i nternational n ews - soa · paul sauve 4922-1973-18510 [email protected] regional...

ISSUE NO. 31

OCTOBER 2003

I N T E R N A T I O N A L N E W S

“Through our partnership with TheActuarial Foundation, we are able tohelp many women take important stepstowards financial security.”– Women’s Institute for a SecureRetirement

“I look forward to helping apply thespecial expertise of actuaries to the chal-lenge of a secure financial future for aneducated public.”– Jim MacGinnitie, FSA, FoundationTrustee

“Many of our prospering students wouldbe going in the opposite direction with-out their actuarial mentors.”– Jennifer Anderson, TechnologyTeacher, Prosperity Heights ElementarySchool

T hese are just some of thecomments received from variouspeople who have participated in

The Actuarial Foundation’s mission. Atthe Foundation, we believe that actuar-ies have a unique opportunity toenhance the community through the useof their skills, knowledge and profes-sional experience. Certainly, Foundationinitiatives benefit adult consumers, thepublic and the actuarial profession, butno program touches lives in quite thesame dramatic way as our AdvancingStudent Achievement (ASA) program.This award-winning program hasattracted the involvement of more than300 actuarial volunteers from everypractice area of the profession, withanother 100 actuaries currently waitingfor a program to be developed in theircommunity.

At the start, we faced this question:Everyone knows that actuaries are goodin math, but can they relate to a groupof 10-year olds? Happily, we found thatthe answer is YES! While some actuar-ies are natural teachers in front of agroup, and others prefer the one-on-onecontact of individual mentoring, eitherway, everyone wins and profits from thebond formed between mentor andstudent.

Bret Shroyer, FCAS, lead actuary forthe ASA program at the ProsperityHeights Elementary School in St. Paul,MN commented:

“I like working with kids and I’m excitedabout enhancing the image of the actu-arial community and also about makingkids think and learn that math can befun. Mentorship is important for any

Volunteering Offers Win-WinOpportunitiesWhy Is It Important?by Eileen Streu, CAE

Volunteering Offers Win-Win

Opportunities: Why Is It Important?

by Eileen Streu ..................................................1

Editor’s Note: “Stepping Out”

by Randy Makin................................................3

Who to Call to Volunteer for the Section

by Shumei R. Kuo ............................................4

International Section Reception Visit to

Epcot: Tuesday, October 28 ...................8

Chairperson’s Corner: The Rewarding

Experience of a Volunteer

by Shumei R. Kuo ............................................9

Calling Gifted Youngsters...

submitted by Mike Gabon ............................14

Development of the Actuarial

Profession in Vietnam

by Huynh Thanh Phong ................................16

“The Mysterious East” Part II – A

Review of Asian Life Insurance Markets

– A Risk Management Perspective

by David Rosier...............................................18

Actuaries to Help Students With

Sums ...............................................................19

International Experience Study

by William R. Horbatt......................................21

What’ New in the SOA’s International

Arena?

by Martha Sikaras ..........................................27

“The Mysterious East” Part III – Future

Market Opportunities & Challenges

by David Rosier ..............................................28

Actuaries in Kazakhstan—Profession

Without Frontiers

by Valentina A. Isakina ..................................30

What Are the Probabilities of Couples

Having Twins?

by Shyamal Kumar ........................................32

contents

continued on page 2

N E W S L E T T E R O F T H E I N T E R N A T I O N A L S E C T I O N

2 | INTERNATIONAL NEWS | OCTOBER 2003

Volunteering...| from page 1

professional. It’s important for actuaries as itgets you outside of your job and outside of whatyou do day-in and day-out and lets you experi-ence new things; lets you share the knowledgethat you have and lets you make a difference inthe life of a child.”

Van Jones, FSA, lead actuary for the ASAprogram at the Riley School in Milwaukee, WIstates:

They begin to grasp the sense of invincibilitythat knowledge and problem-solving skillsbring, and as mentors, when we see this confi-dence growing we leave Riley School with morepersonal energy than we had when we arrived.That is a win-win situation!”

How It WorksThe ASA program requires a two-yearcommitment (with possible funding for athird year, if necessary). The actuaries assistthe school faculty in program development,implementation and evaluation. Actuariesjoin with school faculty to design mathemat-ics mentoring unique to the needs of thatparticular school's students. Additionally, theactuaries serve as “classroom mentors.”

The ASA sites must meet several criteriathat are important to the Foundation’sTrustees in awarding grants. All of the currentASA projects encompass many, if not all, of thefollowing components:

• Clear “project champions,” both actuary(ies) and school representative(s)

• Open-minded school leadership

• Attractive corporate partners

• Priority for under-served schools and children

• Mentoring availability.

International Section News

Issue No. 31 • October 2003

International Section of the Society of Actuaries

475 N. Martingale Road • Suite 600

Schaumburg, IL 60173

Phone: (847) 706-3500 • Fax: (847) 706-3599 •

Web site: www.soa.org

This newsletter is free to section members. A subscription is $20.00 for nonmembers.

Current-year issues are available from the Publication Orders Department by contacting

Aleshia Zionce at (847) 706-33525. Photocopies of back issues may be requested for a

nominal fee.

Expressions of opinion stated herein are, unless expressly stated to the contrary, not the

opinion or position of the Society of Actuaries, its sections, its committees or the employers

of the authors.

The Society assumes no responsibility for statements made or opinions expressed in the

articles, criticisms and discussions contained in this publication.

Joe Adduci, Desktop Publishing Coordinator

([email protected]) • Phone: (847) 706-3548 • Fax: (847) 273-8548

Lois Chinnock, Staff Liaison


Martha Sikaras, Manager of Global Initiatives


Randy Makin, Newsletter Editor

Business Men’s Assurance Company

The BMA Tower, One Penn Valley Park • 700 Karnes Blvd.

Kansas City, MO 64108

Phone: (816) 412-3729 • Fax: (816) 412-3700

August C. Chow, Assistant Editor

H. Carl Khor, 2002 Web Liaison

Shumei R. Kuo, Chairperson

Yiji S. Starr, Vice-Chair

Marc Slutzky, Secretary/Treasurer

Rejean Besner, Council Member

August C. Chow, Council Member

Michael P. Enright, Council Member

H. Carl Khor, Council Member

Jorge M. Noronha, Council Member

Paul M. Sauve, Council Member

OCTOBER 2003 | INTERNATIONAL NEWS | 3

Y ou never know exactly where you willend up. I discovered this truism againyesterday morning as the car in front

of me pulled out, not onto the entrance ramp asI expected, but only out of my peripheral line ofsight. No one was hurt; there wasn’t even adent, but it was still a shock. In Tolkien’s bookThe Fellowship of the Ring, the hobbit Frodoquotes his uncle Bilbo as saying, “It’s a danger-ous business, Frodo, going out of yourdoor….You step into the road, and if you don’tkeep your feet, there is no knowing where youmight be swept off to.”

Shumei Kuo has put together two collec-tions of stories, one about currentInternational Section Council members, andone on volunteers from the section, illustratingthe wonderful and varied ways in which wehave become involved in the section, or ininternational work, or in giving back to ourcommunities. There is also an additional pairof articles, drawn from The Royal Gazette ofBermuda on Mike Gabon’s volunteer work. Itshould be noted that we could only print some

of the stories that many of you have in thisregard. I encourage the reader to find a placeto relax, take out this newsletter, and enjoyreading about those who have stepped out intothe Road, and have been swept off into newand interesting places. Along the same themeof volunteering, Eileen Streu has provided awrite-up on the Actuarial Foundation.

Other articles to round out this newsletterinclude Huynh Thanh Phong’s work paper asour newest international ambassador inVietnam, parts 2 and 3 of David Rosier’sMysterious East, and an article on a recentseminar in Kazazhstan by Valentina Isakina.Martha Sikaras has sent an internationalupdate from the Society, and there is informa-tion on the SOA Annual Meeting Sessions andthe Reception at Epcot. Be sure and come tothe Reception, meet your International Sectionrepresentatives and share your ideas orconcerns with them. They are here to serveyou! And be sure to look both ways when youstep out into the Road.o

Editor’s Note“Stepping Out”by Randy Makin

Randy Makin, FSA,

MAAA, is the chief pricing

actuary at Generali USA

Life Reassurance in

Kansas City, MO. He can

be reached at rmakin@

GeneralUSALifeRe.com.

Eileen Streu, CAE, is

director of the Actuarial

Foundation in

Schaumburg, IL. She

can be reached at Eileen.

[email protected].

Volunteering...

For the actuarial profession, these projectshighlight the concern actuaries have aboutquality education. In each of our ASA projects,actuaries are participating as interested,committed resources who place a variety ofhighly-honed skills at the service of helping chil-dren learn.

For the professional educators, grants haveelicited innovative thinking regardingcurriculum designs, teaching methodologiesand student achievement. Most importantly,students are involved in new opportunities todevelop and integrate core life skills such ascommunication, computation, problem solvingand interpersonal skills.

ASA is just one component of theFoundation’s many innovative programsdesigned to help the actuarial professioncontribute to society. Like any successfulundertaking, its chief strength lies in the

committee volunteers who truly “make ithappen.”

Mary Anderson, president of the ActuarialClub of Indianapolis, remarked at a past SOAAnnual Meeting, “Get your company involved,your actuarial club, your university and callthe Foundation. There is no reason actuaries inany city or professional situation should not bepart of this great program.”o

The Actuarial Foundation is a 501(c)(3) organization estab-

lished in 1994 to help facilitate and broaden the actuarial

profession’s contribution to society. The Actuarial Foundation

is funded through voluntary contributions, principally by the

actuarial profession. For more information on our consumer

education, and research initiatives or to sign-up as a volun-

teer mentor for an Advancing Student Achievement program

in your area, please contact The Actuarial Foundation at 847-

706-3535 or via E-mail at: [email protected].


I f you’d like to participate in any of thesection activities, or want to share someideas or provide comments, please contact

us—the volunteers on the InternationalSection Council (ISC).

