The Actuary August 2011

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Published in London by the Staple Inn Actuarial Society

The

Actuary T HE H E M AG A G AZ A Z IN I N E F OR OR T HE H E A CT CT UA UA RI R I AL A L P RO R O FE F E SS SS IO IO N

www.TheActuary.com

August 2011

Heart of the matter Examining the real risk factors of heart disease

Plus: Investment: Regulatory drivers Techno echnology: logy: BlackBer BlackBerry ry vs iPhone Inside: Pa Paul ul Swe weet etin ing g Q& Q&A A

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Dilnot Dil not re revie view w

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Predictive Predi ctive underw underwriting riting

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Fiduciary Fiduci ary manag management ement

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 Jobs  Jo bs

 

Ad j u s t m en t t o n ew m Ar k et s c An b e t Ak en A l i t t l e t o o f Ar .

www.hannoverlifere.com

 

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The

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Editorial

See page 5 for the editorial team Incisive Financial Publishing 32-34 Broadwick Street, London W1A 2HG T +44 (0)20 7316 9000

August 2011

Publisher/display sales Philip Harding T +44 (0)20 7316 9393 E [email protected] Managing editor Sharon Maguire T +44 (0)20 7316 9016 E [email protected]

Striding forwards

Recruitment Recruitm ent salesmanager Melanie Jacob T +44 (0)20 7316 9618 E [email protected]

The Institute and Faculty of Actuaries’ new Council took office with effect from 28 June and in mid-July I attended my first meeting. The agenda was designed in a manner that encouraged members to get to know one another better and agree what we needed to achieve.

Designer Nicky Brown Senior sub-editor Sam Robson Production manager Matt Parle T +44 (0)20 7316 9766 E [email protected] Group editor-in-chie editor-in-chieff  Jonathan Swift Swift Group publishing director Mark Burton Print and distribution Polestar Poles tar Colch Colchester ester, Esse Essexx Subscriptions For subscriptions from outside the actuarial profession: UK, Eire and Europe: £50 a year/£5 a copy. For the rest of the world: £75 a year/£7.50 a copy. Please contact: Alison Jiggins The Actuarial Profession, Staple Inn, High Holborn, London WC1V 2QT T +44 (0)20 7632 2100 E [email protected] Studentss on actu Student actuari arial al scie science nce cour courses ses at uni univer versiti sities es mayjoin the Sta Staple ple Innn Act In Actuar uarialSocie ialSociety ty for£6 a ye year ar.. Theywill rec receiv eivee The Actu Actuary  ary as part of the their ir mem members bership hip.. App Apply ly to: Mem Members bership hip Depa Departme rtment, nt, The Actuariall Profes Actuaria Profession, sion, Maclaurin House, Hou se, 18 Dubl Dublin in Str Street, eet, Edin Edinburg burgh h EH1 3PP. T +44 (0)131 240 1325 E [email protected] Changes of address should be made known to the membership department as above. For delivery queries please contact: Manisha Khanduri E [email protected]

Internet The Actuary website: www.TheActuary.com SIAS website: www.sias.org.uk  Actuarial Profession website: www.actuaries.org.uk 

Circulation 20 888 (July 2009 to  June 2010)

We also discussed our priorities for the year year,, which was extremely useful for me as a new addition to the team. I feel proud to represent my profession in this way and thank those of you who have written in with your kind words of congratulations. Our th Our them emes es fo forr Au Augu gust st ar aree in inve vest stme ment nt an and d li life fe in insu suran rance ce.. Pe Pete terr Ga Gate tenb nby y, seni se nior or ac actu tuar aria iall pa part rtne nerr at Ma Maza zars rs,, st stan ands ds on hi hiss so soap apbo box x to co comm mmen entt up upon the th e Di Diln lnot otifica repo re port ondia long lo -ter erm m care re prop opos osal als forrbe fo the th e UK UK. . ceiv The Th e ed repo re port hasson ha crea cr eate ted d si sign gnifi cant ntrtme medi ang-t inte in tere rest st ca and an d pr prom pr omis ises essto well we ll re rece ived byrt the pub public lic.. Our interview of the month is with Paul Sweeting, fellow member of Council and European head of J.P. Morgan Asset Management’s Strategic Investment Advisory Group. As if having a full-time industry role, volunteering for the profession and having a family is child’s play, play, Paul also holds a part-time post as professor of actuarial science at the University of Kent. In up upco comi ming ng ev even ents ts,, SI SIAS AS ur urge gess yo you u to ke keep ep yo your ur calend cale ndar arss fr free ee on th thee ev even enin ing g of 1 No Nove vemb mber er fo forr it itss an annu nual al gene ge nera rall me meet etin ing g fo foll llow owed ed by th thee Ju Jubi bile leee Le Lect ctur uree deli de live vere red d by Ro Roge gerr Bo Boot otle le,, an ho hono nora rary ry fe fell llow ow an and d leading lead ing econ economis omist. t. The  The Actuary had Actuary had previ previousl ously y publ blis ishe hed d an in inte terv rvie iew w wi with th Ro Roge Nove No mber ere20 2009 09 (pu www.TheActuary.com/870189) www.TheActuary.com/870189 ) ager ndr in th this isvemb lect le ctur ure Roge Ro gerr wi will ll di disc scus usss th thee ch chan ange gess ne need eded ed to ma make ke thee fin th finan anci cial al sy syst stem em re resi sili lien entt to a re repe peat at of th thee financial finan cial crisi crisis. s. The process for appointing The Actuary ’s ’s next editor is under way and we plan to make an announcement on these pages soon. Watch this space! Fina Fi nall lly y, th thee te team am ha hass be been en wo work rkin ing g fe feve veri rish shly ly to  www.TheActuary.com.. launch laun ch ou ourr ne new w we webs bsit itee at at www.TheActuary.com We ho hope pe yo you u ap appr prov ovee of th thee re resu sult lts. s.

 Marjorie Ngwenya Ngwenya Editor [email protected]

www.TheActuary.com

August 2011 

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The

Actuary

Contents

Editorial advisory panel Peter Tompkins (chairman (chairman), ),  John Batting, ng, Marg Margaret aret de Valois, ois, Matthew Matt hew Edw Edwards, ards, Martin Lunn Lunnon, on, Richard Richa rd Purc Purcell, ell, Andr Andrew ew Smit Smith, h, Chris Sutt Sutton, on, Sher Sherdin din Omar Editor Marjorie Ngwenya E [email protected] T +44 (0)7794 031 225 Features editor Tracey Pritchard Lane Clark & Peacock LLP, E [email protected] T +44 (0)20 7432 3071 Deputy features editors Adam Jorna Sonal Shah E [email protected] Profession news editor Alison Jiggins E [email protected] T +44 (0)20 7632 2172 Industry news editor Terren Friend E [email protected] People/society news editor Kelvin Chamunorwa Towers Watson E [email protected] T +44 (0)7502 107 322 Student page editor Matthew Matt hew Welsh E [email protected]  Arts page editor editor Richard Elliott Scottish Life E [email protected] T +44 (0)7814 509 081 Puzzles editor Tom Bratcher Towers Watson E [email protected] Published by the Staple Inn Actuarial Society. The editor, The Institute and Faculty of Actuaries and Staple Inn Actuarial Society are not responsible for the opinions put forward in The Actuary . Nopartof this public publication ation may be repr reproduce oduced, d, stored sto red or tra transm nsmitt itted ed in anyform or by anymean anymeans, s, ele electr ctroni onic, c, mechanical, photocopying, recording or other otherwise, wise, with without out priorwritten permission ssion of the copy copyright right owne owners. rs. 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 assubmitted you are aware, the content will not infringe any third-party rights, be defamatory or in any any way illegal. © SIAS August 2011 All rights reserved ISSN 0960-457X

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August 2011 Life insurance: Heart of the matter

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Garth Lane looks at heart disease and the use of statins to treat high levels of cholesterol

News 12 Profession news 16 18 20 44

Industry news People/society news  news  SIAS events  events  Appointments and moves

Comment 3 Editorial Marjorie Ngwenya is striding forward

6 Letters In which actuaries discuss longevity risks and endowment risks

8 President’s comment  Jane Curtis seeks the views and support of members to achieve the next steps forward

Features 22

Investment: Driving tests Umar Ilyas steers a course through the regulatory drivers in areas of institutional investment

24

Investment: Aiming for a good outcome Christine Berry asks where the responsibilities lie within pensions fiduciaries

26

Pensions: The tipping point Matthew Furniss finds that high inflation isn’t necessarily a bad thing for pension schemes

30

32

Q&A: Paul Sweeting

43 Book review Peter Tompkins gets to grips with with The Case for  Working with your Hands by Matthew Crawford

Regulars 37 Technology Is the BlackBerry or iPhone best for business?

39 Arts Richard Elliott cuts through the hyperbole to find the best of this year’s Edinburgh Festival

40 Puzzles

Life insurance: A new dawn

42 Student page

Life insurance: Life in the fast lane Paul Hately looks at life insurance’s aim to balance customer needs for convenience and low prices

36

The Diln Dilnot ot rec recomme ommenda ndation tionss are an opp opportun ortunity ity nott to be mi no miss ssed ed,, sa says ys Pe Pete terr Ga Gate tenb nbyy

Marjorie Ngwenya talks to Paul Sweeting about balancing volunteer volunteer work, authorship, academic obligations and time with his family

Rajagopalan Krishnamurthy reflects on the strategic shifts in India’s life insurance industry

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10 Soapbox

Conference preview: Life conference  Jason Hurley introduces introduces this year’s year’s Life Life conference conference

MORE MO RE CO CONT NTENT ENT ON ONLIN LINE E Additional features content content can be found at www.TheActuary.com

Win a £50 Amazon voucher in our prize puzzle

Matthew Welsh says it is time to optimise your high-quality free time

43 Actuary of the future Rachel Gow of Aviva Ireland

WRIT WR ITER ER OF TH THE E MO MONT NTH H Garth Lane is the editorial team’s choice for August for his article on statins, and receives a £50 book token courtesy of:

August 2011 

5

 

Letters

Your vie view w

Letters to the editor In which actuaries discuss longevity risks and endowment risks

LRestriction etterrisks: of Response the mto oNikinCleal, th July 2011

Forw Fo rwar ard d fe feat atur ures es in  The Actuary 

Niki Cleal’s article quite rightly argues that the removal of compulsory annuitisation increases flexibility but potentially adds risk for individuals — investment and longevity longevity.. The longevity risk has two components — general improvements in health status leading to increased life expectancy and also the specific risk of an individual living significantly longer than the average. I would also argue that the quality of financial planning and the availability of suitable longevity hedges currently are not adequate for this new era of flexible decumulation. It ap appe pear arss th that, at, to tooo of ofte ten, n, fi fina nanc ncia iall pl plan anni ning ng in the de decu cumu mula latio tion n ph phas asee se seek ekss to ma maxi ximi mise se th thee va valu luee of th thee re rema main inin ingg as asse sets ts ra rath ther er th than an fo focu cuss on op opti timi misi sing ng th thee inco in come me st stre ream am th that at be best st ma matc tche hess th thee ex expe pect cted ed mo mone neta tary ry va valu luee of the in indi divi vidu dual al’’s pref pr efer erre redd lilife fest style yle.. Thi Thiss la latt tter er ap appr proa oach ch is di diff ffic icul ultt to ma mana nage ge wh wher eree yo youu ar aree effe ef fecti ctive vely ly de decu cumu mula latin tingg ov over er an un unkn know own n ti time me ho hori rizo zon. n. An im impo porta rtant nt st step ep he here re is to redu re duce ce th thee lo long ngev evity ity ri risk sk wh whic ich h ca can n be ac achi hiev eved ed ex expe pens nsiv ivel elyy th thro roug ugh h the pu purc rcha hase se of a

The Actuary’s team welcomes contributions from members or contacts in and around the profession. Belo Be low w is th the e sc sche hedu dule le of th them emes es fo forr th the e next ne xt fe few w mo mont nths hs al alon ong g wi with th th the e de dead adlin line e fo forr subm su bmis issi sion on.. If yo you u wo would uld lik like e to co cont ntri ribu bute te,, please ple ase con contact tact Tr Trace aceyy Bro Brown wn at [email protected] with sugg suggesti estions. ons. For a full list of 2011 issue themes, visit www.TheActuary.com/875190

tradit trad itio iona nall an annu nuity ity bu butt is be bett tter er de delilive vere redd by th thee us usee of a ch chea eape perr ad adva vanc nced ed lilife fe de defe ferr rred ed annuity annui ty (ALDA (ALDA). ). Publ Pu blis ishe hedd wo work rkss in th this is ar area ea,, in incl clud udin ingg Mi Mile levs vsky ky an andd Go Gong ng & We Webb bb,, ha have ve demo de mons nstr trat ated ed th that at mu much ch of th thee lo long ngev evit ityy ri risk sk fo forr in indi divid vidua uals ls ca can n be mi mitig tigat ated ed by usin us ingg ALD ALDAs As.. Im Impo porta rtant ntly ly,, by ap appr prop opri riat atee us usee of th thes esee typ types es of pr prod oduct uctss it all allow owss the indi in divi vidu dual al to de decu cumu mula late te th thei eirr as asse sets ts ov over er a kn know own n ti time me pe peri riod od,, wi with th th thee AL ALDA DA prov pr ovid idin ingg st stop op lo loss ss pr prot otec ecti tion on in th thee ev even entt of th thee in indi divi vidu dual al lilivin vingg lo long nger er tha than n ex expe pecte cted. d. This Th is ap appr proa oach ch is ga gain inin ingg in ac acce cept ptan ance ce in th thee US wh wher eree th thee vo volu lume me of ma matu turi ring ng DC (401k (4 01k)) pla plans ns is gr growi owing. ng. As an in indu dust stry ry we we ne need ed to im impr prov ovee th thee qu qual alit ityy of advi ad vice ce an andd pr prod oduc ucts ts in thi thiss im impo porta rtant nt ar area ea no now w to av avoi oidd a ge gene nera ratio tionn of re reti tire rees es ma maki king ng po poor or fi fina nanc ncia iall de deci cisi sion onss with wi th lilittl ttlee or no op oppo portu rtuni nity ty to re reco cove verr su subs bseq eque uentl ntlyy. Mikee Ty Mik Tyler ler

editorial deadline 12 August, advertising deadline 13 September) ■ Careers: graduate ■ Risk management ■ Mortality/longevity

October 2011 (Published 29 September September,,

November 2011 (Published 27 October, editorial deadline 16 September September,, advertising deadline 11 October) ■ Solvency II ■ Pensions ■ Careers: new fields

December 2011

13 Ju July ly 20 2011 11

(Published 24 November November,, The writer of the letter of the month receives a £25  Amazon voucher 

Exposure to risk I refer to the Financial Ombudsman Service (FOS) Review for the year to 2011. This report repeats an elementary statistical error in its 2010 report — it says that in 2010 the number of cases that had to be referred to an ombudsman increased over the 2009 year by 24%. It failed to say, however, that exposed-to-risk increased from 113,949 to 166,321, which is far more than 24%. The result is that the proportion that required an ombudsman decision actually reduced. The proportion for the year to 2010 was 6.5%, whereas FOS regarded a proportion of about 8% as normal. This is not evidence of a “...shift towards more entrenched

6

August  2011

disputes — with businesses increasingly taking a hard-fought and legalistic approach, and consumers becoming more demanding and less willing to concede”. The proportion of cases referred to an ombudsman is indeed higher in the year to 2011, at 10.6%. However, the average for the two years: to 2010 and to 2011 is 8.6%, which is around the 8% considered normal. How can FOS be trusted to make decisions with regard to endowment mortgage risks, and FSA Treating Customers Fairly, Principles for Businesses, Principle 6 when it does not appear to be allowing for exposed-to-risk?

Anthony Antho ny Pep Pepper per 5 Ju July ly 20 2011 11

editorial deadline 14 October October, , advertising deadline 8 November) ■ General insurance ■ ERM ■ Investment

YOUR YOU R LET LETTER TERS S

More letters are available online at www.TheActuary.com/category/  comment/letters The editorial team welcomes readers’ letters but reserves the right to edit them for publication. Please e-mail [email protected]. The deadline for receiving letters for the September issue is 15 August 2011.

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President’s comment  Jane Curtis

 Jane Curtis outlines outlines the next steps steps forward forward and seeks the views and support of members to achieve these aims

Strategic operations One of the more immediate consequences of becoming president is the increase in emails flowing into my inbox. Although the tide can at times appear overwhelming, it is more than a pleasure to communicate with members. I like to think the Profession’ Profession’ss membership is still small enough for individual views to count and for each one of you to make a difference to how the

actuarial skills, less time and cost to get to recognised level.

Profession operates. Take, for example, the recent consultation exercise on the strategic review. As I mentioned in last month’s article, I was hugely encouraged that over 1,200 of you responded to our survey. To all who contributed I want to thank you and recommend you continue with this positive participation. I think everyone can gain from increased involvement and voluntary work within our organisation. This sentiment is not new. One of my predecessors, Charles Wood, expressed a similar view over 50 years ago when he said: “Pride in the profession grows in proportion to the service which is rendered.” We We have

for being fully qualified n Obtain annual update on professionalism matters and anything else of relevance n Work-based experience requirements to continue to apply broadly as present.

much to beeach proud of could but I am sure there is more that of us be doing. One of the core strands in the new strategy is education — a personal passion of mine — and our objective here is to provide high-quality qualifications for our students and a lifelong education for our members. Pleasingly, Pleasingly, nearly 84% of those responding to our consultation survey were satisfied or very satisfied with this objective. There was also positive support for the core qualification model described below below..

Level 1: Technician n Passed

technical exams not required to do higher level, practical exams or ‘softer skills’. Professionalism required n Meet demand for lower cost, technical skills for more ‘number-crunching’ type roles n Attractive to those interested in technical

8

August 2011

Level 2: Qualification level — actuary/fellow n Generic

qualification — no UK-specific

material n The qualification should be in line with IAA and Groupe Consultatif requirements

Level 3: Practicing/specialist fellow n Entry

through exams or transitional experience applications or through senior actuary endorsement under an approved ‘regulation through firms process’ n In order to act as advisor on one of the five specific areas, the individual has to be qualified in the relevant speciality. speciality. Advisor can mean in-house within employer and external consultant n

 Five specialisms and one ‘general advisor’ specialism n Any reserved role would be treated as an extra specialism for the purposes of CPD n Meet minimum CPD requirements, which should be no more onerous than as present. » You have told us that we need to elaborate the details on these roles before giving us your wholehearted support prior to moving forward on this basis. We are committed to further consultation and listening to what you have to say. In the meantime, we would appreciate feedback on areas such as: n How do these roles fit in to the general career paths of actuaries and students? n How do these roles meet the needs of our members globally?

n What

is the appropriate mix of examinations, work-based experience and CPD for each level? n Which specialisms should be included? n What is the best name for each level and how should they be described? n What should be the transitional arrangements for existing members? At the next stage of the consultation, we are asking for volunteers from the Council to join a Strategy Implementation Group, which will develop the three-tier model as a working premise. They will ask for and respond to the views of members, employers and other stakeholders. We hope to have this stage of the process completed by the end of 2011 so that the Council can press ahead with making a full decision on changes by the middle of 2012. This time of year always sees a batch of newly qualified actuaries, many of whom I hope could donate a voluntary hour or two a week from their freed-up time to the Profession. Many volunteers tell us how much they have got back from their work helping with committees, projects, examinations and offering career support. This has proved to be of tangible benefit to their employers, also. By way of a small thank you to many of those who have already contributed back to the profession, we are organising a number of garden parties, the first of which I will be looking forward to « hosting this month. In fu futu ture re co colu lumn mnss I ho hope pe to te tell ll yo you u ab abou outt more mo re op oppor portun tunit itie iess to get inv invol olved ved an and d thee exc th excit iting ing pl plan anss we hav havee for co confe nfere rence nces, s, events even ts and res resear earch. ch. More details of the strategy and how to volunteer can be found at www.actuaries.org.uk . If  you  you want to find out more about getting involved please email [email protected]

Many vo Many volun luntee teers rs tel telll us how muc uch h th the ey have got bac ack k fr from om th thei eirr wor ork k helpin hel ping g wit with h co commi mmitt ttees ees

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Soapbox

Peter Gatenby

The Dilnot report will shift more of the burden of coping with old age onto on to th the e in indi divi vidu dual al an and d aw awaay fr from om th the e ta taxp xpaaye yerr, sa says ys Pe Pete terr Ga Gate tenb nbyy

Long-term solution

10

On 4 July, Andrew Dilnot and his fellow commissioners published their report on the funding of long-term care in the UK. The report covers a number of areas and makes various recommendations, the two most important of which are an increase in the means test limit to £100,000 and a cap on the amount that people will have to pay for care out of their own pockets.

life ins life insura urance nce,, in incom comee pr prot otect ection ion and critica crit icall illn illness. ess. As actuaries, we will be called on to assist in the development and pricing of a number of these products. Long-term care insurance products were first developed and sold in the UK during the 1990s but they were expensive as they were designed to cover all of the care costs

for long-term care. It is possible to consider three high-level scenarios for people as they age in retirement: 1. They never have a need for long-term care and therefore a level income in real terms in retirement should satisfy their needs. 2. A number of years after retirement they start to experience problems with the normal activities of daily life, perhaps as a

The main recommendation of the Commission is that a public/private partnership is put into place in which people who need care will fund the first £35,000 of care themselves, after which time the State will pick up the rest of their long-term care costs. If government decides to accept and implement such a cap then it will lead to the development of a whole host of financial services products to help people fund the capped amount. Prod Pr oduc ucts ts to he help lp pe peop ople le fu fund nd fo forr th thee ca cap p will wi ll ra range nge fro from m sav saving ingss and inv invest estmen mentt vehicles vehi cles,, equi equity ty rele release, ase, disa disabil bility ity pens pension ion annuitie annu itiess and long long-ter -term m care insu insuranc rancee eith ei ther er on a st stan anda dalo lone ne ba basi siss or ad adde ded d

from the point that care was needed, an open-ended liability. Consequently, only the wealthy or reasonably well off could afford them.

result of arthritis, breathing problems, heart problems and so on, and may therefore have a need for a gradually increasing income in real terms in order to be able to pay for help around the house. 3. A catastrophic event such as a stroke or heart attack or a severe senile dementia such as Alzheimer’s or other major illness occurs, and there is sudden need for a large amount of expensive care either at home or in a nursing home leading to a dramatic increase in monthly outgoings. Our cur curren rentt pen pensi sion on rul rules es all allow ow for poi oint nt 1, but do no nott allo low w fo forr poi oint ntss 2 or 3, and an d it ha hass al alwa ways ys se seem emed ed lo logi gica call to me that th at our pen pensio sion n ann annuit uities ies sh shoul ould d be

to oth other er re relev levant ant pr produ oduct cts, s, suc such h as

uncertainty in government thinking on long-term care. By capping the amount that an individual is liable to pay to £35,000, insurance products can therefore be developed and sold to cover the capped amount. Consequently,, the cost of the insurance will Consequently be much less than the products sold in the 1990s, somewhere between one third and one quarter of the cost. Thiss wo Thi would uld ma make ke lon long-t g-term erm ca care re in insur suran ance ce affor aff ordab dable le to ma many ny mo more re pe peopl oplee and wo would uld reall re ally y op open en up a pot potent entia ially lly la larg rgee ma mark rket. et. The kn knoc ock-o k-on n eff effec ectt wo woul uld d be tha thatt th thee la larg rger er lifee and he lif healt alth h in insu surer rerss wo would uld be li like kely ly to devel dev elop op pr prod oduc ucts ts ra rath ther er th than an a few sm small all nich ni chee pl play ayer erss as in th thee 19 1990 90s. s. As well as insurance, the report also mentions the concept of the disability pension annuity. It has long been a view of mine that the pension is a natural home

August 2011 August  2011

»

If th the e go gov ver ernm nmen entt do does es deci de cide de to im impl plem emen entt th the e Dilnott rec Dilno recommen ommendati dations ons then th en th the e un unce certa rtain inty ty th that at has exis istted in th the e pa passt will wi ll be re remo mov ved « As well as the cost of long-term care insurance in the 1990s, there was an added issue in the minds of the public of

constr cons truc ucte ted d so as to al allo low w fo forr an in incr crea ease se in pa paym ymen ents ts on a de defin finab able le lo long ng-t -ter erm m ca care re event. eve nt. Di Dilno lnott sug sugges gests ts tha thatt suc such h ann annuit uities ies shou sh ould ld be al allo lowe wed d an and d th that at pe pens nsio ion n ru rule less should shou ld be chan changed ged acco accordin rdingly gly.. If the government does decide to implement the Dilnot recommendations then the uncertainty that has existed in the past will be removed, which means that many more people will be likely to consider using insurance, pensions and other financial services products to fund their long-term care costs. To fail to take this opportunity to provide a fairer system for all will be a failure by the government to tackle what is a worrying and financially destructive issue for a growing number of people. Peter Gatenby is the senior actuarial partner and leads the actuarial practice at Mazars LLP

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Talk to us: we’re looking for the brightest and best talent The co The coun untd tdow own n to So Solv lven ency cy II is we well ll un unde derr wa wayy. We are are al alre read adyy wo work rkin ing g wi with th cl clie ient nts s to pr prov ovid ide e le lead adin ing-e g-edg dge e so solu luti tion ons s th that at will wi ll en enab able le th them em to 󿬂o 󿬂our uris ish h in th the e ne new w en envi viro ronm nmen entt an and d fo focu cusi sing ng on wh what at is ne need eded ed on once ce So Solv lven ency cy II be beco come mes s re real alit ityy. If yo you u ar are e lo look okin ing g fo forr yo your ur ne next xt mo move ve in th the e in insu sura ranc nce e/re rein insu sura ranc nce e in indu dust stry ry,, ar are e br brim imm min ing g wi with th id idea eas s an and d wo woul uld d li like ke to lear le arn n mo more re ab abou outt ou ourr st stra rate tegy gy,, wh whyy no nott jo join in us fo forr a ca care reer er co coac achi hing ng di disc scus ussi sion on wi with th bu busi sine ness ss le lead ader ers s Ma Marti rtin n Pi Pik ke (EM EMEA EA)), Chri Ch ris s Fo Ford rdha ham m (U (UK K Li Life fe)) an and d Ka Karl rl Mu Murp rphy hy (U (UK K P&C &C)). Inte In tere rest sted ed? ? You ca can n 󿬁n 󿬁nd d ou outt mo more re at towerswatson.com/RCScareersUK

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Profession

Profession backs more radical reform of state pension Response to DWP consultation favours single-tier flat rate pension, subject to a successful succes sful transition, and cautions against single formula approach to state pension age In its recent response to the Department for Work and Pensions (DWP) consultation,

should make it easier for people to make informed decisions about their financial

“There are significant problems with trying to adopt a single formula approach

‘A state pension for the 21st century’, the Institute and Faculty of Actuaries has said that it believes that the public interest could be best served by the more radical reform to a single-tier flat rate pension set out in option 2 of the DWP’s paper. paper. The professional body argues that in future the state pension age should be subject to regular multidisciplinary reviews rather than having automatic changes based on a single formula on life expectancy. Commenting on the Institute and Faculty’ss response, Ronnie Bowie, Faculty’ immediate past president, said: “We have argued for some time that a state pension scheme that is fair, simple and transparent

future. We therefore support in principle the government’s proposed option for more radical reform to a single-tier flat-rate state pension, although there are many points of detail on how the transition would be delivered that still need to be worked out. “The ending of contracting out is likely to speed up the reduction in schemes in the private sector offering future defined benefit accrual. However, However, it can be argued that it is in the general public interest to have to find solutions to help manage the ending of contracting out for a minority rather than let this be a barrier to single-tier reform that should benefit the majority majority..

to deciding on future increases in state pension age. Firstly, it will not be at all straightforward to decide on what it should be. Secondly, no single formula is likely to be robust enough to give the required stability. And thirdly, life expectancy should not be the only consideration in setting state pension age. We suggest that the key criterion for establishing the best mechanism in this area should be whether it provides stability and sufficient warning, is evidence based and ensures that ultimate accountability is with ministers and Parliament. We outline how a statutory review process would be well placed to fit these requirements.”

Subscription Subscripti on payments Sessional research The minutes of Council meeting are now available on the Profession’s website at http://tinyurl.com/5wa4z7t . Council has approved changes to regulation 24 (http://tinyurl.com/6jcsvnz (http://tinyurl.com/6jcsvnz). ). Previously,, members (except students) were Previously given six months to pay their subscriptions before being defaulted. All members will now need to pay by 31 December each year as Council considers three months as sufficient time in which to make annual subscriptions payments.

meetings — your meetings opinionss sought opinion

The gr The grou oup p of vo volu lunt ntee eers rs an and d st staf afff th that at organi org anises ses ses sessio sional nal res resear earch ch mee meetin tings gs is lookin loo king g at how the Pro Profes fessio sion n can str streng engthe then n the off offeri ering ng at its tra tradit dition ional al dis discus cussio sion n meetin mee ting g and and,, whe where re app approp ropria riate, te, con consid sider er some so me ne new w fo form rmat atss for th thee se sess ssio ion n be begi ginn nnin ing g in Sep Septem tember ber.. Ple Please ase com comple plete te the sho short rt onli on line ne su surv rvey ey (http://tinyurl.com/5w4f5ok http://tinyurl.com/5w4f5ok)) and influence influen ce the discu discussions ssions..

No increase in subscriptions and practising certificate fees Following Follow ing agr agreem eement ent by Cou Counci ncil, l, the there re will wi ll be no in incr crea ease se in su subs bscr crip ipti tion on ra rate tess or pra pract ctisi ising ng cer certifi tificat catee fee feess for 201 2011. 1. In ef effe fect ct th this is me mean anss an ov over eral alll re redu duct ctio ion n in fe fees es wh when en th thee RP RPII in incr crea ease se no norm rmal ally ly adde ad ded d is ta take ken n in into to ac acco coun unt. t. All sub subscr script iption ion fee feess wil willl the theref refore ore rema re main in th thee sa same me as se sett ou outt be belo low: w:

Subs Su bscr crip ipti tion on fe fees es fo forr 1 Oct Octob ober er 20 2011 11 Fellowss (fu Fellow (full ll reg regula ulatio tion): n): £69 £690 0 Fellows Fell ows (par (partial tial regu regulatio lation): n): £342 Associ Ass ociate ate (fu (full ll reg regula ulatio tion): n): £45 £456 6 Associat Asso ciatee (par (partial tial regul regulation ation): ): £228 Stude St udent nt (U (UK/E K/EU) U):: £28 £282 2 Student Stud ent (over (overseas) seas):: £192 Affiliate: Affil iate: £69

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August  2011

Reduce Red uced d sub subsc scrip riptio tion n (al (alll cat catego egorie ries): s): £69

Practising Pract ising certif certificat icate e fees Fees for all pra Fees pract ctisi ising ng cer certifi tificat cates es wil willl rema re main in at £8 £860 60..

Subscript Subscr iption ion pol policy icy and membership membe rship opera operation tion Memberss and stu Member studen dents ts sho should uld con consul sultt the mem member bers’ s’ sec sectio tion n of the Pro Profes fessio sion’ n’ss websit web sitee reg regard arding ing pol policy icy and ope operat ration ional al procedure proc edures. s. Impor Important tant infor informati mation on — su such ch as ho how w to ap appl ply y fo forr pa part rtia iall regulation regul ation,, reduc reduced ed subs subscrip cription, tion, surc su rcha harg rges es an and d mu much ch mo more re — ca can n al also so be fo foun und d on th thee Pr Prof ofes essi sion on’’s we webs bsit itee at www.actuaries.org.uk

Remittanc Remi ttancee advic advicee infor informati mation on will be se sent nt to me memb mber erss du duri ring ng Au Augu gust st an and d it is the mem member ber’s ’s res respon ponsib sibili ility ty to ens ensure ure thatt the cor tha correc rectt sub subsc scrip riptio tion n is pai paid. d. If yo you u pr prev evio ious usly ly pa paid id a pa part rtia iall or re redu duce ced d rate ra te yo you u mu must st en ensu sure re th that at yo you u ar aree st stil illl elig el igib ible le to re rene new w at th that at ra rate te.. Re Rece ceip ipts ts fo forr alll pa al paym ymen ents ts ca can n be do down wnlo load aded ed fr from om th thee member mem bers’ s’ sec sectio tion n of the web websit site. e. Any enqu enquirie iriess rega regardin rding g memb membersh ership ip matt ma tter erss sh shou ould ld be se sent nt to th thee Membersh Memb ership ip and Cert Certifica ificates tes Te Team, am, The Act Actuari uarial al Prof Professi ession, on, Macl Maclauri aurin n Hous House, e, 18 Dub Dublin lin St Stree reet, t, Ed Edinb inburg urgh h EH1 3PP, or yo you u ca can n te tele leph phon onee +4 +44 4 (0 (0)1 )131 31 24 240 0 13 1325 25,, or alte alternat rnativel ively y emai emaill [email protected]

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Dilnot Commission Commission repo report rt offers opportunities for insurance insurance industr industryy As An Andr drew ew Di Dilno lnot’ t’ss rep report ort in into to the fun fundi ding ng of ca care re an and d su supp ppor ortt is pu publ blis ishe hed, d, th thee Actua Ac tuaria riall Pr Profe ofess ssion ion has ind indic icate ated d th that at if the rep report ort is imp implem lement ented, ed, it co could uld pre presen sentt signific sign ificant ant oppo opportun rtunitie itiess for the long long-ter -term m care insu insuranc rancee mar market. ket.

£35,00 £35, 000 0 wo woul uld d ha have ve th thee ef effe fect ct of reduc re ducing ing the pre premi miums ums for the in insur suranc ancee polic pol icy y to som somee ext extent ent,, de depen pendi ding ng on thee per th period iod of co cover verage age pr provi ovided ded by the insu insuran rance. ce. How However ever,, it redu reduces ces,, butt doe bu doess not eli elimin minate ate,, the in incen centi tive ve

annuity) and a link to housing wealth using equity release as a funding mechanism. The imm immedia ediate-n te-needs eeds annui annuity ty mark market et curre cur rentl ntly y ave avera rages ges abo about ut £95 mil millio lion n of pr prem emiu ium m pe perr an annu num. m. It re reac ache hed d it itss peak pe ak sa sale less in 20 2004 04 at ju just st ov over er £1 £110 10

Suee El Su Elli liot ott, t, a le lead adin ing g he heal alth th an and d care ac care actu tuar ary y an and d ch chai airr of th thee Ac Actu tuar aria iall Professi Prof ession’ on’ss heal health th and care comm committ ittee, ee, said sa id:: “I “In n te term rmss of ho how w th this is mi migh ghtt af affe fect ct th thee insuranc insu rancee indu industry stry,, the prop proposed osed £35, £35,000 000 cap ca p fo forr in indi divi vidu dual al co cost stss fo forr ca care re co coul uld d he help lp re-invig re-i nvigorat oratee the long long-ter -term m car caree insu insuranc rancee marke mar ket. t. Cap Cappi ping ng the ins insura urance nce cl claim aimss at

for th for thee in insu sura ranc ncee co comp mpan any y to lo look ok fo forr preve pr event ntati ative ve me measu asure ress to try to re reduc ducee th thee lengt len gth h of per period iod und under er cl claim aim.” .” Private insurance could take many forms such as immediate-needs annuities (which are currently available), pre-funded insurance of various types, a link to pensions (such as disabled life

million milli on bas based ed on 1,7 1,730 30 pol polic icies ies,, wh whic ich h is signifi sig nifican cantl tly y les lesss tha than n th thee 435 435,0 ,000 00 peo people ple in nu nurs rsin ing g or re resi side dent ntia iall ca care re wh wher eree a signifi sig nifican cantt am amoun ountt wo would uld hav havee be been en private priv ate pay pay.. The Act Actuari uarial al Prof Professi ession on look lookss forw forward ard to wo work rkin ing g wi with th th thee go gove vern rnme ment nt on th thee detail det ailss of the pr propo oposal sals. s.

