watsonwyatt.com an introduction to the actuarial profession 21 october 2008
Post on 02-Jan-2016
213 Views
Preview:
TRANSCRIPT
watsonwyatt.com
An Introduction to the Actuarial Profession
21 October 2008
Copyright © Watson Wyatt Worldwide. All rights reserved
2
Agenda
Introduction / benefit consulting – Mark Cooper Investment consulting – Iain Douglas Msc Actuarial Finance – Dr David McCarthy The profession – Robert Hail
Please stop us if you have a question!
Copyright © Watson Wyatt Worldwide. All rights reserved
3
My Background
Graduated from Imperial with Maths Bsc in 2005 September 2005 – Joined the Watson Wyatt
Graduate Scheme Ocobter 2006 – commenced Msc Actuarial Finance
(part time) at Tanaka business school
3
Copyright © Watson Wyatt Worldwide. All rights reserved
4
What is an actuary?
Statistical heart– Analysing future financial events in the presence of
uncertainty Types of work:
– Pricing financial derivatives
– Setting premium rates for insurance policies
– Advising corporate on pension scheme issues
– Recurring theme is dealing with uncertain amounts and timing of future cash flows
The ability to communicate clearly difficult topics to non-specialists is of paramount importance.
Copyright © Watson Wyatt Worldwide. All rights reserved
5
Most popular first degree subjects studied by new entrants to the profession
Mathematics Actuarial science Economics Finance Physics Science Mathematics - MORSE Computer science
Copyright © Watson Wyatt Worldwide. All rights reserved
6
Qualified actuaries working in the UK
37%
32%
1%
9%
9%
12%
Pensions Life Healthcare General Investment Others
Where do actuaries work?
Currently 9,000 qualified actuaries in the UK
Copyright © Watson Wyatt Worldwide. All rights reserved
7
Actuarial Education
Currently there are 15 exams you must pass before you are a qualified actuary
– Range of skills tested, some technical others more applied (wordy)
Typical qualification time: 4 – 7 years Alternative exam paths available
– Imperial Msc Actuarial Finance
– Various other post grad courses
Employer provides generous study package
Copyright © Watson Wyatt Worldwide. All rights reserved
8
Variety Relationship management Solution focused Challenge It pays well!
Why Consultancy?
Copyright © Watson Wyatt Worldwide. All rights reserved
9
Actuarial consultancy
Graduate entry (dependent on exemptions) £22k-27k
Newly qualified £46k-60k
3 years+ PQE £70k-86k+
7 years+ PQE £100k+
UK Actuarial scales
Copyright © Watson Wyatt Worldwide. All rights reserved
101010
Role of a pensions actuary
Defined Benefits – mostly Final Salary Pension Schemes
Questions:– How much should Mr Jones’ employer save now in order that
he can retire at age 65 on a pension of 2/3 of his salary at that time?
– I want to make Mr Jones redundant, what is the cost of providing him with an extra £1,000 of pension?
– I want to buy the company Mr Jones works for, how much should the pension plan affect what I am prepared to bid?
– What is the impact of the credit crunch on Mr Jones’ pension?
Pension = (Service / 60) * Final Pensionable Salary
Copyright © Watson Wyatt Worldwide. All rights reserved
111111
Role development I
Starting out as a pensions trainee actuary:
Graduate training Exams Work / Study/ Social balance Day-to-day work
– Individual calculations
– Valuation calculations
– Spreadsheets and calculators!
Copyright © Watson Wyatt Worldwide. All rights reserved
1212
Role Development II
After a couple of years:
Professional development Junior training Shaping career Less doing, more checking Client contact Regular clients / one-off projects Project management
watsonwyatt.com
Investment Consulting
Iain Douglas
Copyright © Watson Wyatt Worldwide. All rights reserved
14
Role of the investment practice
70%
100%
85%
Time
Funding target for pension plans
Actual progress
Ideal progress
How can we help with this journey plan using investment strategy?
Copyright © Watson Wyatt Worldwide. All rights reserved
15
What do we do?