We would like to hear from you! Pleasecontact any of us with comments, questions,suggestions and/or offers to volunteer (!)regarding the following subjects or any othersubjects of your interest:

Who to Call to Volunteer for the Sectionby Shumei R. Kuo

International Section Council Members and Volunteers

Title Name Telephone E-Mail Address

Chair Shumei Kuo 770-980-3341 [email protected]

Vice Chair Yiji Starr 617-572-4377 [email protected]

Secretary/Treasurer Marc Slutzky 212-330-5844 [email protected]

Meeting SessionCoordinator

Rejean Besner 704-330-5844 [email protected]

Webcasts & SeminarCoordinator

Carl Khor 972-881-4901 [email protected]

Education & ExamCoordinator, Regional

Ambassador CoordinatorAugust Chow 852-2867-2549 [email protected]

Regional AmbassadorCoordinator

Paul Sauve 4922-1973-18510 [email protected]

Regional AmbassadorCoordinator

Mike Enright 302-594-4694 [email protected]

Web site Liaison Shyamal Kumar 5255-5628-4000 [email protected]

Newsletter Editor Randy Makin 816-415-3729 [email protected]


• Sharing topics you’d like to see for meeting sessions, webcasts or seminars.

• Speaking or moderating at meeting sessions,webcasts or seminars.

• Sharing article ideas that you have for the section newsletter.

• Writing an article for the newsletter.

• Comments and ideas about the section’s Web site (http://www.soa.org/sections/ interna.html).

• Comments and ideas about the AmbassadorProgram Web site and country pages (http://www.soa.org/links/amb.html).

• Ideas regarding how to reach out to non-section members located outside of North America.

We’re taking this opportunity to introduceourselves to you. We hope you’ll find the infor-mation helpful. Please do not hesitate to tell ushow we can better serve your needs for profes-sional development and networking in theinternational markets. For those of you whohave volunteered, we thank you for yourcontributions. If you’re interested in volunteer-ing and working with us, we look forward tohearing from you.

Shumei Kuo, Chair Being chair and vice chair of the ISC, I workwith other council members and volunteers toaccomplish tasks that all council membersjointly set out to do. We may be very involvedin some projects and simply stay informed onothers. The focus of the chair and the vice chairis to coordinate and be flexible to injectourselves as needed. We also work on specialprojects with the SOA. In this respect, our roleis to share the information with other councilmembers and provide the section’s perspectiveto the SOA. For example, we provide commentsto the International Strategies under develop-ment and review recommendations by theImplementation Task Force. In addition, weattend meetings of all section chairs to learnabout the latest happenings of the SOA inorder to provide section input and steer thecouncil’s effort.

Serving on the ISC is a lot of work and tonsof fun. It’s a lot of work because everyonealready has plenty to take care of at a regular

job these days, but it’s so much fun because,while working together, we get to know oneanother through sharing ideas and experiencesin an open, direct and energetic fashion. Wemay not always agree on what to do or how todo it, but once a majority opinion is formed anda decision made, we go full speed ahead towardour goals. There is a special sense of achieve-ment and kinship when things are done by agroup of volunteers. Maybe it’s because of thesection work itself, which is something wewant to do, rather than something we are obli-gated or told to do. We don’t take one anotherfor granted and we don’t take having an oppor-tunity to do things for the section for granted.We enjoy the ISC work and working togetheras a group. For that, we owe it to our compa-nies that support our work on the council andalso to our members who elected us to thecouncil.

I am relatively new to the internationalmarkets. My ISC experience has made mewant to continue my international workthough I entered this field by accident. I prac-ticed as a health actuary in the United Statesyears before my husband, who was with AetnaInternational at the time, had an opportunityto go to Brazil for an expatriate assignment.Upon hearing that, I, a career woman and amother of a nine-month old, had indicated thatit was out of the question to even considermoving down the street. Three months later welanded in Brazil with a double expatriate pack-age. It was quite an experience for me to workwith the joint venture company on a healthbusiness of two million members, among otherbusinesses. Yet it was equally challenging toparent a child who spoke only Portuguese.Nevertheless, my family and I had a wonderfulexperience knowing and working with thewarm and welcoming Brazilian people duringour years in Sao Paulo. Two weeks prior to ourreturn to the States, ING acquired AetnaInternational. My husband and I took theopportunity to join ING’s Americas office inAtlanta, Georgia. We have since been blessedfor being able to continue their internationalexperience with a global operation while livingin a culture that we consider a nice mix ofthose in Hartford and Sao Paulo.

Yiji Starr, Vice ChairI have been doing volunteer work for the SOAand other professional organizations for manyyears. My work with the SOA includes taking

continued on page 6

Shumei Kuo


Who to Call ... | from page 5

part in roles such as meeting session speaker,moderator, workshop facilitator and instruc-tor. Prior to joining the ISC, I served on theCommittee on International Issues and theValuation Actuary Symposium PlanningCommittee. When I lived with my family inNew York City, I served one term as Secretaryfor the Actuarial Society of Greater New York.I am is the chief actuary of John HancockInternational Holdings in Boston,Massachusetts. I cover all of my company’sinternational markets, including China,Singapore, Malaysia, Thailand, Indonesia andPhilippines. I travel to these countries on aregular basis.

Ms. Kuo has been amazed that, with Yiji’sposition and job responsibility, as well asbeing a mother of two young children, shehas always managed her work on the ISCwith such efficiency and determination. Ms.Kuo considers one of the benefits of servingon ISC is that she’s been able to learn workand life management skills from people likeYiji.

Marc Slutzky,Secretary/TreasurerI have been involved with the InternationalSection Council for two years. Beginning as avolunteer to be the Web liaison, I helped to getour Web page up and running. A year later in2002, I was elected to the Section Council.Currently I am the secretary treasurer, and myduties are what you would expect—keeping themeeting minutes, and tracking our income andexpenditures.

As a consultant with Milliman USA, I havebeen involved in several consulting projects inJapan, including the demutualization of twoJapanese Life Insurers. Other projects I’veworked on are in Europe, Hong Kong, Koreaand Latin America. In addition, I work on proj-ects in the United States as well.

I like working with the section council as itprovides me opportunities to interact withpeople working all over the world. My work onthe ISC has also helped me understand andappreciate the cultural and business differ-ences in the international markets.

For three years I lived in Tokyo, Japanwhile working for a different company. Thatwas a great experience for my family and me.The experience of living in Japan helpeddevelop my love for travel. So far in 2003, Ihave vacationed in Spain and Italy, and I will

visit Canada and France soon, in addition tomy current plan for a trip to New Zealand.

Rejean Besner, Meeting Session CoordinatorI have been involved with the ISC for the pasttwo years. It’s been a wonderful experienceparticipating and contributing to the work ofa group that is always looking for ways topromote the international scope of the SOA,as well as to improve the experience of SOAmembers that are based outside of NorthAmerica. I have been in charge of organizingthe various sessions at the 2003 meetingsthat are sponsored by the InternationalSection. It’s been great to see the level ofinterest and participation in these sessions,as well as the work done by the speakers thathave made (so far) the spring sessions veryinteresting.

I am also fortunate for the fact that, as thechief actuary of the International ReinsuranceDivision of Transamerica Reinsurance, mywork involves interacting, on a daily basis,with clients, projects and associates that arefrom different cultural backgrounds. It makesmy work so much more challenging but, at thesame time, so much more interesting. I cannotwait to come to the office in the morning andsee what challenges and opportunities havecome overnight in the form of e-mails fromAsia, in addition to what comes through duringthe day from Latin America.

My enthusiasm for different cultures carriesover to my personal time. I like to use most ofmy vacation time to travel out of the country.Over the past 12 months, I have enjoyed vaca-tions in Italy, France, El Salvador and Mexico.Here is a picture (left sidebar) from a recentvacation in Acapulco. And, no, I am not tryingto give up my career as an actuary to sellmangoes on the beach, tempting as it might be.

Carl Khor, Webcasts & Seminar CoordinatorAs a member of ISC, I have been involved incoordinating with other actuarial organiza-tions in Asia about a seminar in Asia. I’m alsoin the process of coordinating some webcastson various interesting topics with othersections of the SOA.

I am in the international group of theAEGON Direct Marketing Services. My jobresponsibility involves overseeing all financialaspects of my company’s international

Rejean besner

Marc Slutzky

Carl Khor & his family

Who to Call ...


operations. My work takes me to the variouscountries in Asia and Europe. I enjoy my workvery much and have a loving family—my wifeand two sons—who are supportive of what I do.

One side benefit serving on the ISC is thatthe work reunited Ms. Kuo and me. We metwhile taking actuarial science classes at theUniversity of Texas at Austin. We both were inthe MBA program and worked for Dr. SamCox, a SOA board member, at different times.Shortly after I started my work on the ISC, Isent a copy of my school paper for a Socialcourse I took at UT, for which Ms. Kuo was theperson I interviewed on a topic about women inthe SOA. We had fun refreshing the memory ofour school days and the time that we werestudying for actuarial exams together.

August Chow, Education & Exam Coordinator,Regional Ambassador CoordinatorShortly after I joined the InternationalSection Council in October 2000, I moved toHong Kong to work for the Government as theassistant commissioner of insurance, respon-sible for the supervision of the long-term lifeinsurers. With council members and volun-teers living in North and South America,Australia, Europe and Asia, they cover a timezone of 19 hours. It has been a real challengefor Lois Chinnock from the SOA to arrange atime for a telephone conference call that isreasonable to every council member. Aftertrying out a few different times includingearly morning and late night, the Councildecided to hold all conference calls at 8 a.m.Eastern Time in the United States, which is 8or 9 p.m. Hong Kong time for me, dependingon the time of the year.

My role in the ISC has been in the educationand exams. I am fortunate that I have also beenon the Professional Development (PD)Committee and the China Region Committee aswell. These associations enable me to work withvolunteer members across various committeesand the section in order to benefit students andfellows living outside of the North America. Tosave some money and time required in travel-ling to North America, students overseas cannow earn up to 15 PD credits by listening to theSOA meeting tapes. I have been involved inputting together the SOA joint regional semi-nars, held annually in various countries in Asia.With a large number of students living in Asia,both Course 7 and APC are now offered in Asia.