CPD determi determination nation reports now online Due to th Due thee co cons nsis iste tent nt na natu ture re of CP CPD D case ca ses, s, th thes esee ha have ve be been en pu publ blis ishe hed d on the Pr the Prof ofes essi sion on’’s we webs bsit itee an and d ar aree no nott to be ta take ken n as a re refle flect ctio ion n of th thei eirr le less sser er importanc impor tancee under the disc disciplin iplinary ary scheme sch eme.. The fol follow lowing ing mem member ber has faced fac ed dis discip ciplin linary ary act action ion for fai failur luree to reco re cord rd th thei eirr CP CPD D in ac acco cord rdan ance ce wi with th th thee Profession Profe ssion’s ’s CPD requi requireme rements: nts: ■ Mr. David Thomas Newman; a reprimand; http://tinyurl.com/6h7uxqj The ful fulll det determ ermina inatio tion n is ava availa ilable ble at www.actuaries.org.uk

Applications open for chief Applications executive of the Institute and Faculty of Actuaries For further information on the vacancy for chief executive of the Institute and Faculty of Actuaries, visit www.odgersberndtson.co.uk/  35788

Applications open Applications for chairman of the Profession’s management board Council is also seeking a new chairman of the Profession’s management board to take up appointment as soon as practicable. The job description can be found at http://tinyurl.com/6gr4nfe.. Please http://tinyurl.com/6gr4nfe Please send your [email protected] b CV to [email protected]  by y 10 August. Interviews will take place around 17 August.

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DETERMINATION REPORT FOR ADJUDICATION ADJUD ICATION PANEL Mr Ala Alan n Ro Robert bert Goo Goodma dman n (the Respondent Respondent)) On 5 Ma May y 20 2011 11 th thee Ad Adju judi dica cati tion on Panel Pan el con consid sidere ered d a com compla plaint int tha thatt the Respon Res ponden dent, t, whe when n ins instru tructe cted d by Bro Brodie diess

increase increa se ass assump umptio tion, n, con contai tained ned in an amen am endm dmen entt to Ar Arti ticl clee 5 of th thee Su Summ mmon ons, s, should shoul d conta contain in qualifi qualificatio cations ns g) pro provid vided ed opi opinio nions ns on mat matter terss tha thatt lay la y ou outs tsid idee wi with th hi hiss ar area ea of ac actu tuar aria iall

LLP to gi LLP give ve an ex expe pert rt op opin inio ion n fo forr th thee truste tru stees es of the WTL Int Intern ernati ationa onall Lim Limite ited d Retirement Retir ement Benefi Benefits ts Schem Schemee (T (Trust rustees) ees) in con connec nectio tion n wit with h a pot potent ential ial cla claim im forr da fo dama mage gess fo forr br brea each ch of co cont ntra ract ct an and d negl ne glig igen ence ce in re rela lati tion on to ad advi vice ce gi give ven n by Mr Eri Ericc Edw Edward ardss (t (the he Sch Scheme eme Act Actuar uary) y) and/ an d/or or Sc Scot otti tish sh Wid idow owss pl plcc (S (SW) W) as a conseq con sequen uence ce of whi which ch the Trus rustee teess mad madee thee de th deci cisi sion on to sw swit itch ch th thee as asse sets ts of th thee scheme sch eme fro from m the def deferr erred ed ann annuit uity y con contra tract ct with wi th SW to a ma mana nage ged d fun fund d co cont ntra ract ct al also so with wi th SW SW,, an and d wh when en ap appe pear arin ing g as an ex expe pert rt witnes wit nesss for the Trus rustee teess at sub subseq sequent uent proc pr oceed eedin ings gs in th thee Co Cour urtt of Se Sess ssio ion n in connce con ncecti ction on wit with h the cla claim, im, he:

expertise expert ise and ent entere ered d int into o adv advoca ocacy cy on behalf beh alf of the Trus rustee tees. s. Such Su ch co cond nduc uctt in an any y, or al alll of th thee ab abov ove, e, gener gen erall ally y fal fallin ling g sho short rt of the sta standa ndard rd requir req uired ed by the Pro Profes fessio sional nal Con Conduc ductt Stand St andar ards ds (v (vers ersion ion 3. 3.0) 0) and in par partic ticula ularr paragr par agraph aphss 1. 1.2, 2, 2.1 2.1,, 2.2 2.2,, 2.3 2.3,, 3. 3.2, 2, 3.4 3.4,, 3.5, 3. 5, 8. 8.1, 1, an and d 8. 8.2, 2, an and/ d/or or in br brea each ch of th thee requirem requ irements ents of Reco Recommen mmended ded Prac Practice tice Guid Gu idan ance ce No Note te 24 (v (ver ersi sion on 1. 1.0) 0) an and d in partic par ticula ularr par paragr agraph aph 4.2 4.2.1o .1orr IAN The Actua Ac tuary ry as an Exp Expert ert Wi Witne tness ss whi which ch rep replac laced ed Recommen Reco mmended ded Prac Practice tice Guid Guidance ance Note 24 (ver (v ersi sion on 1. 1.0) 0) fr from om 9 Ja Janu nuar ary y 20 2009 09,, an and d in any eve event nt con consti stitut tuting ing mi misco scondu nduct ct in ter terms ms of Ru Rule le 1. 1.6 6 of th thee Di Disc scip ipli lina nary ry Sc Sche heme me of th thee

a) re reli lied ed up upon on in info form rmat atio ion n fr from om a conflic confl icte ted d th thir ird d pa part rty y an and d kn knew ew th that at th this is actuar act uary y was con conflic flicted ted b) fai faile led d to ca carr rry y ou outt pr prop oper er ch chec ecks ks on the val validi idity ty of inf inform ormati ation on rec receiv eived ed fro from m the con conflic flicted ted par party ty or oth other er sou sourc rces es c) gav gavee con contra tradic dictor tory y tes testim timony ony and was requ re quir ired ed to wi with thdr draw aw pa part rtss of hi hiss re repo port rt when wh en gi givi ving ng ev evid iden ence ce in co cour urtt d) to took ok on a ro role le as an ac actu tuar aria iall ex expe pert rt withou wit houtt hav having ing the nec necess essary ary exp expert ertise ise e) fa fail iled ed to ac ackn know owle ledg dgee in hi hiss re repo port rt that th at ot othe hers rs in th thee pr prof ofes essi sion on wo woul uld d ho hold ld diffe di ffere rent nt vi view ewss to hi hims msel elf. f. As su such ch he fa fail iled ed to qu qual alif ify y hi hiss re repo port rt to re refle flect ct bo both th th this is an and d that th at mo most st cr crit itic icis isms ms ma made de of th thee Sc Schem hemee Actu Ac tuar ary y in hi hiss re repo port rt wo woul uld d fa fall ll aw away ay if it was dec decide ided d tha thatt a ‘re ‘recom commen mendat dation ion’’ was nott be no bein ing g ma made de by th thee Sc Sche heme me Ac Actu tuar ary y f) fa fail iled ed to ad advi vise se th thee pu purs rsue uers rs th that at th thee new ne w cl clai aim m ba base sed d on th thee pr prem emiu ium m ra rate te

Faculty Facult y of Ac Actua tuarie ries, s, bei being ng con conduc ductt fal fallin ling g below bel ow the sta standa ndards rds of beh behavi aviour our,, int integr egrity ity and comp competenc etencee or prof professi essional onal judg judgement ement which wh ich oth other er mem member berss or th thee pub public lic mi might ght reason rea sonabl ably y exp expect ect of a mem member ber.. ..

Determination Having Havi ng co cons nsid ider ered ed th thee ca case se re repo port rt an and d th thee append app endice icess sub submit mitted ted by the Inv Invest estiga igatin ting g Actuar Act uary y, the Pan Panel el det determ ermine ined d tha thatt the case ca se re repo port rt di disc sclo lose sess a pr prim ima a fa faci ciee ca case se of mis miscon conduc ductt aga agains instt the Res Respon ponden dentt in ac acco cord rdan ance ce wi with th ru rule le 4. 4.4 4 of th thee Facult Fac ulty’ y’ss dis discip ciplin linary ary sch scheme eme and tha thatt the Respon Res ponden dentt sho should uld be inv invite ited d to acc accept ept that th at th ther eree ha hass be been en mi misc scon ondu duct ct an and d th thee following follow ing sanct sanctions: ions: ■ a rep reprim rimand and;; and ■ a fin finee of £5 £5,0 ,000 00.. Thee fu Th full ll de dete term rmin inat atio ion n ca can n be se seen en at http://tinyurl.com/3ou87rm

August  2011 

13

 

News

Profession

Forthcoming events

Emerging trends in mortality and longevity symposium

Actuar Actu arie iess an and d th the e La Law w 8 September, Staple Inn, London 09.00 (registration) 09.30-16.30 2011 is proving to be a year of major change for the pensions industry. This seminar will give insights and

13-14 September, Warwick Conferences, University of Warwick, Coventry Thiss sy Thi symp mpos osium ium wi will ll pr provi ovide de an up upda date te on th thee la lates testt th think inkin ing g ac acro ross ss th thee as assoc sociat iated ed discipli disc iplines, nes, a mult multi-d i-disc iscipli iplinary nary for forum um for th thee ex exch chang angee of in infor forma mati tion on on th thee lat lates estt

and al and alll th thos osee wi with th an in inte tere rest st in be bett tter er unders und erstand tanding ing the det determ erminan inants ts of mor mortal tality ity and long longevi evity ty,, pro project jecting ing thei theirr futu future re cour course, se, and man managi aging ng the unc uncert ertaint ainties ies.. By hos hostin ting g thee co th confe nfere renc ncee adj adjac acent ent to th thee So Soci ciet ety y of Social Soc ial Med Medici icine’ ne’ss annu annual al sci scient entific ific meet meeting ing

updates on vital legal developments and also includes a keynote talk from Stephen Soper, interim executive director for defined benefit funding at The Pensions Regulator Regulator and a perspective on the challenges ahead from Paul Couchman, Premier Pensions. Pensions. Due to the large-scale changes in the pensions legal landscape this year, year, this seminar will provide an excellent excell ent chance to keep up to date and explore new options. This seminar will be very relevant for all actuaries in the pensions industry. It will be of particular interest to actuaries wishing to update employers and schemes on The Pension Regulator’s thinking and

relevant res relevant resear earch, ch, and als also o an opp opport ortunit unity y to lear learn n abo about ut esta establi blished shed kno knowle wledge dge from fr om a ra rang ngee of di diffe ffere rent nt di disc scip ipli lines nes,, al alll with wi th an int inter eres estt in be bett tter er und under erst stan andi ding ng and ma mana nagi ging ng th this is co comp mplex lex ye yett cr crit itic ical al subjec sub ject. t. Thi Thiss sy symp mpos osium ium wi will ll be of in inte tere rest st to all ac actu tuar arie iess wh who o ar aree co conc ncern erned ed wi with th pric pr icing ing or re reser servin ving g fo forr mo mort rtali ality ty an and d longevity longevit y, underwr underwriters, iters, demogr demographers, aphers, epidemiologist epidemi ologists, s, policy policy-makers -makers,, gerontologist geronto logists, s, other medical resear researchers chers

in 20 2011, 11, it is ho hoped ped th that at fur furth ther er par parti tici cipa pati tion on from fro m the med medica ical, l, epid epidemi emiolog ology y and demogr dem ograph aphy y aca academi demicc com communi munitie tiess can be attrac att racted ted as wel welll as th thee Ac Actu tuar aria iall Profession’ Profess ion’ss core membership. For further information, visit http://tinyurl.com/  632l24k

also for actuaries wishing to have a detailed and topical update on issues including special purpose vehicles, Pension Protection Fund entry and discrimination. For further information, visit http://tinyurl.com/6koz6vx

Environment Environ mental al chan change: ge: oppo opportuni rtunities ties for actua actuaries ries 13 September, Staple Inn, London The Profession’s Profession’s Resource and Environment Group is staging a networking evening suitable for all actuaries interested in discussing and finding out more about the opportunities arising as economies respond to resource constraints and climate will be speakers already change. involvedThere in such issues, including sustainable investment consulting, general insurance pricing, energy consulting and green finance, followed by a panel discussion and networking over drinks. This is a chance to debate how existing work is being affected, and new opportunities created, as economies address the challenges involved. This event will provide an excellent update and networking opportunity for students and Fellows. For further information, visit http://tinyurl.com/5uofong

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August 2011

Pensions, benefits and Pensions highlights 2011   Pensions, 21 September, Staple Inn, London social security 4 October, Novotel, Bristol 09.00 (registration) for 09.30-16.30 These two one-day seminars showcase the highlights of the Pensions conference 2011 and are an excellent opportunity to get an update on some of the topics that are currently affecting the pensions industry industry.. This seminar is aimed at all actuaries working in pensions. Further information will be on the Profession’s website shortly.

GIRO conference conference and exhibition 2011 11-14 October, BT Convention Centre, Liverpool The theme this year is ‘Navigating risk: are actuaries at the helm?’. The journey to Solvency II is well underway in the actuarial profession and whether or not you are directly involved in preparing your organisation for this new regime, your work will no doubt be impacted in some way. As a path is navigated through this additional workload, it is clear that actuaries are key to the delivery of Solvency II. When a post-Solvency II world is visualised, ask yourselves to what extent actuaries, although heavily involved, are really influential in all their areas of work? By examining the part actuaries play in organisations today, today, you begin to envisage where you will find yourself when the journey is completed and landfall is made. For further information, visit http://tinyurl.com/5ws4uad

colloquium colloquiu mRoyal 2011 25-27 September, College of Physicians of Edinburgh The UK Actuarial Profession and the pensions, benefits and social security (PBSS) section of the International Actuarial Association (IAA) are hosting the first PBSS colloquium to be held in the UK. This event will provide a forum for the exchange of information on the latest international pensions, social security and ageing population issues, with a focus on how to make both public and private sector provision for retirement income safe and sustainable. It will provide excellent CPD and networking opportunities. For further information, visit http://tinyurl.com/69sf7dr 

Momentum conference 2011:: for actuaries of 2011 today and tomorrow 30 November – 2 December, Hilton Deansgate, Manchester The Momentum conference is the premier conference for recently qualified (up to five years) and about-to-be-qualified actuaries and is attended by delegates from all practice areas. It allows an opportunity for delegates to develop crucial softer skills, learn from industry experts and increase technical knowledge to add further value to a young actuary’s skill-set. For further information, visit http://tinyurl.com/6fuuvy9

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An eventful twelve months for the Scottish board New leader David Martin revie reviews ws progress progress as he takes over from from Gordon Bagot The Sc Scott ottish ish boa board rd has jus justt rev review iewed ed it itss first fir st ye year ar,, fo foll llow owin ing g th thee me merg rger er of th thee Instit Ins titut utee and Fac Facult ulty y. Ac Acti tivit vities ies to me meet et th thee board bo ard’’s aim aimss hav havee bee been n man many y and va varie ried. d.

Princi Prin cipl ples es fo forr it itss us usee ha have ve be been en dr draw awn n up and pro propos posals als are bei being ng con consid sidere ered. d. These The se cur curren rently tly inc includ ludee the exc exciti iting ng prospe pro spect ct of a Sco Scotti ttish sh Act Actuar uarial ial

for al for alll hi hiss wo work rk.. Go Gord rdon on ha hass st step eppe ped d down do wn an and d I am no now w ho hono nour ured ed to ta take ke on th thee ro role le of le lead ader er,, wi with th Ke Keit ith h Mi Mill ller er as dep deputy uty.. Ma Mart rtin in Pot Potter ter wa wass wel welcom comed ed

A se seri ries es of ev even ents ts to took ok pl plac acee in Sc Scot otla land nd,, including includin g sess sessiona ionall res resear earch ch even events. ts. We have pion pioneere eered d prepre-sess sessiona ionall meet meetings ings for you younge ngerr mem member berss and ren renewe ewed d liaiso lia ison n wi with th the tw two o st stude udent nts’ s’ soc societ ieties ies (FAS (F ASS S an and d GA GASS SS)) an and d th thee gr grou oup p ai aime med d at you young nger er me membe mbers rs (‘O (‘Our ur Cha Chang nging ing Future’) Futu re’).. Ther Theree has been co-o co-ordin rdinatio ation, n, via Her Heriotiot-W Watt Uni Univers versity ity,, wit with h the bra brand nd new Sc Scot otti tish sh Fin Financ ancial ial Ris Risk k Ac Acade ademy my (SFR (S FRA) A).. We ar aree ve very ry pr prou oud d to be on onee of itss fo it foun unde derr me memb mber erss an and d lo look ok fo forw rwar ard d to thei th eirr th thir ird d Co Coll lloq oqui uium um on So Solv lven ency cy II on 28 Se Sept ptemb ember er.. We als also o lo look ok for forwa ward rd to hosting host ing the pres prestigi tigious ous lect lecture ure orga organise nised d by the Ins Insti titut tutee and Fa Facul culty ty in Ed Edinb inburg urgh h

Resear Rese arch ch Ce Cent ntre re.. Th Thee Bo Boar ard d is se seek ekin ing g to establ est ablish ish a leg legacy acy of hig high-q h-qual uality ity act actuar uarial ial resear res earch. ch. We wel welcom comee pro propos posals als fro from m the widerr Scot wide Scottish tish const constituen ituency cy.. More detai details ls will wi ll ap appe pear ar on ou ourr ar area ea of th thee we webs bsit itee an and d via our e-n e-news ewslet letter ters. s. Our Cha Charit ritab able le Trus rustt Fun Fund d ha hass establis esta blished hed priz prizes es and awar awards ds rang ranging ing from enco encourag uraging ing high high-qual -quality ity pape papers rs and presenta pres entation tionss from youn younger ger memb members ers to encourag enco uraging ing scho school ol pupi pupils ls in math mathemat ematics. ics. A su sub-g b-gro roup up is wo work rkin ing g wi with th the Profe Pr ofess ssion ion’’s pu publi blicc aff affair airss tea team m to dev devel elop op a custom cus tomised ised pro progra gramme mme to iden identify tify and tak takee forward forw ard spe specifi cificall cally y Sco Scotti ttish sh elem elements ents wit within hin the Prof Professi ession’ on’ss act active ive publ public ic affa affairs irs str strate ategy gy..

as a ne new w me memb mber er of th thee bo boar ard d fo foll llow owin ing g his ele elect ction ion to Cou Counc ncil. il. Go Gordo rdon n Woo ood d and Al Alan an Wat atson son we were re bo both th re re-el -elect ected ed to Coun Co unci cill an and d wi will ll co cont ntin inue ue on th thee bo boar ard. d. Alll mem Al member berss of the Pro Profes fessi sion on aree in ar invi vite ted d to jo join in th thee ne new w Sc Scot otti tish sh Constitu Cons tituency ency Comm Communit unity y on the Professi Prof ession’ on’ss web website site at http://tinyurl.com/  6c547sb Contact details, discussion threads, thre ads, deta details ils of ou ourr ei eigh ghtt ke key y responsibilities

on 10 Oc Octo tobe berr, to be gi give ven n by Sir Ha Harr rry y Burns, Bur ns, Sco Scotlan tland’ d’ss chie chieff med medical ical offic officer er.. The Boa Board rd is ent entrus rusted ted wit with h ove overse rseein eing g thee us th usee of a £5 £500 00,0 ,000 00 en endo dowm wmen ent. t.

This inc include ludess int interac eraction tion wit with h influ influenti ential al parties par ties in Sco Scotlan tland, d, inc includ luding ing MSP MSPs. s. At it itss me meet etin ing g on 29 Ju June ne,, th thee bo boar ard d thanke tha nked d its fir first st lea leader der,, Go Gord rdon on Bag Bagot ot,,

and a fu and full ller er repo re port rt on th thee year’ss activitie year’ activities, s, David Martin, leader of can ca n be fo foun und d th ther ere. e. the Scottish Board 

Following the success of our Bachelors and Masters programmes in Actuarial Science, we are delighted to announce the launch of our new MSc in Actuarial Management.

THE PRO PROGRAM GRAMME ME

THE ENT ENTR RY REQ REQUIRE UIREMEN MENTS TS

This adv This advance anced d pro progra gramme mme all allows ows a succ success essful ful stud student ent exe exempt mption ion in two tw o of th the e Co Core re Ap Appl plica icati tion onss su subj bject ectss (C (CA1 A1 an and d CA CA3) 3) an and d a cho choiceof iceof up to thr threeSpecia eeSpecialistT listTechn echnica icall (ST (ST)) subj subject ects. s. A stud studentwho entwho gra gradua duates tes with wi th a fu full ll se sett of ex exem empt ptio ions ns ha hass on only ly th thre ree e mo more re ex exam amin inat atio ions ns to pass, pa ss, as we wellll as ga gain inin ing g th the e ne neces cessar saryy wo work rk exp exper erie ienc nce e to qu qual alif ifyy as a Fel Fello low w of the In Insti stitu tute te an and d Fa Facul culty ty of Act Actua uari ries. es.

Entry requires at least a Bachelors degree of upper-second class honours level (or equivalent), with sufficient actuarial or financial content to meet the prerequisites for an acceptable choice of courses. It is not necessary to hold exemptions from all of the profession’s CT subjects.

You can apply for either the full 12-month MSc or 9-m -mo onth PG Diplom Dip loma a whi which ch can be tak taken en on a ful full-t l-timeor imeor par part-t t-timebasis,offer imebasis,offering ing grea eatt fle flexi xibi bili lity ty to st stud ude ent nts. s. The lec ectu turres wil illl be gi give ven n by hi high ghly ly experience exper ienced, d, quali qualified fied actua actuaries. ries.

FIND FI ND OUT MO MORE RE To fin find d ou outt mo morre, ca call ll or ee-m mai aill Ms Ms.. Am Aman anda da Hea earn rn,, Pr Prog ogra ramm mme e Manager on 0131 451 8337 or email [email protected] You can also find out more on our website www.macs.hw.ac.uk

Distinctly Ambitious www.hw.ac.uk

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Economic risks and global energy At the Act Actuar uarial ial Teac eacher hers’ s’ and Res Resear earche chers’ rs’ Conf Co nfer eren ence ce 20 2011 11 in Ox Oxfo ford rd on 14 Ju July ly 2011, 201 1, Oli Oliver ver Bet Bettis tis,, pri pricin cing g act actuar uary y at Grea Gr eatt La Lake kess an and d a me memb mber er of th thee Professio Prof ession’ n’ss Reso Resource urce and Envir Environme onment nt memb me mber er in inte tere rest st gr grou oup, p, ga gave ve a ta talk lk on

exponenti expone ntial al gro growt wth h in the eco econom nomy y, thee li th link nk be betw twee een n th thee ec econ onom omy y an and d fo foss ssil il energy ene rgy,, the pos possib sible le eff effect ectss of oil sca scarc rcity ity and an d re reso sour urce ce de depl plet etio ion n on th thee gl glob obal al econ ec onom omy y an and d th thee ac actu tuar ary’ y’ss ro role le in th thes esee hugely hugel y impor important tant issu issues. es.

‘Risks ‘Ris ks to th thee ec econ onom omy y ar aris isin ing g fr from om constrai cons trained ned glob global al energ energy y suppl supply’. y’. Thee ta Th talk lk de desc scri ribe bed d th thee pr prob oble lems ms wi with th

A fu full ll re repo port rt ca can n be fo foun undd at http://bit.ly/qTO1cC

EIOPA calls for IORP pensions input As it pr prep epar ares es to pr prov ovid idee ad advi vice ce on Institutio Insti tutions ns for Occu Occupatio pational nal Reti Retiremen rementt Provis Pro vision ion (IO (IORPs RPs)) to the Eur Europe opean an Commis Com missio sion, n, the Eur Europe opean an Ins Insura urance nce and Occupati Occu pational onal Pensi Pension on Autho Authority rity (EIO (EIOPA PA)) hass is ha issu sued ed a ca call ll fo forr ma mark rket et pa part rtic icip ipan ants ts and occ occupa upatio tional nal pen pensio sions ns sta stakeh kehold olders ers to givee the giv their ir inp input. ut. EIOP EI OPA A is se seek ekin ing g co comm mmen ents ts on th thee

of cro crossss-bor border der act activi ivity ty,, the sco scope pe of pruden pru dentia tiall reg regula ulatio tion, n, and asp aspect ectss of the govern gov ernanc ancee of IOR IORPs. Ps. The dea deadli dline ne for thi thiss con consul sultat tation ion peri pe riod od is 15 Au Augu gust st 20 2011 11,, wi with th th thee Europe Eur opean an Com Commis missio sion n set settin ting g EIO EIOP PA its finall dea fina deadli dline ne for Dec Decemb ember er 201 2011. 1.

scop sc opee of th thee IO IORP RP di dire rect ctiv ive, e, th thee de defin finit itio ion n

visit www.TheActuary.com/875933 visit www.TheActuary.com/875933

China’s continued China’s insurance growth Chinese insurance companies’ premium income topped 805.66 billion yuan (US$123.95bn) in the first half of the year,, up 13% year 1 3% year on year, the China Insurance Regulatory Commission (CIRC) said. In th the e fi first rst si sixx mo mont nths hs,, pr prem emiu ium m income inc ome fro from m the pro proper perty ty ins insura urance nce busi bu sine ness ss ro rose se 16 16.9 .9% % fr from om a ye year ar earl ea rlie ierr to 23 235. 5.96 96 bi billllio ion n yu yuan, an, wh whilile e lilife fe insuran insu rance ce pre premiu mium m inc income ome ros rose e to 569 569.7 .7 billion billi on yuan. Chinese Chi nese insu insurer rerss ear earned ned 10 103. 3.11 11 bil billio lion n yuan yu an fr from om th thei eirr in inve vest stme ment ntss in the firs fi rstt ha half lf,, an average aver age retu return rn on in inve vest stme ment nt of 2.1%, 2.1 %, acc accord ording ing to the th e CI CIRC. RC.

Forr mo Fo more re on th this is st stor oryy, For mor more, e, vis visit it  www.TheActuary www.TheActuary.com/87594 .com/875946 6

OBR urges long-term view on costs of ageing UK population The Offi Office ce for Bud Budget get Res Respon ponsib sibili ility ty (OBR)’ (OBR )’ss Fisc Fiscal al Sust Sustainab ainabilit ility y Repor Reportt sugges sug gests ts tha thatt the inc increa reased sed lon longev gevity ity of th thee UK UK’’s po popu pula lati tion on wi will ll le lead ad to a signifi sig nifican cantt eco econom nomic ic cri crisis sis if lon long-t g-term erm decisi dec isions ons are aren’ n’tt mad madee now now.. Thee re Th repo port rt fo fore rese sees es th that at,, du duee to ri risi sing ng cost co stss of he heal alth thca care re an and d pe pens nsio ions ns,, th thee

govern gove rnme ment nt’’s de debt bt wi will ll hi hitt 10 107% 7% of gr gros osss dome do mest stic ic pr prod oduc uctt (G (GDP DP)) by 20 2060 60 — ev even en withou wit houtt new aus auster terity ity mea measur sures es bei being ng impl im plem emen ente ted d in th that at ti time me — co comp mpar ared ed to thee cu th curr rren entt fig figur uree of ju just st be belo low w 70 70%. %. Thee OB Th OBR R st stat ated ed it itss be beli lief ef th that at th thee co cost st of he heal alth thca care re wi will ll in incr crea ease se fr from om 7. 7.4% 4% of GDP GD P to 9. 9.8% 8% in 20 2060 60,, wh whil ilee th thee ba basi sicc st stat atee

pensio pens ion n is ex expe pect cted ed to co cost st 7. 7.9% 9% of GD GDP P compar com pared ed to 5.5 5.5% % cur curren rently tly.. Forr mo Fo more re on th this is st stor oryy, vi visi sitt www.TheActuary.com/875935 . See als alsoo ‘Aus Auster terity ity cut cutss and ret retire iremen mentt age cha change ngess falling falli ng short’ short’ www.TheActuary.com/875917   www.TheActuary.com/875917 

SIAS de deba bate tess So Solv lven ency cy II Pensio Pens ion n dede-ri risk skin ing g to SIAS Sovere Sove reign ign ris riskk inte in terna rnall mod model elss surelalati rtivel gvely ey mo aft fte e£350 r 50qmi ullion ieontofQpepensi 1nsion top opss con onccer erns ns for A re mode dest st £3 milli onss The SIAS meeting on 17 May discussed Europ Eur opea ean n ins insura uranc nce e dede-ri-riskskiningg bu busi sines nesss wa wass wr writ itte ten n ove overr th thee the challenges faced by GI actuaries in duct ctio ion n in meeting the Solvency II requirements and an d pe pens nsio ions ns se sect ctor orss cocourursese of Q1 20201111,, a 7878%% reredu Sovereign risk is currently the main threat to the financial stability of the European insurance and occupational pension sectors, according to a report from the European Insurance and Occupational Pensions Authority (EIOPA). The report covers developments in the insurance, reinsurance and occupational pension fund markets as of April 2011 and is released ahead of discussions on the macro-financial conditions and overall stability of the EU financial system. For more on this story, visit www.TheActuary.com/875919

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August 2011

activity activi ty fro from m the prev previous ious quar quarter ter,, accord acc ording ing to JL JLT T Pens Pension ion Capi Capital tal Str Strate ategies gies.. Howe Ho weve verr, th thee fir firm m sai said d th that at in insur surer erss re rema main in confi co nfiden dentt ab about out th their eir pr prosp ospec ects ts fo forr 20 2011 11 and repo re port rted ed ac acti tivit vity y of de deals als to dat datee co comp mple lete ted d in Q2 20 2011 11 am amou ount ntss to ov over er £1 £1bn bn.. For mor moree on thi thiss st story ory,, visit w visit  www.TheActuary.com/8759 ww.TheActuary.com/875943 43

under the internal model approval process (IMAP). Though many of the regulatory requirements for model approval are now in the public domain, it is not yet clear how these should be implemented by firms in practice in many areas. The de deba bate te wa wass ch chair aired ed by Vi Visha shall De Desai sai of th thee FS FSA A an and d in incl clud uded ed a pa pane nell of sp spea eake kers rs from fro m the Pro Profess fession’ ion’ss GIR GIRO O wor workin king g par party ty.. Highlights can be found at http://bit.ly/qGcckf 

BREAKING BRE AKING NEWS Breaki Brea king ng ne news ws is no now w pu publ blis ishe hed d on onliline ne at www.TheActuary.com

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From th the e worl rld d of ge gene nerral insu surranc nce e Solven Sol vency cy II

221 ins insure urers rs rep repres resent enting ing ove overr 50% of the premi pr emium um in incom comee by co count untry ry,, and ove overa rall ll about ab out 60 60%. %. The exe exerc rcise ise con confirm firmed ed tha thatt thee ma th mark rket et is ro robu bust st,, wi with th on only ly 10 10% % of thee in th insu sure rers rs co cove vere red d fa fail ilin ing g to me meet et th thee Solvency Solv ency II mini minimum mum cap capital ital requ requirem irements ents

analysis analy sis of the co comp mpany any’’s bus busine iness ss mod model, el, especi esp eciall ally y in ar areas eas hav having ing a concen con centr trati ation on of ris risk, k, and wi will ll inc includ ludee some forw forwardard-look looking ing str stress ess test tests, s, whe where re they th ey wo woul uld d us usee th thei eirr ow own n ju judg dgme ment nt ra rath ther er than th an ta taki king ng th thee re resu sult ltss on a pa pass ss or fa fail il

industry indust ry com comme ment nt on th thee pr pract actic icali ality ty of the ori origin ginall ally y pla planne nned d da date. te. Thi Thiss del delay ay woul wo uld d re requ quir iree th thee le lega gall fr fram amew ewor ork k to be in pl plac acee by th thee en end d of Ma Marrch 20 2013 13,, with wi th exi existi sting ng ca capit pital al and sol solven vency cy requir req uireme ements nts con contin tinuin uing g unt until il th thee end of 201 2013. 3. The si situa tuatio tion n re remai mains ns unc uncert ertai ain n pendi pen ding ng a rec recom ommen mendat dation ion fro from m the European Euro pean par parliam liament ent and prob probable able negoti neg otiati ations ons bet betwee ween n th thee co counc uncil il and the parlia par liamen ment. t. How Howeve everr, a few day dayss lat later er,, Carlos Carl os Mont Montalvo alvo Rebu Rebuelta elta,, exec executiv utivee direc dir ector tor of th thee Eur Europe opean an Ins Insura urance nce and Occupat Occ upationa ionall Pens Pensions ions Auth Authori ority ty (EIO (EIOPA PA), ), maint mai ntain ained ed th that at no de delay lay wo would uld tak takee pla place, ce, althou alt hough gh a one one-ye -year ar tr trans ansit ition ion mig might ht be

even und even under er th thee mo most st ad adver verse se st stres resss scena sc enari rio. o. Ove Overal rall, l, it wa wass fou found nd th that at th thee adver ad verse se st stres resss sc scena enario rio red reduce uced d the so solve lvenc ncy y surpl sur plus us by 35% com compa pared red wi with th th that at bef before ore applyi app lying ng th thee st stres resss sce scenar nario, io, and the inflat infl ation ion sc scena enari rio o red reduce uced d it by 14 14%. %. EIOP EIO PA dis discl close osed d tha thatt the mai main n dri driver verss of mark ma rket et ri risk sk are equ equit ity y pr price ices, s, int intere erest st ra rates tes and an d so sove vere reig ign n bo bond ndss an and d th that at th thee ma main in insur ins uranc ancee ri risks sks ar aree cl claim aimss infl inflat ation ion and natural disaster disasters. s.

basis. The basis. They y wo would uld con consid sider er inp input ut fr from om third-pa thir d-party rty prof professi essional onals, s, such as audi auditors tors and act actuar uaries ies.. Wi With th re regar gard d to go gover vernan nance ce,, thee PR th PRA A wil illl fo focu cuss on th thee qu qual alit ity y an and d competen comp etence ce of seni senior or mana manageme gement. nt.

introduc introd uced, ed, a sug sugge gesti stion on tha thatt EIO EIOPA PA had raised rai sed wi with th th thee Eur Europe opean an par parlia liamen ment. t. During Dur ing suc such h a tr trans ansiti ition on yea yearr, reg regula ulator torss woul wo uld d co coll llec ectt So Solv lven ency cy II da data ta,, bu butt no nott automat auto matical ically ly inte interven rvenee if comp companie aniess fail to me meet et th thee fu full ll So Solv lven ency cy II cr crit iter eria ia,, alth al thou ough gh ac acti tion on wo woul uld d be ta take ken n ag agai ains nstt a compa com pany ny hav havin ing g les lesss tha than n th thee mi minim nimum um capital requireme requirement. nt. At th thee be begi ginn nnin ing g of Ju July ly,, EI EIOP OPA A announ ann ounced ced the res result ultss of the se secon cond d Europe Eur opean an ins insur uranc ancee st stres resss tes tests ts ca carr rried ied out betwe bet ween en Mar March ch and May May.. The tes tests ts co cover vered ed

regulati regul ation on wou would ld wor work k und under er th thee Pru Pruden dentia tiall Regul Re gulato atory ry Aut Author hority ity (PR (PRA) A) and the Fi Finan nancia ciall Conduc Con ductt Aut Author hority ity (F (FCA) CA) aft after er th thee abo abolit lition ion of the Fi Finan nancia ciall Se Servi rvices ces Aut Author horit ity y at th thee end en d of 20 2012 12.. Ev Ever ery y UK in insu sure rerr wi will ll ha have ve it itss own ow n na name med d su supe perv rvis isor or at th thee PR PRA, A, wh who o wi will ll be th thee pr prim imar ary y po poin intt of co cont ntac act. t. Ll Lloy oyd’ d’ss an and d itss ma it manag naging ing age agent ntss wi will ll hav havee a ded dedic icate ated d supervis supe rvisory ory team team.. The supe supervis rvisors ors stat stated ed their th eir int intent ention ion to int interv ervene ene at an early ear ly sta stage ge whe when n the they y per percei ceive ve a com compan pany’ y’ss financi fina ncial al pos positi ition on to be bec becomi oming ng pre preca cario rious. us. Their The ir ass assess essme ment nt wi will ll co comm mmenc encee wi with th

Tow owar ards ds th thee en end d of Ju June ne,, th thee Co Coun unci cill of the Eur Europe opean an Un Union ion sud sudde denly nly pr propo oposed sed a one one-ye -year ar del delay ay in the imp implem lement entati ation on of So Solv lven ency cy II II,, to 1 Ja Janu nuar ary y 20 2014 14,, af afte terr significa sign ificant nt medi media a spec speculat ulation ion and adve adverse rse

Large losses Earthquake, Christchurch, New Zealand —  22 February. February. By mid-June, the number of claims filed with the New Zealand Earthquake Commission had risen to nearly 160,000, which exceeds the number from the previous quake last September September.. Aftershocks continue to occur, including a severe one (magnitude 6.0) on 13 June — these are being treated as separate events. Tohoku earthquake and tsunami, northern Japan — 11 March By mid-June, the Japanese non-life insurance industry had already paid out the equivalent of US$12.4bn on nearly 555,000 claims in relation to these events. Over 130,000 further claims remained to be settled and new claims are still being reported at the rate of around 20,000 a week. The Japanese government has

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Other regulatory and legal developments Towa oward rdss the end of Jun June, e, som somee inf inform ormati ation on wass pr wa prov ovid ided ed as to th thee wa way y in wh whic ich h UK

Catastrophe bonds Argo Group has unveiled its first catastrophe bond, a US$100m deal through Loma Reinsurance Capital, providing protection to the group against multiple occurrences of such perils as hurricanes, US and Japanese earthquakes and European windstorms. Coverage will be triggered by the second loss from covered perils.