Investment strategy
Manager research
Client reporting
Copyright © Watson Wyatt Worldwide. All rights reserved
16
Setting investment strategy
Ongoing funding level after 10 years
3. Would like at least this much return
1. “Minimum” risk
2. Too much risk?
3. Would like at least this much return
1. “Minimum” risk
2. Too much risk?
95th Percentile
Lower Quartile
Median
Upper Quartile
133
142
152
161
171
6467697275778081828277
9594929189
8186
9595 95 96
107
127123
120116
112
85
99
8994
103
116
124
100
89
107
94
0
20
40
60
80
100
120
140
160
180
0%RS
10%RS
20%RS
30%RS
40%RS
50%RS
CurrentPolicy
70%RS
80%RS
90%RS
100%RS
(%)
Matching Return-seeking
Asset allocation
Quantitative modelling, plus:
Sponsor covenant
Maturity of liabilities
Risk beliefs
Copyright © Watson Wyatt Worldwide. All rights reserved
17
Setting and implementing strategy
Matching
Equities
Return-seeking
OtherDebt
Alternatives
Asset allocation
Privateequity
Property
Long termequity
Overseas UK
Corporatebonds
Index-link.GiltsGilts
Hedging
PFICommodity
Overseas
Swaps
Man
ager
s
Bonds
GTAA/currency
Hedge funds
Benc
hmar
ks
Setting and implementing investment strategy
Copyright © Watson Wyatt Worldwide. All rights reserved
18
-
Global manager research resources
European Manager Research Team
39 full-time manager researchers10 support staff
25 part-time manager researchers(56 full-time equivalents)
Americas Manager Research Team
17 full-time manager researchers
2 support staff
14 part-time manager researchers
(20 full-time equivalents)
Asia Pacific Manager Research Team
10 full-time manager researchers
3 support staff
17 part-time manager researchers
(16 full-time equivalents)
Global Manager Research Team
66 full-time manager researchers
15 support staff
56 part-time manager researchers
(92 full-time equivalents)
We cover over 1,000 organisations and rate over 4,000 products through 2,000-3,000 research meetings per year
Copyright © Watson Wyatt Worldwide. All rights reserved
19
America
Atlanta MontrealBoston TorontoChicago VancouverNew YorkSan Francisco BrazilWashington Mexico
Europe
Belgium GermanyFrance IrelandNetherlands Portugal Sweden Switzerland Spain UK
Asia Pacific
Australia China Hong Kong IndonesiaJapan Korea New Zealand MalaysiaPhilippines SingaporeTaiwan Thailand
Over 300 dedicated investment consultants in 22 countries Regional centres: London, New York, Hong Kong and Tokyo Over 1,000 pension funds, institutional investors, fund distributors, charities and family
offices with assets of around $1.9 trillion.
Investment consulting resources
Copyright © Watson Wyatt Worldwide. All rights reserved
20
An ongoing process
Investment strategy
Manager research
Client reporting
watsonwyatt.com
Msc Actuarial FinanceImperial College Business School
Dr David McCarthy
22
The Actuarial Profession
Robert Hails
Council Member, Institute of Actuaries
October 2008
23
Role of the Actuarial Profession
Provides qualifications…
…and continuing education
“Learned society” Promotes profession Regulates conduct Disciplines miscreants Serves public interest
24
Our strategy
To support members throughout their careers so they have the skills, attributes and knowledge appropriate for the evolving needs of the UK financial sector, primarily as quantitative risk professionals.
25
Broadening the Profession
26
Professional Administration
Joint Councils
Audit andGovernance
Management Board
DisciplinaryBoard
QualificationsProfessional Regulation
Member Support
InternationalCMI
Examination Board
Professional Community
Practice Areas(linked to qualification)
Member Interest Areas
Emphasis changes over time
Communication at all levels:•actuarial knowledge - left to right•management decisions - right to left
*
*
Public Affairs
27
Oversight by Financial Reporting Council
FRCBoard
Board forActuarial
Standards
AccountingStandards
Board
AuditingPractices
Board
ProfessionalOversight
Board
ReviewPanel
Accountancyand
ActuarialDiscipline
Board
28
The international dimension: distribution of actuaries worldwide
USA
Canada
Latin America
Caribbean
UK
Europe ex UK
Africa
Middle East
Asia
Australia/NZSource: IAA
29
The UK dimension: distribution of actuaries by qualification
Fellows
Students
Affiliates
Associates
Source: UK Profession
30
Current issues
Broadening range of services to members
Strengthening links with universities
Promoting Associate qualification
Expanding role in risk management
Encouraging new structure to provide member support
31
Actuaries are:
“Dedicated, skilled professionals providing important and useful advice, with commitment, integrity and a strong sense of duty”
Sir Derek Morris, March 2004
32
The Actuarial Profession
Robert Hails
Council Member, Institute of Actuaries
October 2008
top related