My three-year term on ISC is about toexpire at the end of October but my work withthe section will continue. I’m staying on as avolunteer to serve the students and membersin my new capacity as the regional ambassadorcoordinator in Asia, Australia and NewZealand.

Paul Sauve, Regional Ambassador CoordinatorThis is now my second year of involvement onthe SOA International Section Council, afterseveral years being a section member. I havebeen working overseas for six years now—twoyears in Asia and the rest in Europe. Mycurrent position is with Manulife Reinsurancein Cologne, Germany.

The active participation in the ISC is my wayto contribute something back to the SOA, theorganization that gave me the credentials thatfacilitated a mobile international work experi-ence. Beyond my general input to ISC and itsmany initiatives, I have also taken on a new roleas the regional ambassador coordinator forEurope, Africa and the Middle East. In this role,I hope to expand and reinforce the SOA'snetwork of international contacts and represen-tatives so that the FSA and ASA designationscontinue to be well received around the world,which allows other SOA members to have theopportunities to explore international actuarialassignments. In addition to these more altruis-tic reasons, volunteering in the SOA ISC is alsoan opportunity to interact with people fromvaried cultures, companies, backgrounds, etc.Being exposed to people with views differentthan your own is a very important part of grow-ing and learning ... something we should neverstop doing!

Mike Enright, Regional Ambassador Coordinator I’ve been a member of the ISC since 2001. It’sbeen a very positive experience for me. One ofthe things that I’ve been involved with is work-ing with the Ambassadors for Latin America.Ambassadors are SOA members who are work-ing in a foreign country and are willing tocoordinate activities between the SOA and theactuaries, both local and SOA members in thatcountry. It’s been a real pleasure working withthe ambassadors and finding out about localactivities in different countries.

continued on page 8

Paul Sauve

Mike Enright


I’ve recently started coordinating a projectbetween the SOA and the ActuarialAssociation in Colombia to produce a newmortality table. I’m also in the process of help-ing to organize a joint project between the SOAand the superintendent of insurance in Peru toproduce a new annuitant mortality table.

My work for AIG is primarily in the LatinAmerica region. Since AIG has business in mostof the Latin American countries, I have theopportunity to work with a large variety ofpeople and projects. I’ve always enjoyed othercultures and languages, so this is just my idealjob. Besides learning Spanish, I’ve also beenstudying Mandarin Chinese for a few years. Ilove being able to call Mexico or Peru, for exam-ple, during the day and deal with the localactuaries. You never know what may come upnext in today’s business environment.

My wife, who was born in Havana, sharesmy love of other languages and cultures andwe spend most of our vacations visiting othercountries. The photo on the previous pageshows me visiting St John’s Castle in Irelandwhere some of my ancestors might one dayhave stormed the walls.

Shyamal Kumar, Web site Liaison (see article on pg. 32)

Randy Makin, Newsletter EditorAlthough I work for part of a large global firm,Generali, located in Trieste, Italy, my trueinternational experience has been confined toworking with the ISC Section itself. Severalyears ago, Kevin Law was seeking an assistanteditor to the newsletter. Since my forte’ isproofreading rather than scouting articles, Ireadily volunteered.

After a couple of issues, Kevin was pressedby other duties and invited me to succeed himas editor. After a big “gulp,” I agreed. Thewonderful result has been working with ISCmembers who have worked especially hard toproduce or find articles, as well as many otherinternational writers. Some of these relation-ships have grown into genuine friendships, andfor that I am especially grateful.

And, by the way, I am seeking an assistanteditor.o

Who to Call ... | from page 7

My work for

AIG is primarily

in the Latin

America region.

Since AIG has

business in

most of the

Latin American

countries, I have

the opportunity

to work with a

huge variety

of people and

projects.

- Mike Enright

International Section Reception Visit to EpcotTuesday, October 28!!

Experience an evening of desserts, networking and fireworks with the

International Section at Epcot! On

the United Kingdom terrace you will

enjoy desserts, coffee, tea, lemon-

ade and a cash bar while meeting

other members of our global

community. The evening will end

with a spectacular show of lights and

fireworks.

Buses will load at 7:30 p.m. at the

Walt Disney World Dolphin Hotel for the short ride to Epcot and return at

approximately 9:30 p.m.

There is a nonrefundable charge of $25 for International Section members and

$30 for all others. Please include the additional fee with your registration. o


A s you know, the section’s tasks such asdeveloping meeting sessions, publish-ing newsletters and expanding the

Ambassador Program are initiated, coordi-nated and carried out by volunteers. Over theyears, the volunteers, with the assistance fromthe SOA staff, have worked together to provideabundant continuing education and profes-sional development opportunities, timelymarket information, and global networks forour section members.

For this newsletter, I invited many sectionvolunteers to share their experience. Thevolunteers, such as people like you and me,have different reasons and motivations tovolunteer. But we all share one thing. That is,while we start out with helping others or want-ing to make a difference, we end up beingrewarded personally by the experience in unex-pected ways. As Emma McWilliam, one of myguest writers, says, “Giving time for what youbelieve in is really the cornerstone of who youare and can give you experiences that younever realized would shape your life.”

The following stories offer some lighter sidemoments as well as valuable business andpersonal experiences from my guest writers’volunteer work. These are people who haveworked with the section council on one or moreprojects, as well as served on the section coun-cil for years. Getting to know and working withthem and other volunteers is my biggestreward being on the International SectionCouncil. There is so much to learn from myfellow volunteers—not only international actu-arial work and markets, but also work and lifeexperience. With their encouragement, adviceand direct contributions, projects are movingalong and task result delivered. Furthermore,it is a simply wonderful experience workingwith people who enjoy what they do.

Have you ever wondered why you feelcomfortable calling for help from another volun-teer whom you met only once before? Have youfelt an immediate connection with a fellowactuary at the start of a volunteer project?There’s something about volunteer work thatgives us the opportunity to bond like no otherwork. The “comradeship” developed will go along way in both our professional and personallives. International actuaries especially benefit

from volunteer work since relationships andnetworks are fundamental to our work, and ourprofessional and personal lives are oftentimesinseparable.

In addition to the “soft” benefits, there areplenty of hard and solid management skills thatcan be developed through volunteer work. Forexample, what’s a better way to learn how to“influence others without authority” but by beinga volunteer? Even the highest ranked among ushave daily opportunities to practice this, say,with regulators, major clients, and of course,bosses. My first guest writer, Angelica Michail,shares how being a volunteer in a non-profitorganization can be an excellent way for us toget prepared for the corporations of tomorrow.

I hope that reading this article will makeyou want to increase your volunteer participa-tion or perhaps to volunteer for the first time.We are very lucky that many of our employerssupport us in volunteering in both professionaland community organizations. The followingstories reveal that the supporting employersactually have everything to gain by givingtheir employees time and opportunities to dovolunteer work. Mike Gabon concludes it wellat the end of this article saying, “Volunteerismis suited to the profession. To volunteer…forwhat, is the question.” And if you wonder whatto do as a volunteer, Jim Toole inspires, “If youcan dream it, do it!”

Enjoy the volunteer experience from a groupof your fellow actuaries. Happy volunteering!

Angelica MichailAngelica is a consulting actuary with NationalActuarial Network in California. She has donevolunteer work in many professional andcommunity organizations, including thePhilippine Actuarial Society, ToastmastersInternational, East San Gabriel Coalition forthe Homeless and the Presbyterian Church ofUSA. She is also a former chair of theInternational Section Council of the SOA.Through her work, Angelica learned to appreci-ate children, as well as fellow volunteers whohave different life experiences and perspectives.Here’s what Angelica has to say about hervolunteer experience.

Chairperson’s CornerThe Rewarding Experience of a Volunteerby Shumei R. Kuo

continued on page 10

Have you ever

wondered

why you feel

comfortable

calling for help

from another

volunteer whom

you met only

once before?

- Shumei Kuo


The Rewarding Experience of a Volunteer | from page 9

A few weeks ago I attended a lecture byPeter Drucker, the well-known managementguru, on “The Future of the Corporation.” Weknow that the corporations of today are verydifferent from the corporations of yesterday.We, who have been in the insurance industryfor the last decade or more, also know this verywell on a personal level. It appears that thereis no turning back to the old ways. As Druckerputs it, “The corporation of tomorrow is goingto be more strategic and less operational. Morecorporate work is outsourced and corporationsare more like confederations (i.e., alliances).”When someone in the audience asked the ques-tion, “What should managers do to preparethemselves for the new corporation?”, my earsperked up when Drucker answered, “Be avolunteer in a non-profit organization.”

I am a volunteer in my community, churchand professional organizations. My initialmotivation is to help others. However, I learnedthat by helping others, I actually help myselfin so many unexpected and rewarding ways. Idon’t always know the impact of my volunteerefforts but I believe in volunteerism and I keeptrying. These days my volunteer hours arespent teaching young children public speakingand leadership skills, helping churches dealwith diversity issues and assisting homelessfamilies gain the resources and skills to gainaccess to permanent housing. In prior years, Iwas very active in the SOA and served as amember and chair of the International SectionCouncil.

What do I gain as a volunteer? It is notfortune since I usually contribute financiallywhen I get involved. It is not fame since mywork is mostly behind the scenes. What I gainis much more valuable than fortune or fame.Through volunteer work, I made wonderfulfriends who share my dreams and values. Ihave good mental health, as there are a lot ofpositive vibes around volunteers and those whoare being served. I developed many peopleskills as I became very aware of other people’sneeds and viewpoints—not only those beingserved, but also those who are serving with me.The people skills made me feel more comfort-able in management and leadership roles andenabled me to say “yes” when asked to be thechair of the International Section Council.

In the management lecture given byDrucker, he gave two reasons for the “being avolunteer” response. First, volunteer organiza-tions provide opportunities to work with

diverse groups—people with different person-alities, abilities, ethnic backgrounds, economiclevels, educational levels and values. Secondly,volunteers join and leave the organizations attheir free will. Those volunteers who can lead,manage and retain other volunteers will mostlikely be able to lead and manage tomorrow’scorporations. This may yet be the best manage-ment tip for an aspired manager in thecorporation of the future, What a great rewardfor volunteering!