Typhoon and hurricane predictions

In mid-June, the Guy Carpenter Asia-Pacific Climate Impact Centre predicted that there would be 31 cyclones in the North-West North-West Pacific during 2011, with China likely to be particularly hard hit with an estimated seven landfalls, and Japan and Korea also having above average frequency of landfalls with six. If this is borne out by the facts, it will be one of the worst years for some time, as only two of the previous 13 years have experienced above average activity in the region.

assessed the economic property loss from the events US$210bn — this caused does notby include the at costs of disruption the damage to the Fukushima nuclear power station. It is believed that the German market may experience claims under directors’ and officers’ liability policies triggered by the earthquake and tsunami on the basis that the interruption in supplies from the Japanese market had caused losses to the company in Germany, but the company should have had alternative sources of supplies identified for such a crisis. Tornadoes in US — April The tornadoes during April are estimated es timated to have resulted in insured losses of US$502.5m in Kansas alone, there having been 66,000 claims — this is the highest amount ever recorded in a single month in the state.

 

FOR MO FOR MORE RE GE GENE NERA RALL INSURANC INSU RANCEE NEW NEWSS More news on the following items can be found on the website: Solvenc vencyy II ■ Sol Otherr reg regula ulator toryy and leg legal al ■ Othe developments ■ Deepwater Horizon Marine ne pir piracy acy ■ Mari motor or insu insuranc rance e ■ UK mot More large losses ■ Visit http://bit.ly/o0hmRN

August 2011  August 2011

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People/Society

Actuaries take on Caledonian Caledonian challenge PwC actuaries complete 54-mile walk in 24 hours, raising over £4,250 for charity A te team am of fo four ur ac actu tuar arie iess fr from om Pw PwC’ C’ss Edinbu Edi nburgh rgh offi office ce com comple pleted ted the gru gruell elling ing Caledo Cal edonia nian n Cha Challe llenge nge on 1111-12 12 Jun June. e.

forewent forewe nt sle sleep ep and bat battle tled d thr throug ough h the pain pa in ba barr rrie ierr to co comp mple lete te th thee 54 mi mile less in 24 ho hour urss an and d 20 mi minu nute tes. s. Th They ey ra rais ised ed ov over er

Brande Bran ded d ‘T ‘The he Wal alk k of You ourr Li Life fe’, ’, th thee ardu ar duou ouss ro rout utee co cove vers rs a 54 54-m -mil ilee st stre retc tch h of the West Hig Highla hland nd Way ay,, whi which ch inc includ ludes es uphi up hill ll se sect ctio ions ns eq equa uall in he heig ight ht to tw two o asce as cent ntss of Be Ben n Ne Nevi vis. s. Colin Col in Swa Swan, n, Cla Claire ire Wool oolley ley,, Rebecc Reb ecca a Coa Coalte lterr and Sco Scott tt Mc McNei Neill ll formed for med the ima imagin ginati ativel vely y nam named ed ‘Will ‘W ill thi thiss imp improv rovee our lif lifee exp expect ectanc ancy?’ y?’ team te am to co comp mpet etee in th thee ev even entt an and d ra rais isee money mon ey for the Sco Scott ttish ish Com Commun muniti ities es Foundation. Afte Af terr ma many ny mo mont nths hs of tr trai aini ning ng an and d coun co untl tles esss ho hour urss of wa walk lkin ing, g, th thee te team am

£4,250 £4,2 50 fo forr ch char arit ity y in th thee pr proc oces ess. s. Th Thee fin final al stages sta ges wer weree par partic ticula ularly rly tou tough gh but the team’ tea m’ss cam camara arader derie ie saw the them m thr throug ough. h. Thee fo Th four ur we were re as assi sist sted ed by th thee su supp ppor ortt team te am of Jo John hn Me Mell llor or,, Da Davi vid d Pe Pear arso son n and an d Ca Cath thy y Wal alsh sh,, wh who o di did d a gr grea eatt jo job b of pro provid viding ing hot mea meals, ls, app applyi lying ng bli bliste sterr plaste pla sters rs and gen genera erally lly rai raisin sing g spi spirit rits. s. They Th ey pr prov oved ed to be th thee vi vita tall el elem emen entt th that at help he lped ed th thee te team am ov over er th thee fin finis ish h li line ne.. Alth Al thou ough gh th thee te team am ha have ve vo vowe wed d to hang ha ng up th thei eirr hi hiki king ng bo boot otss in re reti tire reme ment nt,, as ti time me pa pass sses es an and d bl blis iste ters rs he heal al,, wh who o know kn owss wh what at th thee fu futu ture re wi will ll br brin ing? g?

Births (LCP) and Alex Howell  are delighted to announce the birth of their first baby, baby, Thomas Edward, on 2 June. Thomas weighed 9lb 4oz. n Roger (Prudential) and Alison Houlihan are pleased to announce the birth of their baby girl Sophia Mary n Helen

(below), who was born on 13 June. Sophia weighed 4lbs 4oz.

Sophia Mary Houlihan with proud parents

PwC actuaries on the uphill path

Deaths n John

Richard Bradley died on 23 April, aged 80. He became a Fellow of the Institute in 1957. n Roy Thomas Foster died on 8 June, aged 77. He became a Fellow of the Institute in 1968. n Howard William Johnson died on 16 April, aged 86. He became a Fellow of the Institute in 1953. n Renison Kahakachchi died on 12 June, aged 71. He became an Associate of the Institute in 1974.

First graduates emerge from Queen’s University actuarial programme The first wave of graduates to emerge from the Actuarial Science and Risk Management degree programme at Queen’s University Management School were celebrated at a special event in Belfast on 27 June. The event included the chance to network with local employers as well as a keynote speech by Trevor Watkins, head of education at the Institute and Faculty of Actuaries, in which he charted the actuarial career path and reminded the graduates of their responsibility to uphold the high technical, professional and ethical standards of the Actuarial Profession. Other speakers to offer their congratulations to the graduates included the head of Queen’s University’s Management School, Professor Richard

18

August 2011 August  2011

Harrison, and programme director Colin O’Hare who talked about the development of the programme and its connections with the wider academic and corporate world. Brian Spence, founder of Spence & Partners which sponsored the event, and a

former graduate of Queen’s, paid tribute to the vision of the university in establishing the degree and noted that the emergence of the first graduates was a key development in addressing the skills shortages that had hampered the development of the financial services industry in Northern Ireland.

Queen’s University, Belfast

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Make a date for the Worshipful Company’s Company’s charity gala banquet One of the highlight events of the Worshipful Company of Actuaries’ Actuaries’ year will be a black-tie blacktie charity gala banquet, to be held at Drapers’ Hall on the evening of Tuesday Tuesday 20 September. The evening will begin with a drinks reception at 6.30pm followed at

an enjoyable evening in the magnificent surroundings of Drapers’ Drapers’ Hall, while at at the same time contributing to charity. Even if you have not not been to Drapers’ Hall, you may still recognise it as it has appeared on television and in films, most recently in

especially in a time of high fees nThe Rainbow Trust, which provides respite care and bereavemen bereavementt counselling to terminally ill children and their families. Members of the Worshipful Company and their partners are encouraged to come.

7.00pm by dramatic entertainment prior to the banquet. There will also be musical entertainment between the courses, ranging from musicals to opera, providing something for all tastes. The entertainment will be by students from the Guildhall School of Music & Drama. This provides the opportunity both to have

The King’s Speech. Speech. The Company of Actuaries’ Charitable Trust will give all the donations and any profit from the evening to: n The Royal Society to help fund its five-year research project on mathematics education nThe Guildhall School of Music and Drama where its support will make a difference,

The price will be £80 plus a voluntary donation to charity at a suggested level of £30. Larger donations would, of course, be appreciated. Following the banquet there will be an auction and raffle. If you would like further details, please contact John Lockyer at  johnalock  john alockyer@h yer@hotmai otmail.co l.co.uk  .uk 

The Actuary  editor on the run

Anyone for cricket?

Edinburgh student scoops Deloitte maths prize

 By Marjorie Ngwenya Ngwenya My ch char arit ity y fu fund ndra rais isin ing g fo forr 20 2011 11 wa wass of offf to a la late te st star artt bu butt is go goin ing g ah ahea ead d no none neth thel eles ess. s.

Daniel Tait, a third-year student in economics and statistics at Edinburgh University,, has been awarded the Deloitte University

This ye This year ar I yet ag agai ain n sig igne ned d up fo forr a number num ber of eve events nts,, sup suppor portin ting g dif differ ferent ent charit cha rities ies for eac each. h. On 30 May I took part in the BUPA 10km challenge, running on behalf of The Stroke Association. On 12 June I ran my annual 5km for Cancer Research in the Race for Life. Finally, to push the boat out a little further, in lieu of the cancelled London Kilomathon, I will be running a self-planned 26km course for Asthma UK on 23 October. October. Some of you will know that I am asthmatic and a tentative runner, but inching my way forward to marathon distance in about the next ten years! If you are feeling charitable and would

The ina inaugu ugural ral Hig High h Fin Financ ancee Gro Group up cric cr icke kett le leag ague ue st star arte ted d in Ma May y wi with th ni nine ne teams tea ms all fro from m wit within hin the act actuar uarial ial sph sphere ere.. Matc Ma tche hess ha have ve ta take ken n pl plac acee at ve venue nuess ac acro ross ss th thee capi ca pita tall in a ro roun und d ro robi bin n le leag ague ue pl play ayed ed on a Thursday Thursd ay eveni evening. ng. Somee fier Som fierce ce riv rivalri alries es have alr already eady devel dev elope oped, d, wi with th tea teams ms vyi vying ng for th thee to top p tw two o spot sp otss fo forr a pl plac acee in th thee gr gran and d fin final al,, du duee to be held he ld on 1 Se Sept ptem embe berr wi with th an en end d of se seas ason on dinne di nnerr an and d aw awar ards ds th thee fol follo lowi wing ng we week ek..

prize for outstanding achievement in financial mathematics. Daniel, 21, from Aberdeen, was awarded his prize by Andrew Smith, actuarial and insurance solutions partner at Deloitte. In awarding the prize, Andrew said: “Daniel is a very talented individual and we are pleased to be able to offer him this prize in recognition of his dedication and commitment to his studies.” Winner Daniel beat off stiff competition from students across Scotland to win this prestigious prize. The Financial Mathematics prize has been sponsored by Deloitte for the past five years. This year’s revised format saw

like to sponsor me, please visit www.justgiving.com/MarjCNgwenya/ 

The le The leag ague ue is lo look okin ing g to ex expa pand nd ne next xt ye year ar,, so interes int erested ted par parties ties are inv invited ited to appl apply y.

The Actuary  and  and WCA joint charity campaign The joint charity campaign run by The Actuary  and  and the Worshipful Company of Actuaries has so far raised £197,250 towards the £1m target since September 2010. Many thanks to all the actuaries who are doing various activities for charity, some of whom have featured here over the last few months. Are you taking part in a charity bike ride?

PEOPLE/SO PEOP LE/SOCIETY CIETY NEW NEWSS If you have any newsworthy items for these pages, email Kelvin Chamunorwa at  [email protected]   social@the-actuary .org.uk 

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the top financial mathematics students presenting to a Deloitte panel, increasing the competitive aspect and making this an even more deserving win for Daniel. The prize includes a £400 cheque for Daniel and a trophy for the winning university.

Daniel Tait £197,250

0

£1m

Or running 10km for your favourite charity? If so, please let us know. We We would like to add the amount of monies raised by members of the Actuarial Profession for any charity to be added to our running total. You You can do this by emailing Kelvin Chamunorwa or Charles Cowling at [email protected]

August August 2011  2011 

19

 

Tuesday 9 August Global banking crisis what ifs? Dr Mark West Staple Inn, High Holborn, London 5:30pm for 6pm

Tuesday 1 November SIAS AGM followed by  Jubilee Lecture Staple Inn, High Holborn, London 6:00 pm The Annual General Meeting of the Society will be held at Staple Inn Hall on Tuesday 1 November, followed immediately by the Jubilee Lecture. Members of the committee are: n Frank Oldham, chairman, Fellow, Mercer Fellow, n Will Bennett, honorary secretary, Fellow, Barnett Waddingham LLP Williamson, son, honorary honorary treasur treasurer er,, Fellow Fellow,, n James William Barnett Waddingham LLP 1 n Mark Dainty , student, High Finance Group n Richard Purcell, Fellow, Pension Corporation n Alvin Kissoon, Fellow, PwC 1 n Taha Ahmad , student, Navigators Management UK Ltd n

1

Iain Ritchie , Fellow, KPMG Divyaa Mohan1, student, Aon Hewitt Fellow,, Swiss Re n Sarah Darwin, Fellow 1 n Watson Teo , student, Swiss Re 1 LLP. n Anna Lynskey , student, LCP LLP. Will Bennett, Iain Ritchie, Taha Ahmad and Divyaa Mohan are retiring. Iain Ritchie and Taha Ahmad are standing for immediate re-election. Frank Oldham and James Williamson will continue to serve as chairman and honorary treasurer respectively for the 2011/12 session. Richard Purcell has been nominated to take over the position of honorary secretary on Will Bennett’s retirement. The main business of the meeting will be to accept the reports and accounts, to confirm the n

nomination for honorary secretary, and to confirm the appointment of the successful candidates in the

Programme event The global banking crisis is the largest macroeconomic event that many actuaries have experienced and has had devastating consequences for tens of millions of people across the world. Could governments have avoided the crisis? If so, at what cost? Could governments have avoided some of the consequences? What impact

could the crisis have on the global insurance industry? Are there any lessons for actuaries? These are just some of the questions that will be considered. The speaker will consider the various avenues that our governments/financial institutions could have taken and how things could have been. Please visit www.sias.org.uk  visit  www.sias.org.uk  for  for more details.

SIAS AGM and Jubilee lecture election to fill the vacancies for ordinary members of the committee. Members are elected for a three-year term and may serve for up to two terms, though they may fill one of the honorary roles beyond this period. The Rules of the society state that there can be between eight and twelve ordinary committee members, so there are a maximum of seven vacancies to be filled, with two nominations already received from current members who are standing for re-election. The vacancies for ordinary members are open to any member of the Society, other than one who has already served six years as an ordinary member of the committee or who will be older than 35 on 1 October 2011 and has not already served on the committee. One vacancy will be reserved for a ‘younger member’, who has not yet completed the examinations of the Institute and Faculty of Actuaries or any other body of actuaries or who has not done so since 1 April 2010 and who has not already served on the committee for at least three years. Nominations should be sent in writing to the honorary secretary, giving name, status and employer of the candidate, together with the names of proposer and seconder, who must be SIAS members. Each candidate should supply a personal profile no longer than 50 words, including a brief biographical history. Nominations should be received no later than Wednesday 31 August 2011. Notice is also needed in writing before 31 August 2011 of any resolutions which members may wish to move at the meeting. For further information about the role and responsibilities of committee members, please contact Will Bennett at  at  [email protected] [email protected]  .uk . All committee members are expected to attend committee meetings (up to eight per year at Staple Inn on a weekday evening), attend subcommittee

meetings (approximately four per year, venue decided by convenor), SIAS sessional meetings (ten per year, Tuesday evenings), attend the Jubilee Jubi lee Lecture, the annual supper, and some of the social events (approximately one per month, usually Thursday evenings). 1 — a ‘you ‘younger nger member’ member’ as defined defined in the Society’s rules

Roger Bootle, economist We are delighted to confirm that the Jubilee Lecture will be given by Roger Bootle, an honorary Fellow and leading economist. Roger will discuss the changes needed to make the financial system safe against a repeat of the recent financial crisis, including discussion on breaking up the banks, capital requirements and regulation. He will also discuss the implications for how we should regard the financial sector s ector of our economy.

For details of event events, s, visit www.sias.org.uk 20

August 2011

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Now,, let’s let ’s talk about the importance impor tance of financial modelling. Now

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Investment

Regulatory drivers

Driving tests Umar Ilyas steers a course through the regulatory drivers in areas of institutional investment investment

Umar Ilyas is a senior investment and risk actuary at Investmen Investmentt Solutions. The views represented in this article are the author’s and not necessarily those of his company

n the UK a number of regulatory changes have affected the investment behaviour of various institutional investors. Regulation shouldn’t necessarily be the main driver of investment strategy — other factors including

I

governance requirements, solvency solvency,, objectives and risk appetite/tolerance of the various stakeholders will need to be considered. However, the impact of regulation continues to be a key influence on investment decisions, leading to meaningful changes to the asset allocations of institutions. These changes alter the price and amount of funding available to companies, such as the cost of capital. In this article I examine some of the more notable regulatory drivers on the horizon affecting pension schemes and insurance companies.

22

move away from a concentration in UK equities and UK government debt to a broader strategic asset allocation, including an increased exposure to alternative assets. As pension schemes continue their move away from equities, this is set to grow further. In addition, the growth of liability-driven investment (LDI) is set to continue. Designed to immunise the scheme funding against changes in interest rate and inflation, implementation is usually through derivatives and appropriate bonds. The im impac pactt of the re revis vised ed Int Intern ernati ationa onall Account Acc ounting ing Sta Standar ndards ds (IAS (IAS)) 19 regu regulati lations ons is li like kely ly to ad add d an anot othe herr na nail il to th thee eq equi uiti ties es ‘cof ‘c offin fin’. ’. Co Comp mpan anie iess wi will ll ha have ve to us usee a

prudent ‘sel prudent ‘self-su f-suffic fficienc iency’ y’ bas basis, is, and even eventua tuall buy-o bu y-out ut/i /in n of th thee lia liabi bili liti ties, es, the ne need ed fo forr a good goo d gov governa ernance nce fram framewor ework k is esse essenti ntial. al. This Th is wi will ll al also so in incr crea ease se th thee de desi sire re to in inve vest st in asset as setss th that at ar aree mo more re ti tigh ghtl tly y co corr rrel elat ated ed to th thee natur na turee of th thee lia liabi bili liti ties, es, as we well ll as pr prov ovid iding ing some so me ups upsid idee po poten tenti tial al — for exa examp mple le,, infrast infr astruc ructur ture-ty e-type pe ass assets ets.. For tho those se sch schemes emes with wi th an ey eyee to towa ward rdss ev event entual ual bu buy-i y-in/ n/out out,, they th ey wi will ll ne need ed to be mi mind ndfu full of th thee pr pric icin ing g base ba sess use used d by in insur surers ers.. To re reduc ducee th thee ba basis sis risk ri sk,, it is li like kely ly re regu gula lator tory y ch chan anges ges ta taki king ng plac pl acee in th thee in insur suran ance ce sp spac acee ma may y ind indir irec ectl tly y influenc infl uencee som somee sch scheme emes’ s’ asse assett all allocat ocation ions. s.

discount discou nt ra rate te ba based sed on AA AA-r -rate ated d co corpo rpora rate te bond bon d yi yield eldss ra rathe therr tha than n th thee exp expect ected ed re retur turn n on the sch scheme eme’’s as asset sets. s. Thi Thiss rem remove ovess onee of th on thee in ince cent ntiv ives es to in inve vest st in potentia pote ntially lly high higher-r er-retur eturning ning asse assett clas classes. ses. Invest Inv estme ment nt st strat rateg egies ies wi with th a gr great eater er sponso spo nsorr in influe fluence nce may loo look k to fur furthe therr ‘de-r ‘de -risk isk’, ’, mov moving ing mor moree of the their ir ass asset etss int into o ‘protec ‘pro tection tion’’ asse assets. ts. In addi addition tion,, the Pensi Pen sion on Pro Protec tecti tion on Fun Fund d (P (PPF) PF) wi will, ll, fr from om 2012/1 201 2/13, 3, st start art to use sc schem hemee in inves vestm tment ent risk ris k to cal calcul culate ate the lev levy y pay paymen ment. t.

In the insurance world, the impending Solvency II regulations are just around the corner.. Insurers are some of the largest corner investors in domestic financial markets and any change in their investment behaviour could have a significant effect on the demand/supply of various asset classes, impacting the pricing and cost of capital. Under Solvency II, capital will need to be held to reflect the short-term volatility in the market value of assets and ensure Value at Risk (VaR) over a one-year time horizon is within prescribed confidence intervals. As Solvency II places greater emphasis on asset liability modelling, any ‘mismatching’ will increase the capital

»

Insure Insu rers rs ar are e so some me of th the e la larg rges estt in inv ves esttor orss in do dome mest stic ic fi fina nanc ncia iall mark ma rket etss an and d an any y ch chan ange ge in th thei eirr in inve vest stme ment nt behav beh aviou iourr co could uld ha have ve a si sign gnif ific ican antt ef effe fect ct on the dem deman and/ d/sup supply ply of vari va riou ouss as asse sett cl clas asse sess «

Pension schemes

Although Althou gh the im impli plica catio tions ns of th this is cha change nge shou sh ould ldn’ n’tt be a ke key y dr driv iver er in se sett ttin ing g th thee invest inv estmen mentt str strat ategy egy,, in so some me ca cases ses it wi will ll increa inc rease se the spo sponso nsor’ r’ss foc focus us in try trying ing to minim min imise ise th thee lev levy y pay payme ment. nt. Thee ma Th majo jori rity ty of DB sc sche heme mess ar aree no now w well we ll int into o th thei eirr jou journ rney ey to towa ward rdss th thee end

In the world of defined benefit (DB) pension schemes, the demise of the minimum funding requirement (MFR) in the midnoughties gave way to the statutory funding objective (SFO), which helped facilitate a

ga game. me.bers’ Howe Ho ver,ion , in ben order or der to, be bett tter er secur se cure e g’ member mem s’wever pension pens benefits efits, the ‘de-ris ‘de -riskin king’ proc pr ocess ess ha hass to be ma mana naged ged mo more re eff effec ecti tive vely ly.. Whet Wh ether her th this is mea means ns foc focusi using ng on a sc schem heme’ e’ss techn te chnic ical al pr prov ovisi ision on fun fundi ding ng bas basis is or a mo more re

August 2011

Insurance companies

requirement for insurers. Thee cu Th curr rren entt pr propo opose sed d ca capit pital al ch char arge gess ai aim m to re reflec flectt th thee pr pric icee vo volat latili ility ty of eac each h as asset set clas cl ass. s. Th Thee exp expli lici citt ch char arge gess va vary ry fr from om 49 49% % forr pr fo priv ivat atee equ equit ity y ri righ ghtt th thee wa way y th thro roug ugh h to app apply lyin ing g no ca capit pital al ch char arge gess fo forr Europe Eur opean an Eco Econom nomic ic Are Area a gove governm rnment ent deb debt. t. Whet Wh ether her th thee ca capi pita tall ch char arge gess ap appli plied ed to th thee vari va riou ouss as asse sett cl class asses es ar aree fai fairr an and d ap appr prop opri riat atee is que quest stio ionab nable. le. As of la late te,, th thee sov sover erei eign gn debt de bt cr cris isis is co cont ntin inues ues to gr grip ip pa part rtss of Eur Europe ope,, and an d as assi sign gnin ing g no ca capi pita tall ch char arge ge on de debt bt issued iss ued by sov sovere ereign ign cou countr ntries ies whe where re the there re are per perhap hapss lon longer ger-te -term rm str struct uctura urall iss issues, ues, appear app earss cou counte nterin rintui tuitiv tive. e. On the oth other er hand ha nd,, so some me as asset set cl clas asse sess wi with th at attr trac acti tive ve ri risk sk// retu re turn rn pr profi ofiles les ar aree pe perh rhap apss be being ing tr treat eated ed to too o harshl har shly y und under er the pro propose posed d reg regime ime.. Under Solvency II, the liability discount rate used to value the insurers’ technical provisions will be ‘swaps plus a liquidity

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premium’ (changing the perceived riskfree rate). This will be a key influence on investment strategy, strategy, leading to an increased use of derivatives — for efficient portfolio purposes — in order to better manage the balance sheet volatility volatility.. Another important thing to note is that the liquidity premium is based on a reference index — therefore there is no dependency on the underlying assets of the insurer. Investment in other interest rate hedging tools or funds, such as long gilts, will therefore leave a basis risk. However, with no capital charge on gilts, and long gilt yields being greater than swap rates at present, retaining exposure to gilts should be attractive. Insurers may also

A ‘sy ‘symm mmet etri ricc ad adjus justm tmen ent’ t’ wi will ll als also o be appli ap plied ed.. Th This is adj adjust ustmen mentt is de desi sign gned ed to avo avoid id procyc pro cyclic licali ality ty and wil willl mod modify ify the str stress ess test te st,, up or do dow wn, by a ma maxi ximu mum m of 9% 9%,, depen de pendi ding ng on wh wher eree gl glob obal al equ equit ity y pr pric ices es aree tr ar tradi ading ng re rela lati tive ve to th thei eirr re rece cent nt av avera erage ge.. Redu Re duce ced d all alloc ocat atio ion n to di direc rectt pr prop opert erty y as a resu re sult lt of hi high gher er ca capit pital al ch char arge gess (2 (25% 5%)) is al also so expect exp ected. ed. How However ever,, inve investm stment ent in real est estate ate debt de bt ma may y be mo more re ap appe peal alin ing g du duee to ca capi pita tall efficienc effic iency y. As thi things ngs sta stand, nd, mos mostt alt alterna ernativ tivee asse as sett cl clas asse sess do no nott ap appe pear ar to ha have ve fa fare red d well we ll und under er So Solve lvenc ncy y II. De Deem emed ed as ‘o ‘oth ther er equi eq uity ty’, ’, a 49 49% % ch char arge ge wi will ll be ap appl plie ied d— nott su no surp rpri risi singl ngly y a lo lowe werr al alloc locat ation ion to altern alt ernativ ativee ass asset et clas classes ses,, inc includi luding ng pri privat vatee

A mo move ve is exp expec ecte ted d to towa ward rdss a dy dyna nami micc assett all asse allocat ocation ion and ris risk k man managem agement ent framework, framew ork, with increas increased ed recalib recalibration ration,, in ord order er to max maximis imisee cap capita itall effic efficienc iency y. Other Ot herwi wise se,, si sign gnific ificant ant ca capi pita tall ma may y ne need ed to be held aga against inst mar mark-t k-to-ma o-marke rkett spr spread ead ris risk. k. Well-capitalised Well -capitalised insurers are expected to have greater scope for adding risk-adjusted value though their investments. However, However, insurers with weak capital levels may require more assistance. Across insurers, this is likely to lead to a diverse range of investment strategies. In any case, investment governance will need to be improved for all insurers to meet the challenges under Solvency II. Investment decisions will need

look to invest in gilts with a view to setting up reverse repurchase agreements — they could lend the gilts to banks and capture additional yield for providing this liquidity. Given Giv en th thee ca capit pital al ch char arge ge lev levels els,, a re reduc duced ed leve le vell of in inve vest stme ment nt in no nonn-EE EEA A de debt bt is likely lik ely.. In add addit ition ion,, it is exp expect ected ed th there ere wi will ll be a gr grea eate terr ex expo posu sure re to sh shor ortt du dura rati tion on credit cred it wher wheree the risk risk-adj -adjuste usted d retu return, rn, allowi all owing ng for any cap capit ital al cha charg rge, e, is hi highe gherr. However How ever,, inve investm stment ent in long long-dat -dated ed cre credit dit may ma y be im impe pede ded d as th thee ca capi pita tall co cost stss an and d potentia pote ntiall bala balance nce shee sheett vola volatili tility ty (bas (basis is ris risk) k) makee it les mak lesss att attra ract ctive ive.. Low-eq Low -equi uity ty al alloc locat atio ions ns ar aree lik likel ely y to be maintai mai ntained ned give given n the high cap capita itall char charges ges

equit eq uity y an and d hed hedge ge fun funds ds,, is li like kely ly to re resul sult. t. An increase in the use of financial engineering is also expected, including total return mandates. The use of swaps for duration matching, as well as changing the risk/return profile of conventional assets, will require investments to beat cash plus the illiquidity premium, so as to minimise the re-investment risk. A further requirement will be to ‘look through’ to underlying assets. The capital charges may impact decisions about efficient asset allocation. Thought should be given to how insurers using an internal model will properly capture these risks. This is likely to increase the attraction of segregated

to take account of risk-adjusted return after the capital cost of risk. This should form part of the insurer’s own risk and solvency assessment and enterprise risk management framework.

of 30 30% % fo forr gl glob obal al eq equi uiti ties es (m (mem embe bers rs of th thee Organi Org anisat sation ion for Econ Economi omicc Co-o Co-oper peratio ation n and Devel Dev elopm opmen entt or EE EEA) A) an and d 40 40% % for other equitie equities. s.

mandates, as well as more transparent investment holdings. An in inve vest stme ment nt st stra rate tegy gy of bu buy y an and d ho hold ld is like li kely ly to be les lesss at attr tract active ive und under er So Solve lvenc ncy y II.

governanc govern ancee and ri risk sk man manage agemen mentt will wi ll pl play ay a bi bigg gger er ro role le so th that at in insu sure rers rs maximi max imise se cap capita itall effi efficie ciency ncy.. Dri Driven ven by a need nee d for mar market ket-co -consi nsiste stency ncy and bet better ter transp tra nspare arency ncy,, it rem remain ainss to be see seen n if al alll pa part rtie iess ri rise se to th thee ch chal alle leng nge. e. ■

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Summary Regulatory drivers will continue to play a key role in the investment strategy of both pension schemes and insurance companies, leading to changes in asset allocation and capital markets behaviour behaviour.. With Wi th the imp impend ending ing Sol Solven vency cy II legislati legis lation, on, gover governance nance requi requireme rements nts are enshri ens hrined ned wit within hin the thr three ee mai main n pil pillar larss underpinni under pinning ng the regul regulation ations. s. Inves Investmen tmentt

August  2011 

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Investment

Pensions fiduciaries

Aiming for a good outcome Christine Berry asks where the responsibilities lie for pensions fiduciaries

Christine Berry is policy officer at FairPensions and author of the report, ‘Protectin ‘Protecting g our Best Interests: Rediscovering Fiduciary Obligation’

hen it co hen come mess to en ensu suri ring ng go good od investm inve stment ent outc outcomes omes,, the rol rolee playe pla yed d by qua quali lified fied ac actu tuar arie iess as investm inve stment ent con consult sultant antss is vit vital. al. And wit with h the int introd roduct uction ion of aut auto-en o-enrol rolmen mentt in 20 2012 12 — pr pred edic icte ted d to br brin ing g an ex extr tra a fiv fivee to ei eigh ghtt mi mill llion ion pe peopl oplee int into o sa savi ving ng th thro rough ugh

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workpl work plac acee pen pensi sion on sc schem hemes es — th this is ro role le wi will ll only onl y gr grow ow in im impor portan tance ce.. Bu Butt wh what at do does es th this is weight wei ghty y res respons ponsibil ibility ity mea mean n for cons consult ultants ants?? Traditional Traditi onal trust-based occupational pension saving is built on the legal foundation of fiduciary obligation. Trustees have a clear duty to act in the best interests of their beneficiaries: this includes a duty to avoid conflicts of interest, to treat beneficiaries impartially and to make prudent decisions based on appropriate advice (which is where the consultant comes in). So far, so simple. But these legal assumptions were developed centuries ago, at a time when trustees were mostly individuals making investments on behalf of

rarely rare ly ha have ve th thee exp exper erti tise se to ch chall allen enge ge th that at advi ad vice. ce. Thi Thiss pu puts ts co consu nsult ltan ants ts in a pos posit itio ion n of en enor ormo mous us po powe werr — bu butt do does es th that at po powe werr imply imp ly a fiduc fiduciary iary res respons ponsibi ibility lity?? Fiduciary duty is a common law concept, which means there is no dusty old statute book listing all the positions that entail fiduciary duties. Instead, there is centuries of case law establishing various criteria for when a fiduciary relationship arises. The Law Commission has summarised these criteria as “discretion, power to act, and vulnerability”. It also concludes that these criteria are met by the relationship between investment advisors and those they advise. Indeed, in the US, the Supreme Court

family or friends. A very different landscape, then, from the hugely complex web of relationships that characterises today’s capital markets. Tod oday ay,, it is ge gener neral ally ly agr agreed eed tha thatt tr trust ustees ees can del delega egate te the their ir pow powers ers,, but not the their ir fiduciary fiduc iary resp responsi onsibili bilities ties.. But does this mean me an th that at th thos osee th they ey de dele lega gate te to ha have ve no parallel para llel resp responsi onsibili bilities ties?? Cons Consulta ultants nts and asset ass et ma manag nagers ers arg arguab uably ly exe exerc rcise ise as much muc h dis discr creti etion on as th thee mo moder dern n tr trust ustee. ee. Asset As set ma manag nager erss ma make ke ma many ny of th thee day day-t -to-d o-day ay investm inve stment ent dec decisio isions ns tha thatt wer weree the pres preserve erve of tr trust ustee eess th them emsel selves ves in da days ys go gone ne by by.. Consul Con sulta tant ntss ar aree no nott gi given ven th thee sa same me operati oper ational onal dis discre cretio tion. n. But tru truste stees es are leg legally ally

has explicitly confirmed that investment advisors are fiduciaries — although there’s been no similar confirmation in the UK. The reaction to the suggestion that consultants may be fiduciaries has been intriguing, with responses ranging from ‘Of course we’re not’ to ‘Of course we are’. One consultant argued that asset managers might be fiduciaries but consultants weren’t, because they didn’t exercise the same discretion over assets. Another argued that asset managers weren’t fiduciaries but consultants were, because the decisions they advise on are much more strategic and fundamental. This in itself is a powerful testament to the confusion and ambiguity

oblige obli ged d to se seek ek th thei eirr ad advi vice ce an and, d, as th thee Myners Myn ers Repo Report rt note noted d a dec decade ade ag ago, o,

surrounding what is, after all, a pretty fundamental question. But does it really matter, or is this all just academic? Do we need to know who is a fiduciary and who is not, as long as all parties in the investment chain are clear on their contractual responsibilities? To try and answer that, let us look at the two key fiduciary duties: loyalty and prudence. Fiduciary investors have a duty to invest prudently, exercising due skill and care and taking all relevant considerations

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into account. A strong case can be made  that this confers a similar duty on consultants even if they are not fiduciaries in their own right — since they have contractual and professional duties to help trustees fulfil their own fiduciary responsibilities. This implies a duty not just to react to what trustees ask of them, but to proactively raise issues that could affect outcomes for beneficiaries, even — perhaps particularly — if trustees seem unaware of them. An increasingly relevant example is the exercise of stewardship and ‘responsible ownership’. The debate around the new UK Stewardship Code — which encourages

Yet in a re rece cent nt su surv rvey ey on th this is is issu sue, e, aroun ar ound d hal halff of con consul sultan tants ts vi viewe ewed d their th eir rol rolee as ‘se ‘seco conda ndary ry or re react active ive’. ’. Another Anot her surv survey ey conc conclude luded d that “cli “c lient ent de deman mand d rem remain ainss th thee ma main in dr drive iverr for co consu nsult ltant antss to off offer er res respon ponsib sible le investm inve stment ent serv services ices”. ”. This appr approach oach seem se emss to be mi mirr rror ored ed el else sewh wher eree in th thee investm inve stment ent chai chain, n, wit with h the unfo unfortu rtunate nate resul re sultt th that at nob nobod ody y fee feels ls tr truly uly re respo sponsi nsible ble forr ES fo ESG G in inte tegr grat atio ion. n. A su surv rvey ey of as asse sett mana ma nage gers rs in 20 2009 09 fo foun und d th that at on onee of th thee bigge bi ggest st ba barr rrier ierss cit cited ed to gr great eater er int integ egrat ration ion of cl clim imat atee ch chan ange ge wa wass la lack ck of cl clie ient nt dem de man and. d. In ot othe herr wo word rds, s, it was up to trus tr uste tees es to as ask k th thei eirr as asse sett ma mana nage gers rs to do

and no and nott pr prio iori riti tisi sing ng th thee in inte tere rest stss of th thir ird d part pa rtie ies. s. Th This is du duty ty of un undi divi vide ded d lo loya yalt lty y li lies es at th thee he hear artt of fid fiduc ucia iary ry ob obli liga gati tion on — itss wh it whol olee pu purp rpos osee is to pr prot otec ectt vu vuln lner erab able le people peo ple fro from m sel self-i f-inte nteres rested ted or rec reckle kless ss beha be havi viou ourr by th thos osee wh who o ac actt on th thei eirr behalf beh alf.. Yet wh when en com commer mercia ciall inv invest estmen mentt agen ag ents ts us usee th thee te term rm ‘fi ‘fidu duci ciar ary’ y’ to de desc scri ribe be them th emse selv lves es,, th this is ra rare rely ly se seem emss to be wh what at they th ey ha have ve in mi mind nd — in inst stea ead, d, th they ey ta talk lk abou ab outt th thee du duty ty of pr prud uden ence ce,, wh whic ich, h, as we have ha ve se seen en,, is pe perh rhap apss le less ss un uniq ique ue to th thee fiduciary fiduci ary posit position. ion. So if co consu nsult ltant antss rea really lly ar aree fiducia fidu ciarie ries, s, wh what at doe doess th this is mea mean n for their the ir dut duty y to avo avoid id con conflic flicts ts of in inter terest est??

fund managers to be active owners of their investee companies — has focused largely on corporate governance. In the run up to the financial crisis, investors were accused of being ‘absentee landlords’, failing to take the banks they owned back off the edge of the cliff. Yet investors’ legal responsibility is not to the companies they own, but to the people whose money they manage. Stewardship matters because it contributes to stable long-term returns, and that is very much a fiduciary issue. Asset owners are being encouraged to apply the Code by including it in their mandates and monitoring. But this suggests that consultants in turn may have a

more. Yet wh more. when en tr trust ustees ees the thems mselv elves es ar aree survey sur veyed ed,, the they y oft often en ar argue gue th thee opp opposi osite te — if th these ese is issue suess are mat mater erial ial to inv invest estmen mentt outco out comes mes,, the then n sur surely ely ma manag nagers ers wi will ll fac factor tor them th em in wi with thou outt ha havi ving ng to be to told ld?? The traditional assumption that trustees alone have fiduciary duties would place the responsibility squarely at their door.

