunity to join a leading multinational insurer as their chief actuary to

drive their newly created HK operations. Due to the startup nature of the role, you must

have both technical and commercial skills to develop actuarial functions for the office.

Head of Actuarial

Toby Weston

Malaysia

RM420k + Bonus + Benefits

My client is a major European insurer with a strong G.I. book in Malaysia, due to

changing regulations they are seeking an experienced actuary to oversee all actuarial

duties. Strong communications, technical skills and team management required.

p50-51_ACT.12.14.indd 51 25/11/2014 10:18

52

Appointments


The Actuarial Recruitment Company

A nearly/newly qualified reserving actuary is required for this Lloyd’s Managing Agency. The role will cover a range of property, casualty and specialty reinsurance lines. Involvement will include production of quarterly reserves and financials, analysis of reserve risk for the internal capital model and Technical Provisions, development of new reserving and reporting tools and ensuring compliance with regulatory requirements. Strong communication and technical ability required. Ref: ARC26269

Nearly/Newly Reserving General InsuranceLondon Circa £75K

This Bermuda reinsurer is looking for a qualified actuary with a

background in London Market reserving, particularly reinsurance

lines, to report into the Chief Actuary on the island. Knowledge of

GAAPs and IFRS accounting beneficial as well as Solvency II including

experience of technical provisions. Good communication skills

and proactive personality needed as well as ability to work to tight

deadlines. Ref: ARC26265

Reserving Actuary General InsuranceBermuda Circa $240K plus benefits

A qualified actuary with ideally Igloo experience is needed to support capital modelling for an international insurance and reinsurance business. The role will involve development and maintenance of elements of the internal model, working with reserving and pricing actuaries to improve the model, liaison with the business for model parameterisation, assisting with regulatory submissions and support for model validation. Significant capital experience from a London market or other equivalent environment required. Ref: ARC26253

Capital Actuary General InsuranceLondon Circa £130K

Working for this blue chip Lloyd’s business, this role will be the main

point of call with underwriters for the reinsurance pricing in London.

The roleholder will work alongside other actuaries in the pricing

team and will be involved with case pricing, rate monitoring and

pricing model development. Prospective candidates must have a

background in London Market pricing, particularly of the reinsurance

market. Ref: ARC26268

Reinsurance Pricing General InsuranceLondon To £100K

Call us anytime including evenings and weekends on 020 7717 9705 or email [email protected]

Andy Clark BSc FIA 0781 333 7891 [email protected] Massey BSc MBA FIA 0781 398 9016 [email protected]

The Actuarial Recruitment Company is an employment agency

www.the-arc.co.uk

A fresh approach

p52_ACT.12.14.indd 52 25/11/2014 10:19

the actuary - december 2014

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