Jim TooleJim is the managing director of life and healthat MBA Actuaries in Winston–Salem, NorthCarolina. Jim started working internationallyfive years ago and has since lived and workedin Mexico, Brazil, Australia and various othersunny locales. Jim started volunteering inprofessional activities 10 years ago in the form-ative Computer Science Section Council. He iscurrently active in the Latin AmericaCommittee, the Strategic Planning Committee,and the Course 8 Finance exam, as well as edit-ing a textbook on acquisitions and the role ofthe actuary. Jim feels volunteering is the mosteffective way to implement change —if you candream it, do it!

I started volunteering when I was a kid. Mymother used to make a point of taking me towork with her on her projects. These were not“charities”; these were organizations withwhich she had a deep commitment. Sometimes,it seemed as though you could almost touch thebonds she forged between people.

We did a lot of different volunteer activitiestogether, from fund raising to outreach to envi-ronmentalism, but the work that made thesingle biggest impact on me was the soupkitchen. It was a real team effort from start tofinish to get those meals up and over. Doingthe table service for the guests really drovehome how important it was to be involved inthe community, and how little it really takes tostart making a difference.

Once I left my hometown, it became moredifficult finding the time and, more impor-tantly, organizations that resonated with me.I was fortunate in New York to come acrossthe East Harlem Tutorial Program, whichprovided educational assistance and rolemodels to children in East Harlem. I neverwould have hooked up with them if it had notbeen for my employer, Met Life, who main-tained a list of pre-screened charitable

Jm Toole

Angelica helps a student

The Rewarding Experience of a Volunteer


organizations that it shared with its employ-ees upon request.

After volunteering with them for about ayear, I had an idea which became my first exer-cise in grant writing. They had a space outback with a concrete floor and a tree burstingthrough it that was completely underutilized. Isaw a garden and, with the support of theorganization and the skills of its various volun-teers, we put together a proposal, which MetLife approved, and put in a garden that isthere to this day. It is not big and I am sure ithas changed a lot in the last 10 years, but atleast it is a safe place for a kid to come and puttheir hands in the dirt.

That was to be my last satisfying volunteerstint for a long time. As my professionalcareer became more complicated, my hoursbecame less predictable. Shuffling aroundfrom continent to continent, I found I had lessability to find organizations I connected withand much less time to volunteer. However, Idid start playing chess, and I found it to beboth a satisfying outlet and a good way to getknow other people while on the road forextended periods.

After a decade and a half, I have come backfull circle to my hometown of Winston-Salem,North Carolina. I quickly found the local chessorganizations and became involved with theWinston-Salem Scholastic Chess Association.This group has brought chess to the areaschools, going from zero to over 350 programparticipants in just a year and a half. I wasfortunate that my father taught me how toplay chess when I was a kid but, if you are notexposed to it at a young age, it is likely thatyou will not pick it up. Studies have shownplaying chess has many positive effects on chil-dren, and I am very pleased to be involved inan organization bringing this experience tolocal youth.

One of our longer-term capital projects isinstalling fixed chessboards in a downtownpark. The goal of the project is to use chess andart to fashion bridges linking Winston-Salem’sdiverse community to its urban center whilebringing vitality to a beautiful and well posi-tioned downtown park.

Outdoor chess venues can be found in majormetropolitan areas throughout the world.Fixed boards draw life to them and serve as agathering place for people who might neverotherwise have come together. Some come toplay; some come to talk, but all come to enjoy.

For travelers, outdoor venues are a great wayof getting introduced to the city’s inhabitantsand tasting a local slice of life. For locals it is adraw of players and observers alike, one thatnever fails to give pause to passers by for fiveminutes, a lunch hour or an afternoon.

As part of the effort, we are involving theDowntown Arts District Association (DADA),and we will be presenting competing designs topublic vote at a “gallery crawl.” Winston-Salemis a diverse community, but we are fragmented;too often we look at each other over fencesinstead of across bridges. The chess board is byits very nature democratic; neither the gamenor its aficionados make distinctions based onage, race or economic status. And althoughchess is not strictly actuarial, I’ll sneak it inthere somehow…

Dan Spafford Dan is vice president and chief actuary withAllmerica Financial Services in Worcester,Massachusetts. He has been involved in a vari-ety of SOA volunteer activities over his 30-yearcareer with Prudential, New York Life, AXA andAllmerica. His involvement with InternationalSection activities is more recent—including aproject to survey a number of section membersabout the joys and pitfalls of the internationalinsurance business.

After “retiring” from AXA at the end of2001, I considered what next to do in my actu-arial career. I began to read the InternationalSection’s newsletter more closely and notedthe results of a section survey that had beenconducted that year. A number of memberscommented that they would like to knowmore about what duties, responsibilities andcommitments were involved in internationalactuarial work. I was interested in that too, soI decided to interview a cross-section of inter-national actuaries and write an article aboutmy findings. That started a fascinatingprocess of information gathering that led toan article in the June 2002 InternationalSection newsletter and a panel discussion atthe SOA’s annual meeting in October. Thedistinguished panel that I moderatedconsisted of Rejean Besner, EmmaMcWilliam, Ronald Poon-Affat and JimTrimble, who shared their insights with about30 attendees.


Dan Spafford visits Paris

Jim & Jimmy planting


In all, I interviewed about 40 actuaries for45 to 90 minutes apiece and heard many fasci-nating stories. Some had handled theirinternational duties primarily from their desksin the United States while others had spentyears abroad in a variety of locations and jobs,often with several different companies. Onetheme that emerged was the assumption oflarge responsibilities early in careers. Anexample was a recently-minted FSA who wassent down to a large U.S. insurance company’sMexican operation to “help out.” Two yearslater she had been placed in charge of 25 actu-aries and other staff as chief actuary. Anothertheme was the bridging of wide cultural differ-ences. The chief actuary of a U.S. company’sSpanish operation mentioned that his staffwould not mind being asked to work until 10 or11 p.m. but would rebel if they had to give uptheir siestas. That was not because theywanted a mid-day snooze, but because thesiesta was their primary family time. I wasalso a bit surprised to learn that the dangers oftravel, including robbery and kidnapping inthis post 9/11 world, while certainly acknowl-edged, were universally “shrugged off” by therespondents.

All in all, the project was a fascinating expe-rience, and I gained a unique insight into thepsyche of the international actuary and theopportunities for actuaries abroad.

Emma McWilliamEmma is a senior manager at Ernst & YoungLLP and is currently on secondment* to theirNew York office from London (which she callshome). She has worked in many territoriessince early on in her career, includingAustralia, France, Germany, Netherlands andSingapore.

One of my most memorable experiences wasvolunteering to join an international businesssociety known as AIESEC (formerly a Frenchacronym for Association Internationale desEtudiants en Sciences Economiques etCommerciales). The SOA seeks to encouragestudents to gain international exposure in thework place and share cultural experiencesglobally.

I was elected president of AIESEC at theUniversity of Bristol. My main responsibilitiesthere were raising jobs locally in the UnitedKingdom for international students to pursueand motivating Bristol students to participatein the international business program. To this

end, my team and I had the challenging task offinding jobs not for ourselves, but for others.Interviewing with a future employer to recruitsomeone from, say India, for three months canseem even more difficult than interviewing foryourself. It was an amazing feeling when themajor multi-national IT consulting firm said“Yes!” The work didn’t end there. It alsoincluded organizing the annual career fair (forstudents to gain access to major multi-nation-als) and arranging multi-cultural events toprovide students with exposure to othercultures.

Giving time for what you believe in is reallythe cornerstone of who you are and can giveyou experiences that you never realized wouldshape your life.

This international flavor continues inEmma’s career where she fulfills her passion tocombine international concepts and business.She now leads Ernst and Young’s global actu-arial team for International AccountingStandards (IAS) and is a member of the GlobalActuarial Leadership Team, which requiresinvolving actuarial professionals around theworld to leverage the experiences of everyone.

Hubert MuellerHubert, a principal with Tillinghast-TowersPerrin in Hartford, Connecticut, has beeninvolved in a number of volunteer activities inboth Europe and North America over his 17-year career with the company. Born andeducated in Germany, Hubert moved to theUnited States in the mid-80s, then returned towork in Europe for most of the 1990s. Mostrecently, his volunteer activities have includedbeing on the International Section Council from2000 to 2002, and being a current member ofthe SOA’s Risk Management Task Force.

I have enjoyed “every minute of it,” as thisallowed me to meet with many different peoplein a variety of cultures and in many differentmarkets.

My memorable activities include:

• Stepping directly off a plane in Munich ontoa speaking platform for an actuarial societymeeting in Munich, and not being able to


Emma McWilliam

Hubert Muelller*Shumei’s note: Secondment means the detachment of a

person from his or her regular organization for a temporary

assignment elsewhere, per www.rhyme.lycos.com.


speak any full sentence in German without adding in English words.

• Working as a volunteer with the newly established insurance regulatory body in Sofia (Bulgaria) in the mid-90s and teaching them the basics of insurance mathematics and investment management in a one-week course (along with a group of other German volunteers). The afternoon sessions always seemed to go a lot smoother than the morn-ing sessions, which I attribute to the insur-ance regulators consuming large amounts of vodka for lunch…

• Acting out the Boston Tea Party at the OldSouth Meeting House in Boston last fall as amember of the International Section Council.

Hans WagnerHans is the corporate actuary for AXA in Paris,working on financial reporting matters for thegroup’s consolidated reporting. After getting hisFSA in 1992, but before moving abroad in 1998,Hans was active in the Education & Examprocess, serving first as an exam grader and thenlater on the curriculum design. He also spoke atmeetings, contributed to articles and was on theorganizing committee for the ValuationActuaries Symposium. Because of the timing ofthe Education & Exam changes, Hans continuedproviding examination support for a year fromMelbourne Australia, where he joined AXA. RicGeisler, the SOA Ambassador to New Zealand,first convinced Hans to run for the InternationalSection Council. While working on the Council,Han’s main initiative was to support educationabout the new E&E process through theAmbassadors.

A few of my favorite volunteer memoriesinclude:

• While serving as the regional ambassador coordinator for Asia on the section council,I had lovely meetings with the SOA Ambas-sadors in Hong Kong and Singapore. I onlywished that my schedule could have allowed me to visit more of the region.