Clearly Clear ly,, pot potent ential ial co confli nflict ctss ca can n nev never er be eliminat elim inated ed com complet pletely ely — for inst instance ance,, whil wh ilee sc sche heme mess ha have ve an in inte tere rest st in controll cont rolling ing cos costs, ts, com commer mercial cial prov provider iderss inevitab inev itably ly bene benefit fit from reco recommen mmending ding moree cos mor costl tly y and co compl mplex ex ser servi vices ces and investm inve stment ent appr approach oaches. es. Inde Indeed, ed, ther theree is som somee evi evide dence nce th that at ad advis visors ors ma may y unwitti unwi ttingly ngly priv privileg ilegee thes thesee com commer mercial cial intere int erests sts ove overr the bes bestt in inter terest estss of sch scheme eme member mem bers. s. Fo Forr ins instan tance, ce, the ave avera rage ge extern ext ernall ally y ma manag naged ed pen pensi sion on sch scheme eme now has nin ninee man mandat dates, es, co compa mpared red to jus justt thr three ee a de deca cade de ag ago. o. Th This is tr tren end d ha hass co cost st pe pens nsio ion n fund fu ndss up to a th thir ird d ex extr tra a in ma mana nage geme ment nt fees fe es,, as we well ll as ex extr tra a co cons nsul ulta tant nts’ s’ fe fees es du duee

responsibility to proactively raise the issue with asset owners. Moree spec Mor specific ificall ally y, the there re is inc increas reasing ing evidenc evid encee tha thatt shar sharehol eholder der eng engagem agement ent on environ envi ronment mental, al, soc social ial and gov govern ernance ance (ESG) (ES G) iss issues ues can imp improv rovee lon long-te g-term rm ret returns urns.. In ad addi diti tion on to the we weal alth th of the theor oret etic ical al and empir em piric ical al re rese sear arch ch,, la last st ye year ar br brou ought ght a st star ark k lesso les son n in the pe peri rils ls to inv inves esto tors rs of ign ignor orin ing g ESG iss issues, ues, when an envi environ ronment mental al dis disast aster er led le d BP to ca canc ncel el it itss di divi vide dend nd fo forr th thee fir first st time ti me si sinc ncee Wor orld ld War II. Th Ther eree we were re ple plent nty y of wa warn rning ing si sign gnss ab about out BP BP’’s lax ap appr proac oach h to he heal alth th an and d sa safe fety ty — if in inve vest stor orss ha had d heeded heed ed thes thesee war warnin nings gs and dem demand anded ed improv imp rovemen ements, ts, the Deep Deepwat water er dis disast aster er mig might been prevent pre ed. consult cons ant’s role ro leht inhave this th is co cont ntex ext t isvented. to he help lpThe sche sc heme messultant’ ensu en sure res that th at th thei eirr po poli licy cy on ES ESG G is issu sues es is ro robu bust st an and d that th at th thei eirr as asse sett ma mana nage gers rs ar aree on to top p of th thee risks involve involved. d.

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Do we need to know who is a fiduciary and who is not, as long as all part rtiies in the inve in vestm stment ent cha chain in ar are e clea cl earr on th thei eirr co cont ntra ractu ctual al responsibilities? « But from a wider fiduciary perspective, it is arguably everyone’s duty to ensure proper integration of material ESG risk factors. Consultants, far from being extraneous to this chain of accountability accountability,, are in a particularly good position to break the impasse — proactively raising the issue of stewardship with trustees, and helping them to assess prospective managers’ approaches. So wh what at ab abou outt th thee se seco cond nd co core re fid fiduc ucia iary ry dut uty y — t he he dut uty y of lo loy yal altty? It is t hi his thatt rea tha really lly dis distin tingui guishe shess a fidu fiducia ciary ry fro from m someon som eonee wit with h a con contra tract ctual ual or profes pro fessio sional nal dut duty y to uph uphold old som someon eonee els else’ e’ss

to th thee hig higher her num number ber of ma manag nager er sel select ection ion proces pro cesses ses.. It is que questi stiona onable ble wh wheth ether er th thee perform perf ormance ance adva advantag ntages es of this inc increas reased ed compl com plexi exity ty rea really lly out outwei weigh gh th thee co costs sts.. Of co cour urse se,, th this is is no nott to su sugg gges estt th that at consul con sulta tants nts — or ind indeed eed,, ass asset et ma manag nagers ers — ar aree in inat atte tent ntiv ivee to th thee ne need ed to ma mana nage ge conflict confl ictss of inte interest rest.. Cons Consulta ultants nts may be su subj bjec ectt to FS FSA A ru rule less or to ac actu tuar aria iall professi prof essional onal stan standard dardss that requ require ire confl conflicts icts to be ma mana nage ged. d. Bu Butt th thes esee ar aree le less ss st stri ring ngen entt than tha n fid fiduci uciary ary dut duties ies,, and the there re is cle clearl arly y no ro room om fo forr co comp mpla lace cenc ncy y wh when en it co come mess to ma makin king g sur suree th that at ben benefic eficiar iaries ies’’ bes bestt intere int erests sts ar aree pr prote otect cted. ed. Wi With th up to eig eight ht millio mil lion n peo people ple ab about out to be int intro roduc duced ed

fiduciary fiducia ry dut duties ies.. Fid Fiduci uciari aries es mus mustt act in thee be th best st in inte tere rest stss of be bene nefic ficia iari ries es — and an d (c (cru ruci cial ally ly)) in ca case se of a co confl nflic ict, t, in th thee benefic ben eficiar iaries ies’’ sol solee int intere erest. st. Thi Thiss mea means ns both bot h avo avoidi iding ng per person sonal al con conflic flicts ts of int intere erest st

to th thee wo worl rld d of pr priv ivat atee pe pens nsio ion n sa savi ving ng,, it is vi vita tall th that at tr trus ustt an and d co confi nfide denc ncee in th thee system sys tem is bui built lt and sus sustai tained ned.. Ma Maki king ng thi thiss a re reali ality ty is eve everyo ryone’ ne’ss res respon ponsib sibili ility ty — ■ including consultant consultants. s.

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Pensions

Inflation-linked liabilities

The tipping point Matthew Furniss finds that high inflation isn’t necessarily necessarily a bad thing for pension schemes

Matthew Furniss is assistant vice-president at PensionsFirst

ince the start of compulsory indexation, inflation has been one of the key risks faced by UK pension schemes. With retail prices index (RPI) inflation recently creeping above the 5% mark for the first time in nearly two decades, trustees and sponsors of some defined benefit (DB) pension schemes are fretting about the impact that increases

S

weak economy and curtail a much-needed rebalancing towards exports, this is not an unimaginable scenario.

in inflation could have on their funding positions, with many looking towards reducing their inflation exposure through the purchase of inflation-hedging assets (such as index-linked bonds or swaps). On the other hand, some pension schemes may find that caps on pension increases mean that high levels of inflation have less of a negative impact on funding levels than might be expected. Indeed, increases in inflation beyond these caps could in fact be beneficial for schemes, as asset values continue to rise while liability values are capped. Our research shows that, for a sample pension scheme, the point where further inflation could be beneficial

re reduc eease defici def tsem inste ins tead ad ofduce incr in crea seicits them th «

Inflation affe Inflation affects cts pens pension ion sch scheme eme ben benefits efits in a num numbe berr of wa ways ys.. Fi Firs rstly tly,, ea each ch me memb mber er’’s benefits bene fits wil willl typ typica ically lly inc increa rease se annu annuall ally y

and th and ther erefo efore re val valued ued wi with th re refer feren ence ce to expect exp ected ed fut future ure infl inflatio ation. n. While realised inflation clearly affects the current level of benefits payable, future inflation expectations are just as important in determining the overall cost. The impact of a scheme on its sponsor’s balance sheet and cashflow is driven by valuations that allow for the projection of future pension increases, naturally incorporating inflation expectations. The higher these expectations, the higher the liabilities, deficits and subsequent contribution requirements. On th thee ot othe herr si side de of th thee ba bala lanc ncee sh shee eet, t, sche sc heme mes’ s’ as asse sett va value luess ma may y in incr creas easee du duee to rising ris ing infla inflatio tion n expe expecta ctatio tions, ns, but not alw always ays

— known the ‘tipping point’ — otherwise could occur whenas inflation reaches 1.2% above current market levels. Given the Bank of England has signalled that a rise in rates would undermine an already

— with wi th the th e in incr crea ease se ra rate usua us lly y tied ti edsto inflat infl atio ion. n. UK law holds hol dsteth that atuall pensi pe nsion ons accr ac crued ued after aft er 19 1997 97 mu must st in incr creas easee ev every ery yea yearr aft after er reti re tire reme ment nt by at le leas astt th thee ra rate te of in infla flati tion on up to 5% 5%;; for pe pens nsion ionss ac accr crue ued d aft after er Ap Apri rill 20 2005 05,,

at th thee sa same me ra rate te as th thee lia liabi bilit lities ies.. As Asse sets ts such suc h as inde index-li x-linked nked bond bonds, s, infl inflati ation on swa swaps, ps, infrastr infr astruct ucture ure inv investm estments ents and pro proper perty ty wit with h inflat in flation ion-li -link nked ed lea leases ses ar aree li link nked ed to th thee RP RPII and an d th ther erefo efore re re reac actt di dire rect ctly ly to ch chang anges es in

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Scheme Sche mess ar are e begi be ginn nnin ing g to wo wond nder er at wh wha at po poin intt in infl flat atio ion n incr in crea ease sess wi will ll st star artt to

The ‘tipping point’ will, of course, differ depending upon the specific nature of both the scheme’s benefit structure and its asset portfolio. It is therefore imperative that schemes understand exactly how their balance sheets are impacted by various inflation scenarios, particularly given today’s volatile economic environment.

Inflation impact may vary

the ca the cap p on inc incre reas ases es is 2. 2.5% 5%.. Th Thee ma major jorit ity y of def defer erre red d be benefi nefits ts al also so ha have ve RP RPI-l I-lin inke ked d increa inc reases, ses, howe however ver her heree the tot total al inc increas reasee over ov er th thee wh whol olee pe peri riod od is co comp mpar ared ed to us usin ing ga fixed fix ed as assu sump mpti tion on of 5% pe perr an annu num m an and d th thee smal sm alle lerr of th thee tw two o is us used ed.. Th Ther eree ma may y al also so be thos th osee st still ill ac accr cruin uing g be benefi nefits ts or wi with th pension pens ionss link linked ed to nat nationa ionall aver average age ear earning nings. s. Thes Th esee be bene nefit fitss ar aree of ofte ten n se seen en as re real al in na natu ture re

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until recently, remained under 5%, for example, below the cap levels associated with most pensions. Changes in inflation expectations have therefore fed through directly to liability values. For schemes not fully hedged against inflation, increases in asset values as a result of higher inflation have generally failed to match the increase in overall liability values, resulting in an overall deterioration in funding positions. However,, as inflation levels reach the However 5% mark and the caps applying to most benefits have begun to bite, schemes are beginning to wonder at what point inflation increases will start to reduce deficits instead of increasing them.

Finding the ‘tipping point’

inflation inflatio n rat rates es or expe expecta ctatio tions. ns. Oth Other er asse assets ts such suc h as eq equit uitie iess and rea reall es esta tate te inv inves estm tment ent trus tr usts ts ar aree al also so vi view ewed ed as re real al in na natu ture re bu but, t, with wi thout out a dir direc ectt li link nk to infl inflat atio ion, n, ma may y re reac actt overr a lo ove long nger er ti time me per period iod.. Cle Clear arly ly,, th thee im impa pact ct of an in incr crea ease se in in infla flati tion on on a sc sche heme me’’s fundi fun ding ng lev levels els st stem emss fr from om the eff effec ectt on bo both th itss as it asset setss and li liab abili iliti ties es.. Thi Thiss va vari ries es am among ong schem sc hemes es de depen pendi ding ng on the na natur turee and

To illustrate the point at which inflation can positively impact a scheme’s portfolio, we can investigate the impact inflation increases may have on a real scheme. Consider a pension scheme with assets totalling £363 million and liabilities totalling £402 million — leaving it 90% funded. We can chart the impact of inflation increases across both sides of the balance sheet. The results from this analysis are highlighted in Table 1. The analysis shows that the example scheme, subjected to a 1% increase in inflation expectations, would see its

maturi matu rity ty of the their ir li liab abili iliti ties es,, th thee am amoun ountt of real re al as asse sets ts he held ld an and d to wh what at ex exte tent nt th they ey ar aree direct dir ectly ly imp impact acted ed by infla inflatio tion. n. Thanks to the explicit aim of monetary policy to keep inflation low and stable, inflation and inflation expectations have,

liabilities increase by about 10%. However,, an increase from 2% above the However current inflation curve to 3% would only increase the value of the liabilities by about 2% due to the protection afforded by the liability caps.

Table 1 — Valuation results under increased inflation scenarios Inflation curve 31/12/2010

Assets

Liabilities

RPI

£363m

£402m

90%

£379m (+4%)

£441m (+10%)

86%

RPI +1%

Funding level

The tipping point RPI +2%

£400m (+10%)

£462m (+15%)

87%

RPI +3%

£425m (+17%)

£470m (+17%)

90%

RPI +4%

£457m (+26%)

£471m (+17%)

97%

RPI +5%

£497m (+37%)

£472m (+17%)

105%

Turning to the other side of the balance sheet, we find that, as inflation expectations rise, so does the value of its index-linked assets and, as there are no caps on the inflation-linked cashflows from these assets, the values continue to increase above and beyond the corresponding increase in the liability values. The result is that the scheme’s funding level initially falls as inflation expectations increase, and then recovers as expectations rise further. The point at which this recovery begins, or its ‘tipping point’, occurs when inflation rises start to improve the funding level. In this case the tipping point is around 1.2% above current market levels, so an inflation curve of approximately 5% per annum. This adds a key metric to the information for the scheme to consider when contemplating the impact of inflation.

The importance of understanding risk As sh show own n ab above ove,, hi high gh infl inflat atio ion n ca can n re redu duce ce pension pens ion sch scheme eme defic deficits. its. How However ever,, the ext extent ent of th this is re redu duct ctio ion n de depe pend ndss on th thee na natu ture re of inflat infl atio ion n ch chang anges es and the ma make ke-up -up of the schemes sch emes’’ ass assets ets and lia liabili bilitie ties. s. Clea Clearly rly,, it is im impor porta tant nt for pe pens nsion ion sc sche hemes mes to del delve ve deeper dee per int into o thi thiss is issu suee and to un under derst stand and th thei eirr own ow n ind indiv ivid idual ual ri risk skss fro from m infl inflat atio ion n in bo both th thee sho th short rt and lo long nger er ter term. m. In the past, pension schemes have been unable to stress-test the impact of changes in key risk factors — such as inflation — across the whole of their balance sheet. However, this is no longer the case. New technology provides DB schemes with the tools necessary to better understand the risks that they face and the potential impact on funding levels. By modelling both their assets and liabilities on a common platform, scheme sponsors and trustees are now able to stress-test both values under different inflation scenarios. This advance allows schemes to analyse the impact inflation might have on funding levels and determine the point at which further increases in inflation actually become beneficial, giving them a crucial advantage in managing and mitigating risk. When schemes are able to pinpoint the moment at which an increase in asset values outpaces their liabilities, they ■ have found their ‘tipping point’.

August 2011 

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Life

Statins

Heart of the matter Actuaries should avoid jumping to conclusions about the risk factors associated with heart disease, says Garth Lane A young

through all his patrimony and had but one good cloak left. One day he happened to see a Swallow Swallow,, which had appeared before its season, skimming along a pool and twittering gaily. He supposed that summer had come, and went and sold his cloak. Not many days later, winter set in again with renewed frost and cold. When he found the unfortunate Swallow lifeless on the ground, he said: “Unhappy bird! What have you done? By thus appearing before the springtime you have not only killed yourself, but you have wrought my destruction also.”  — Aesop

Garth Lane is a valuation actuary and Solvency II expert at RGA in the UK

s on onee sw swal allo low w ‘d ‘doe oess no nott ma make ke a summe sum mer’ r’,, so co corr rrela elati tion on do does es no nott imply imp ly cau causat sation ion.. Whe When n act actuar uaries ies concer con cern n the themse mselve lvess wit with h ris risk k fact fa ctor orss th they ey tr try y to avo avoid id th thee co confo nfoun undi ding ng of co corr rrel elat ation ion wi with th ca causa usati tion on.. We nee need d prin pr inci cipl ples es to gu guid idee us wh when en we su susp spec ectt a caus ca usal al re rela lati tion onsh ship ip ex exist istss or wh when en we de deci cide de to use a ra rati ting ng fa fact ctor or wh when en und underw erwri riti ting ng risk ri sks. s. We ge gener nerall ally y ag agre reee th that at a re reas ason onab ably ly stro st rong ng co corr rrel elat ation ion is a pr prer ereq equis uisit itee for a ri risk sk fact fa ctor or in it itss as asso soci ciat ation ion wi with th a pa part rtic icul ular ar dise di seas ase, e, an and d ac ackn know owle ledg dgee th that at th this is do does es not make ma ke th thee ri risk sk fa fact ctor or a ca caus use. e. In 19 1965 65 Si Sirr Au Aust stin in Br Brad adfo ford rd Hi Hill ll la laid id ou outt

 A

man, a great spendthrift, had run

the acc accepte epted d nine fund fundame amental ntal pri princi nciples ples that th at sh shoul ould d gui guide de th thee pr prac acti titi tione onerr in distinguishing disting uishing correl correlation ation from causati causation. on. The mo most st im impo port rtan antt of th these ese ar aree th thee st stre rengt ngth h of as asso soci ciat ation ion,, th thee ex exist isten ence ce of a bi biol ologi ogica call gradientt (the dose-re gradien dose-response sponse relatio relationship) nship) and an d te temp mpor oral alit ity y — th thee la last st of wh whic ich h he down do wnpla playe yed d at th thee ti time me.. It is is,, how howeve everr, vit vital al that th at th thee pr presu esume med d ca cause use pr prec eced edes es th thee ev event ent.. The pr prin inci ciple ple of coh coher erenc encee is al also so im impor porta tant nt as any pre presum sumed ed caus causal al rel relatio ationshi nship p sho should uld not seri serious ously ly con conflic flictt wit with h gene general rally ly known know n fact facts. s. We st start art by loo looki king ng at cor corre relat lation ion withi wi thin n th thee co conte ntext xt of the ori origin ginal al

Figure 1 — An Anccel Keys: Sa Satturated fat as a cause of coro co rona nary ry he heart art dis disea ease se (CH CHD D)

lipid hy lipid hypot pothes hesis is in rel relati ation on to th thee hea health lth of our hea heart rts. s.

Heart health: The lipid hypothesis (the consumption of saturated fat causes heart disease) This infamous hypothesis was proposed by Ancel Keys in 1953 based on statistics of consumption of saturated fat in six countries (Figure 1). Keys neglected to disclose that he had selected six countries out of a total of 22 whose data were available to him. His misuse of the data was exposed by Yerushalmy and Hilleboe in 1957 when they

Figure 2 — The full ful l 22-country data set  Adapted from Yerushalm Yerushalmyy and Hillebowe (1957)

22 countries’ data  Adapted from Ancel Keys Keys (1953)

800

800 USA

700 Australia    0    0    0  ,    0    0    1   r   e   p   s    h    t   a   e    d      D    H    C

Canada

600 500 400

England and Wales

Six countries’ data Curve fitted to data

300 Italy

200

   0    0    0  ,    0    0    1   r   e   p   s    h    t   a   e    d      D    H    C

600

Australia

Ireland

Switzerland Sweden Austria Denmark Italy West Germany Norway Netherlands Portugal

300 200 Ceylon

Chile

10

20

30

40

Fat calories as % of total c alories

50

France

Mexico

0 0

Great Britain

Israel

400

100

0

Canada New Zealand

500

 Japan  Japan

100

USA

Finland

700

0

10

20

30

40

Fat calories as % of total calories

50

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August  2011

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published the graph of the full data set (Figure 2). When the full data is used, the biological gradient disappears — as does the strength of the association. The lipid hypothesis was consequently modified so that dietary cholesterol became the villain instead of saturated fat. Many years of research followed but Ancel Keys finally admitted in 1997 that “There’s no connection whatsoever between cholesterol in food and cholesterol in blood. And we’ve known that all along. Cholesterol in the diet doesn’t matter unless you happen to be a chicken or a rabbit”. So, if saturated fat and cholesterol in the diet do not matter matter,, what does? Clearly Clearly,, the

Journal it 2009 edition of American of American Heart Journal it was reported that, of the 136,905 people admitted to 541 hospitals in the United States with heart attack whose lipid levels were recorded, nearly 75% had “normal” LDL cholesterol levels, which is below 130mg/dl (or 3.4 mmol/l).

There The re ar aree ma many ny st stat atin in dr drug ug st studi udies es th that at purpor purp ortt to pr prov ovee th that at li live vess wi will ll be sa save ved d by red reduci ucing ng cho cholest lestero erol. l. How However ever,, the there re

As actuaries we should consider updating our risk calculators to take account of current research and especially look at the age ranges for which cholesterol may still

implication is that it is cholesterol in the blood and the hypothesis has been modified again.

It should be noted at this point that this is still a hypothesis. Unfortunately, Unfortunately, it is medical orthodoxy and even perhaps dogma that serum cholesterol levels should be managed down. If it were not for the class of drugs called statins this would not be possible, as the human body manufactures virtually all of the cholesterol needed

appears appea rs to be no pr prim imar ary y pr preve event ntion ion st stud udy y that th at sh show owss co conc nclu lusiv sivel ely y, in te term rmss of a st stro rong ng absolut abs olutee res respons ponse, e, tha thatt the tot total al mor mortal tality ity end en d po poin intt wi will ll be af affe fect cted ed by th thee us usee of stat st atin ins. s. Th This is me mean anss th that at,, in mo most st of th thee st stud udy y grou gr oups ps,, as ma many ny pe peop ople le di died ed as in th thee co cont ntro roll grou gr oups ps.. Wh What at is th thee us usee of be bein ing g sa save ved d fr from om hear he artt di dise seas asee on only ly to di diee fr from om so some me ot othe herr cause? cau se? Even wor worse, se, high higher er cho cholest lestero eroll leve levels ls appea ap pearr to be pr prote otect ctiv ivee ag again ainst st ca canc ncer er in th thee long lo nger er ter term m an and d st stat atin inss hav havee si signi gnific fican antt an and d probab pro bably ly unde under-r r-repor eported ted sid sidee effe effects cts.. Table 1, extracted from a recent study by Hippisley-Cox and Coupland, illustrates the effect of medicating a large proportion of the whole population. The number of

be an appropriate risk factor, especially for women where there appears to be little or no dose response. We have an obesity epidemic in spite of the accepted wisdom on diet that emerged from flawed science originated by Ancel Keys. We suspect that overconsumption of carbohydrates may have something to do with this, but we also suspect that giving obese people a statin potentially acts to perpetuate the continued epidemic of obesity as it allows them to avoid lifestyle and behavioural changes in the belief that the statin will prevent future heart attacks. I will continue to enjoy a full English breakfast, shorn of the guilt that

(mainly in the liver) and has mechanisms to regulate the levels of cholesterol. To To our knowledge, it appears that no one has yet demonstrated the satisfaction of Sir Austin Bradley Hill’s criteria in relation to this modified lipid hypothesis. In fact, many people with heart disease have low levels of cholesterol. In the January

conditions is probably under-reported because some symptoms would have been mild and therefore not reported and cases of memory loss may have been ascribed to age-related conditions. It is important to note that statins have shown significant benefits in the case of secondary prevention, albeit not necessarily

this may affect the health of my heart. At my age (50+), and free of heart disease with a cholesterol level higher than the recommended level, I am quite happy not to increase the five-year probability of avoiding a heart attack from 98.2% to 98.8% by taking a statin for five years. The probability that I will avoid nasty side effects is 100%. Statins are not the swallows heralding a summer free of heart disease for everyone. Arguably,, if we do not insist on a proper Arguably answer to the question of what really causes heart disease then we may unduly medicate millions of people for little benefit at the danger of making a significant number of ■ them seriously ill.

Heart health: The lipid hypothesis continued (high total serum cholesterol with a high LDL/HDL ratio causes heart disease)

»

Sta tati tins ns ar are e no nott th the e swal sw allo lows ws he hera rald ldin ing ga summ su mmer er fr free ee of he hear artt disea dis ease se fo forr ev every eryone one «

Table 1 — Number of extra cases per 10,000 treated Women Condition

Men

Number

95%, CI

Number

95%, CI

Acute renal failure (kidney failure)

17

(9, 26)

22

(14, 32)

Cataract Liver disfunction

252 65

(213, 292) (50, 80)

151 64

(125, 178) (51, 79)

Myopathy (muscle weakness — worst case, muscle death)

32

(22, 44)

95

( 77, 116)

from their effect on cholesterol. Statins have pleiotropic effects; that is to say they have other effects such as anti-inflammatory, plaque-stabilising or anti-coagulant effects. These effects are available at much lower doses than those that are required to aggressively manage down the level of cholesterol and may be the ones preventing further heart attacks in the secondary prevention trials.

Final thoughts

MOREE CO MOR CONTE NTENT NT ONL ONLINE INE An ex exte tend nded ed ve vers rsio ion n of th this is ar arti ticl cle e ca can n be foun fo und d at http://bit.ly/pEKdfv 

August 2011 

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Q&A

Paul Sweeting

Spinning plates Marjorie Ngwenya talks to Paul Sweeting Sweeting about balancing volunteer work, authorship, academic obligations and time with his family Why did you choose to become an actuary? Initially, it was the challenge that attracted me, but I then found that I actually enjoyed the job. I wanted to work in an area that required maths, but I soon found that being able to do the numbers was only a small part of being an actuary — interpreting and communicating the results was just as important. This is what got me hooked; the potential scope of the role and the range of opportunities are what have kept me interested over the years.

You are a member of the Institute and Faculty Council and sit on the management board. What motivates you to volunteer your time to these causes? I believe that the actuarial qualifications offer a great foundation for a career in financial services, and I’m keen to make sure it stays that way. In areas such as enterprise risk management (ERM), the opportunities for the actuarial profession are enormous, but so are the threats from other organisations. I feel it’s important that we position our profession such that we can best address these challenges, and that we equip our members with the skills they’ll need. Being a member of Council offers a great opportunity to

influence the strategy of the profession, while sitting on the management board means that I can help to support the implementation of the strategy.

What has been your greatest g reatest professional challenge to date? Probably working on the successful merger of the Institute and Faculty. While the vast majority of fellows from both the bodies believed that it was right to merge, many also had a range of concerns about the implementation of the merger. Finding a way to take these into account was hard work, but it produced a better result — this was borne out by the proportion of

keep »   The things that keep

me busy busy are hugel hugely y diverse,, so as long as there diverse are interesting interesting things to do, I’ll keep doing them « both bodies that voted for the merger. Of course, the next challenge is to ensure that the merger delivers improved services to all members of the profession, and equips them for the changing financial environment — something that Council is working on from a strategic point of view,

and I had thought that I could just while away the days carrying out research and teaching students. However, I started to feel that removing myself from industry was making it harder to keep a practical edge to my research, something I have always thought of as important. This — together with the fact that I really enjoy working in the City — meant that when the right role came up with J.P. Morgan Asset Management, I was happy to take it. The fact that I can combine this with some work at the University of Kent is an unexpected bonus.

You are now a managing director at  J.P. Morgan Asset Mana Management gement.. What is your remit and what does this thi s new challenge mean in practice? We’re focusing on helping institutional investors understand the risks they face, and developing investment solutions to address these risks. I’m responsible for leading this effort in Europe. As well as developing bespoke solutions for clients, we’re also producing a range of research papers aimed at highlighting the issues facing investors — and proposing solutions to these issues.

You have participated in numerous conferences to present your ERM

and the management board is helping to implement.

research What are and yourthought top tipsleadership. for public publi c speaking?

Your career developed extensively in the investment arena and then you took an alternative route into academia. Talk us through that chain of events. I’ve been involved in research with the profession for many years, with presentations to the Staple Inn Actuarial Society and at the Profession’s conferences, sessional papers and, more recently, publications in the Annals of Actuarial Science. I’d also taken up a role as a visiting lecturer. lecturer. After a while I thought

Find a technique that works for you. Some people can make wonderful off-the-cuff speeches, while others need to have something written down — and the written techniques range from holding a handful of cue cards to having the full text of the speech in front of you. None of these solutions is more ‘right’ than others — although different approaches might work better for different situations — but the important thing is to see what’s best for you. Experience also helps — there’s no

that, rather than keep trying to fit all of this around my day job, I’d make it my day job instead. Fortunately, the University of Kent was looking to expand, and my skills fitted their needs. This was a lot of fun,

substitute for getting up there and talking, while no amount of preparation is a substitute for time on your feet in front of people. Finally, remember that most of the time people are interested to hear what you

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have got to say, so you are unlikely to be facing a hostile audience.

should change once Solvency II is in force, but also how any changes in strategy at an industry level will affect the returns on various asset classes in the intervening period. The way in which insurance companies reach their customers given the Retail Distribution Review is also something that should be high on the agenda for many firms. Larger companies will also need to think about how, and if, they access the rapidly growing developing markets.

Your book on ERM is soon to become b ecome part of the t he Profession’s ST9 exam syllabus. How long did it take you to write the book? What are its highlights and will there be another? The book probably took about a year to write. It started as a high-level overview I wrote as a sessional meeting paper, so I thought it would be straightforward to expand it into a book — but it took a little longer to come up with the finished product than I imagined. I hope that the highlight will be the overall accessibility of the text — that and the beautifully rendered graphics. However, it’s not really for me to say what the best bits are. Apart from the fact that I am too close to it to be even remotely objective, other people will have to say what they like, and what can be improved in future editions. Apart from a second edition of  Financial Enterprise Ent erprise Risk Management  —  — which I can’t bring myself to think about at the moment — I have also agreed to write a book on mortality and longevity. This will look at not just the mathematical aspect of this subject, but also insights from other disciplines and real-life considerations. Watch this space…

What are your views on the CERA qualification for actuaries?

How do you measure your success? If I’m stretching myself but still doing a good job, then I would count that as

Paul Sweeting is a managing director at  J.P. Morgan Morgan Asset Asset Managemen Management, t, where where he is European head of the firm’ firm’ss Strategic Investment Advisory Group. Before this, he was a professor of actuarial science at the University of Kent, a post he still holds on a part-time basis. Paul has also worked in pensions and investment consultancy, and as a longevity strategist. Paul is a member of the Council of the Institute and Faculty of Actuaries, and also a member of the Profession’s Profession’s management board. He has written a number of papers on pensions, investment, risk and longevity issues, and is a regular contributor to the print, broadcast and online media. His book Financial Enterprise Risk  Management   Managemen t  is  is due to be published in September 2011. As well as being a Fellow of the Institute of Actuaries, Paul is a Fellow of the Royal Statistical Society and of the Chartered Institute for Securities and Investments. He is also a CFA Charterholder.

one measure of success. If I give all of my commitments the time they deserve — including spending time with my family — then I feel like I’m getting it right.