• I did a lot of side-trips, from E&E committeemeetings. From Reno he went cross-country skiing up above Lake Tahoe—the best skiingI’ve ever had. From Albuquerque I visited

northern New Mexico during 110°F heat;and from Phoenix I did one drive including Monument Valley and other sites in north-eastern Arizona. On another trip I hiked to the bottom of the Grand Canyon and stayed overnight.

• While based in Australia I was asked to speak at the International Association of Insurance Supervisors conference in San Francisco one December. Meeting insurance regulators and other interested parties from around the world was a fascinating experi-ence, as there was a great mix of cultures and also of market “maturities” and practices. Also, being in the Northern Hemisphere gave me the Christmas holi-day spirit much more than I could ever getin Melbourne with its long, warm December days!

• My favorite experience was seeing three overseas students, whom I assisted with theprofessional development component,achieve their FSA qualifications and con-tinue with interesting careers.

• The nicest hotel room I ever stayed in was in Keystone, Colorado, while attending an examination committee meeting. I was given a suite with separate living and bedroom, a sunken tub that could accommodate a relay team and a huge picture window view over the Rockies. Unfortunately, I had visited with a friend near Denver the day before the meeting and, since it was such a great visit,I didn’t arrive in Keystone until 3 a.m.Having to be up at 7 a.m. for the meeting and fly out that night, this terrific room was totally wasted. Incidentally, I was able to stay awake and productive for the meeting with the help of a lot of coffee.

Mike Gabon Over his 17-year actuarial career, Mike haslived in Bermuda, Grand Cayman, the UnitedStates, Gloucester, England and Canada, andhas worked on projects and assignments ofthese as well as other countries in WesternEurope, Asia and South America. Mike hasmanaged to volunteer his time in each countryin which he has lived, either for the localcommunity or the SOA community. This

The Rewarding Experience of a Volunteer


Mike Gabon

Editor’s Note: the following article is reprintedwith permission. It last ran in the March 21,2003 issue of The Royal Gazette. It can be foundon their Web site at www.theroyalgazette.com.

T he Institute for Talented Students(ITS) is this weekend going to besearching for gifted youngsters in

need of some additional tutoring are providedfor students who are accepted.

The out-of-school program was launched forthe first time last year, but now the institute islooking for more students for its second yearand is appealing for all children in both privateand public schools to take notice.

The institute aims to stretch the minds ofcreative and intelligent students by providingthem with extra lessons in English and math.It prides itself on being available for childrenof all walks of life, backgrounds, religions andschools. The only thing that it asks is that thestudents are talented and have a willingness tolearn and work hard.

Coordinator of the school Riquette Bonne-Smith said the search would be held onSunday, when children aged between 10 and 14will be academically tested at BermudaCollege between 2 p.m. and 5 p.m.

“Mathematics courses, including individu-ally paced programs, including geometry andalgebra, and creative writing courses with jour-nalism, to engage the students in active andin-depth enquiry,” (are provided for studentswho are accepted, said Ms. Bonne-Smith.

“The students respond to the challenge andunfailingly seek further demands on their abil-ities. A recent survey indicated a high degree ofsatisfaction with the course content and themethodology of delivery, while, most excitingly,the students were insisting on an even greaterchallenge.”

Ms. Bonne-Smith said students were push-ing the boundaries of their grade levels incourses designed to complement and supple-ment their regular school work. And she saidcollege lecturers, who are also instructors atthe institute, found their classes sometimesexceeded the insight of college students. Lastyear’s class consisted of equal numbers ofstudents from the public and private sector,

which Ms. Bonne-Smith said had purely beendown their academic achievement. But shesaid it proved that a lot of talented studentswere in the Government education system.

She said students already in the institutelast year would be eligible to join classes thisyear, and would not need to re-sit the tests.

However, she said as the first term wascoming to a close this year, students needed tore-register for the next one, starting in April.This weekend, however, will also be a time forinstructors to be re-trained by the Institute forTalented Students’ affiliated centre, JohnsHopkins University Centre for Talented Youthin Baltimore. Qualified and experienced mathsand English experts will be on the Island totalk to lecturers about teaching talentedstudents in the next few days. She added:“Plans are underway for September 2003 torestructure the after-school program to allowstudents to study more subjects, as courses inscience, humanities and art are introduced.

“But Sundays have become an importantfeature of the ITS program, allowing a part-nership with actuarials in Bermuda to informthe students of the insurance industry and itsvital importance to the Island. Actuaries alsowork with math classes through the week toadd a real life dimension to the theory ofmathematics.

Ms. Bonne-Smith thanked the many spon-sors of the program and said the school hopedto soon be able to offer scholarships to somestudents.

All talented students are encouraged toturn up at Bermuda College on Sunday for thetest—the fee is $40. For more information,teachers and parents can call the institute on296-5676.o


Calling Gifted Youngsters...by the Royal Gazette | submitted by Mike Gabon

The institute

aims to stretch

the minds of

creative and

intelligent

students by

providing them

with extra

lessons in

English and

math. It prides

itself on being

available for

children of all

walks of life...


includes being one of the fund-raisers in organ-izing and developing an initiative for thebetterment of a nation’s youths’ exposure tomath applications.

In earlier days, Mike’s enthusiastic attitudeand willingness to try anything had earnedhim the names “Jalapeno Mike” and “CrazyCanuck” by fellowship admission coursecolleagues. There is also a serious and dedi-cated side to his volunteerism. Mike’spost-fellowship efforts started with spring andfall finance exam committees. Following that in1997, he started serving on the InternationalSection Council and also as an SOAAmbassador. His work on the council includeddeveloping meeting sessions, coordinatingopportunities for members to meet at interna-tional cultural and historical venues, such asthe United Nations, the Cultural Center ofChicago and the Old South Meeting House inBoston. He also participated in the worldwideTable Manager update while on the council.

It is a combination of several factors thatmakes the volunteer experience rewarding,observed Mike. Within the profession, it’s thecamaraderie of peers, a sense of giving back tothe community, as well as the opportunity tosee a project through for the advancement andenhancement of the profession. It’s also aboutthe ability to be involved in interesting areasand issues not available in the workplace anddeveloping or keeping fresh on technical andmanagement skill sets. Other factors includesharing of knowledge, being able to work withpeople you might otherwise never meet—including those located in other parts of theglobe as well as exposure to various cultures.Those same factors apply, pretty much, to thelocal community.

Some of my notable section volunteer momentsinclude:

• Reenactment of the loyalist-patriot Tea Tax debate in Boston as Samuel Adams (while appropriately drinking the beer with the same name).

• Meeting other volunteers in their countries,such as:

• Iceland, especially the assistance surrounding the 9/11 attacks.

• While traveling in Argentina, seeing several “a la venta” or “for sale” signs on the front lawn of the home of the third President installed in as many weeks.

• Discussing the Danish “wine versus beer” mortality study (a.k.a. the tastes great vs. less filling vs. improves mortal-ity debate).

In 2002, I was elected to the ReinsuranceSection Council and am involved in a majorliterature review and liaison with the ACLIReinsurance committee on globalizationissues. Year 2003 marks my 7th year on thespring and annual program committees, withteam members nominating me most valuedplanning and development contributor onseveral occasions.

I am currently the vice-chair of the 2003Annual Meeting, a member of the ReinsuranceSection Council, the Board Advisory Group onContinuing Education, Project OversightGroup for Managing Retirement Assets forLongevity and Other Risks, as well as the SOAAmbassador to Bermuda.

Mike’s giving of his time has extendedbeyond the actuarial society to charities andlocal communities. Raising funds and partici-pation in the local community are ingrained inMike—from an early age he has raised fundsfor the Jerry Lewis telethon, local sports teamsand schools and for the Terry Rox Foundation’s“Run for a Kid Who Can’t.” His entry, as a kid,for a local police motto “Man Helping Man”sums things up and was chosen over all agegroups. Among his more unusual activities, hehas played basketball in a company president’soffice to raise money for the United Way,assisted in England’s scouting program (alongthe way, enduring the conditions of theCotswold marathon) and augmenting theJohns Hopkins’ Center for Talented Youthcurriculum with math applications.

“Volunteerism is suited to the profession. Tovolunteer…for what, is the question! o


Shumei R. Kuo, FSA,

MAAA, is an actuary of

ING Americas in Atlanta,

GA. She can be reached

at [email protected].

com.


1. Background InsuranceIndustry Information

T he Vietnam life insurance industry isstill in its infancy. The first lifecompany, Bao Viet Life, was set up by

the government of Vietnam in 1996 andforeign insurers were allowed to enter themarket in 1999. Three 100 percent foreign-owned subsidiaries and one joint-venture lifeinsurers, namely Manulife, Prudential(United Kingdom), AIA and Bao Minh-CMG,started operating in 2000. The insurancelaws were promulgated by the NationalAssembly in April 2001 forming the legalbasis for the industry.

Since the liberalization, the industry hasgrown rapidly in all relevant measures. As of theend of 2002, the number of life policies in forcehas exceeded three million lives with totalannual premium exceeding $300 million USD.While this is a small, absolute figure, it repre-sents almost 1 percent of Vietnam’s GDP, aremarkable achievement for a short period. Thenumber of people employed by the industry hasnow reached almost 70,000 countrywide. Mostimportantly, the assets invested by the life insur-ers are making significant impact on thedevelopment of the country’s nascent capitalmarket. The life companies are solely responsi-

ble for the creation of the country’s long bond

market, and for the first time, Vietnam actuallyhas a yield curve serving as a benchmark forother financial activities.

While the industry has quickly developedin the past three years, the process for humanresource development has been laggingbehind. Vietnam, with only rudimentaldepartments of insurance study in twouniversities countrywide, had practically noinsurance professionals in 1999. The effortsby the multi-national life insurance compa-nies in the past three years helped develop asmall but inadequate number of professionals.The situation is the bleakest for the actuarialfield. There are less than a dozen studentspursuing an actuarial career, most with only afew exams or less, and none has obtained thenecessary exposure to prepare themself for along-term actuarial career.