What’s the greatest piece of advice advi ce you’ve ever been given? I’m not really very good at taking advice and I think — so far — that’s paid off. ‘Just do it’ is probably as good a piece of advice as any.

What do you do to relax? I’m a bit of a petrolhead, so cars and bikes feature quite highly — driving and riding rather than watching. In complete contrast, I also enjoy listening to all sorts of music, from Bach to Bombay Bicycle Club, and I play the piano, though too infrequently to be any good. In terms of sport, I always try and pack a pair of trainers when I’m travelling so I can go for a run, although I don’t have the time to run as far as I used to, having completed the London Marathon in 2002 and 2004. And while it’s not always relaxing, spending time with my two-year-old daughter is always good for taking my mind off work.

I think it’s a great qualification. First, it’s accessible. In terms of examinations, associates need take only a single additional subject to obtain the CERA qualification, meaning that it can be gained more quickly than fellowship. It also covers a great range of skills, from the maths that you need to understand complex risk interactions to the crucial qualitative considerations that are needed when looking at a broad spectrum of risks. Finally, Finally, the global nature of the

What top three issues should insurance company boards have in mind for 2011 and beyond?

When do you find time to relax with wit h all your various competing commitments?

qualification means that it’s ideal for actuaries wanting to use their qualification abroad. Fourteen actuarial associations signed up to CERA last year, giving it truly worldwide recognition.

It might sound a bit obvious given my current role, but investment strategies in the face of Solvency II must be near the top of their lists. This doesn’t just mean considering how investment strategies

I do firmly believe in the adage that “a change is as good as a rest”. Although I’m busy, the things that keep me busy are hugely diverse, so as long as there are interesting   ■ things to do, I’ll keep doing them.

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India

Life

A new dawn Rajagopalan Krishnamurthy reflects on the strategic shifts in India’ India’ss life insurance industry industry,, which have seen it grow to the world’s eleventh largest in just ten years

Rajagopalan Krishnamurthy is managing director of products, distribution and markets at Towers Watson, India

ndia, as a global sweet spot, attracts the attention of every major insurer. The country started in 20th place in the global insurance league table when the market opened to private players in 2000, moving up to 11th place by 2010. Since 2000, a total of 22 life insurance companies have set up operations in India. Most major multinational insurers are represented through joint ventures (the only option for foreigners), and all but two

new players are licensed as joint ventures. Total foreign direct investment in insurance companies stands at close to IRs51 billion (about US$1.1 billion). While the stateowned Life Insurance Corporation (LIC) still holds a significant majority of market share, other companies have established footholds (Figure 1).

Figure 1 — Market share of leading life insurers in India

of mo more re th than an 8% pe perr an annu num, m, it itss vi vibr bran antt democrac demo cracy y and inst institut itutions ions,, and chea cheap p labour lab our wit with h goo good d Eng Englis lish h sk skill ills. s. A re recen centt study stu dy pr predi edict ctss th that at Ind India’ ia’ss eco econom nomy y will wi ll gr grow ow fiv fivef efol old d in th thee ne next xt 20 ye year ars. s. The coun country’ try’ss favo favourab urable le demo demograp graphic hic profi pr ofile le is of sp spec ecia iall in inte tere rest st to in insu sure rers rs — 56% 56 % of In Indi dian anss we were re un unde derr th thee ag agee of 15 or ov over er the age of 64 in 201 010. 0. Researc Rese arch h show showss that Indi India’ a’ss work workinging-age age popula pop ulati tion on wil willl inc increa rease se by 13 136 6 mi milli llion on by 2020. 202 0. In com compar pariso ison, n, Chi China’ na’ss wo work rking ing age popula pop ulati tion on wil willl gr grow ow by 23 mi milli llion. on. Indian Ind ian hou househ sehold oldss sav savee mor moree tha than n th those ose in ot othe herr em emer ergi ging ng ma mark rket etss su such ch as Ch Chin ina a and Br Brazi azil. l. Ho House usehol hold d sav saving ingss we were re 25 25% %

multinational insurers in a short span of time. What have major players learned in the first decade of operations? There are five important lessons:

of Ind India’ ia’ss gr gross oss dom domest estic ic sav saving ingss in 200 2008, 8, comp co mpar ared ed wi with th 5% in Br Braz azil il an and d 15 15% % in Chin Ch ina. a. Th Thee fig figur ures es fo forr Br Brit itai ain n an and d th thee US are 2% and 1% res respec pectiv tively ely.. The large young population, combined

because local partners have not been ready to pump in capital as needed to support business volumes and solvency needs. As a res resul ult, t, we well ll-c -capi apita tali lised sed ba bank nkss ar aree emergi eme rging ng as pre preferr ferred ed par partner tnerss in insu insuranc rancee

I

LIC 72.1% ICICI Prudential Life 5.3% SBI Life 5.1% HDFC Standard Life 2.8%

Bajaz Allianz Life 2.6% Reliance Life 2.3% Others 9.8%

Favourable economic profile India is rec India recog ognis nised ed glo global bally ly for its tr trill illion ion-dollar doll ar econ economy omy,, cons consiste istent nt high gro growth wth

with the current low rate of life insurance penetration and high rate of personal savings, points to the upside potential for the Indian insurance market. Thee pr Th prop open ensi sity ty to sa save ve ha hass le led d to a su surg rgee in inve investm stment ent-lin -linked ked life insu insuran rance ce poli policies cies.. Thee st Th stro rong ng per perfo form rman ance ce of Ind India ian n st stoc ock k indi in dices ces has ai aided ded th this is gr grow owth th.. Th Thee In India dian n stoc st ock k ma mark rket et ga gave ve re retu turn rnss of 22 22% % in 20 2010 10,, a si sign gnifi ifica cant nt dr drop op fr from om th thee di dizz zzyi ying ng 90% ga gain in in 2009 2009,, but sti still ll impr impressi essive ve none nonethe theless less.. India has attracted a large number of

1. The importance of a strong local partner and brand Private insurers have learned that the strength of their domestic partners and their market franchises are vital to sustainable growth. Insurance buyers rely more on the market standing and distribution network of local sponsors than the global image of their foreign counterparts. At the same time, a few joint ventures have experienced growth constraints

31

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venture ventu res. s. On Only ly so sound und an and d pr profit ofitabl ablee ba bank nkss get th thee nec neces essar sary y ap appr prova ovall fr from om th thee ce cent ntra rall bank ba nk to ta take ke a st stak akee in In Indi dian an in insu sura ranc ncee busin bus iness esses es.. In fac fact, t, ent entra rant ntss su such ch as HS HSBC BC and Dai Dai-ic -ichi hi Li Life fe ha have ve of offer fered ed hi high gh pr premi emium umss to ba bank nkss in or order der to for forge ge pa part rtne ners rship hips. s.

bancassurance. While agencies remain the backbone of distribution, mass recruitment led to quality and sales skill issues, and widespread complaints of misrepresentation of insurance plans ensued. Most agents consider insurance sales a secondary pursuit for additional income, and they often rely on their immediate contacts to make sales. This has led to high agent turnover and a high percentage of policy lapses, which has affected insurers’ long-term profitability. profitability. According to the regulator,, the lapse rate on ULIP policies regulator was 26% in 2006 and, according to Towers Watson’s estimates, that has climbed higher in recent years. The regulator has also voiced

1% of them have been cross-sold insurance. The potential is huge, and insurers are now waking up to the need for well-orchestrated implementation plans.

environment. Unit-linked insurance plans (ULIPs) are a prime example of the need to absolutely understand the marketplace. A few companies underestimated customer interest in ULIPs when they were introduced in 2003 and kept to their more traditional plans, thereby missing a slice of the pie. On the other hand, companies that relied solely on ULIPs suffered in the global financial crisis when customers took flight to safety, and again more recently in the wake of regulatory measures that sought to curb the excessive growth of ULIPs at the cost of traditional insurance plans.

concerns about the status of orphan policies at many companies.

their prem their premium ium sem semi-an i-annual nually ly or quar quarter terly ly,, tran tr ansac sacti tion on si size zess ar aree mu much ch low lower er th than an th thee annual annu al pre premiu mium. m. Man Managi aging ng the res result ulting ing huge tra transa nsacti ction on num number berss and serv service ice leve levels ls has pr prese esent nted ed a ch chal allen lenge ge to in insur surer ers. s. Insurers active in the rural and micro-insurance businesses have also learned to cater to customers who want small policies with annual premiums of IRs500 (about US$11) or even lower, and they have developed mechanisms to collect and account for small amounts.

3. Distribution efficiency A key lesson for insurers in India is in distribution, which is witnessing the emergence of new channels such as

branches are inefficient and are centred on sales push. Customer service is often mediocre. Indian banks have more than 400 million retail customers, and only about

2. Flexible product strategies Life companies in India have learned that product strategies need to be under constant review to respond to changing risk appetites and customer preferences. As a result, product teams are under pressure to assess the market and come up with new plans, often on short notice, to satisfy distribution partners and as a response to the market

»

The In The Indi dian an in insu sura ranc nce e ind ndus usttry is poi oissed for a big bi g le leap ap in pe perf rfor orma manc nce e and an d opp opportu ortuni nitie tiess « The low quality of sales and high incidence of policy discontinuance are also evident in bank distribution. A 2008 study that benchmarked bancassurance distribution in India (which was followed by a second study in 2010), showed that distribution practices at bank

Figure 2 — New business premium of insurers Weighted new premium income 18000 16000 14000   n   o    i    l    l    i   m    $    S    U

12000 10000 8000

4. Large volumes and small tickets When Wh en th thee ma mark rket et ope opened ned,, mo most st pr priv ivat atee insurer insu rerss unde underes restim timate ated d the Indi Indian an market mar ket’s ’s pot potent ential ial vol volume ume and poli policy cy siz sizes. es. The vol volum umee of ne new w bu busi sines nesss bo boom omed ed (Fig (F igur uree 2) 2).. In 201 2010, 0, pr priv ivat atee ins insur urer erss is issue sued da tota to tall of 14 14.5 .5 mi mill llion ion po polic licies ies,, an and d th thee stat st ate-o e-own wned ed LIC iss issue ued d cl close ose to 40 mi mill llio ion. n. Thiss tr Thi trans anslat lates es to an av aver erag agee fir first st-ye -year ar premium prem ium of abo about ut IRs2 IRs20,0 0,000 00 (ab (about out US$ US$440 440)) per pol polic icy y. Bu Butt be beca cause use po polic licyh yhol older derss ca can n pa pay y

5. Focus on cost management Despite robust growth, good cost management is a key issue for private players. Indian regulations prescribe caps on costs, including management expenses. Most private players have breached this limit, citing the additional costs of start-up. While the operating costs ratio for private insurers came down to about 21% last year — a decline of 5% from the previous year — a recent set of new regulatory measures drastically lowering policy surrender charges and capping fund management fees has required insurers to relentlessly pursue costreduction initiatives.

Private players

Summary

LIC

big leap in performance and opportunities, notwithstanding the challenges and the strategic issues that the private players — and their foreign partners — face as part of ■ this momentous growth.

6000

These developments clearly show that the Indian insurance industry is poised for a

4000 2000 0 FY2004

FY2005

FY2006

FY2007

FY2008 1 US$ = RS45

FY2009

FY2010

FY2011

August 2011 August  2011 

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Life insurance

Predictive underwriting

Life in the fast lane Paul Hately looks at life insurance’s aim to balance customer needs for convenience and low prices through predictive underwriting standard terms, had they gone through the long and expensive underwriting process. n A means of targeting customers with an offer. By leveraging information already known about customers, organisations with strong data can make an asset of this and offer consumers additional convenience. n Th Thee us usee of st stat atis isti tica call mo mode dels ls.. Th Thes esee ca can n predic pre dictt lik likely ely und underw erwrit riting ing or cla claims ims outcomes. n A controlled buying experience. Similar to simplified issue, consumers can access cover at a price considered to be good value for those in good health. Developments in the UK have so far focused on reducing the amount of

model is to predict an individual’ individual’ss likelihood to claim, underwriting decisions can be used to build the model rather than claim data because this is harder to come by. Several projects have been undertaken in the field of bancassurance, using banking data as the predictor. predictor. One or two projects have also been explored using supermarket, general insurance or publicly available commercial data as the predictor. Over the past eight years or so, our work in this field has focused on building models based on depersonalised data held by high-street banks. This is then linked to traditionally determined underwriting decisions for sales made face to face, in

he life insurance industry is often accused, and rightly so in many instances, of a lack of consumer focus. The finger is pointed at products that are not innovative and fail to meet the needs of the modern consumer. At the same time, compared to other industries ranging from retail to general insurance, we are woefully underdeveloped in our use of consumer data to improve the proposition and target customers effectively. effectively. In recent years, predictive underwriting has emerged as a technique that, while still only being whispered about, is increasingly seen in the UK and the US as a potential solution that helps counter both these

traditional underwriting needed for those consumers offered a product through predictive modelling. In the US, life industry talk is more of using predictive techniques to triage the underwriting process and avoid expensive medical tests for healthy people. In general insurance, similar techniques are being used to predict which applicants will have the lowest claims frequency, the lowest rates of fraud and display the most loyalty.

The best models are derived from the widest-ranging depersonalised data sets. From the broad range of possible factors, statistical techniques are used to find

branch or in a customer’ customer’ss home. There is therefore a selective effect at work in the data used to build the model, in that the very ill tend not to apply for life insurance through these methods. As a consequence, to mirror this effect, even the very best predictive models tend to require a degree of filtering through the inclusion of a much-reduced number of traditional underwriting questions. Whether looking at bank-specific or publicly available data, the strongest predictors of underwriting outcome are age, socio-economic — for example, community or neighbourhood, affluence, occupation and credit — as well as account activity or

charges. In countries like these, where there are sizeable and distinct protection markets, predictive underwriting can connect with parts of the population that have not, so far, engaged with protection insurance and thereby make in-roads into closing the protection gap. While still in its infancy as far as life risks are concerned, the technique is being developed to support a brand’s desire to improve its insurance offering. This is against a backdrop of increasing acquisition and medical evidence costs, along with long elapsed times between order and fulfilment. A definition of predictive underwriting — sometimes referred to as lifestyle

combinations of predictors that are most correlated with mortality or an underwriter’s view of relative mortality. In other words, while the purpose of a

transactional fields. If data points exist that are very close to health status then they too are highlighted as predictive of underwriting decision.

Paul Hately is head of accelerat accelerated ed underwriting and data insights at Swiss Re Life and Health

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underwriting — would include: n Making life insurance quick and easy to buy. The process allows for most of the traditional underwriting to be bypassed for those people most likely to end up with

Interesting insights

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As an example of account activity, activity, we have found, on more than one occasion, that frequency of ATM visits proves to be one of the predictors of UK underwriters’ decisions. This surprising discovery highlights the need not to prejudge which variables will be predictive. Before it was discovered nobody thought of it, yet it is likely to have links to basic social and occupational activity that other studies show are linked to well-being and mortality.

error and any additional anti-selection encouraged by the easy-to-buy proposition. Underwriting or pricing can be used to allow for moderately impaired lives that form part of this model error. The statistic used to measure the effectiveness of the model is the coefficient of concordance and anything over 50% is better than random, with the best models seen in this field achieving up to 70%.

Product characteristics Model effectiveness Assume we take a large sample of recent underwriting decisions for life insurance policies. Say 80% of these were offered

Clearly these techniques have the potential to be used across a range of products and distribution channels. Wherever possible, the product, brand and channel

insurance contracts marketed at consumers selected using predictive techniques, is take-up rate by health status. Understanding consumer behaviour is therefore an essential part of the product development process. Indeed, it is to be expected that some of the type II error lives will not have been able to buy insurance through any other method. Therefore, these would be expected to have a higher take-up rate than the healthiest lives. Furthermore, this effect is exaggerated for those not even represented in the model due to their very poor health. A way to counteract this anti-selective effect would be to have the insurance linked to the sale of another product or packaged

standard rates, or a small loading, and the remaining 20% were significantly loaded or declined. If we then took a random sample of 50% of these decisions, one would still expect an 80:20 split. If a model is derived that aims to predict underwriting outcome and we then take the best 50% of lives according to our model, then the model is predictive if significantly more than 80% — the non-predictive average — of the lives selected are deemed to be good risks. The higher this figure, the better. If it is 95%, this still leaves a 5% type II model error1, of all customers in the best 50% of the model — if they all buy the product — that is, the model predicts that

combination for any proposition should be derived from a model built on data from the same mix. For example, it would not be appropriate to target independent financial advisers with a proposition derived from a model built on tied sales.

in such a way that all potential customers buy the product, for example, linked to employment or included in a premium banking package.

»

These methods are most appropriate for those who hold a lot of data on their customers. Ideally, Ideally, they will have access to both predictor data and actual mortality or underwriting experience on some of those same customers. Bancassurers clearly meet these criteria but so too do consumer-centric data-rich companies with links to a life insurer.. Examples of these are supermarkets insurer — especially those who already sell

they are a good risk but we know they are not (Figure 1). Traditional Traditi onal underwriting has to be used to remove the worst cases of type II

possible, in terms of added features and benefits, with limits on maximum sum assured, age at inception and term. A key assumption, when pricing

The be The best st mo mode dels ls are ar e de deri riv ved fr from om th the e widest-ranging depers dep ersona onalis lised ed da data ta set setss « In all cases the product presented to the customer should be very similar to standard products sold using traditional underwriting. It must be kept as simple as

20%

financial products — non-life insurers and asset managers. Predic Pre dicti tive ve tec techni hnique quess ar aree com commo mon n in othe ot herr in indu dust stri ries es an and d ar aree us used ed in li life fe of offic fices es and an d ba bank nkss in te term rmss of pr prop open ensi sity ty to bu buy y. Of cou cours rse, e, sin since ce pre premiu miums ms for lif lifee ins insur uranc ancee aree de ar deri rive ved d fr from om a ve very ry lo low w un unde derl rlyi ying ng cl clai aim m rate ra te,, it do does es no nott ta take ke ma many ny mo more re cl clai aims ms th than an expe ex pect cted ed to tu turn rn a mi mild ldly ly pr profi ofita tabl blee li line ne in into to one mak making ing big los losses ses.. We sho should uld th there erefor foree avoid avo id inc increa reasin sing g the att attrac ractiv tivene eness ss of the prod pr oduc uctt to th thee fe few w wi with th a hi high gh pr prop open ensi sity ty to cla claim, im, and hen hence ce inc increa reasin sing g the pr price ice unfair unf airly ly for th thee wid wider er poo pool. l. Ind Indeed eed,, wh when en carefull care fully y deve develope loped, d, thes thesee tech techniqu niques es have hugee pot hug potent ential ial,, as the they y ca can n rem remove ove sal sales es

10% 0%

barriers barrie rs tha thatt dis dissua suade de man many y hea healt lthy hy peo people ple ■ from buyi buying ng insu insuranc rance. e.

Figure 1 — Cumulative gains 100% 90%    d   n   u 80%   o    f    ’   s 70%    d   a    b 60%    ‘    f   o 50%     e   g 40%   a    t   n   e 30%   c   r   e    P

Users of predictive techniques

Random Model

10

20

30 40 50 60 70 80 Percentage of the model targeted

90

100

The blue line shows the cumulative percentage of "bad" customers captured as you widen the targeted population. The base line in red shows the percent you would expect

1 A type II error: failing to reject the null hypothesis when it is false

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Conference preview

Life

We can work it out… Tracey Pritchard talks to chair Jason Hurley about preparations for this year’s Life conference, taking place on 20-22 November at the BT Convention Centre in Liverpool he theme of this year’s Life conference, ‘Wee can work it out’, sums up ‘W conference chair Jason Hurley’ Hurley’ss mood nicely. The managers of insurance companies have a whole raft of challenges — changes to regulatory frameworkss (not just Solvency II), changes to framework financial reporting, reporting, the need to better manage their business, the fragile state of the economy and the ever-changing legal environment. Mr Hurley wants actuaries to be honest and realistic about the challenges for the industry and the profession. He believes that to fix these problems, actuaries need to understand their role, and need to work together in the bigger, wider community. community. He is very keen to foster a community spirit,

must not forget the primary, if not sole, purpose — to deliver products and services that meet customers’ needs. ■ Sue Harrison will present customer research. By listening to the public and giving them what they want, there are many opportunities. But how often does the industry ask: What do the public think of us? What do they value? What are they prepared to pay for? ■ Simon Clayden, AXA Insurance, will share his experience from general insurance, building and delivering iPhone apps to speed up the application process, improve application and claim services, manage operational risk and reduce costs.

he encourages people to participate, to speak their mind, to think and to have fun. Mr Hurley suggests that often people focus on “today’s problem” and maybe lose sight of the fact that the industry’s fundamental job is to serve our customers, provide good quality value for money products, that meet customer needs. He questions whether we have embraced technological changes to anywhere near the extent that we should. Putting this together into a coherent programme means that the conference will cover a number of areas in the main plenary sessions, the key messages being: “Where are we, where are we going and what are we doing about it?”

Workshops

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Plenary Ple nary sess sessions ions David Nish, CEO of Standard Life, will share his views of the industry, its challenges and prospects. David is relatively new to the industry,, having spent many years working in industry the electricity industry. It will be interesting to hear the views of a relative newcomer ■ Colin Simpson of Goldman Sachs will give an honest and realistic view of how analysts and investors see the life insurance industry ■ Ross Walker and Andrew Roberts of RBS will offer an economists’ insight into UK and global ■

markets.

 Jason Hurley, Hurley, chair of the Life conference and exhibition committee

Custom Cus tomer er focu focuss Mr Hurley firmly believes that actuaries

As well as these plenary sessions, there will be over 80 workshops sessions, including a number of ‘hot topics’, many with an international flavour. flavour. Mr Hurley believes that much can be learnt from abroad, provided solutions are tailored to the local market. In this respect he is very pleased to welcome the involvement of the International Actuarial Association at this year’s conference.

Keynote Key note speake speakerr So that gives us a lot of background information, the environmental challenges and where the industry is aiming for. So how does that come together as a plan? In that respect, the keynote speaker on Sunday night will give personal valuable insight. Among many things, Rt Hon Sir Richard Needham is a non-executive director of Dyson, and a former Trade and Northern Ireland minister. Drawing upon his experience in both Government and the Commerce, he will share his views under the banner of ‘Winning Through’. Sir Richard will deliver a number of clear messages, including innovation, dealing with suppliers, managing your margin, managing people, testing your strategy and working out what customers actually want. An entertaining and thought-provoking speaker, speaker, he has plenty of messages that we can all learn from. Mr Hurley’s final request is for actuaries to make the trip to Liverpool, to make your contribution to helping the profession but, more importantly, to helping your customers.

MOREE INF MOR INFORM ORMA ATIO TION N ONL ONLINE INE For information on the Life further conference and to book your place, visit http://tinyurl.com/5rql5j2 . Book before 20 September to receive the early booking fee.

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Sponsored by

Business phones

Technology

BlackBerry crumble? Anthony Dhanendran compares the latest developments within the business phone market and asks which one one is best for you?

Anthony Dhanendran is the reviews editor of Computeractive he BlackBerry is a remarkable line of products. Its maker RIM

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managed to completely corner the market in business phones, but now it faces a huge challenge from other, smarter smartphones. Before the days of the iPhone and Android, the reason why people bought BlackBerries was that they worked with corporate emails and did it seamlessly. Before that, connecting your users’ phones to the corporate network was a nightmare, but RIM made it easy. As with most cases of market dominance, though, it led to complacency and an unwillingness to innovate. When the iPhone came out in 2007 it wasn’t a business phone. It looked great, and

real hassle compared to the iPhone, and the interface is starting to look dated. There are still a couple of things that the BlackBerry does better: for one, BlackBerry Messenger — BBM — provides a truly secure instant » messaging service between employees, something no other phone system does. Apple is nipping at RIM’s heels here too, though: the next version of the iPhone, due in September 2011, is expected to include just this feature. The iPhone does very well when it comes

wipe the handset of absolutely everything. It makes sense — if your phone is lost or stolen it’s important for the company to safeguard its data — but be aware of that before you connect. Android handsets are good for business users, though their Exchange support is much more limited than Apple’s. Also, Apple does considerably more « vetting on iPhone apps than Google does on Android apps, so companies will be much more reticent about allowing them to connect to the network.

to integrating with Microsoft’ Microsoft’ss Exchange, the email server used by most companies. But if your firm is already set up to use BlackBerry Push email, moving to using Exchange on its own will be quite a change. More and more companies are allowing employees to connect their own devices to corporate networks, and the iPhone can easily be networked up to your firm’s Exchange server. Its email support is pretty good these days, although there is one thing to bear in mind: connecting a personal iPhone to the corporate network will usually give your company’s IT department a degree of control over your phone. That includes the ability to remotely

So what’s the best choice? Well, assuming you have a choice — assuming your company allows connection of your own device to the network — the iPhone has to be the leader at the moment. Android And roid devi devices ces just are aren’t n’t sec secure ure enou enough, gh, and al alth thoug ough h se secu curi rity ty is one of Bl Blac ackB kBer erry’ ry’ss stre st reng ngths ths,, th thee iPh iPhone one ha hass ca caugh ughtt up in that th at ar area. ea. The ad addit dition ion of sec secur uree ins insta tant nt mess me ssagi aging ng la late terr th this is yea yearr wi will ll re remo move ve th thee la last st real thi thing ng tha thatt Bla BlackB ckBerry erry doe doess bett better er.. Then Th en it co come mess do down wn to us user er ex expe peri rien ence ce — the iP iPhon honee win winss han hands ds-do -down wn.. Unle Un less ss yo you’ u’re re we wedd dded ed to th thee lo look ok an and d fe feel el of yo your ur Bl Blac ackB kBer erry ry,, it mi migh ghtt be ti time me no now w to ■ makee the sw mak switc itch. h.

Androi Andr oid d de devi vice cess ju just st aren ar en’’t sec secur ure e en enou ough, gh, and alth al thou ough gh se secu curi rity ty is on one e of Bla BlackB ckBerry’ erry’ss str strengt engths, hs, the th e iP iPho hone ne ha hass ca cau ugh ghtt it up in that area

was even easier to use than BlackBerries, but didn’t have the chops to be used seriously for work. Apple steadily worked to make it better, and now the iPhone makes real sense as a business handset. The impressive and still improving iOS operating system is much easier to use than that on recent BlackBerry models. Email support on iOS is much better, there’s there’s support for networked printers and the growing number of business-friendly business-friendly,, useful apps is a marker of how seriously the phone is being taken. BlackBerry,, on the other hand, is lagging BlackBerry behind. Making apps for the BlackBerry is a

ReMetrica for Solvency II www.aonbenfield.com/remetrica_demo

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Richard Elliott

[email protected]

Arts

Fes esttiv ivaal fever Richard Elliott cuts through the hyperbole to find the best of this year’s year’s Edinburgh Festival Books

icking icki ng sh show owss to se seee at th thee Edin Ed inbur burgh gh Fe Fest stiv ival al ca can n be a st stru rugg ggle. le. As if th thee unp unpre redi dict ctab able le Sc Scot otti tish sh weath we ather er wa wass not en enoug ough h for vis visit itor orss to con contend tend wit with, h, rel relentl entless ess hype hyperbo rbole le buf buffets fets them th em fr from om eve every ry dir direc ecti tion on th thee mo mome ment nt they th ey st step ep of offf th thee bu bus. s. “A co comp mpell elling ing co comi micc monster mon ster!” !” “Per “Perfect fectly ly mas master tered ed yet volc volcanic anic energy.” energy .” “Sick “Sickeningly eningly accomp accomplished. lished.” ” A cu curs rsor ory y lo look ok at th thee co cont nten ents ts of th this is ye year ar’’s progra pro gramme mme and the mult multipl iple-po e-ponie nied d Appren rentice tice suddenly Stuart Stu art Bag Baggs gs from The App appea app ears rs a ma mast ster er of re rest stra raint int.. If ev even en ha half lf thee sh th show owss th ther erei ein n tu turn rn ou outt to be th thee corusc cor uscati ating ng wor works ks of geni genius us the per perfor former merss so bol boldl dly y pr proc ocla laim im,, on onee mi might ght exp expec ectt th thee unprece unpr ecedent dented ed leve levels ls of foot foot-sto -stompi mping ng

and Shakespeare’ Shakespeare’ss The Tempest  transplanted  transplanted to fifth century Korea.

laughte laugh terr an and d ri riot otous ous ap appla plaus usee to ca cause use Scot Sc otla land nd’’s ca capit pital al to br break eak off th thee co coas astt an and d drif dr iftt do down wn th thee No Nort rth h Se Sea a (t (thus hus re rend nderi ering ng a long-concealed long-co ncealed Glasw Glaswegian egian plot redunda redundant). nt). Of co cours urse, e, th thee sh show ow se selec lecti tion on ta task sk is usually usua lly fur further ther com compli plicat cated ed by havi having ng to ca cate terr fo forr ta tast stes es bey beyon ond d yo your ur ow own. n. Anyon An yonee wh who o has had th thee du dubio bious us hon honour our of pi pick ckin ing g a sh show ow fo forr a gr grou oup p of fr frie iend ndss or — ev even en wo wors rsee — a gr grou oup p of wo work rk co coll llea eagu gues es,, soon so on ma make kess th thee unh unhapp appy y di disc scov overy ery th that at no nott everyo eve ryone ne is for fortu tunat natee en enoug ough h to po poss ssess ess th thei eirr own ow n fin finee po powe wers rs of di disc scri rimi minat nation ion.. As th thee sayin sa ying g go goes es,, one pe pers rson’ on’ss ide idea a of co come medy dy is another anot her per person’ son’ss Rus Russel selll How Howard ard.. Thus Thus,, it is wi with th a de degr gree ee of re reti tice cenc ncee th that at I of offe ferr th thee

Kaufman’ Kaufma n’ss br brand and of ‘an ‘anti ti-hu -humou mour’ r’ sho should uld loo look k up Nei Neill Ham Hambur burger ger and Edw Edward ard Acz Aczel. el.

While the International Festival covers the classical side of things, The National (23 August) are the clear standout from what looks like a rather insipid rock line-up (unless you happen to take a keen interest in the trajectory of Charlie Simpson’ Simpson’ss post-Busted career…). If melodic punk cabaret is high on your list of favourite musical genres, then Amanda Palmer (25 August) returns after popular shows at previous festivals. If you would prefer to wallow in mid-90s Britpop

continues to exert a powerful influence on many authors, including Self. Other talks to watch out for are those by Jennifer Egan (15 August), author of Pulitzer prize-winning  A Visit from the Goon Squad  Squad , and poet novel A novel Paul Muldoon (20 August), who last year proved an affable and engaging speaker. speaker. Fina Fi nall lly y, if yo you u wo woul uld d li like ke to su supp ppor ortt a fellow fel low act actuar uary y, the then n Geo George rge Lew Lewkow kowicz icz,, a cap capita itall mod modell elling ing con contra tracto ctorr for Tea Fue Fuelle lled d Ltd, Lt d, wi will ll be pe perf rfor ormi ming ng as Su Supe perb rbar ard, d, a storyt sto rytell eller er fro from m the fut future ure,, mix mixing ing self-c sel f-comp ompose osed d mus music ic and vid video eo pro projec jectio tions ns to telll dar tel darkly kly com comic, ic, whi whimsi msical cal tal tales. es. Geo George rge firs firstt appear app eared ed in The Act Actuary  uary ba back ck in 20 2008 08 wh when en he mad madee his Edi Edinbu nburgh rgh Fes Festiv tival al deb debut, ut,

following followi ng recomm recommendatio endations. ns.

nostalgia, then Cast will be rolling back the years on 26 August.

and we wi and wish sh hi him m we well ll wi with th th this is ye year ar’’s sh show ow.. www.edfringe.com

P

Theatre It’s difficult to ignore the big names this year: John Malkovich directing Julian Sands in A in  A Celebration of Harold Harold Pinter , and Steven Berkoff’s take on Sophocles’ Oedipus Oedipus.. There is also, however, emerging young talent on offer. The Analogue theatre company — a Fringe First Winner in 2007  Mile End — returns with its latest play with Mile with 2401 Objects, Objects, inspired by an important neuroscientific case study, and promising to tell a ‘remarkable story of a man who could no longer remember, but who has proven impossible to forget’. The Edinburgh International Festival also celebrates Asian cultures this year, with the line-up including One Thousand and One Nights,, The Wind-Up Bird Chronicle Nights (based on Haruki Murakami’ Murakami’ss novel),

Comedy Over th Over thee pa past st si six x fe fest stiv ival als, s, tw two o co come medi dian anss have ha ve en enti tice ced d mo more re la laug ughs hs fr from om me th than an th thee rest re st co comb mbin ined ed.. On Onee of th them em is Da Dani niel el Ki Kits tson on,, conspi con spicuo cuousl usly y abs absent ent fro from m thi thiss yea year’ r’ss lin line-u e-up. p. Thee ot Th othe herr is St Stew ewar artt Le Lee. e. Th Thee se seco cond nd se seri ries es of Stewart Stew art Lee’ Lee’ss Come Comedy dy Vehicl ehiclee dre drew w hea heavil vily y fro from m hiss 20 hi 2010 10 Ed Edin inbu burg rgh h sh show ow,, an and d th this is ye year ar’’s show sh ow is li like kely ly to pr prev evie iew w ma mate teri rial al fo forr th thee th thir ird d seri se ries es.. Le Lee’ e’ss sh show owss no norm rmal ally ly se sell ll ou outt fa fast st,, so book early early.. Fans Fa ns of  Peep Show  Show and and Flig  Flight ht of the Conc Conchord hordss may ma y wi wish sh to ch chec eck k ou outt Is Isy y Su Sutt ttie ie (D (Dob obby by)) an and d Krist Kr isten en Sc Schal halll (M (Mel) el),, whi while le adm admire irers rs of And Andy y

Music

Unlike Unli ke mo most st of th thee ot other her Au Augus gustt fes festi tival valss in Edinb Ed inbur urgh gh,, th thee Bo Book ok Fe Fest stiva ivall en enjoy joyss a si singl nglee locati loc ation on — th thee at attr trac acti tive ve and int intim imat atee se sett ttin ing g of Ch Char arlot lotte te Sq Squar uaree Ga Gard rden enss — th thus us avo avoid iding ing a ma mad d ta taxi xi da dash sh ac acro ross ss to town wn bet betwe ween en ev event ents. s. Thiss ye Thi year ar’’s lin line-u e-up p fea featur tures es a pa para rade de of Booker Book er win winners ners,, AS Bya Byatt, tt, Ala Alan n Holl Holling inghurs hurst, t, Ben Be n Ok Okri ri an and d Mi Mich chael ael On Onda daat atje, je, al alon ong g wi with th an imp impres ressiv sivee arr array ay of nonnon-fict fiction ion auth authors ors,, includi inc luding ng Nia Niall ll Ferg Ferguson uson,, Sim Simon on Bla Blackb ckburn urn and th thee ub ubiqu iquit itous ous AC Gr Gray aylin ling. g. I am particularly looking forward to hearing Will Self’s views on WG Sebald (28 August). This year marks the tenth anniversary of the death of the German writer whose melding of memoir and fiction

August 2011 August  2011 

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Puzzles

Coffee break

 August prize puzzle

E pluribus unum

There Ther e ar are e fo four ur co colu lumn mnss of cl clue uess (to a wo word rd)) be belo low w. You wi will ll nee eed d to ta takke a cl clue ue fr from om eac ach h of th the e fi firs rstt th thrree col olu umn mnss whic wh ich, h, wh when en co comb mbin ined ed,, gi give ve th the e so solu luti tion on to on one e of th the e clue cl uess in th the e fo four urth th co colu lumn mn..

For a chance to win a £50 Amazon voucher, please email your solutions to the fourth column clues to  [email protected]  by  by 14 August 2011.

This ca This can n be re repe peat ated ed fo forr ea each ch cl clue ue in th the e fo four urth th co colu lumn mn usin us ing g ea each ch cl clue ue fr from om th the e fi firs rstt th thre ree e co colu lumn mnss ex exact actly ly on once ce.. Note No te th that at th the e fo four ur co colu lumn mnss ar are e no nott ne nece cesssa sari rily ly in an anyy usefull orde usefu orderr.

Example clue: [Turn in circular motions] [act dishonestly] [expression of hesitation] [a warm jacket] Answer: Wind/cheat/er.

A pet

An item of clothing

After deductions

A beggar

Body part

Building material

A shape

Animal enclosure

Charged particle

Get up

Chew vigorously

Expected standard

Hypocritical expressions

Graffiti signature

In use

Destroy enthusiasm

Grow old

Large vessel

Following childbirth

Mail

Involutary spasm

Metallic rock

Legendary monster

Promotional material

Part of the psyche

Part of the psyche

Promotion in rank

Shallow container

Pronoun

Stomach

Snooker shot

Vehicle

X

A preposition

Heal Human

Arrange into classes Censure

Royal house Series of contests

Terms and conditions The prize will be awarded for the most complete entry received before the closing date. In the event of a tie, the tie-breaker question will apply. apply. The winner’s winner’s name will be announced in the next edition. Please note that the puzzles editor’ editor’ss decision is final and no correspondence will be entered into. We reserve the right to feature the winner’s winner’s name and a photo (if supplied) s upplied) in The Actuary , and to use any tie-breaker entries in future puzzles. Your details will not be passed to any third party in connection with this draw draw..

Puzzle 479

Food for thought (reprise) Puzzle 480 The Cau Caulta ltaria ria Cry Crypto ptogra graphy phy and Act Actuar uarial ial Ser Servic vices es Societyy (mo Societ (motto: tto: ‘nev never er knowingly understood’) are ar e of offf at th thei eirr an annu nual al dinner din ner.. The fol follo lowin wing g are list li sted ed on th the e di dinn nner er me menu nu as acc accomp ompani animen ments ts to the main mai n cou course rse:: 123345 647274 823347 What,, in pl What plai ain n En Engl glis ish, h, is on the men menu? u?

Hat trick

Twenty Twen ty fo four ur lo logi gici cian anss ar are e sa satt in a ci circ rcle le,, tw twel elve ve ar are e we wear arin ing g whit wh ite e ha hats ts an and d te ten n bl black ack ha hats ts (as th they ey ar are e wo wont nt to do do). ). Lo Look okin ing g down dow n fro from m abo above ve,, tha that’ t’ss all you ca you can n se see e of th them em.. Al Allo lowi wing ng for rot rotati ationa onall sym symmet metry ry,, ho how w manyy suc man such h pos possib sible le dis distin tinct ct arrangemen arran gements ts are ther there? e? (For (F or ex exam ampl ple, e, th ther ere e is on only ly on one e arrang arr angeme ement nt whe where re all ten whi white te hats ha ts ar are e lo loca cate ted d in on one e bl bloc ock. k.))

Puzzle 481

Guesstimation

Estima Esti mati tion on is a vi vita tall ac actu tuar aria iall sk skil ill. l. Fo Forr ea each ch of th the e pa pair irss gi give ven n belo be low w, wh whic ich h is la larg rger er — or ar are e th they ey rou ough ghly ly th the e sa same me?? 1. Num umbe berr of gr grai ain ns of ri ricce in a 1 kil ilo o bag vs Num umbe berr of run unn ners in the 20 2011 11 Lon London don Mar Marath athon? on? 2. Nu Num mbe berr of words in th the e Bibl ble e vs Nu Numb mber er of ca carrs bu buiilt in th the e UK in 20 2010 10??

MORE MO RE PUZ PUZZLE ZLESS ONL ONLIN INEE To acc access ess the puz puzzle zless arc archiv hive, e, vis visit it www.TheActuary.com/   puzzles.. Th  puzzles The e pu puzz zzle less ed edit itor or is pl plea ease sed d to re rece ceiv ive e id idea eass fo forr new ne w pu puzz zzle less fr from om re read ader erss at puzzle  puzzles@thes@the-actuar actuaryy.org. .org.uk  uk 

3. Diam Di amet eter er inick inch in ches est? of a go golf lf ho hole le vs Ma Maxi ximu mum m br bre ead adth th in inch in ches es of a cr cric ket bat? ba 4. Nu Numb mber er of pi pint ntss in an Ol Olym ympi picc st stan anda dard rd sw swim immi ming ng po pool ol vs Number Num ber of peo peopl ple e in Ta Tanz nzani ania? a? 5. Nu Numb mber er of ha hair irss on th the e ed edit itor’ or’s he head ad vs Nu Numb mber er of em empl ploy oyee eess of th the e In Indi dian an st stat ate e ra rail ilwa way? y?

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August 2011 August  2011

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chall alleng enge e 17 Bridge ch

Cover Co ver sto story ry

A us usef eful ul be begi ginn nner ers’guid s’guide e to pl play ayin ing g br brid idge ge ca can n be fo foun und d at www.ebu.co.uk/education/learning/default.htm . Pl Plea ease se se send nd an anyy comm co mmen ents ts yo you u ha have ve to Tom Br Brat atch cher er at at puzz  puzzles@t les@the-ac he-actuary tuary.org. .org.uk  uk 

You are sitting East. South opens the bidding with 1NT (12-14 points) and North raises direct to 3NT. West leads ♠K ♠864 ♥AK75 ♦QJ9 ♣A42 ♠53

N W

E S

♥103 ♦K543 ♣ J10983

Declar Decl arer er du duck ckss th the e fi firs rstt sp spad ade e an and d wi wins ns ♠ A wi with th th the e se seco cond nd.. He du duck ckss a heart to you ourr  ♥ 10 10.. Wi With th no mo morre sp spad ades es,, you switc sw itch h to ♣ J. Declarer wins with his  ♣ Q an and d pl play ayss tw two o mo more re hear he arts ts.. You di disc scar ard d on th the e th thir ird d ro roun und. d. He no now w le lead adss  ♦ Q. Do you cov over er wi with th you ourr Ki King ng?? Wh Whyy (or wh whyy no nott)?

Solutions for July 2011  July prize prize puzzle

The Oscars

The ‘missing’ characters are shown in brackets. 1. Se(7)en 2. T(r)on 3. The Sti(n)g 4. Chariots of Fir(e) 5. For Your (E)yes Only Only 6. Scr(e)am 7. Dumb and (D)umber 8. A Clockwork Orang(e) 9. Where Eagles (D)are 10. The (O)men 11. The (C)able Guy 12. Brie(f) Encounter 13. A Series of Unfortunate Even(t)s 14. Talk to H(e)r 15. Once Upon a Time in the We(s)t 16. Toy (S)tory 17. No Country for Old Me(n) 18. Bor(n) on the Fourth of July 19. Pu(l)p Fiction 20. 2(8) Days Later

Strike a light!

1. Move three matchsticks to leave six squares.

 2. Move three matchstick matchstickss to leave six triangles.

Credit was given for some alternative answers.

Puzzle 477 solution

Puzzle 476 solution

The matches moved then form a three-dimensional pyramid with one of the remaining triangles as its base.

Mental arithmetic

Removing three letters from Seventy, or two letters from Eleven, leaves Even!

 July prize prize winner Congra Con gratul tulati ations ons to Jul July’ y’ss win winner ner,, Mik Mike e Hoo Hooton ton of Adm Admin in Re

Board? Puzzle 478 You can place 32 solution Knights on a chessboard so that they do not attack one another (eg. one on each dark square). You can place 14 Bishops on a chessboard so that they do not attack one another (eg. on the first through seventh ranks on opposite edges of the board).

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Student page

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Matthew Welsh

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Matthew Welsh Welsh says it is time to optimise your high-quality high-quality free time

Balancing act M ost people face choices that are either/or: eat in or out, to buy  X Factor  or or not to buy, buy, X  or Strictly Come Dancing , daddy or chips? Of course, actuarial students — while they love their binary — prefer life to be a little more complicated. In the quest for a work-life balance they like to throw in a third, unspeakable variable.

weekend, holiday and study day (exam days will be considered as work days) n Both take 14 days’ holiday/bank holiday n There are no external factors, like sick days. So, over six months, what do our two subjects spend their time doing? The major difference is the presence of study days for the student — more on that later. It is worth pausing to consider the

We say that we suffer in the name of qualifying. Perhaps we do it because it offers us a supply of rants about how we never have time to enjoy ourselves — we are either working or studying. We follow the student ABC: Always Be Cramming. But is it true? Are we selflessly missing out on our 20s and 30s in the pursuit of excellence or are we, in fact, just a bunch of moaners? I hate ambiguity so let’s find out. Compare two people: a student and a person with a job but no study.

nature of ‘free time’. Let’s say there are two kinds: Grade A free time comes when there is a substantial block in which to do a meaningful activity. Grade B free time occurs when the subject may be tired or have chores to do. It is clear grade A free time is more valuable than grade B. Holidays, weekends and work days are broken up as shown in Table 1. Holidays and weekends will always have grade A free time and work days will have grade B.

Study St udy day dayss The inv investiga estigation tion Any actuary knows to state their key assumptions, so:

We can assume that study days offer 12 hours of free time similar to weekends. The student can do one of a few things:

n

n

This takes place over six months — the time between actuarial exams n The student is studying for two CT exams with 14 study days n Each exam takes 80 hours’ preparation n There are four types of day: work day,

They can do a full day of study (about eight hours) n They can take the ‘day off’ (at their own peril) n They can do something in-between. I will assume the student will study more

as the exams approach. Also, if they study a lot in a day then free time downgrades from grade A to grade B. This means that the student might typically enjoy 31 hours of grade A free time and 44 days of grade B free time from study days. However,, this assumption means they need to However find another 67 hours of study time to prepare for the exam. This will come from weekends.

Results Whichever way you slice it, the student will end up with about 36 hours less free time than the worker. That’s the deal. Also, with no exam commitments, the worker can choose when to take holidays more freely. But the student can gain flexibility from study days. They can end up with more days with grade A free time than a worker. Some would argue that having more days of free time is better than having more free time condensed into fewer days. Also, the overwhelming amount of free time that a student has is flexible. They can choose to have high- or low-quality time depending on how they approach studying — little and often or blitzed all at once. So, when you think about your work/life/study balance, consider the ways you can get the mix that is right for you. This could go a long way to making students feel more content in dealing with the perceived sacrifice of having to study.  Matthew Welsh works works as as a GI GI reserving reserving actuary actuary for Zurich Financial Services

Table 1

Figure 1 — A time comparison between a student and a worker 35

Holiday and weekends (per day)

30

Activity

25   s   y   a 20    d    f   o     m 15   u    S

Hours

Work day Activity

Hours

Type of day

Sleep

8

Sleep

8

Work Study

Commute

0

Commute

1.5

Eating

2

Eating

2

Work

0

Work

7

Wasted time

2

Wasted time

2

Grade A

12

Grade B

3.5

Wee Holi

10 5 0

Student

Worker 1

Student

Worker 2

Student

Worker

Student

3

Month/Person

Worker 4

Student

Worker 5

Student

Worker 6

free time

free time

42

August  2011

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AOTF/Book AOTF /Book review

Actuary of the future future Rachel Gow Employer and area of work Aviva Ireland — GI Pricing.

How would your best friend describe you? That I have a good memory for pointless information.

What motivates you? I love working things out and solving problems.

What would be your personal motto? I quite like ‘ad astra’ (‘to the stars’). It was my university’s motto.

Who do you admire most and a nd why? My father. He is a mathematician and the cleverest person I know.

What is your most ‘actuarial’ habit? Probably correcting people’s grammar and spelling.

How do you relax away from the office? I love travelling, especially to anywhere with ancient ruins.

Alternative career choice? Previously, I worked on Basel II and credit risk in banking, but if I had to pick something totally different it would be teaching.

Tell us something unusual about yourself I studied Ancient Greek in school up to Leaving Cert (Irish version of A levels). I managed to win an international prize and got to meet the Greek president.

If you ruled the world, what would you change first? Outlaw anti-red-hair prejudice!

WHO WOULD YOU LIKE TO SEE FEATURED HERE? If you would like to nominate someone for Actuary of the Future, please email  AOTF@the  AO TF@the-actuar -actuaryy.org.u .org.uk  k 

People/Comment

Book re review view Peter Tompkins gets to grips with Th The e Cas ase e for Wor orki king ng with your Hands: or Why Off ffiice Work is Bad for Us and Fixi Fi xing ng Th Thin ings gs Fe Feel elss Go Good  od  by  by Matthew Crawford The title of this book held out the promise of an interesting argument, which sadly was not fulfilled by its content. The author went to college with the usual expectation of being prepared for a life behind a desk, did a PhD and somewhat by accident found himself working for a ‘think tank’. But having grown up with a love of repairing motorbikes, he soon gave the office up and opted for a career in oily workshops. Drawing heavily on his background as a philosopher and quoting Aristotle and Pirsig (Zen (Zen and the Art of Motorcycle  Maintenance)) among others he admires,  Maintenance Crawford’s best writing is his analysis of the demeaning nature of many office jobs. Glamorous-sounding careers often resolve into differentiated tasks, with any task that can be clericalised reduced to just that. Crawford has a hostility to a world of rules and regulations that take the individuality out of the professional. “White-collar professions… are subject to routinization and degradation, proceeding by the same logic that hit manual fabrication a hundred years ago: the cognitive elements… are appropriate from professionals, instantiated in a system or process, and then handed back to… clerks — who replace the professionals.” On public policy, likewise: “Standardized tests remove a teacher’s discretion in the curriculum; strict sentencing guidelines prevent a judge from judging. Our liberal political instincts push us in this direction of centralizing authority; we distrust authority in the hands of individuals.” Crawford lampoons the corporate focus on teamwork and the creation of corporate rather than individual culture. If anything, his view is that university education is designed not to develop specific skills but to mould the future players in these corporate teams. Although he makes a convincing case for where office work is bad, he is less good in making the case for working with your hands. He describes the Herculean efforts he makes in order

to get a motorbike working again and the ensuing pleasure this gave him. But there is little assessment of the intrinsic satisfaction of a manual job well scoped and delivered with the sense of completion this brings. If there is one area for future focus or development, he could address the challenge of choosing a manually skilled vocation. College probably provides a few years’ interlude when young people can develop their maturity and drift towards an office job. The school-leaver choosing a manual career by contrast needs to make an earlier decision and choice on how to develop their skill. The world, after all, does not solely consist of pen-pushers and repairmen. Crawford needs to pay more attention to the people whose hands actually make things in the first place.

The Case for Working with your Hands or Why Office Work Work is Bad for Us and Fixing Things Feels Good is published by Viking. RRP £16.99

CRITICALLY CHALLENGED We welcome welcome readers’ suggestions of relevant books for our contributors to review or if you would like to submit your own reviews, please email  sharon.magu  sharo n.maguire@i ire@incisiv ncisivemedia emedia.com .com

www.TheActuary.com

August 2011  August 2011

 

 

Appointments

thee UK  KPMG in th has appo appointe inted d David O’Ha O’Hara ra as a principal investment consul con sultan tantt to lea lead d its newl newly y esta establis blished hed Scottish Investment Advisory Advi sory team team.. He wi will ll be ba base sed d in Gla Glasgo sgow w and willl re wil repor portt to Patrick McCoy McCoy,, head hea d of inv invest estme ment nt adviso adv isory ry for KP KPMG MG in th thee UK UK.. Th Thee te team am will advi advise se clie clients nts on thei theirr inves investmen tmentt arrangem arra ngements ents and will wor work k along alongside side the Sco Scottis ttish h Pensio Pen sions ns te team am led by KPM KPMG G par partne tnerr, Donald Dona ld Flem Fleming. ing. Mr O’H O’Hara ara joi joins ns

Sponsored by

People moves

David O’Hara

Peter Redhead

KPMG fro KPMG from m Hy Hyman manss Robert Rob ertson son wh where ere he provided investment advi ad vice ce to a ra rang ngee of major maj or pri privat vatee and public pub lic UK pen pensio sion n schemes. KPMG KPM G has also welc welcomed omed Gary Gar y Mar Martin tin as a principa prin cipall advi advisor sor in its Man Manch chest ester er Life insu insuranc rancee actuaria actu ariall team team.. Mr Mar Martin tin joi joins ns thee te th team am fr from om

Kendra Felisky has  Barnett Waddingham Waddingham been appointed has promoted by Travelers to seven of its senior the newly created client advisers to position of chief risk the position of officer for Europe. partner and added Ms Felisky will be 14 associates. responsible for The promotions take the development, the total number of implementation partners across its and monitoring of seven UK practices risk management to 50, the firm said. strategies and The seven policies for new partners are the European actuaries operations. Paul Hubbold, Additionally,, she Additionally Ben Pullen, will assume the Ben Roach, reporting line of Vanessa Smart and the risk function Ruth Thomas, who and the capital are joined by modelling group, Mark Futcher and and will play a role  Julian Mainwood. in the organisation’ organisation’ss Angela Gay FIA Solvency II efforts. joins the firm’s Ms Felisky joins Bromsgrove office from Deloitte where as an associate she was a director with the other

Co-operative Insurance, where whe re his foc focus us was on pro produc ductt and busi business ness development. He qu qual alifi ified ed in 20 2002 02 and an d ha hass 15 ye year ars’ s’ experi exp erienc encee in th thee life indu industry stry..

in the Actuarial and Insurance Solutions consulting practice. Prior to Deloitte, Ms Felisky held leadership roles at CNA Re and CX Re and was previously a consultant in the UK and the US.

MORE MO RE MO MOVES VES ON ONLI LINE NE For more people moves, please visit www.TheActuary.com

13 new associates coming from within the firm. They are actuaries  Jon Daykin, Martin Hooper , Oli McCulloch,  Tracey McManus McManus, Dan Robinson and Sam Underhill.  Aon Hewitt  has  has announced that Peter Redhead has joined the company

as business leader for the North West, based in the Manchester office. Mr Redhead joins the company after spending 16 years with Jardine Lloyd Thompson where latterly he was deputy chairman of its employee benefits division.

Have you moved? Please Plea se se send nd ne news ws of mo move ves, s, promoti pro motions ons,, ret retire irement mentss and appointm appo intments ents to peoplemoves@ the-actuary.org.uk 

Change of address Please re Please remem member ber to upd update ate yo your ur details deta ils on the Pro Profes fession sion’’s webs website ite at   www.actuaries.org.uk/members/  transactions

actuary responsible  Munich Re has for financial announced that reporting. Andrew Buchanan Mr Latimer joins the will join the firm as Presto-based listed chief risk officer for life insurer after the UK, Australian 15 years working for and South African AEGON in Lytham Life markets. He will St Annes, primarily start the role from involved in financial the beginning of reporting but September. latterly assisting Mr Buchanan joins with the group’s from Prudential plc Solvency II where he is the head programme. of risk oversight. Prior to Prudential,  Hannover Life Re he spent seven years (UK) has recently at Oliver Wyman announced the Financial Services. appointment of Andy Batley has Peter Turvey as an also recently started independent at Munich Re as non-executive commercial director director. Mr Turvey for the life business has worked for in the UK & Ireland. Swiss Re in the He was previously UK and held

capital management and the provision of solutions for reinsurers.

at XL Re for eight years as global head of business development where he was responsible for a team based in the UK, US and Continental Europe covering protection and longevity business.

multinational clie cl ient nts, s, bo both th in Europ Eur opee and th thee US, adv advisi ising ng them th em on a ra rang ngee of intern international ational benefit ben efitss and rew reward ard issues. iss ues. In add additi ition, on, forr th fo thee pa past st si six x ye year arss Mr Mo Morr rris is ha hass be been en thee of th offic ficee lea leade derr for the Rei Reigat gatee offi office, ce, onee of Tow on ower erss Watson’ atson’ss larges largestt offices globall globally y.

Peter Latimer  has  has joined Chesnara plc  as the corporate

positions within a range of actuarial professional bodies. Chris Lewis joins  Milliman as a senior consultant in the London life practice. He joins from Aviva where he was most recently general manager of Aviva Re Europe in Dublin. Mr Lewis will initially focus on

Towers Watson Towers has app appoint ointed ed Paul Morr Morris is as region reg ional al lead leader er for Europe, Eur ope, Mid Middle dle Eas Eastt and Afr Africa ica.. Mr Mo Morr rris is jo joine ined d the com company pany in 19 1988 88 as an international consul con sultan tantt in the New York offic officee before reloca relocating ting to Lo Lond ndon on so soon on afterwards. Sinc Si ncee th then en he ha hass been be en an ac acco count unt direct dir ector or and cons co nsul ulte ted d wi with th a number num ber of Towers Watson’ Watson’ss largest

43

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Appointments www.theactuaryjobs.com

To advertise advertise your vacancies in the magazine and online please contact: contact: Melanie Jacob, Tel: Tel: +44 (0)20 7316 9618, E-mail: [email protected]

High Finance Group

www.highfinancegroup.co.uk 

Specialist Recruiters

Investment Bank - ALM

Life

Head of Product – Risk Systems

Life

Up to £130k + Bonus + Benefits London

Up to £130k + Bonus + Benefits London

1st class oppo opportunityto rtunityto trans transitio ition n int into o the Insu Insuranc rance e Solu Solutio tions ns teamof  this th is Europe European an In Inves vestme tment nt Ban Bank. k. As one of on only ly 2 Actu Actuari aries es yo you u wil willl be deliveri del ivering ng ALM solu solution tionss to you yourr UK & Eur Europea opean n clie client nt base. This rol role e requi req uires res a dyn dynami amic, c, int intel ellig ligent ent Co Comme mmerci rcial al Act Actua uary ry wit with h str stron ong g Lif Life e insur in suran ance ce kno knowle wledge dge and an exc excel ellen lentt gras grasp p of th the e ind indust ustry. ry. Cli Clien entt cons co nsul ulti ting ng exp exper erie ienc nce e an and d an un unde ders rsta tand ndin ing g of Fi Fixe xed d In Inco come me an and d Equity Derivatives would be highly advantageous. CB8521

Unique Uniq ue op oppo portu rtuni nity ty to le lead ad th the e Pr Prod oduc uctt De Deve velo lopm pmen entt of a ne new w Ri Risk  sk  based software software designed designed for for the UK Life Insura Insurance nce marke market. t. This niche niche firm has an excellent reputation and they are looking for a Life Actuary to lea lead d prod product uct dev develo elopmen pmentt as the theyy ente enterr the Life Insu Insuranc rance e marke market. t. Thiss is gea Thi geared red to an ent entre repre prene neuri urial, al, co comme mmerc rcial ially ly min minde ded d Act Actua uary ry with wit h excell excellent ent pro produ duct ct kno knowle wledg dge e and goo good d compre comprehe hensi nsion on of Ri Risk  sk  and IT. Considered on Contract & Permanent basis. CB6781

Economic Capital – New Team Team

Management Consultancy - Student

Up to £95k + Bonus + Benefits London

Life

 You will be integral to developing the Economic Capital exper tise at this wellknown insu insurer rer as they they embe embed d S2 intothe busin business. ess. The rol role e is geared gear ed to a dyna dynamic, mic, progressiv progressive e Actua Actuary, ry, looking looking for glob global al exposu exposure re in a te tech chni nica call llyy ch chal alle leng ngin ing g ro role le de deli live veri ring ng ne new w ec eco ono nomi micc ca capi pita tall initiativ init iatives. es. You You will hav have e rele relevant vant experi experience ence,, stro strong ng comm communi unicati cation on skills and a desire to be ahead of the game with S2. CB1565

Commercial Reporting Analyst

Life

£55k - £65k £65k + Benefits + Bonus Surrey

Life

Leading glob Leading global al mana manageme gement nt con consult sultancy ancy is seeki seeking ng a near nearly ly qua qualifie lified d student stud ent to joi join n the their ir spec speciali ialist st Actua Actuarial rial con consult sulting ing divi divisio sion. n. Offer Offering  ing  actuarial solutions solutions across across the life industry, this this team cover M&A, M&A, product pricing, S2 support, AFH work and property securitisation as part of the their ir practi practice. ce. Tr Traini aining ng is supp supported orted by strat strategic, egic, com commerc mercial ial projects. Consulting or reinsurance experience is preferred. JE8768

Move in to Life Insurance

Life

£30k – £55k + Bonus + Benefits Benefits UK Wide

£3ok - £60k + Bonus + Benefits UK Wide

Market Mark et lea leadi ding ng Li Life fe Ins Insur uran ance ce fir firm m is se seek ekin ing g a pa part rt qual qualif ifie ied d stude stu dent nt to jo join in th their eir fin financ ancial ial re report portingteam. ingteam. Wo Worki rking ng as part of th the e

Fan anta tast stic ic oppo opport rtun unit itie iess ex exis istt fo forr st stud uden entt an and d qu qual alif ifie ied d Pe Pens nsio ions ns  Actuarie s to move in to a variety of opportuniti opportunities es across the life

wider Actuarial suppor t , yo you will be re responsible for S2 implemen impl ementati tation, on, MCEV work, Actua Actuarial rial mode modellin lling, g, ad hoc proj projects, ects, and liaising with other teams within the Group. The role is complimented by 1st class training. JE2287

insura insu ranc nce e ma mark rket et.. Cu Curr rren entl tlyy wo worki rking ng wi with th sm smal alle lerr ni nich che e fir firms ms,, international insurers and well-known consultancies, there are a  varietyy of opportuntie s across  variet a cross the sector from financial reporting to  ALM. MW8208

Life Risk Analysis Actuary (part-qualified) Life

Solvency 2 Life Actuary

Starting at £50k + Bonus + Benefits Zurich

 Around €85K + Bonus + Benefits Madrid, Spain

Our cl clien ientt off offers ers uniqu unique e op opport portun unit ities ies fo forr PQ actuarie actuariess to joi join n the their ir international team in Zurich. You will be expected to assist the S2 and Swis Swisss Solv Solvency ency Te Test st projec project, t, support supporting ing the enh enhanc ancemen ementt and review rev iew of Lif Life e liabi liabilit lityy and and Ris Risk k Bas Based ed Capi Capital tal Cal Calcul culati ation ons. s. You You should shou ld be open mind minded, ed, dyna dynamic, mic, and ambi ambitiou tious, s, with the capac capacity ity to integrate youself within a multinational team. DB9772

Life Clare Bethell: 020 7337 8829 Graeme Braidwood: 020 7337 8820  Jack Eccles: 020 7337 1208

[email protected]  [email protected]  [email protected] 

Life

We ar are e lo look okin ing g fo forr a se seni nior or En Engl glis ish h sp spea eaki king ng S2 Act Actua uary ry to jo join in an international internatio nal team. Following CEIOPS and Group guidelines, you will lead the QIS proc process ess goi going ng forwa forward rd inv involvi olving ng key stak stakehol eholders ders (loca (locall CFO’s, senior management) reporting directly to Group Risk Manage Man agemen mentt and sup suppo portin rting g lo local cal en entit tities ies.. A uni uniqu que e op opport portun unity ity to join a major insurer in Europe. DB1213

Europe

Executive Search

Damien Bernard: 020 7337 1206 [email protected] 

Mark Dainty: 020 7337 8816 [email protected] 

 Actuarial | Finance | Governance | IT | Insurance | Solvency II

020 7337 8800

[email protected]

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August 2011

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Darwin Rhodes’ well established UK Actuarial recruitment team is based in the heart of the City on Cornhill, and has been helping actuaries  f nd new roles throughout the UK and and

Life Pri Life Pricin cing g Act Actuar uary y Vaca acanci ncies es - Eng Englis lish h spe speaki aking ng Zurich CHF CH F ve very ry co comp mpet etit itiv ive e sa sala lary ry + bo bonu nus s+ comprehens compr ehensive ive benefts pac packag kage e Our cli clien entt is a le leadi ading, ng, gl glob obal al re reins insur urer er.. Th They ey ar are e growing their Pricing team and, as such, are looking forr Eng fo Englis lish-s h-spe peak aking ing pri pricin cing g act actuar uaries ies,, fr from om 2-3

Longevity Actua Longevity Actuary  ry  UK  £compe £co mpetit titive ive + ben bene efts Inquisitive Inquisiti ve and innovat innovative ive individual needed to lead the dev develop elopment ment and refneme nement nt of pric pricing ing fact factors ors and as assu sump mpti tions ons fo forr pr prici icing ng lo long ngev evity ity at lea leadin ding g BPA BP A and DB de-risk de-risking ing solutions prov provider ider.. You will

Europe since 1996. We work across Non-life, Life, Pensions and Investments at all levels from student actuaries to Partner and Chief Actuary.

years’ year s’ exp exper erien ience ce up to Tea eam m Lea Leader der lev level. el. Th Thes ese e ar are e genuinely excellent opportunities, with full relocation assistance, and a great benefts package including gym,, sub gym subsidi sidised sed res restaur taurant, ant, and shar share e pur purchas chase e plan plan..

be tas tasked ked with anal analysi ysing ng the driv drivers ers of annu annuitan itantt mortality experience, building models and identifying factors which can be used in pricing to differentiate the client from their competitors, and exacting sound pricing pric ing prac practice tices. s. You will ide identif ntify y nich niche e proftable opportun oppo rtunitie ities s forthe clie client,and nt,and be becom commer mercial cially lyawar aware e of resea research, rch, longevity model develop development, ment, medical advances adva nces and life lifesty style le res resear earch ch aff affect ecting ing long longevi evity ty,, to guarantee the highest level of expertise for the client in the longevity market place. Competitive salary and benefts pa pack ckag age e on of offer fer.   R ef: AC C5460

We offer our clients a range of services including retained search, advertised search and selection, and contingent solutions - on a permanent and contract basis. Our candidates beneft from our experienced and long serving consultants who offer a consultative, discreet, and 100% transparent transpare nt service.

For mor more e infor informatio mation n rega regardin rding g contra con tract ct or per perman manent ent recr re crui uitm tmen entt in th the e UK an and d Europe Euro pe pleas please e conta contact; ct; General enquiries [email protected]

UK  Ben Whalley: [email protected]

Europe Michael Lixenberg: [email protected]

Life UK  [email protected]  [email protected] [email protected]

Non Life UK  [email protected] [email protected] [email protected]

Pensions & Investments UK  [email protected] [email protected]

Germany  [email protected]

France & Spain [email protected]

Switzerland

Ref: EML15079

Qualifed Non Non-Li -Life fe Act Actuar uary  y  London Circa Cir ca six fgures  A sp speci eciali alist st in the man manag ageme ement nt of mu mutua tual, l, ca capt ptiv ive e and other specialist insurance companies is seeking a qualifed actuary to act as number two within the actuari act uarial al tea team. m. Therole willincludereser willincludereserving ving,, busi business ness plan pl anni ning ng,, SI SII, I, ca capi pita tall an and d pr pric icin ing g as we wellll as th the e da day y to day management of part qualifed actuaries. You will have strong presentation skills and will be expected

to pres pr esen entro t to the th e bo boar ard. d.busi The Th enesstrul oppo op port rtun unit ity y to play ay allent key ke yt strate str ategic gic role le with within in the business truly y exis exists. ts.pl Excellen Exce communi com municat cation ion ski skills lls are ess essenti ential. al.   R ef: AC ACS114 S1146 6

Nearly/Newly Nearly/New ly Qual Qualiifed (non-l (non-life) ife) City  Up to £1 £100 00k k pl plus us bo bonu nus s & be bens ns Nearly/Newly Nearly/ Newly qualifed ac actu tuar ary y so soug ught ht fo forr a sm smal all, l, bu butt dynamic dyn amic,, Act Actuari uarial al tea team. m. Thissyndic Thissyndicate ate writ write e a var variety iety of business both direct and RI, and have ambitious plans plan s to dou double blesta stamp mp cap capacit acity y and div divers ersify ifybusi business ness lines. line s. Repo Reportin rting g into the Glob Global al Chie Chieff Act Actuary uary,, the successful candidate will be involved in pricing, data analysis, model design and parameterisation as well as re rese serv rving ing and wil willl wo work rk clo close sely ly wit with h ov overs erseas eas actuari act uarial al tea teams, ms,unde underwri rwriter ters s and andclai claims. ms.Outs Outstand tanding ing

communication skillsopportunity and strong to technical are crucial. An excellent assist inability shaping the th e fut futur ure e of a gr grow owing ing sy syndi ndicat cate. e.   R ef: APW 53 5353 53

Risk Sof Risk Softwa tware re Act Actuar uary  y  London £Excellent  A gl glob obal al pr prov ovide iderr of ac actua tuaria riall se serv rvice ices s to totheinsu theinsuran rance ce market is seeking a Nearly/Newly Qualifed Actuary upwar upw ards ds to jo join in th their eir Ris Risk k So Soft ftwar ware e Team eam.. The ro role le wil willl involve invo lvemana managingclient gingclientrel relati ations onshipsas hipsas well wellas asputt putting ing forward viable risk software solutions whilst working closely clos ely with sof softwar tware e pro progra grammer mmers s and act actuari uarial al cons co nsult ultant ants. s. Th Ther ere e wil willl be so some me pr prog ogra rammi mming ng invol inv olve ved d in the po posit sitio ion n as wel welll as de deve velo lopin ping g mo mode dels ls for an arra array y of clie clients nts.. Cand Candidat idates es sho should uld have an

int inter eres estt in so softw e andThis ideal id eally have hav e wo work rked ed wit with DFA  DF A  packages in ftwar theare past. islyan opportunity tohwork in a multi-faceted role for one of the market leaders.