The fast pace of development for the indus-try has not been matched with paralleldevelopment of the regulatory system. Vietnamcurrently only has a Division of Insurancewithin the Ministry of Finance. It is expectedthat this division will be upgraded to aDepartment of Insurance within the next fewmonths. While this is encouraging news, thegeneral level of power, and more importantly,the level technical expertise is low. TheVietnamese government needs a lot moreassistance from companies and professionalassociations in order to learn to regulate theindustry. At the moment, the government onlyhas the promulgated the Insurance Laws and afew Decree & Circulars to help regulate theoperation of life insurers. Many areas are leftuncovered.

Since the concept of life insurance is rela-tively new in Vietnam, the general public’sknowledge of the related subject is still verylimited. There still is not an appropriate trans-lation for the terms “actuarial science” and“actuary” in the Vietnamese language, letalone most other more technical terminologies.This low level of awareness also results in alack of knowledge about the insurance indus-try in general and about actuarial science inparticular amongst the Vietnamese students.

Development of the ActuarialProfession in Vietnamby Huynh Thanh Phong

Since the

concept of life

insurance is

relatively new in

Vietnam, the

general public’s

knowledge of

the related

subject is still

very limited.

An overlooking view of Saigon taken from HuynhÕs window...


2. Proposed Focus forAmbassador projects inVietnamGiven the current conditions of the life insur-ance industry in Vietnam, the SOA’s focusshould initially cover the important areas of:(i) Information dissemination

(ii) Actuarial education encouragement

(iii) Regulatory assistance

(iv) Social activities coordination

There are many other areas where the SOAcould also be active and of benefit to the country.However, given the small number of actuariespresent in Vietnam and the limited resources,the initial activities and programs of the firsttwo years should be well-focused and restrictedto the above areas.

3. Proposed Work Plan for the Society of ActuariesAmbassador in VietnamOver the next 12 to 18 months, the proposedwork plans for the different focused areas areas follows:

3.1 Information Disseminationa. Set up a Vietnam Country Web page for

the SOA. Even though Internet usage isstill low for the general population, the younger generations are sufficiently web-savvied and should be targeted to ensure an increase in the awareness for the actu-arial profession and for the SOA.

b. Cooperate with the major newspapers topublish articles promoting the actuarial profession and the SOA.

c. Lecture the faculties of business manage-ment, science, statistics and mathematicsof the various universities on the signifi-cance of the actuarial profession in the sound development of the insuranceindustry.

d. Give actuarial publications to students in targeted faculties in selected universities in order to increase the level of awareness of the actuarial profession amongst the university students.

3.2 Actuarial EducationEncouragementa. Establish a permanent examination center

in Ho Chi Minh City to facilitate the exist-ing students’ effort to participate in the examination process.

b. Cooperate with selected local universities to encourage the setting up of an actuarial curriculum based on a recommended approach by the SOA.

c. Grant actuarial textbooks to the libraries of selected universities to provide students with better access to actuarial and research materials.

d. Coordinate actuarial study group to assist local students to successfully write the SOA examinations.

3.3 Regulatory Assistancea. Create the actuarial sub-group for the

Vietnam Insurance Association. This sub-group will act as the main conduit for the industry to provide technical assistance to the government.

b. Invite members of the board of the SOA tovisit the country and to conduct seminars covering subjects interested in by the authorities. These visits by the board members will create tremendous opportu-nities for the branding and educational efforts.

3.4 Social ActivitiesCoordinationa. Create an actuarial club of Ho Chi Minh

City to provide a social forum for existing members and potential actuarial students to meet and exchange information. This forum will also provide the SOA with the platform to perform meaningful charitable and social activities.

b. Coordinate regular social get-togethersand events for the small but growing actu-arial community of Ho Chi Minh City.

c. Publish a fun letter to inform members of the important and not so important devel-opments in the country and the industry.o

Huynh Thanh Phong,

FSA, FCIA, is CEO of

Prudential Vietnam

Assurance in Ho Chi

Minh. He can be reached

at ht.phong@prudential.

com.un.


Editor’s Note: the following article is reprintedwith permission. It last ran in Vol. 19, No. 1(2003) in On The Risk. Part I of “The MysteriousEast appeared in the December 2002 issue of OnThe Risk.

Executive Summary: Asian insurancemarkets generally possess enormous growthpotential, and insurers from around the worldare continuously being tempted to enter theregion. From a risk management perspective,much misconception exists concerning thenature of the markets, the approach to riskevaluation and management, and the issuesand challenges that are being encountered.

This multi-part article attempts to dispelsome of the “myths” around the perceivedunique nature of Asian markets. Part Iaddressed the nature of the markets, the busi-ness drivers and the issues and challengesbeing encountered. Part II takes a riskmanagement perspective.

The current situation is reviewed, includingissues concerning the future development ofappropriate skills to tackle the inevitable rapidgrowth in customers under management, andthe anticipated diversification in terms of prod-uct coverage and distribution approaches.The world continues to “shrink” and ourcustomers will become increasingly moremobile. Appreciation of international marketswill be a key requirement for risk managers inthe future.

Operational Risk Management in Asia IntroductionI believe the information contained within PartI is vital in terms of understanding the dynam-ics of the region and in being able to appreciatethe challenges associated with effective riskevaluation and management.

All the aspects covered in Part I impact, insome form, upon the risk management func-tion, and failure to appreciate and understandmarket realities must inevitably lead to inap-propriate risk solutions. As a general comment,which is not unique to Asia, I would suggestthat far too few underwriters and claim asses-sors have ambitions to make it to the higherlevels of management, and so all too oftensenior management teams lack the appropriate

guidance as to core risks associated withmortality and morbidity risk that they seek toaccept so readily.

Whilst underwriting is clearly viewed as anecessity, often the defining of process andrequirements are carried out once the productconcept has been created and approved. All toofrequently, underwriters do not have the oppor-tunity to participate in the process of creating“innovative” products as they are not seen asan area that can contribute positively to aproduct concept. I know of no company whichseeks to position risk management expertise asa marketing strength. Part of the blame lieswith the “profession” itself who have thetendency to get overly sidetracked on highlytechnical issues whilst inadvertently alienat-ing themselves from the overall managementstrategy—or they simply do not see as part oftheir responsibilities a need to influence andshape the business model.

Before we consider today and tomorrow, let’sbriefly consider yesterday. Firstly, let me dispelone of the apparent major misconceptionsabout Asian markets—the nature of the risks(generally) and the principles by which theyare evaluated are essentially no different thanthe established markets of North America andEurope.

Whilst local circumstances related to avail-ability of information, access to records, qualityof medical screening facilities, etc., may varywidely, the fundamental approach is the same.Additionally, there are relatively few “unique”risk scenarios linked to medical impairments—prevalence may differ (and often we simplyhave no statistical data), but the process ofdetermining a level of extra mortality is essen-tially the same as anywhere else. In my yearsin Asia, this has proved a constant frustrationas the “we are different” barriers are oftencreated and used to block progress either by“local” representatives or those in regional orcorporate headquarters. An underlying aver-sion to change that so many of us have is asstrong in Asia (some would argue stronger) asit is in the rest of the world.

So we start with essential practices andprinciples that represent global accepted prac-tice—classic publications such as Brackenridgeare the cornerstone of underwriting as are theleading international reinsurance manuals.Whilst some reinsurers make adaptations for

The Mysterious East, Part II –A Review Of Asian Life Insurance Markets —Issues & Challengesby David Rosier

Appreciation of

international

markets will be

a key require-

ment for risk

managers in

the future.


Asia (i.e., height and weight tables) most recog-nize these do not represent a major deviationfrom the core approach.

With our senior underwriters trained in thebest that is available from North America andEurope (with some influence out of Australia)it is logical therefore to assume that the corecapabilities are sound and professional.

Differences emerge in the application ofpractices due to market limitations, particu-larly concerning access to information. Qualityof that information is also often a factordependent upon location.

It is in the adaptation of these global “bestpractices” where the real challenge exists.Limited experience and/or lack of seniority inan organization can often combine to result insignificant levels of inertia in the evolution ofrisk selection and management techniques.

This has generally resulted in sound butrather conservative, often expensive, riskevaluation. The appropriate senior personnelmust be able and willing to challenge thetraditional approach—embrace, having under-stood, the business strategy and deliverappropriate market, product, distribution andcustomer related solutions where risk evalua-tion and management are concerned.

All too often, our risk technicians arepassive and driven by competitor approachespresented in an environment of confrontation

by marketing and distribution management.Whilst senior management often needs tochange its views as to the full value of riskspecialists, the actual underwriters and claimspersonnel must also take the initiative to forcethemselves into business strategy manage-ment. To me, this is one of the greatestchallenges this area of the business faces inthe next few years.

So we start with generally a sound founda-tion in terms of process and principles,delivered through generally competent person-nel. The problem is that the pool of talent iswoefully inadequate and companies are gener-ally failing to invest enough resource into thedevelopment of additional new expertise,enhancement of existing skills and the effec-tive retention of these specialists.

All too often, the debate centers on “showme the adverse claim experience and we willtake preventive action”—as we all know, thisis a naive statement borne of a time perhapswhen margins were “fat” and assumptionsregarding expected claims were so conserva-tive that actual claims never came close tocausing a loss (at least for life products asopposed to medical riders). With intensifiedcompetition across a broader and morecomplex set of risks, it will be trend analysis


Editor’s Note: the following article is reprintedwith permission. It last ran in the January 23,2003 issue of The Royal Gazette. It can be foundon their Web site at www.theroyalgazette.com.

I n one of the first programs for the newInstitute for Talented Students, locallybased actuaries from some of the world’s

leading insurance companies have volunteeredto provide maths tuition.

Riquette Bonne-Smith, founder and execu-tive director of the institute says:

“I think it’s a great opportunity for businessesto come to the classroom at an early stage andteach children to enjoy and appreciate mathe-matics. If we can develop interest within thatgroup of academically talented students, itmay motivate them to pursue further studieswithin the field of mathematics.”

Recognising that Bermuda has the highestpercentage of actuaries per capita in the world,Ms. Bonne-Smith decided to tap into thisunique pool of talent.