R ef: AAH4964 AAH4964

Daily Rat Daily Rate e Con Contra tracto ctors rs UK  Life Li fe & No Non n Li Life fe,, £6 £600 00 - £1 £150 500 0 pe perr da day  y  We hav have e a num number ber of co contr ntract acting ing op oppo port rtuni uniti ties es

thr throu ougho ghout ut th the e UK UK, both bo thedinincl the Life Non n lif life e sectors sect ors. . Expe Experien rience ce,req requir uired includes udes: : and No • SII • In Inte terna rnall Mo Mode dell • Cap Capital ital Mod Modelli elling ng • Res Reserv erving ing • Rep Report orting ing • Prop Prophet/MoS het/MoSes es •Igloo/ReMetrica

Ref: ABW1975

Interesti Intere sting ng Car Career eer Mov Move e for PQ Pen Pensio sions/  ns/  Investments Invest ments Actua Actuary  ry  London Pensions, Pensi ons, £Compe £Competitiv titive e This new role sits within the Solutions team of this

majo major r insu insuranc e ions company com pany, , spe special ising ng in large lar ge end of therance pensions pens de-risk derisking ingcialisi transact tran saction ionthe market. mark et. The Th e te team am ha has s ha had d si sign gniifcan cantt suc succe cess ss in re recen centt years ye ars,, and is gr growi owing ng fur furthe therr. A va varie riety ty of dut duties ies will be on offer covering a range of solutions from buy-outs to buy-ins and investment advice. The job is suitable for a part qualifed actuary with pensions or inv inves estm tment ent ex expe perie rience nce and mak making ing go good od pr prog ogre ress ss with the exams, wanting to gain wider experience in an ex excit citing ing ar area. ea.   R ef: AB W54 W5444 44

[email protected]

 

www.ipsgroup.co.uk/actuarial ACTUARIAL

Life Reporting Actuary 

Chief Actuary – Middle East & Africa

£100,000 + Bonus & Benefits

– Munich  

£130,000 + Bonus & Benefits

– South Africa 

This leading global life insurer currently requires an experienced, qualified

Leading general insurer currently seeks a Chief Actuary with responsibility

actuary to join the life actuarial team based in Munich. With respon actuary responsibili sibility ty for group level financial reporting from the business units across the globe, the successful candidate will have substantial knowledge of IFRS/USGAAP, good communication, personal planning and organisation skills and be able to show initiative in applying good problem solving and analytical skills. Overall the successful candidate will be enthusiastic, inquisitive and adaptable with between four and eight years’ experience. Contact:  Ivan.Cla Contact: Ivan.Clarke@ipsgro [email protected] up.co.uk –  Lo Lond ndon on Of Offfice Reff:IJC47 Re 4735 3553 53

for the MEA region. region. Rep Reporti orting ng to the CFO CFO,, the Chief Chief Act Actuary uary will be responsible for the management and development of the actuarial team and provid pro videe exp expert ert act actuar uarial ial ins insigh ightt and adv advice ice to bot bothh loc local al and reg region ional al management. The successful candidate will be a fully qualified actuary with at least eight years’ experience in a non-life actuarial environment. You will have experience of working as part of a global network and be comfortable working in a multi-cultural environment. Contact:  Ivan.Clar Contact: Ivan.Clarke@ipsgrou [email protected] p.co.uk –  Lond ndon on Of Offfic icee Ref: IJC JC47 4737 3760 60

Solvency II – Contract

FTSE FT SE 25 250 0 Co Corp rpor orat ate e Ad Advi viso sory ry Le Lead ader er - Pe Pens nsio ions ns

To £1000 per day

– London

Top quartile quartile Salary + Bonus & Benefits Benefits Package – London

Six mon month th con contrac tractt for a lea leadin ding g Lon London don base based d ins insuran urance ce prov provide ider; r; sup support porting ing the current curr ent actuarial actuarial team and the Group Act Actuary uary on key delivera deliverable bless for the Solvency II project. This will include; technical provisioning, documentation and sensitivity testing of the internal models.You will be required to engage with other members of the Solvency II Policy & Methodology team (including consultants or contractors) to refine areas of each other’s designs, to improve the overall quality of the design design and document documentati ation on of the Solvency Solvency II solu solutio tionn and to agre agreee implementation plans. Contact:  Ivan.Cla Contact: Ivan.Clarke@ipsgrou [email protected] p.co.uk – Lo Lond ndon on Of Offfic icee Ref: IJC47 4735 357 77

Outstanding Outstand ing oppo opportuni rtunity ty for an ambi ambitiou tiouss indi individu vidual al who will currently currently be advising the senior management of firms in the FTSE 250/350 on corporate pensio pen sions ns str strat ategy egy and the opt option ionss ope openn to de deal al wit withh de defin fined ed be benef nefitit le legac gacyy iss issue uess and alternat alt ernative ive aretirement retirem ent esolutions. solutio ns.ng Cand Candidat idates esfirm willand be will qualifie qual ified d pens pensions ions actuarie actu aries s from corporat corp orate consulti cons ulting advisory advi sory have led and develope deve loped d clie client nt relationsh relationships ips of both listed listed and unlisted unlisted firms for at lea least st 5  years.  year s. Stro Strong ng prof professi essional onal cons consult ulting ing skil skills ls and an enli enlighte ghtened ned com commerc mercial ial approach are both essential for this role. Contact:   [email protected] –  Contact: –  Lo Lond ndon on Of Offi fice ce Ref:Z47 Re f:Z4734 3465 65

Global Specia Specialty  lty 

Pens Pe nsio ions ns Ac Actu tuar ary y (I (Ide deal ally ly Th Thre ree e to Fi Five ve Yea ears rs PQ PQE) E)

£90,000 + Benefits

– London

Global Spe Global Specia cialty lty str strate ategic gic bus busine iness ss uni unitt of thi thiss lea leadin ding g glo global bal Ins Insure urerr. Support Supp ort unde underwrite rwriters rs and fina financia nciall cont controll rollers ers main maintai taining ning stro strong ng relationships with claims, reinsurance and IT departments. Lines of business includ inc ludee lar large ge spe specia cialty lty acc account ounts. s. The can candid didate ate wil willl bui build ld act actuar uarial ial valuat val uation ions, s, sup support port the bud budget get proc process ess and ass assist ist in glo global bal ins insuran urance ce projects. projec ts. You will deal with US GAAP GAAP,, SEC financial requirements, requirements, UK GAAP regulatory framework and the Lloyd’s platform. The candidate will be responsible for Solvency II technical provisions. Contact:   Ivan.Cla Contact: Ivan.Clarke@ipsgro [email protected] up.co.uk –  Lon ondo donn Of Offfice Ref: IJC47 4741 4186 86

Top Quartile

– Leeds or Manchester  

A new opportuni opportunity ty in the Nort Norther hernn mar market ket for an Act Actuary uary to joi joinn thi thiss established estab lished and growing team. An exist existing ing corporate and truste trusteee clien clientt portfol port folio io is in pla place, ce, however however any new business business exp experi erienc encee wil willl be welcome. A Scheme Actuary certificate would be desirable but by no means essential. This would suit someone working in a large team who is perhaps slightly frustrated at a lack of visible career path. This Practice is performing extremely well at present, hence the hence  the need to expand. Contact: [email protected] Contact:  [email protected] –  –   Lon London don Off Office ice Ref Ref:: SA47 SA474600 4600

Part Qualified Pensions Student

Nearly/Newl Nearly /Newly y Qualif Qualified ied Actua Actuary  ry 

£ Competitive Salary

£45,000 - £65,000 + Benefits

– North of London

I'm now rec recruit ruiting ing for an emp employ loyee ee ben benefi efitt con consul sultan tancy cy tha thatt has an exce ex cellllen entt re reput putat ation ion in th thee ma marke rket. t. Th This is rol rolee wil willl be ba base sed d wi with thin in commutable distance from London, and represents a wise career move from a career development perspective as the training is second to none. You will work on a range of trustee and corporate clients and will be checking the work of more junior more  junior colleagues. Given the location this is a tempting move to make if you are looking for more of a work/life balance. Contact:   Simon.Arthu Contact: [email protected] [email protected] o.uk –  Lo Lond ndon on Of Offi fice ce Ref:SA4 Re f:SA472 7274 744 4

– London

If you are app approa roachi ching ng qua qualif lifica icatio tionn or hav havee alr alread eadyy com comple pleted ted you yourr studies, this opportunity could provide you with fresh impetus. The work will involve providing advice to trustee and corporate clients covering a wide range of projects within a commercial and dynamic environment. If you are curren cur rently tly working working for a UK pen pensio sions ns con consul sultan tancy cy or wit within hin a big four corporate corpora te pensions team but feel your opportunities opportunities for career progre progression ssion are limited, then please call me to discuss this role. Contact: Simon.Arthur@ipsgroup. Contact:  [email protected] co.uk –  Lo Lond ndon on Of Offi fice ce Ref:SA4 Re f:SA474 7417 173 3

London Office:  IPS Group, Lloyd’s Avenue House, 6 Lloyd’s Avenue, London, EC3N 3ES Tel:  020 7481 8686   Fax:  020 7481 8660   Email:   [email protected]

Leeds Office:  IPS Group, 8 St Paul s Street, Leeds, LS1 2LE Tel:  0113 202 1577   Fax:  0113 202 1598   Email:   actuarial@ipsgro [email protected] up.co.uk  

More jobs online at www.theactuaryjobs.com

LDI Solutions Specialist Asset Management Company, London circa £55k + bonus + benefits This is a truly unique opportunity for a candidate with some investment consultancy experience to move into a structured solutions role within a leading asset management company. This role is 50% client facing and 50% technically focused, and you will be: •   Providing support for senior solutions specialists/advisers offering risk management solutions to DB pension schemes. •   Liaising internally with various specialist specialist teams to provide high quality investment solutions services: ie with client directors, service associates, fund managers, quant analysts and dealers. •   Communicating directly with clients and their advisers, primarily their investment consultants; communicating often fairly technical and sophisticated solutions and techniques into plain English. •   Focus Focusing ing on manag management ement of liability interest rate and inflati inflation on risks within the LDI framework for more effective funding. Solutions regularly also extend to managing equity, credit, currency, longevity and other risks, typically implemented using a combination of physical and synthetic instruments.

Welcom elcomee aboa aboard rd the Spi Spirit rit of Ind Indepe epend nden ence ce Actuarial Systems – Systems – model development opportunity £Highlyy Competi £Highl Competitive tive Hymans Robe Hymans Robertso rtson n LLP is one of the lead leadingindepend ingindependent ent prov provider iderss of actuarialand actu arialand cons consulta ultancyservicesto ncyservicesto the occu occupatio pational nal pens pensionsmarket ionsmarket,, across acro ss boththe priv private ate andpublic sect sectors. ors. Peoplelie at thehear Peoplelie theheartt ofour bu busin siness ess;; ouruniq ourunique ue cu cultu lture re hashelp hashelpedus edus createe a poolof high creat highly ly tale talented nted,, expe experien rienced ced andenthusi andenthusiasticindivid asticindividuals uals.. The resu result lt has beenstrong cont continue inued d growth grow th withsignifi withsignificantinvestm cantinvestment ent in bothpeople andtechnolo andtechnology. gy. As a resu result,excitingopportu lt,excitingopportuniti nities es are availabl avai lablee for tale talentedindivid ntedindividualsto ualsto  joinour Actu ActuarialSystem arialSystemss team team..

•   Initially tasks are likely to include drafting strategy proposals, providing ad-hoc and regular tailored reporting, assisting in new business pitch preparation. Ronnie Bowie Senior Partner

Contact   Parvinder Matharu Contact Newton Recruitment t e

 +44(0)1689 862937

  [email protected] w

  www www.newtonrecruitment. .newtonrecruitment.com

ActuarialModelle Actuar ialModellerr – Glas Glasgowor gowor London Withresponsibil Withrespons ibility ity forthe developm deve lopment ent of pens pension ion liab liability ility models mod els andthe inte integrat gration ion of thes thesee withour riskmodels riskmodels,, the succ successf essful ul candidat cand idatee willfocus on anal analysis ysis,, design desi gn andprogram andprogrammin ming g mode models ls in collaboration collaboratio n with key stakeholde stakeholders. rs. Previousactuarial modelling experiencerequired. experience required.

If yo you u wou would ld li like ke to fin find d outmoreplea outmoreplease se goto   www.hymans.co.uk/careers

48   August 2011

www.jobs.the-actuary.org.uk

 

www.ojassociates.com

Actuarial Contract - Life Insurance Solvency II Actuary

Rob Bentham

Midlands - 6 Months

£1300/day

Capital Actuary

Gary Rushton

London - 12 Months

£1200/day

Actuary required to lead the Solvency II Programme from a technical regulatory perspective and act as in-house expert on emerging SII regulation.

Part/fully quali󿬁ed actuaries required to focus on project work to optimise the group’s capital efficiency. Will have exposure to various business areas.

Actuarial (ICA) Contractor

Peak 2 Actuary

Ik Onyiah

South West - 6 Months

£1100/day

Rob Bentham

South East - 6 Months

£1100/day

Our client, a leading insurance provider, provider, is seeking an actuarial generalist to provide wider Solvency II support and back󿬁ll BAU support.

You will help to design, develop and document the actuarial valuation process for life business executed by the group.

Capital Actuary

Reporting Actuary

Ik Onyiah

London - 6 Months

£1000/day

Rob Bentham

South East - 6 Months

£1000/day

You will support the Chief Actuary in developing and managing actuarial aspects of the risk reporting framework & ongoing SII system developments.

 To assist in the delivery of a 󿬁nancial reporting process for the Solvency II programme of this market leading client.

Moses Development

Interim Actuary

Ik Onyiah

Midlands - 6 Months

£900/day

Gary Rushton

London - 6 Months

£900/day

Experienced Moses modeller required to develop the existing model across a number of high pro󿬁le projects.

Our client has just been accepted into the IMAP pre-application process. You will ensure satisfaction of the criteria for Internal Model approval.

Actuarial Modeller

Actuarial Contractor (ALS)

Ik Onyiah

South West - 6 Months

£800/day

Rob Bentham

Midlands - 6 Months

£800/day

 To provide market leading modelling expertise with a strong stakeholder focus to the design and implementation of the new actuarial systems.

Prophet Developers

Gary Rushton

South East - 6 Months

£800/day

My client is currently looking for a number of experienced Prophet developers with either stochastic or deterministic modelling experience. experience.

 The main purpose of the role is to support the work of the methodology workstream of the Solvency II project within the Life & Pensions business.

Senior Student Reporting Actuary London - 12 Months

Gary Rushton £650/day

Outstanding contract opportunity for a student with good exam progression. Must have a can-do attitude & previous 󿬁nancial reporting experience.

Actuarial Contract - General Insuranc I nsurance e Capital Modeling Actuary London - 9 Months

Stewart Cherry £1000/day

Catastrophe Risk Actuary London - 6 Months

Stewart Cherry £900/day

A Lloyd’s syndicate is looking for a Capital Modeling Actuary, ideally with Igloo, to undertake a 9 month contract.

A Lloyd’s syndicate insurer is currently looking for an experienced quali󿬁ed Catastrophe Risk Actuary for a 6 month contract.

Solvency II Actuary

Stewart Cherry

Remetrica Actuary

Stewart Cherry

London - 9 Months

£900/day

London - 9 Months

£800/day

A global London Market insurer seeks a Solvency II actuary (nearly or recently quali󿬁ed). The candidate must have up to date SII experience.

Experienced Remetrica capital modelling actuary required for a 9 month contract focusing on the internal model development for SII.

Senior Pricing Actuary

Stewart Cherry

Reserving Actuary

Stewart Cherry

London - 6 - 12 Months

£800/day

London - 6 Months

£750/day

A senior pricing Personal & Commercial lines experience required require d for a 6-12actuary monthwith contract working within the London Market. is

Contact Gary Rushton [email protected]

My client, a leading London Market insurer insurer, , is currently lookingcontract. for an experienced reserving actuary (part or fully quali󿬁ed) for a 6 month

Contact 0207 310 8793

Stewart Cherry [email protected]

0207 310 8651

Ik Onyiah [email protected]

0207 310 8785

Rob Bentham [email protected]

 

0207 649 9351

 

More jobs online at www.theactuaryjobs.com

A name you can trust can  trust Pensions Consulting Senior Actuarial Consultant London/Leeds, £Negotiable Ref: 47093 4709373 73

Life Company Pension to Life Switchers Bristol, to £70,000 Ref: 468 468250 2505 5

FSA Relationship Builder Qualifed Life or GI Actuary London, to £110,000 + benefts Ref: 412 412224 2248 8

Life Provider Actuarial Consultant Surrey, £Negotiable Ref: 477 477267 2671 1

 A leadin leading g globa globall consu consultancy ltancy is lookin loo king g to exp expand and its pen pensio sions ns practic pra ctices es in Lon London don and Lee Leeds. ds. The Th e pr prac actic tice e is th thre ree e ye year ars s ol old d an and d specialises specia lises in corpo corporate-ba rate-based sed work. wor k. The com compan pany’ y’s s stra strateg tegy y willl se wil see e th the e rig right ht pe peop ople le mo move ve into interna internationa tionall and inves investment tment work.O wor k.Over ver the nex nextt few yea years rs this opp opport ortuni unity ty will fac facilit ilitate ate profes pro fessio sional nal gro growth wth in an environmen envir onmentt wher where e actua actuaries ries are recognised recog nised for their succe successes sses..

 Are you a part/nearly/qualifi part/nearly/qualified ed Pensions Actuary seeking a move into Life? If you are progressing well with the exams and have experience of consultancy, we have the perfect opportunity for you within a major UK Life company. Roles are available in reporting and capital management.

Our cli clien entt ne needs eds a str stron ong g communic comm unicator ator to mana manage ge its relati rel ation onsh ship ip wit with h the FS FSA. A. Thi This s is a se senio niorr ap appoi pointm ntmen entt and co come mes s with a sixsix-figu figure re pac packag kage. e. You’l ou’lll work wor k alo along ngsid side e the So Solve lvency ncy II  Actuary  Actu ary and wide widerr fina financia nciall report rep orting ing tea team m to ma manag nage e the run up to So Solve lvency ncy II an and d be beyon yond. d.

 Are you a nearly or fully qualifi qualified ed  Actuary  Actuar y or exam stopp stopper er with some Prop Prophet het expe experience rience? ? Our clie client nt will con consid sider er act actuar uarial ial profes pro fessio sional nals s fro from m a var variety iety of backgr bac kgroun ounds ds and lev levels els if the they y have ha ve a pa pass ssion ion fo forr sy syste stems ms and som some e Pro Prophe phett exp experie erience nce.. You mu must st be wi willi lling ng to be beco come me a Prophet Proph et codin coding g exper expert. t.

020 7220 4774 [email protected]

020 7220 4774 [email protected]

020 7220 4774 [email protected]

020 7220 4774 [email protected] Over 300 Over  300 actuarial  actuarial jobs advertised.

 t. 10   ye 10 years ars in ac actu tuari arial al rec recru ruitm itmen ent.

Offces in 13 in  13 countries.  countries.

reed.co.uk /actuarial

Reed Spec Specialis ialistt Recr Recruitm uitment ent Ltd is an empl employme oyment nt agen agency cy and emp employm loyment ent busi business ness..

Equity Analyst – Life Insurance, London £75,000 - £85,000 plus Benefits

Life Actuarial Opportunities, South West Ref: MJB48906

£40,000 - £80,000 plus Benefits

Ref: MP12733

A world renowned sell-side research firm is looking for an analyst to join its life l ife insurance team. You will be involved in conducting in-dep indepth th ana analys lysis is of the ind indust ustry ry and pub public licly-t ly-trad raded ed com compan panies ies in the sector sect or,, bui buildin lding g and mai mainta ntainin ining g det detaile ailed d fina financia nciall mod models, els, dra draftin fting g and writ writing ing res resear earch ch rep reports orts,, hel helping ping for formula mulate te inve investme stment nt opin opinion ionss and interacting with company management, sales and trading, and institutional clients. Ideal candidates will be newly / recently qualified life actuaries with broad commercial understanding. E: [email protected] T: T: +44  +44 (0)20 7324 0505

As a result of recent expansion in the South-West market, I am curre cur rent ntly ly re resou sourc rcing ing fo forr a va varie riety ty of pro proje ject ctss ac acro ross ss a br broa oad d ra rang nge e of discipli disc iplines nes incl includin uding g Fina Financia nciall Rep Report orting ing,, Solv Solvency ency II and Mode Modellin lling. g. Oppor Opp ortu tunit nities ies exi exist st fo forr ne near arly ly / ne newly wly an and d qu qual alifie ified d ac actu tuar arie iess wi withi thin n each of these areas, whilst bespoke roles can also be tailored to suit the skill set of strong candidates with other specialisms. Ideal candi ca ndida date tess wi will ll ha have ve a te techn chnic ical al kn know owled ledge ge of lif life e me metr trics ics,, alt altho houg ugh h applications will be considered from any background. E:  [email protected] T: +44 (0)20 7019 8842 E:

Strategy Risk Management Consultant, London L ondon

EEV Reporting Actuaries x2, Edinburgh

£45,000 - £85,000 plus Benefits Ref: ME22317 My cl clie ient nt is lo look okin ing g to hi hire re pa part rt an and d qu qual alifi ified ed ac actu tuar arie iess in into to a spec sp ecia iali list st ar area ea of it itss gr grow owin ing g Lo Lond ndon on te team am,, se sett up to ac actt as a strat str ategi egicc ov overa erall ll ris risk k ma manag nagem emen entt of offe ferin ring g to its la large rge cli clien ents ts.. You wi will ll be in invol volved ved in a wid wide e va varie riety ty of pr proje oject ctss fo focu cuse sed d ar aroun ound d ALM mode modellin lling, g, Liab Liabilit ility-Dr y-Driven iven Inve Investme stment, nt, Buy Buy-in -in / Out, Enh Enhanc anced ed Tran ransfe sferr Va Value luess and othe otherr inve investm stment ent str strate ategy gy tec techniq hniques ues.. Idea Ideall candida cand idates tes will come fro from m a pen pension sionss or inve investm stment ent back backgrou ground. nd.

£30,000 - £50,000 plus Benefits Ref: GMcG43957 Do yo you u wa want nt mo more re re resp spon onsib sibili ility ty an and d car caree eerr gr grow owth th bu butt don don’t ’t kn know ow how ho w to ge gett it fr from om yo your ur ro role le? ? Jo Join in th the e gr grow owin ing g EE EEV V re repo port rtin ing g te team am at on one e of th the e le lead ading ing lif life e ins insur urer erss an and d co cont ntrib ribut ute e to th the e pr prod oduc uctio tion n of EE EEV V an and d RB RBS S re resu sult lts. s. You wi will ll ga gain in an un unde ders rsta tand ndin ing g of ho how w EE EEV V is used to manage a business and communicate results to other depart dep artmen ments ts (pri (pricing cing,, valu valuati ation) on) and man manage agemen ment. t. We are look looking ing for one student and one qualified actuary.

E:  [email protected] T: E: T: +44  +44 (0)20 7019 8828

E: [email protected] T: +44 (0 (0)20 )20 701 7019 9 886 8863 3

Please contact us on 020 7336 7711 or visit www.goodmanmasson.com Goodman Masson is an equal opportunities employer. Goodman Masson offers the services of an agency for permanent work and an employment business for temporary work.

50   August 2011

www.jobs.the-actuary.org.uk

 

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Chie Ch ieff Ac Actu tuar ary y MSV Life plc is the leading provider of life insurance protection, long term savings, investments and retirement planning in Malta. •

Reporting to the CEO andan theactive Boardparticipant of Directors, you driver will set Compan y’s actuarial policy and. direction while al so also being in, and of,the theCompany’s organisation’s overall overall strategy strategy.



You will plan, organise, organise, direct and control all operations of the Actuarial Unit and to assist the the Chief  Executive Officer to achieve the Company’s objectives efficiently. efficiently.



As a member of the senior leadership team of the Company, Company, you you will work closely with the CEO and the Board of Directors as well as with the relative governance committees of the board.



You will oversee the Actuarial Unit to ensure proper maintenance of all systems and functions functions and supervise the staff in the Actuarial Unit.

Required: At least 5 years PQE FIA or equivalent Salary €130,000 to €145,000 + competitive ex-pat package. Contact Details: Zoe Campbell, Senior Consultant, Eames Consulting T: +44 20 7902 3280 E: [email protected]

Kent School of Mathematics, Statistics and Actuarial Science (SMSAS)

the UK’s European University  The University University of Kent Kent is one one of the UK’s UK’s most dynamic dynamic universities universities with a strong European and international international presence. presence. Our Our excellent ent RAE results reflect reflect our world-leading world-leadin g research and, while we are currently increasing our postgraduate activities, our undergraduates continue to rate us one of the top universities in the country according to the National Student Survey.

Senior Lecturer in Actuarial Science

Ref: STM0234

 Applications are invited invited for the position of of Senior Lecturer in Actuarial Actuarial Science. Science. This post will be based at at our Canterbury Canterbury Campus Campus on a full-time basis and is available from 1st December 2011 or as soon as possible thereafter.  The successful successful candidate candidate will will join the Centre for Actuarial Science, Risk and Investment (CASRI), which is part of the School of Mathematics, Statistics and Actuarial Science (SMSAS). The Centre is well established and enjoys an excellent working relationship with the professional bodies. Currently, undergraduate and postgraduate postgraduate programmes in Actuarial Science and Finance are offered by the Centre. All our Actuarial Science programmes are accredited by the UK Actuarial Profession.  The person person appointed appointed will be expected expected to contribute to innovative research programmes in Actuarial Actuarial Science Science & other related related areas areas of finance and contribute to the School’ School’s s teaching activities in Actuarial Science and Finance (particularly in the area of Risk Managemen Management). t). Applications from outstanding candidates with different backgrounds will also be considered considered.. There may be opportunities for some consultancy work. An excellent package including relocation costs is offered. Informal enquiries may be made to Professor Malcolm Brown, Head of SMSAS, on + 44 (0)1227 823508 (direct line) or e-mail: [email protected]  Informal visits to the School are welcomed. Furthe Fur therr inf inform ormati ation on is ava availa ilable ble fro from m our web websit site e http:// http://www www.kent. .kent.ac.uk/ ac.uk/jobs. jobs. Mini inicomusers comusers ple pleaseteleph asetelephone one 012 01227 27 824 824145 145..

Closing date for completed applications: 9th September 2011. Interviews are expected to be held in October 2011. For posts of this nature you will be required to fill in the main details section as well as upload your CV which should include a personal st atement and any supporting documents.

We actively promote equal opportunity in education and employment and welcome applicants from all   sections of th e co mmunity.

www.jobs.the-actuary.org.uk

August 2011

 

More jobs online at www.theactuaryjobs.com

Actuarial roles — Edinburgh and Dublin We’ e’rre gr gro owi wing ng our tea eam m — and we want yo you u to be a pa part rt of it. This is an ou This outs tsta tand ndin ing g op oppo port rtun unit ity y fo forr yo you u to jo join in a le lead adin ingg-ed edge ge team te am.. He Here re at AE AEGO GON, N, we off offer er so some meth thin ing g un uniq ique ue:: we we’r ’re e a gl glob obal al,, people-fo peop le-focused cused orga organisa nisation tion that valu values es you yourr work work-life -life bala balance. nce. We’re We’r e int intere ereste sted d in spe speaki aking ng wit with h can candid didat ates es who ha have ve dri drive ve and ambiti amb ition on at all lev levels els:: par part-q t-qual ualifie ified, d, nea nearl rly/n y/newl ewly y qua qualifi lified ed and exper ex perien ienced ced act actuar uaries ies tha thatt ha have ve a bac backgr kgrou ound nd in lif life e ins insur uranc ance. e.

Shape the future future

In re retu turn rn,, we we’r ’re e off offer erin ing g th the e ch chan ance ce to de deve velo lop p yo your ur ca care reer er an and d re reac ach h your yo ur po pote tent ntia iall wi with th us us,, wo work rkin ing g in on one e of ou ourr te team ams s wh whic ich h co cove ver: r:

Help us grow our Actuarial team

n

Modelling

n

Pricing

n

Capital Management

n

Financial Reporting

To apply now or to find out more about our company and our future strategy, go to aegon.co.uk/careers

AEGON UK plc, registered office: 6 Devonshire Square, London EC2M 4YE. Registered in England (No. 3679296). An AEGON company. www.aegon.co.uk

More th More than an 16 160 0 ye year arss ex expe peri rien ence ce.. More than 7m UK customers. More than just a career. Join us

“I'm personally very grateful for your efforts and even more grateful for your success in

A career at Prudential means you will be working

bringing to us such

at the forefront of one of the UK’s leading life & pensions companies.

a talented group of people.”

 June 2011

 

Prudential has over seven million customers and a leading range of products and services. With over 160 years experience, it’s our people that ensure we continue to perform. That’s why we’ve put in place a people development programme designed to reward high performance and why we constantly seek out new and exciting talent. We are currently recruiting the following vacancies; >  Senior

Actuarial Trainees

>   Senior Qualified Qualified Actuary

(Retirement Income)

Qualified/Qualified Qualified >   Nearly Qualified/ Actuary (Pricing) >  Business Development Analyst

T o find outvisit more about the roles above and an ad career with   www.pru.co.uk/careers Prudential  and add your name to our growing list of achievers.

51

52   August 2011

www.jobs.the-actuary.org.uk

 

High Finance Group Specialist Recruiters

Chief Actuary

High Finance Group is a specialist consultancy, providing Finance, Actuarial, Audit, Risk Management, Compliance and IT Recruitment solutions to major Insurers and Asset Managers, professional services firms and SMEs. We aim to provide a market leading recruitment service, bridging the gap between large agencies and e xecutive search.

General

Treaty Pricing Actuary

General

£130k - £170k + Bonus + Benefits London

£80k - £110k + Bonus + Benefits London

This ra This rapi pidl dlyy exp expan andi ding ng Ll Lloy oyd’ d’ss syn syndi dicat cate e is lo look okin ing g to sec secur ure e a qualified Actuary to lead their Actuarial function. The role will have oversight across capital, reserving and pricing whilst managing a

This special specialist ist Lloyd’ Lloyd’ss insurer insurer is looking looking for an experience experienced d prici pricing  ng   Actua ry with a strong treat  Actuary treatyy backg round. The role will sit with the Underwriters and support them on a day to day basis. You will be

medium sized team. The successful candidate shouldWG9578 have a strong man management background and relish a challenge.

confident andWG8439 outgoing with the ability to liaise with senior stakeholders.

Newly Qualified Actuary

Casualty Pricing Analyst

General

General

£70k - £100k + Bonus + Benefits London

Up to £55k Basic + Bonus + Benefits London

This role is supporting the Deputy Chief Actuary and will suit someone who is newly qualified and looking for a step up in their career. The work will include capital modelling, pricing and reserving with significant exposure to the senior board. As this supports the Deputy Chief Actuary, there is the opportunity for managerial exposure too. WG6781

This role requires a bright Actuarial student to take ownership of the pricing for the Casualty business of this highly regarded London market insurer. The ideal candidate will have previous pricing experience, experien ce, be very articul articulate ate and consc conscienti ientious. ous. The role woul would d suit a candidate looking to break in to the London market for the first time or someone looking to specialise their pricing experience. JK1946

(Re)Insurance Reserving Analyst

General

Consultancy up to Partnership

Up to £55k Basic + Bonus + Benefits

Over €150k + Bonus + Benefits

London

 All Europe

This established reinsurer is looking to grow theirReser ving function with the appointment of an Actuarial student. The candidate will enjoy g re reat development s up uppor t and b e gi given immediate responsibility to take on integral aspects of the reserving process.  JK8541

Contract Roles

General

Europe

One of the most reco recognised gnised and dynam dynamic ic cons consultan ultancies cies is lookin looking g to expand strongly in European markets, specifically Switzerland, Germany, The Netherlands and Spain. We offer partnership opportunities for the right candidates, who are able to demonstrate a successful succ essful trackrecord and stron strong g localmarket knowledge. knowledge. If you are look lo okin ing g fo forr a ch chal alle leng nge e an and d ha have ve str stron ong g te tech chni nica call an and d ne nego goti tita taio ion n skills, please contact our Europe desk. DB8546

Contract Roles

Life

£400 - £2,000 per day UK Wide

£500 - £1,500 per day UK Wide

In a rapidly changing market, our clients are looking for contractors with a strong Pricing or Capital Modelling background to assist with their Solvency 2 requirements. Modelling experience especially w ith Igloo or ReMetrica is in demand as well as commercial and/or personal lines experience. Opportunities for part qualified to qualified Actuaries are available. RP234

Part qualified / qualified applicants required with S2, Capital or Financial Reporting experience. You will be involved directly in the interpretation and implementation of S2 for European companies.  You will work the internal model, develop the economic capital

De-risking Solutions

Pensions Consultant

Pensions

methodology, methodol ogy, manage the ORSA and work with the globa globall offices. offices. Project management skills required. RP8001

Pensions

£35k - £80k + Bonus + Benefits £35k London

£35k - £65k £65k + Bonus + Benefits Benef its UK Wide

Excelle Excel lent nt op oppo portu rtuni nity ty to br broa oade den n yo your ur exp exper erie ienc nce e ac acro ross ss th the e financial services market. This leading global organisation is currently seeking proactive and innovative part-qualified and expe ex peri rien ence ced d Pe Pens nsio ion n Ac Actu tuar arie iess to wo work rk on be besp spok oke e pr proj ojec ects ts addressing funding policies and liability management. With exposure to asset allocation investment strategy you will be highly comm mmer erci cial al and and abl ble e to dem emo ons nstr trat ate e in inssig igh ht to cu cutt ttiing edge edge solutions. MW8530

 Are you looking for a varied role with increas increased ed respons responsibilit ibilityy and client exposure? Our client is seeking part-qualified and qualified pensions pensi ons actuar actuaries ies to work on an excep exception tional al range of Tru Trustee stee and Corporate clients. Providing support to senior consultants, you will assist on a variety of projects including bespoke de-risking and investment related assignments whilst and benefitting from accelerated career progression. MW7746

Contract

General William Gallimore: 020 7337 8826  James Kit t: 020 7337 1202 120 2

[email protected]  [email protected] 

Pensions Miranda Wilkinson: 020 7337 8815 [email protected] 

 Actuarial | Finance | Governance Governance | IT | Insurance | Solvency Solvency II

Rupa Pithiya: 020 7337 1200 [email protected] 

020 7337 8800

[email protected]

www.highfinancegroup.co.uk 

 

More jobs online at www.theactuaryjobs.com  Actuarial Analyst – Pensions (Ref (Ref:: HLEB HLEB-9) -9) £30k - £40k p.a. + study package Reading

“A fr fre esh app pprroa oach ch to pe pens nsio ion n sc sch hem eme e fi fin nan anci cing ng and ri risk sk mana nage geme ment nt”” Previo Prev ious usly ly He Heat ath h La Lamb mber ert, t, we jo join ined ed th the e Ar Arth thur ur J Ga Gall llag aghe herr fa fami mily ly in Ma May y 20 2011 11 to be beco come me on one e of th the e wo worl rld’ d’s s la larrge gest st an and d fastes fas testt gr growi owing ng in insur suran ance ce br broki oking ng,, und underw erwrit riting ing an and d em emplo ployee yee be benef nefits its or organ ganisa isatio tions, ns, ope operat rating ing in mor more e tha than n 100 co count untrie ries. s.  An exciting opportunity opportunity has arisen to become part part of the Gallagher Gallagher Employee Benefits actuarial actuarial team to assist in the the provision of actuarial and risk management services to pension scheme clients. At Gallagher Employee Benefits we believe in looking at tasks from first principles to gain a proper understanding. This requires research, research, thinking and implementation - all team members are expected to be competent, to communicate with clients and make a contribution. Key Skills and Experience You will be a highly skilled actuarial student with • a minimum of four years experience within a similar role; • a minimum of six Institute and Faculty of Actuaries CT series exam passes or equivalent; • excellent communication skills; and • experience of using SuperVal. This position will put your skills into practice and you will be given the opportunities and responsibilities you deserve. To apply online please visit our website www.gallagherheath.com/careers or or via  via post to: Joanna Marlowe, Gallagher Heath, Focal Point, 27-35 Fleet Street, Swindon SN1 1RG. For further information email us at [email protected] Gallagher Employee Benefits are an equal opportunities employer. Closing date: 25t 25th h Au Augu gust st 201 2011 1

Creatively different  Gallagher Employee Benefits is a trading name of Heath Lambert Consulting Limited, which is authorised and regulated by the Financial Services Authority.  A member of the Society of Pension Consultants. Registered office: 9 Alie Street, London E1 8DE. Registered No. 0772217 England England & Wales. www.gallagherheath.com

Global Speciality Unit Financial Reporting Actuary, London circa £150k package

UK I Europe I Asia Paci fi c

This role supports the Global Specialty strategic business unit. You will work with underwriters and financial controllers while maintaining strong relationships with claims, reinsurance and IT departments. The lines of business will include large specialty accounts on a worldwide basis. The candidate will build actuarial valuations, support the budget process and assist in global insurance wide projects. You will deal with US GAAP, SEC financial requirements, UK GAAP regulatory framework and the Lloyd’s platform. The candidate will be responsible for Solvency II technical provisions and ancillary reporting including reserve volatility measurement. In addition you will work directly with external consultants and with internal and external auditors. You’ll become responsible for: •  Completing the quarterly reserving process including performance of reserve reviews and claims liabilities’ recommendations;

“ .. ...one .one of the best best recruit ment and search   fi rms I have worked with .. ...” .”