As mathematics experts, actuaries areideally qualified to teach the select group ofstudents aged 10-14 about maths. The studentswill also be given the unique opportunity, tolearn about maths as applied in an insurancecontext.

One of the chief actuaries at ScottishAnnuity and Life, Mike Gabon, has co-ordi-nated the group of actuaries which includes,Ted Dew of Chubb Re, Patrick Lesage ofEverest Re, Jim McNichols of XL Capital, DaleMensik of Hampton Re and Dianna Williams ofXL Financial Assurance.

Also participating, but not pictured, areGreg Haft of Chubb Re, Arie Haziza of Ernst &Young and David Whiting of Swiss Re.o

Actuaries to Help Students With Sumsby the Royal Gazette | submitted by Mike Gabon

Back row, left to right, Ted Dew,

Patrick Lesage, Jim McNichols, Dale

Mensik.

Front row, left to right, Sonia

Whayman, Dianna Williams, Mike

Gabon, Riquette Bonne-Smith.


“The Mysterious East” Part II | from page 19

(and appropriate responses) which mustbecome the most critical claim managementtool, but which will also undoubtedly identifyon occasions growth opportunities.

So the challenge for the future is creating anew generation of risk managers who are compe-tent technicians yet excel in developing strategiesto support the business objectives. They must berisk takers and opportunity seekers based onsound business acumen, rather than simplyregarded as “guardians of profitability.”

The remaining sections of this article coversome of the main issues and challenges associ-ated with risk management in Asia.

Critical Business Development IssuesProduct DiversificationRisk assessment has generally been a some-what generic model designed to fit all productscenarios. Clearly, this becomes increasinglyinappropriate as diversity and complexity ofproduct coverages advance.

There is a continuous need for companies toadapt their risk rules to match the nature ofrisks written. I see only limited evidence of thisin many of the Asian markets. Inevitably, somerisk evaluation approaches being applied areinappropriate and certainly cannot besustained in the assumptions in the premiumfor acquisition costs. Further time needs to beinvested so all those involved in managingrisks have a sound understanding of the riskenvironment and the risk tolerance of thecompany linked to the underlying financialstructure of the product.

Competitive PressuresIntense competition impacts not just price andproduct features, but places pressure on the riskselection process. Too often, approaches are beingadopted simply by fact that the market “leader”or, more commonly, latest entrant has decided onthis approach. There is often only limited reviewand validation of approach prior to implementa-tion because the pressure to be competitive isintense and experience is low.

Differentiation is often overlooked and anassumption is taken that you have to improveon the existing to compete, not move to a differ-ent position.

As a general observation, risk specialistshave failed to secure a central role in productdevelopment strategies and process. Far toooften, they have to react to decisions taken andproducts designed rather than influencing thecreation. This is regrettable, unhealthy andoften wastes the talent companies have at

their disposal. This problem will becompounded if reinsurers retreat, as they prob-ably will, from their traditional role ofpurveyors of extensive free value added serv-ices. If the traditional “role” of the reinsurerchanges, then companies must either lookmore internally for the required expertise oroutsource to risk consultants.

Pricing ImpactIn competitive environments, even if compa-nies are not competing on price, margins willshrink as insurers respond to market realities.

The spotlight continues to fall on riskmanagement as an area which is arguablymore controllable than some other aspects interms of the expenses generated.

Risk managers need a better understandingof the pricing assumptions of a product. Riskrules should never be developed withoutunderstanding these financial dynamics of theproduct. All too often, however, they appear tobe ignored or a generic model imported from afriendly reinsurer is seen as the answer.

Matching evidence and risk assessment toproduct, distribution and target consumer/customer base will become a key requirementand challenge for senior risk personnel.

As mentioned earlier, the assumptions ofexpected claim levels are only informed esti-mates. As risk managers, we are responsiblefor tracking emerging trends and predictingfuture outcome plus the proposal of anymeasure to avoid or mitigate possible adverseexperience. I see only limited evidence of thisor even that this is fully appreciated as aresponsibility that extends beyond the actu-arial review of overall mortality andmorbidity experience plus input from thetreaty reinsurer.

Volume Driven Risk AssessmentWe all, to a degree, fear change—certainly riskmanagers in Asia are no different. The revolu-tion in automated application screening hascaused much consternation amongst theunderwriting community with, to a degree, aresultant resistance to such developments.

This is inherently wrong—the underwritersshould and will own and control the rule base.Dedication to high volume manual tasks tojustify resource levels is a redundant strategy—adopting to the new environment is vital. Thefocus will shift to sound/consistent/ efficientinitial screening and relevant/ cost-effective/consumer-friendly individual risk evaluationprocess for non-standard applicants.

Risk managers

need a better

understanding

of the pricing

assumptions of

a product.

“The Mysterious East” Part II


DistributionThis is a constant “theme” throughout thisarticle as it will be a major driving force forrisk management approaches and outcome.

Given the predominance of tied agencyforces, the prime focus has to be to support thissales capability as effectively and efficiently aspossible. Success is very dependent upon openand regular dialogue on relevant issues andnot just change instigated as a result ofcomplaints from the field force.

Risk management occurs far too often in a“vacuum” with inadequate explanation to thefield force or appropriate training, not just atthe initial level, but ongoing as agents developtheir customer base.

Perceptions have to change and constructiveregular dialogue should be central to this.

Looking further ahead, a new challenge willemerge as new forms of distribution areadopted which will require new risk models.Underwriters must take the initiative to adaptthe generic tied agency model with regard torisk management.

Customer Relationship ManagementWhilst companies start to embrace theconcepts of seeking to know customers better,

serve them more effectively and increase theretention and profitability of the customerrelationship, there is little evidence this hasfiltered through to risk management activities.

Ultimately, this must change as risk andclaim evaluation deals with two of the mostcritical and sensitive points in a customer rela-tionship. How these activities are handled willspeak volumes about the character of theorganization.

Customer-handling skills must become acritical element of risk management trainingand development programs. In this new era,companies must be able to justify to theoutside world what they do and why—under-writing and claims will certainly move furtherinto the media and consumer “spotlight.”

Customers will demand explanations andalternatives and will need increased directcontact with “experts” in the area of riskmanagement.

Beyond serving customer expectations anddemands, companies will mount campaignsspecifically to sell targeted products tosegments of the customer base. This strategywill demand appropriate risk evaluationapproaches which recognize the existing


T he SOA is launching an internationalexperience study that intends to meas-ure individual life insurance key

performance indicators such as mortality andpersistency on a country-by-country basis.While traditionally the SOA has publishedsimilar experience studies of life insurancesold in the United States, the focus of the studyis individual life insurance experience of poli-cies sold internationally. It is anticipated thatinternational actuaries will use study resultsfor pricing purposes, business planningpurposes and performance benchmarking.

A pilot study is currently being conductedwith four companies contributing 2000–2002experience data for three countries (Mexico,South Korea and Taiwan). The results of thepilot study will be released soon and willinclude persistency and actual to expectedmortality rates. When available, results can be

found on the SOA website at http://www.soa.org/research/index.asp.

The pilot study results should also encour-age more company interest in contributingdata for an expanded study involving addi-tional parameters and countries. Planning hasalready begun for this comprehensive study.Among the additional key performance indica-tors being considered are agent productivityand company expenses.

As one of the co-chairs of the SOA’s interna-tional experience study, I invite you and yourcompany to participate in this groundbreakingendeavor. For more information about thestudy, please contact myself ([email protected]) or Mike Gabon ([email protected]), co-chairs of the SOA’sinternational experience study committee orJack Luff ([email protected]) or Ronora Stryker([email protected]) of the SOA.o

International Experience Studyby William R. Horbatt

William R. Horbatt, FSA,

MAAA, is a consulting

actuary at Actuarial

Consortium in Short Hills,

NJ. He can be reached

at Horbatt@Actuarial

Consortium.com.

Success is

very dependent

upon open and

regular dialogue

on relevant

issues...


customer data and the nature of the relation-ship with the company.

In concluding this section, it can be seenthat virtually all the current market dynamicsimpact upon risk evaluation and management.No market in Asia is excluded from such reali-ties. Unfortunately, the underwriting andclaims fraternity has, to date, been slow torespond and remain often isolated from wherestrategy is defined. This has to change andrequires risk specialists to be far more confi-dent in the value of their contribution andproactive in positioning issues and opportuni-ties with management.

Technical Skills and Business AcumenSkill DistributionIt is very difficult to comment in specificterms without dealing with individualmarkets. Obviously, a market such asVietnam, which effectively opened only threeyears ago, will not have a deep pool of experi-ence to draw upon. This creates majorchallenges for new entrants who have soughtand experienced rapid growth, but have strug-gled to have their risk management expertisekeep pace in an, as yet, unproven environ-ment. China has presented similar challengessince AIG reentered in 1992 and others even-tually followed. Whilst Shanghai andGuangzhou-based operations compete for thelimited skills that exist as other cities openup, there will have to be migration of“experts” and/or rapid development programs.Logic might have dictated products offeredshould reflect to a degree the limitations inrisk evaluation capabilities. Competitive pres-sures have tended to override this wisdom.

Elsewhere, according to my colleagues, theissue is one of moderate to chronic shortage ofskills caused by market immaturity and/orintense competition for this scarce resource.

Virtually no market has real strength indepth, and much development has been dele-gated to international reinsurers—a situationthat is not likely to be sustainable. The focushas been on creating the key role of “chiefunderwriter” but there has been a lack of focusin creating strength in depth, leaving companiestoo vulnerable to the migration of senior person-nel and the temptation, or necessity, ofpromoting the best of the remainder. Muchneeds to be done to create meaningful careerpaths with linkage to a relevant examinationprocess plus ongoing development facilities.Companies and markets need to combine effortsto achieve this in the belief that everyone willgain. Only the largest of multinationals canafford in-house development resources.Reinsurers, however, will probably focus moreattention on major clients, so leaving a signifi-cant “gap” in the market.

Local insurance federations should seek tofill that void and link across the region,perhaps via the auspices of the InternationalUnderwriting Congress which is now underthe management of LOMA.