HR Mana Manager ger,, Amlin

•  Present and discuss the results of your work to pricing actuaries, underwriting business unit managers, auditors and consultants; •   Preparing Reports of the Actuary and Actuarial Memorandums on Business Units results; •  Support accounting and finance teams on a worldwide basis.

Rob Bulpitt, Manager  Tel +44 (0)20 7092 3237

Dennis Ball, Senior Consultant Tel +44 (0)20 7092 3286

[email protected]

[email protected]

Rupert Rickard, Managing Consultant Tel +44 (0)20 7092 3219 [email protected]

Mansi Koshy, Senior Consultant Tel +44 (0)20 7092 3283 [email protected]

Zoe Campbell, Senior Consultant Tel +44 (0)20 7092 3208 [email protected]

 Alis tair Allan , Senior Consultant Tel +44 (0)20 7092 3262 [email protected]

Contact   Parvinder Matharu Newton Recruitment t e

 +44(0)1689 862937

  [email protected] w

  www www.newtonrecruitment. .newtonrecruitment.com

54   August 2011

www.jobs.the-actuary.org.uk

 

Start a more targeted search. Execut Exec utiv ive e Se Sear arch ch is ou ourr cor ore e bu busi sine ness ss.. Th That at’’s wh why y an in incr crea easi sing ng nu numb mber er of com ompa pani nies es ar are e loo ooki king ng to us to find th the e ex exc cep epti tion onal al pe peop oplle th the ey ne need ed.. At Pure Search we don’t subscribe to a high-volume recruitment strategy and we don’t believe in gimmicks to attract the best talent.

Instead we offer a tailored search methodology which, in a short space of time, has allowed us to establish a reputation as a company which never fails to deliver. ■

Ourr Ac Ou Actu tuar aria iall & Ri Risk sk ma mand ndat ates es ar are e ex excl clus usiv ive e to Pu Pure re Se Sear arch ch wi with th an ou outs tsta tand ndin ing g co comp mple leti tion on re reco cord rd of ou ourr



retained retai ned sea searc rches hes at the £10 £100-5 0-500k 00k le level vel.. Our track record includes EMEA & UK leadership roles through to cross-border and cross-functional team builds.



We ar are e co const nstant antly ly re resea searc rchin hing, g, ana analy lysin sing g and ben benchm chmark arking ing pr prof ofess ession ionals als acr acros osss the mar market ket – we kno know w the th e an answ swer er to “W “Wha hatt am I wo wort rth? h?””

Make Mak e a mo more re in info form rmed ed de decis cisio ion n an and d ca call ll th the e be best st co conn nnect ected ed Act Actua uaria riall & Ris Risk k sea searc rch h pr prof ofes essi sion onal als s in th the e ma mark rket. et. Pensions & Investments Ian Addison-Smi Addison-Smith th Insurance

James Everett

02074294446

[email protected]

02074294434

 jameseverett@pur  jameseve rett@puresearch. esearch.com com

London

Hong Kong

160 Queen Victoria Street London EC4V 4BF

Level 5, Two Exchange Square, 8 Connaught Place Central, HK

www.puresearch.com  

More jobs online at www.theactuaryjobs.com

Consultant, Actuar Consultant, Actuarial ial Melbourne, Melbo urne, Austra Australia lia This position will support the growth of the the Russell Investments Australian Actuarial practice and execute plans that will result result in strengthening our position as a thought leader and premier specialist actuarial advice provider in the superannuation (pensions) industry indust ry in Austr Australia. alia. This role will be responsible for day to day delivery of actuarial and consulting services for a range of clients. We are currently considering applications from experienced consultants with a background in Pensions/ Superannuation who would be keen to relocate to Melbourne, Australia. This is an opportunity for you to expand your expertise and gain international experience in an innovative market. We will consider part-supporting relocation and visa requirements to successful UK based applicants and offer a competitive market rate compensation package. Russell Investments has been present within the Australian market for 25 years and globally for 75. Our Our Sydney and Melbourne based Actuarial team is a major provider of actuarial actuarial services to complex defned beneft superannuation schemes, including major public sector schemes and is actuary to 8 of the 10 largest corporate corporate schemes in Australia.

To apply for this position or for further details please contact Nathan John, Talent Acquisition Manage Man agerr for EMEA EMEA & Asi Asia a Pac at [email protected] at  [email protected]

OPEN DOORS ...visit Jobs in Risk and we’ll unlock career expansion or business growth if you’re looking for that ideal candidate. For career openings, visit the UK’s largest lar gest risk industry job portal at:

www.jobsinrisk.com 0870 08 70 04 0427 2764 641 1 Now part of Incisive Media

the job-site for the UK risk and compliance sectors 

56   August 2011

www.jobs.the-actuary.org.uk

 

High Finance Group Specialist Recruiters

What We Offer 

Non-Life Roles

High Finance Group is an established leader in the recruitment of Actuarial Professionals with a worldwide reach. Our consultants, led by ex-industry professionals, work closely with trusted clients across the industry.

Our consultants stay close to the profession through maintaining personal and professional relationships, providing a network of clients and candidates to offer quick solutions to assignments.

The work of non-life actuaries has never been more important to the processes of the industry and with this has come an increased need for Actuaries and their expertise. Whilst there has been an upsurge in the demand for Actuaries with Capital Modelling experience in particular, those with Pricing and Reserving backgrounds have seen the demand for their services increase exponentially too. Opinions differ as to when or if this demand will slow but for the moment Actuaries can expect to be presented with a variety of roles that fit their experience allowing them to be selective over their choice of job application and extremely well remunerated when negotiating packages.

The consultants attend and organise industry events to ensure they are leading the way in the appreciation of the challenges impacting the industry.

High Finance Group can offer professional and discreet advice across a number of areas including salary benchmarking, CV formatting and future career options.

Each consultant focuses specifically on a single respective area of Life and General Insurance, Pensions and Investment Management.

Current assignments in the Non-Life sector are:

Life Roles

 Actuarial Lead Director - Experienced E xperienced Qualified Qualif ied  Actuary to subject subjec t specific areas of a emerging Actuarial Consultancy.

The demand on Actuaries to become forward thinking and adaptive to new challenges has resulted in a surge in non - traditional and very interesting opportunities for Life

Chief Risk Off Officer icer – Qualified Actuary Actuar y to head up the Risk and Actuarial function at an established Lloyd’s syndicate.

 Actuaries. A mongst Amongst growSpecialism growth th in Economic Capital Management, Modeling and the continuing  success of boutique specialist consultancies the spectrum of work is growing beyond the traditional remit.

Syndicate Chief Actuary - Qualified Actuary to build a team underneath them at the inception point of this new Lloyd’s syndicate.

In particular we are actively working with Investment Banks, Management Consultancies and CRO functions utilizing Actuaries to provide the second line of defense in Risk Management. Current assignments in the Life sector are:

Contact Us

 ALM Actuary Actuar y – Life Actuary Actuar y to deliver bespoke insurance solutions to UK Insurers as part of European Investment Banking team.

For more information about our current roles, or to speak to one of our specialist consultants about your career contact us at:

Financial Risk Manager – Actuary to manage strategic Investment focused risk initiatives

 

E. [email protected] 

across the business units and develop new trade concepts.

T.  +44 (0) (0) 20 20 7337 8800

Equity Research – Qualified Actuary to cover a portfolio of UK stocks for Global Investment Bank.

W. www.highfinancegroup.co.uk 

 

STAR A C T U A R I A L F U T U R E S  JUST QUALIFIED? QUALIFIED? WHAT WHAT IS IS YOUR NEXT NEXT CAREER CAREER GOAL? NATIONWIDE

SOLVENCY II BY THE SEA

£ salary benchmarki benchmarking ng

Contact us for insight and advice to help you set and achieve your next career goal. We have a wide range of potential opportunities for qualified actuaries across all areas of actuarial specialism. We are also very happy to perform salary benchmarking.

SOUTH COAST

NON-LIFE £ excellent + bonus + benefits

Our client is seeking a part-qualified non-life actuary to play a key role in the Solvency II project. You will develop your technical skills and your softer skills through interaction with the wider business. This is a great opportunity for a work-life balance that will enable you to make speedy exam progress and enjoy the sun, sand and surf. Ride the wave.

Ref: Star538

LONGEVITY ACTUARY

LIFE

LONDON, YORK OR NORWICH

up to £90k + bonus + benefits

Ref: Star537

MOVE TO ERM

SOLVENCY II

LONDON

£ excellent + bonus + benefits

Insuran Insu rance ce gr group oup se seek ekss qua qualif lified ied act actua uary ry or equ equiv ivale alent nt to lea lead d the th e dev develo elopm pment ent of a re refin fined, ed, ev evolv olving ing se sett of pr prici icing ng fac factor torss and as assu sump mptio tions ns fo forr pr prici icing ng lon longev gevit ityy. You wi will ll hav have e ex excel cellen lentt

Our cli Our client ent se seeks eks can candid didate atess wi with th st stro rong ng ope operat ration ional al ris risk k know kn owled ledge ge wi with thin in an ins insur uran ance ce ba backg ckgrou round nd to su supp pport ort Solv So lvenc encyy II int inter ernal nal mo model del de deve velop lopmen ment. t. You wil willl be an

sta statist tistical ical andaanal analytic ytical skills, skil ls, experie exp erience inch analysi anal ysing ng longev lon gevity ity and stro st rong ngal under und erst stand anding ing nce of the chall alleng enges es fa facin cing g an an annu nuit ityy pr prov ovid ider er.. Th This is is a gr grea eatt op oppo port rtun unit ityy to bu buil ild d yo your ur profi pr ofile le wit with h a mar market ket lea leader der..

exc excelle nt com communi municato cator r who can translat tran slate e sses technica tech concepts epts into in toellent pract pr actic ical al so solu lutio tions ns an and d yo you u wi will ll al also so poss po esssnical wellll conc wel deve de velop loped ed st stake akehol holder der man manage agemen mentt sk skill ills. s. Thi Thiss ro role le of offer ferss an unpar un parall allele eled d op oppor portun tunity ity to be at the cut cuttin ting-e g-edge dge of So Solv lvenc encyy II deve developm lopment. ent. Ref: Star535

Ref: Star536

STAR C A N D I D A TE B O N U S R E G I ST S T E R W I TH TH U S IF WE PLACE YOU IN A NEW ROLE IN 2011 W E W I L L G I V E Y O U A TA B L E T P C O F Y O U R C H O I C E V IS IS IT I T O UR UR W EB EB SI SI TE T E F OR OR F UL UL L T ER ER MS MS A ND N D C ON ON DI DI TI T I ON ON S A ND ND A LL LL O U UR R LA AT T ES ES T V A CA CA NC NC IE IE S

Louis Manson

Antony Buxton FIA

Irene Paterson FFA

Martine Scott-Gordon AFA

Lance Randles MBA

M +44 (0)7595 023 983 E [email protected]

M +44 (0)7766 414 560 E [email protected]

M +44 (0)7545 424 206 E [email protected]

M +44 (0)7900 696 825 E [email protected]

M +44 (0)7889 007 861 E [email protected]

Please contact us at any time (including evenings and weekends) to discuss vacancies of interest or for an

informal discussion regarding your career goals.

Paul Cook

Carolina Emmanuel

M +44 (0)7740 285 139 E [email protected]

M +44 (0)7841 872 575 E [email protected]

 

“...energy,, integrity and a long term perspective.”  “...energy

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         

            

                                              

                                                  

 

 



 

     

 

  





     

                                  

                                      

                

                             

 

 

 

 

    

                                

  



  

                                                               

 

 

   

 

  



  



                                                       

 



      

                                                           

 

 

                         

                       



 

STAR C L I E N T S STAR VACAN CIES STRATEGIC CAPITAL MANAGEMENT

EDINBURGH

Our client is looking to recruit several strong candidates to join a newly formed in-house Strategic Capital Management team. The work is varied and challenging and focuses on capital transactions, capital efficiency and capital risk mitigation. This is a great opportunity to develop and deploy first class technical and stakeholder management management skills within a high calibre and high profile team. Candidates with either Life or GI experience will be considered. Excellent packages are available to the right candidates.

HEAD OF CAPITAL ASSESSMENT

CAPITAL ASSESSMENT ACTUARY

£ to attract and retain exceptional talent

£ to attract and retain exceptional talent

Reporting to the Director of Capital Management, you will

Reporting to the Head of Capital Assessment, you will play a

provide thought leadership on capital management and oversee the integrity of the capital aggregation across the Insurance Division. You will be a senior qualified actuary with strong capital reporting and Solvency II knowledge, the ability to lead and implement change and to influence at senior levels internally and externally.

key role in the management of the Insurance Division's capital base using tools such as RiskAgilityTM. You will provide support in the production and reporting of the Insurance Division’s capital requirement, the production of capital projections and the oversight of the underlying capital bases and assumptions.

Ref: Star480

Ref: Star484

CAPITAL REPORTING ANALYST

RISK AGILITY ANALYST

£ to attract the best

£ excellent package

Reporting to the Head of Capital Assessment, you will play a key role in the management of the Insurance Division's capital base including the production of periodic reports covering regulatory capital, risk capital and solvency measures. You will be a qualified actuary with strong capital management knowledge. You will have good planning, organisation and prioritisation skills together with the ability to facilitate, negotiate and influence.

Reporting to the Capital Assessment Actuary, Actuary, you will assess and analyse the capital requirement for the Insurance Division and develop capital projection capability. capability. You will have a strong statistical background and a good grounding in Solvency II. Quant analysts, PhDs PhDs or nearly qualified actuaries will be considered.

Ref: Star483

Ref: Star485

The above vacancies represent a snapshot at the time of writing. What matters most is your career development. Ire ne Paterson is a Partner at Star Actuarial Futures. She is a qualified actuary Irene actuary based in Edinburgh and would be delighted to meet with you to discuss the next steps in your career. Irene is well connected within the Profession and is an expert in working with candidates at all levels to find the right roles for their ‘Star Actuarial Futures’.

Please contact Irene Paterson on Paterson on 07545 424 206 or 206 or irene.paterson@staractuari irene.paterso [email protected] al.com to discuss these opportunities.

Follow us on Twitter http://twitter.com/StarActuarial

 

                                                                               

 

 

      

                              

 

 

      

                                                              

     

      

                                                 

    

      

                                       

    

 

      

                                                       

                     

More jobs online at www.theactuaryjobs.com

MAKE A POSITIVE IMPACT Head Pricing Actuary – Financial Lines London, £150-170,000 + benefits

Pensions Actuarial Consultant Bristol, to £120,000 + bonus + benefits

This global insurer is seeking a financial lines senior actuary to join its team. This is a unique opportunity to shape the developmentt of the international product offering. With developmen operations in more than 50 countries you will be working with the overseas general product heads. You will work with the international portfolios and will have significant exposure exposure to the group’s senior management team. Reporting directly to the European group chief actuary, a sound background of technical and product knowledge knowledge coupled with the desire to enhance your career is essential. Ref: 1422195

Working for this major financial services provider, you will advise trustees and employers on the funding and risks associated with defined benefit pension schemes, including scheme funding/restructuring, funding/restructuring, M&A, ALM and a nd risk management. Should you hold a Scheme Actuary certificate, you’ll be appointed to a pension scheme, where you’ll provide actuarial advice as required by the pension scheme’s documentation and any statutory requirements. You will be a qualified actuary and have knowledge of benefits legislation, market awareness and the ability to assist with business developmen development. t. Ref: 1464892

[email protected] or 020 or 020 7481 9984

[email protected] or 020 or 020 7481 9984

Solvency II Manager, London £90-120,000 + car + bonus + benefits Working within the group function of this global insurer, you will be required to support the development of the group’s Solvency Solvency II modelling capabilities. This includes developing the methodology for the business unit’s Solvency II and economic capital modelling and supporting future development in accordance with Group standards, providing the necessary technical/actuarial advice. To be successful,l, you’ll be a qualified life actuary, ideally with successfu solid PQE, with risk modelling research, Solvency II and/o a nd/orr risk and capital modelling experience. Team Team management  Ref: 1432787 experience is advantageous. [email protected] or 020 or 020 7481 9984

For further information or to apply for any of these vacancies, visit hays.co.uk and enter the relevant job reference number.

hays.co.uk

Group Actuary London, £80-110,000 + benefits Working for this global insurer you will play a key role and report directly to the chief actuary. You You will develop suitable acquisitions, divestitures divestitures and strategies, with a view to support the European reinsurance department. Successfully executing M&A activity, you will define, challenge and articulate the business model. You will be at the centre of this team and have the ability to manage the full process. As a qualified actuary or finalist you will ensure best practice and liaise with non-actuaries. Ref: 1442445 [email protected] or 020 or 020 7481 9984

62   August 2011

www.jobs.the-actuary.org.uk

 

 Actu  Act ual al Search  Search

T:

020 8420 1818

E:

 [email protected]

W: www.actualsearch.co.uk

S E E KI K I N G T H E E X C EP E P T I ON ON A L

Life Consultancy + work/li work/life fe balanc balance e

Pensions & Investment

South Sou th Ea East/ st/ Ho Home me Co Count unties ies

London

c£45-6 c£4 5-65K 5K + ben bens s

£40-60K

Boutique consultancy with clients in the UK & overseas seek senior part or  nearly qual life actuary. actuary. Provide a range of services from AFH work through to

Broaden Broad en you yourr pen pensio sions ns exp exp.. by joi joinin ning g the inv invest estmen mentt tea team m at thi this s glo globa ball consultancy.. Duties include ALM, consultancy ALM, investment advice & business development.

Solven Sol vency cy 2, M&A M&A’s ’s & pro produc ductt pri pricin cing. g. Gai Gain n wid wide e ran rangin ging g exp exp.. & ear early ly

You’ll attend client meetings & mentor juniors. Pensions & strong Excel needed

responsibility with friendly, open team. A great work life balance. Ref:1801

for this small friendly team. Suit p/q or newly qual. Ref: 1807

Nearly / newly qualified life actuary

Pricing & Making Your Mark

N East / N West

to £60K

London

£40-95K

International role for a life actuary ideally with with-profits or financial reporting

Leadin Lea ding g glo global bal P&C ins insure urerr nee needs ds pri pricin cing g ana analyst lysts s & act actuar uaries ies for the their  ir 

exp. to join a small team providing corporate governance & group actuarial

European division. You’ll assess profitability, analyse products & liaise with

support. Suit a senior student or nearly/newly qual. able to communicate well

reserving & capital teams. Terrific chance to play key role in the development

plus keep a hands on approach to detailed work. Ref:1802

of this new team. Excellent rewards & worldwide career options. Ref:1808

Move to Invest Investment ment Consultancy

Solvency, Valuation & more

Superb opportunity opportunity for part & qual actuaries actuaries with pensions or invest investment ment

Expansion at this small, highly respected, consultancy has created roles for a

experience to join successful investment consultancy. New challenge, terrific

p/q & qual life actuary. Extensive client contact & varied projects inc solvency &

variety & chance to excel in small, dynamic, proactive team. Help manage a

valuation work in a profit scheme environment. Prestigious clients, profit share

portfolio of clients, deliver investment solutions & ALM/Quant work. Ref:1803

& excellent career prospects. Exams progress not essential. Ref:1809

Prophet Proph et - ALM ALM – Stochastic Stochastic Modelling Modelling

No more commuting

Surrey/Berks + Travel

South Coast

City

£40£4 0-95 95K K + bo bonu nus s

£50-95K + exc bens

Surrey

£40-90K + exc bonus

£35-85K + RELOC

Need a new challenge? This is it - totally client facing, exciting, leading edge

Change Chang e your lifest lifestyle yle & enjoy more free time by joini joining ng this award winning GI

& everything that’s different from routine within life & financial services. PQ or 

personal & commercial lines insurer. Expansion has led to key roles for pricing

qual actuaries with Prophet, Moses or similar skills for key business projects

analys ana lysts ts & actu actuari aries es to spe spearh arhead ead new pro projec jects. ts. Out Outsta standi nding ng work working ing

in ALM, stochastic modelling, financial economics & derivatives. Ref:1804

environment inc flexitime. Strong Excel & analysis skills essential. Ref:1810

Capitall Modell Capita Modelling/Re ing/Reservin serving g – GI

Fantastic Career Prospects

London

£60-100K

M4 Corridor 

£40-60K

My client, a leadi leading ng personal lines Lloyd's syndicate syndicate is looking for an actuary

 Are you good enough to go to the top? Independent, growing & dynamic

to jo join in its ex expa pand ndin ing g te team am.. Sc Scop ope e to de deve velo lop p th the e ro role le,, bu buil ild d cl clie ient nt

consulting practice seeks pensions analysts with ambition to progress to board

relationships, undertake reserving & create capital models as well as R&D.

level. lev el. If you yourr skil skills ls inc includ lude e pen pensio sions ns val valuat uation ions, s, stro strong ng Exc Excel el and good

 Attractive package on offer for nearly/newly qual. non-life actuary. Ref:1805

communications skills this is a fantastic chance to prove yourself. Ref:1811

Senior Product Actuary London

Life ALM to £80K

Surrey / Hants

£50-75K

Leading life insurer with new & innovative protection products seek individual

Fast track your career by joining this global life & protection provider. Key role

with exp. in a life office, office, rei reinsu nsurer rer or con consul sultan tancy cy & exp exposu osure re to pro produc ductt developmen devel opmentt or financ financial ial modelling. modelling. Work closely with Actuarial Director &

overseein overse eing g inv invest estme ment nt pra practi ctices ces & int integ egrat rating ing wit with h sol solven vency cy II. Use you yourr ALM exp to advise on derivatives, hedging & liquidity ratios. Suit nearly/newly qual actuary.

assist the team in new product development, pricing/profit testing, financial

Contractors & flexi-working also considered. Ref:1812

projections, capital management, reinsurance & marketing. Ref:1806

To apply for any of these vacancies please phone 020 8420 1818, and speak to Peter or Norma

or apply online at   www.actualsearch.co.uk or o r email   [email protected].

www.actualsearch.co.uk

 

[email protected]

 

 e s  e .  r o  l  a  l  l  e s   i e  e s  e  c  i  s  e  c  n  s  e  m     fi  fi  a .  f   T  h  n  l y  e a  r  o  y  s  v a c  t  i  m e ,  p  l e   i m  e  o  o u     h  h  e  u  t  f  n  o  f  o  o  a r e  e   y  o  t o  n e  p  l e   t  a n y   fi  o  c  m   t    fi  s a  v e  a  e c  i  u s  a  s p  c  t  h a   l e   e  e  w  r o  n  t a  o  a  c  r   F o

Global opportunities

Industry insight 

Worldwide contacts R u n by a c tu a rie s  f   for  or a c tu a rie s

Global opportunities

Unrivalled contacts

Industry insight

CV preparation

Interview coaching

Salary negotiation

 

 Chief Actuary Mediterranean Our client is seeking to recruit a Chief Actuary. Reporting to the CEO the successful candidate will set the company’s Actuarial policy and direction while also being active in, and the driver of the organisation’s overall strategy. As a member of the senior leadership team you will work closely with the CEO and Board of Directors as well as with the relative governance committees of the board. You will be a quali fied Actuary with a minimum of 5 years’ post-qualification experience. Job ref: J4009

  Life Pricing Actuaries and Analysts Europe Exciting opportunity for students and qualified actuaries to join an expanding reinsurance operation where your

 Capital Actuary

contribution to their business will be visible and rewarded.

South East

Responsibilities will include: development and maintenance

My client, an Essex-based insurer is looking for a Capital

of pricing methodologies and tools; research and product

Actuary to work on the capital model build, parameterisation,

development; and experience analyses. Also part of the job

documentation, model refinement and output development. The

will be to enhance the company’s industry pro file through

role involves working closely with the Chief Actuary and an d the rest

publications, conference participation and working with

of the actuarial function. Experience of Igloo software modelling

professional bodies. Job ref: J4003

would definitely be a bonus. The ideal candidate will be either a nearly/newly qualified actuary or a part-qualified actuary with knowledge of insurance regulation. Job ref: J3961

  Business Development Actuaries UK/Europe We are working with several clients who are keen to recruit life

London

insurance actuaries with an interest in sales and marketing. At the heart of the role is the requirement to generate

You will support the enhancement of the pricing processes

profitable new business opportunities and build sustainable

performed by the actuarial products teams and the delivery of

client relationships. You will have a track record of business

the annual plan for pricing reviews. The scope of the role includes

development plus the ability to convert dif ficult concepts into

all lines of business for all countries across the European region.

neat solutions and to implement practical initiatives. A high

You will have proven people management and leadership skills

degree of organisation and enthusiasm with a focus on pro fit

and a proven ability to educate non-technical managers on

is essential. Job refs: J4004, J4006

  Non-Life Pricing Manager

technical areas that enhance their decision-making ability. Job

ref: J3971

  European Product Development London

  Senior Investment Consultant

A new and exciting role with an international market leader.

Scotland

Based in London, the role will have a European focus and

You will have responsibility to help drive the consulting agenda

you will be working with local branches to develop innovative inn ovative

with clients and successfully promoting the proposition to new

product variations. You will have oversight of pricing processes

and existing clients in Scotland and, more generally, in the

and models and you will liaise with many other departments

market. You will also have a responsibility to help develop the

in bringing products to market. Post-qualification experience,

business and team in Scotland. You will act as a mentor and

ideally in a pricing or product development environment, is

role model to junior staff, by motivating and inspiring a high

required. European language skills will be an advantage but

standard of excellence, and creating a culture of proactively,

are not essential. Job ref: J3988

collaboration and personal development. development . You will also contribute to the ongoing development of the intellectual capital. Job ref: J3982

 Chief Actuary Dublin Experienced Non-Life Actuary required to lead the Actuarial

  CV Booster - Life or GI

Department and be responsible for all activities, including

London

planning, strategy and operational work flow. Responsibilities of

Unmissable opportunity to join a high-profile organisation that

the role will include developing and overseeing actuarial strategy

will influence and shape the development, implementation and

in line with company objectives, assisting with Solvency II to

monitoring of insurance regulation. A spell in this organisation

ensure compliance and development of the risk management

will bring you into regular contact with some of the most

function. Job ref: J3951

experienced actuaries in the country. Applications are invited fi

from quali ed actuaries of all levels. Job refs: J4008, J4010

Dublin

London

Sydney

Hong Kong

[email protected] [email protected] Tel +353 Tel  +353 1 6099 400

[email protected]   [email protected] Tel +44 Tel  +44 20 3189 2900

[email protected]   Tel +61 Tel  +61 2 9262 1612

asiapacifi[email protected] [email protected]   Tel +852 Tel  +852 3051 9920

 

www.ojassociates.com

General Insurance - UK Chief Actuary

 Jamie Howard

London

£250,000 + Bonus + Bens

Partner - Consulting London

Paul Francis £200,000 + Bonus + Bens

EXCLUSIVE OPPORTUNITY. Senior Chief Actuary role for London based insurance company. Call for details.

An established global business with strong non-European non-European footing is seeking to formally develop an actuarial service offering. They will target front-office insurance services through effective software development. Unique opportunity to contribute to the growth of an astonishing entity!

Group Chief Actuary

GI Risk Actuary

Paul Francis

London

£150,000 + Bonus + Bens

 Jamie Howard

London

£150,000 + Bonus + Bens

My client is an entrepreneurial entrepreneurial London Market business seeking s eeking a managing actuary. You You will work closely with the board, manage the actuarial team and also engage in extensive portfolio analysis to advise the board on acquisition opportunities. Very visible, in󿬂uential role.

A unique opportunity to join a non-life group risk team. A multinational insurer is looking for an experienced commercial actuary with around 2-5 years PQE. Previous experience in GI reserving or pricing an advantage, you must have good business acumen and communication skills.

Reinsurance Pricing Actuary

Capital Manager

London

Rick Davis £110,000 + Bonus + Bens

Rick Davis

London

£110,000 + Bonus + Bens

as part of aactuary successful underwriting team. The successful candidate be a quali󿬁ed with pricing experience gained within a will non-life insurer/reinsurer. Requires excellent communication skills.

Exciting London Market insurer requires an experienced actuary to lead a capital team. An excellent role for anyone looking to build team leadership and business-facing experience. Requires previous capital experience (igloo preferred) and a high level of commercial acumen.

Technical Provisioning

London Market Pricing

A strong Lloyd’s Syndicate requires a Reinsurance Pricing Actuary to operate

Ben Pitt

London

£75,000 + Bonus + Bens

 The London market division of a global insurer seeks an ambitious part quali󿬁ed actuary for their newly appointed Technical Provisioning team. You will work directly with the Chief Actuary on a variety of Reserving and Solvency II based projects. Excellent support and training is guaranteed guaranteed..

London

Ben Pitt £55,000 + Bonus + Bens

A vacancy has arisen within the Pricing team of a London Market organisation. You You will work closely with the underwriters on a variety of lines of business. Previous pricing experience is not necessarily required as excellent ‘on the job’ training will be provided.

Ireland, Continental Europe & Asia Head of Non-Life Risk  International

 Julien Fabius €Competitive + Bonus + Bens

Senior Run-Off Actuary Zürich, Switzerland

Emma Gilbert CHF180,000 + Bonus + Bens

General Insurance Group seeks a Head of Risk to set up and lead the risk and audit function, prepare the organisation for the implementation of Solvency II and coordinate the 󿬁rm's enterprise risk management processes. Managerial experience and Solvency II knowledge are required.

I am working with a world-renowned Reinsurer exclusively on two Senior positions within their Run-Off buy-out team. A rare opportunity to get involved in unique Reserving transactions, leading global project teams and negotiating with external clients internationally. German not needed.

Senior Actuaries

Senior Actuary GI

Phu Le-Ngoc

Phu Le-Ngoc

Germany German y or Switz Switzerlan erland d €Com €Competit petitive ive + Bonus Bonus + Bens

Germany

Exciting career opportunities for high potentials. My client is looking for quali󿬁ed or part-quali󿬁ed actuaries with a strong s trong academic and professional track record. You will deal with MCEV, SST or Solvency II, ALM. Travelling into local entities requires international experience.

My client is looking for senior actuaries with 7-10 yrs experience. You will be responsible for either Reserving, Pricing or Capital Modelling. You will also provide technical and thought leadership for junior actuaries. Relocation package includes language courses.

General Insurance - UK

Life Insurance - UK

Rick Davis [email protected] Paul Francis [email protected]  Jamie Howard  jamie.howard@ojassoci  jamie.how [email protected] ates.com

0207 649 9353 0207 649 9469 0207 310 8725

€90,000 + Bonus + Bens

Clare Nash [email protected] Patrick Flanagan patrick.󿬂[email protected] Harriet Hall

0207 649 9350 0207 649 9355 0207 310 8783

Ben Pitt [email protected]

0207 310 8719

[email protected] Patrick McMahon [email protected]

0131 278 0133

 

Life Insurance - UK Senior ALM Actuary

Clare Nash

London

£130,000 + Bonus + Bens

An outstanding opportunity has arisen within a prestigious investment bank; my client seeks an experienced actuary (qualified or QBE) to take ownership of market leading projects. You will enjoy playing a pivotal role in technical and more commer commercial cial projects. Outstanding career potential.

Clare Nash

Reinsurance Actuary London

£100,000 + Bonus + Bens

Unique Actuarial Consultant UK Wide

Patrick Flanagan £110,000 + Bonus + Bens

A unique consultant role working in a small actuarial team for a Fortune 500 company. You will be the key link between the clients and internal employees explaining actuarial concepts. You will have the flexibility to manage your own workload and can work from home on Fridays.

Commercial Pricing Actuary South East

Clare Nash £90,000 + Bonus + Bens

Have you ever considered moving into Reinsurance? My client seeks two qualified actuaries to play major roles within their Capital and Marketing teams. A multitude of backgrounds will be considered as long as you have the aptitude to acquire new skills. High profile positions.

Are you looking for a highly commercial role within a market leading insurer? You will play a lead role in the management and development of the Pricing team and help influence key strategic decisions. Working Working alongside senior management, this is a career enhancing opportunity.

Newly Qualified Actuary

Actuarial Systems Consultant

Patrick Flanagan

London

£80,000 + Bonus + Bens

South East

Harriet Hall £80,000 + Bonus + Bens

A niche and specialist insurer is looking for a nearly/newly qualified actuary to join their small entrepreneurial team. A broad all-encompassing position that will allow you close interaction with the Chief Actuary, CRO and Investments/ALM Investments/AL M team. A truly outstanding career enhancing opportunity opportunity..

Do you have a strong technical background but now looking to be more strategic and less hands-on? This tier one financial services firm is looking for actuaries with extensive systems and modelling skills to join its market leading consulting team. All levels of qualification considered.

Financial Reporting Actuary

Actuarial Analyst - Buyout

Scotland

Patrick McMahon £70,000 + Bonus + Bens

A highly motivated and qualified actuary is required to take the lead on various new reporting projects and team developments. You will have outstanding communication, organisational and influencing skills as you present results to senior management and non-technical stakeholders.

London

Harriet Hall £45,000 + Bonus + Bens

Are you a pensions or investments investments actuary wanting to get involved in more sales focused activities in addition to cutting edge buy-out projects? Highly commercial role within a leading insurer responsible for developing de-risking solutions for their clients. Excellent career development role.

Ireland, Continental Europe & Asia Team Leader – Pricing Zürich, Switzerland

Emma Gilbert CHF170,000 + Bonus + Bens

Corporate Actuary Dublin

Patrick McMahon €115,000 + Bonus + Bens

An extremely prestigious global Reinsurer is looking for an exceptional actuary to lead and build a brand-new pricing team of 4. The role will be technically focused on pricing methodology and Experience Analysis for global market units. Please call for a more detailed overview.

A global market leader is looking for a qualified actuary to take on a new role within the organisaton. You will be exposed to cutting edge projects such as Solvency II and Capital Management. A wealth of career progression is on offer working with such a prestigious name.

Valuation Actuary

Unique Annuities Position

Brussels

 Julien Fabius €Competitive + Bonus + Bens

 Top 20 European Insurance Group seeks a Valuation Valuation Actuary to join the Valuation team at Group level responsible for Europe and Asia. You will work within a strong valuation team where you will be responsible for the group’s calculations and analysis on the group’s results (MCEV, SCR, MCBS, LAT...)

International Patrick McMahon +353 (0)1 685 2413 [email protected] +32 2-88 860 51  Julien Fabius  julien.fabius@ojassociates.  julien.fabius@oj associates.com com   0207 649 9466 Emma Gilbert

+41 (0)43 508 0509

Dublin

Patrick McMahon €80,000 + Bonus + Bens

Are you looking to bolster your actuarial skills in a challenging and varied role? My client seeks a nearly/newly qualified actuary to provide actuarial support on all aspects of Variable Annuities with exposure to Pricing, Reporting and Product Development. Excellent career progression.

Asian Opportunities - Life / GI / Investments Investments  Jonny Plews  [email protected]  [email protected] m

+44 (0)207 649 9467  9467 

[email protected] Phu Le-Ngoc [email protected]

  0207 310 8782 +49 (0)89 2206 1068   0207 310 8643

 

R ead y to clim b

 hiig h e r ?  h

A fre f res sh ap p roa roac ch www.the-arc.co.uk

The Actuarial Recruitment Company

Cal alll us us anyti anytime me including evenings evenings and w eekend s o n 02 0 7 71 7 9 70 5 o r email [email protected]  email [email protected]  General Insu General Insurance rance   A nd nd y Clar k BSc FIA Lif e, pens pensions ions an and d inv i nves estt me ment nt   Ch r is Can n o n BA

0781 333 7891 0771 122 8449

   

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