One very positive feature—for insurers ifnot for the community in general—is that, inmany countries, doctors and nurses are rela-tively inexpensive to recruit and working for amultinational is often very appealing.

Many companies have qualified doctors andnurses employed as underwriters and claimassessors. Clearly, there is an advantage ascore anatomy and physiology are alreadymastered as is an understanding of majorimpairments. The mistake is to assume thatthe medical knowledge will ensure that theseindividuals can and will master the techniquesof risk assessment and understand thecommercial environment. This does not simplyhappen and so whilst the “raw material” ishigh quality, the recruits still have to betrained and molded into skilled risk managers.

Arguably, increasing automation challengesthe level of focus on skill development. This,however, is not logical as automation of theroutine actually supports the development ofspecialists. Companies should be seeking todevelop specialist units of underwriters andclaim assessors who operate across the fullproduct range.

The role of underwriter and claim specialistshould mean exactly that and companies needto get away from the proliferation of job titles



which suggest risk management responsibili-ties, but are, in fact, administration roles. Adesire to retain staff drove companies todevelop misleading job titles which appealed toindividual egos.

The challenges are to create meaningfulcareer paths and status for both administra-tors and risk technicians and to recognize theimportance of both in the organization.

Depth and Breadth of ExpertiseGenerally speaking, virtually all markets, rele-vant to their stage of development, have highlycompetent senior underwriters operating in thelarge local companies or with multinationals.

Whilst recognising the lack of strength indepth, the actual technical knowledge of thesenior risk assessors often rivals anywhere inthe world. There is a strong foundation onwhich to build.

Medical knowledge is generally excellent asis the insight into the fundamentals of riskmanagement. My concern is that this oftendoes not translate into a “leadership” rolewhere product opportunities are identified,processes and practices are constantly evolv-ing, and risk scenarios recognized andexploited to the full.

All too few risk specialists gravitate to thehigher echelon of management or even leader-ship of operational areas. In discussing thiswith colleagues, there seems an unfortunateresignation that this will not change. As longas that feeling prevails, then this will certainlybe a self-fulfilling prophecy!

I believe most “observers” regard underwrit-ing practices and approaches in Asia to begenerally conservative but based on global“best practice.” Arguably, this leads to a volumeof cases being “lost” due to the rigid underwrit-ing approach. Compounding this perception isthe issue of over-ordering of medical require-ments as natural caution drives underwritersto seek absolute answers.

Change will occur when the skills and expe-rience of the senior underwriters can beimparted to more junior technicians and deci-sions are made with a full insight into thenature of the risk and the actuarial assump-tions as to overall underlying risk.

There is no easy answer as this requiresmentoring of underwriters with exposure to everincreasing complexity of risk. These skills cannotbe created in the classroom and it is only practi-cal experience that will create these skills. Thetime and effort required by the senior under-writer must be recognized—time created—rewards given for a task successfully progressed.

The ultimate goal is decision makers and risktakers rather than technical “wizards.” Thisremains a major challenge in Asia.

Compounding the skill shortage is the issueof retention. A fear pervades many marketsthat if you succeed in developing good riskmanagers they will inevitably be recruitedaway. Companies will never be irradiated ofthat risk but, equally, fear of “poaching” shouldnever be an excuse to not develop people.

Whilst remuneration is critical, it is not theonly driver of retention—recognition is vital as isaccess to regional and international meetingswhere a person can represent his or her companyat a senior level. Activity in local insurance asso-ciations raises the individual’s profile and helpsto develop communication skills. None of theseshould be under-estimated as retention measuresbut they need active management support.

Training & DevelopmentThis is the cornerstone of a credible riskmanagement community and my impression ofAsia is that we have become far to dependentupon our reinsurers to tell us what we need toknow and be concerned about.

Generally, this “service” has not catered forthe basic training needs and regular ongoingdevelopment via exposure to current issuesand approaches. Whilst having concerns as tothe future of “value added” services providedby reinsurers, I have to pay tribute to a rein-surance program that originated in Asia andhas been exported to other parts of the world.The GeneralCologne Re Comet programcombines modulized training for junior under-writers and then conversion to an ongoingdevelopment program via aspects such as casestudies and journal review services. An excel-lent program which represents tremendousvalue for insurers.

Reinsurers have tended to determine topicsof interest and bring seminars and publicationsof a fairly generic nature to these markets. Onehas to recognize that these companies do sowith a vested interest to promote potential rein-surance products and so certain relevant topicscould and do get neglected.

The solution should be with local associa-tions that will determine areas of focus andinterest and seek expert input. These groupscan operate within life associations or as anindependent specialist group. Sadly, there areall too few of such groups and my colleaguesregularly cite this as a major shortcoming inmost markets. The Philippines has a very activelocal underwriting association and is a model to



I believe most

“observers”

regard under-

writing practices

and approaches

in Asia to

be generally

conservative but

based on global

“best practice.”


others in what can be achieved. Unfortunately,these initiatives do not suddenly happen—theyneed volunteers and much hard work plus alevel of company endorsement sponsorship.

The Academy of Insurance Medicine—Asiais a relative newcomer but already has established itself as a leader in the field ofdealing with topical risk issues via its biannualregional conference. We desperately need suchan organization to survive and thrive and, dareI suggest it, to broaden its membership andmandate to involve the lay underwriting andclaim communities.

Whilst international events run by LOMA(i.e., the International Underwriting Congress)and the International Congress of Life InsuranceMedicine periodically come to Asia, this is notenough and discussions planned for late2002/2003 into a possible Asia-Pacific Under-writing/Claims Association and some form ofexamination/qualification process specific tothese markets are to be encouraged. All of thisactivity requires senior underwriters to see andaccept training and development as a coreresponsibility at a market and company level.

Specific Risk ManagementChallengesWhilst I have stressed that most of the chal-lenges faced in Asia are not unique in nature,there are a few risk aspects which presentsomewhat unique aspects and I want to touchbriefly on some of these.

HIV/AIDSThis could warrant a separate article in itselfbut safe to say the region presents—certainlyin the Thailand situation—an arguably uniqueset of risk characteristics in terms of the preva-lence of the disease and the risk profiles.

The challenge faced concerns how unique isthe Thailand experience and could the HIV

problem be rapidly developing in some otheremerging insurance markets such as Chinaand Vietnam and how could this threaten thelonger term viability of such markets?

The answer is unknown but the experiencegained in Thailand from risk screening linked tounderlying prevalence rates, risk group charac-teristics and random testing provides companieswith a very sound model as a reference point.

Hepatitis B-C— and BeyondIt is probably true to say that wheneveranyone is asked to identify a particular risksynonymous with Asia, the majority would citeHepatitis—specifically type B and C. Clearly,there are unique features in terms of diseasedistribution and, in some cases, the endemicnature of the infection.

Given the known prevalence rates, theconstant challenge is one of evaluating thosewho present with marginally abnormal liverfunction tests. Opinions differ considerably as toscreening approaches and the handling of thosewho are asymptomatic and yet present abnor-malities of liver function. It is certainlyexceptional that the approach adopted in“Western” markets is not appropriate (i.e., tooharsh) in Asia but we are far from having aclear structure for a generally acceptedapproach.

Medical Evidence—Quality & QuantityRather than dwell on specific diseases anddisorders, I believe it is appropriate tocomment in more general terms regarding thechallenges of establishing an applicant’smedical history. Clearly, there are considerabledifferences between developed markets andemerging countries in terms of quality, avail-ability of medical evidence and health records.

The general rule is that to a large extentcompanies are dependent primarily on disclo-sures by the applicant supported by currentmedical data. To the uninitiated, this couldappear at times to lead to over ordering ofrequirements but this often reflects the diffi-culty in accessing comprehensive medicalrecords/histories.

The attending physicians report is generallydifficult to get, expensive and of questionablevalue. In most countries, there is no central-ized system of medical record collection. Theconcept of a family doctor/personal physician isrelatively new. This creates considerable chal-lenges around determining the medical historyand enhances the opportunities to successfullynon-disclose a relevant history. Underwritersare, therefore, naturally cautious.



In countries where state-run hospitals exist,there remains problems of access and qualityof storage and accuracy of records. Often finan-cial relationships have to be established withhospital administrators rather than dealingdirectly with the specific doctor.

It’s a very challenging environment in whichto evaluate a disclosed medical history (and toevaluate the validity of a suspicious claim).

Turning to the quality and availability ofmedical screening facilities, the situationvaries dramatically according to country.

Companies generally create approvedmedical examiner panels and try to exert somebasic quality controls but normally only mini-mal training in the concepts of life insurancemedicine. Only the largest of companies havein-house, full-time doctors for medical screen-ing although many companies in China,Vietnam, Indonesia and Thailand employdoctors (and nurses) as full time underwritersand claim assessors.

The real challenge comes where morecomplex tests are required—accessibility, qual-ity and cost are all issues. As business developsand geographical boundaries are pushed back,finding access to quality medical screeningcapabilities continues to be a logistical problem.

The major labs continue to evaluate thepotential of establishing in Asia but struggle tolocate a base which would be cost-effective(given perceived volumes) and offer qualityfacility and staff. In reality, decisions oftenhave to be made on the best of what is avail-able which would not always be acceptable in adeveloped market and, as a result, the finaldecision may look overly conservative.

Financial Risk EvaluationPossibly one of the most problematical aspectsof underwriting in Asia concerns the evalua-tion of the financial status of an applicant andjustification for cover levels.

The fundamental issues of access to qualityinformation are global in nature but appearcompounded in Asia, particularly in theChinese community, where financial structuresare often complex in order to minimize tax.Additionally, there is often a pathological fearof producing data regarding income, assets andliabilities let alone justification for levels ofcoverage proposed.

There are even issues of sales being madebased purely on ensuring the coverage isbigger than a personal or business rival. Egoand “face” can be a major driving force.

Sources of income—which appear unusuallylarge—in markets where the nature of the

occupation would not generate such levels isalso an issue. An example would be localgovernment officials applying for large cover-ages in markets such as China.

Applicants who are entrepreneurs andtaking advantage of economies that are liberal-izing and have stimulated a culture of freeenterprise create issues as to nature andsustainability of their income. Generally, prod-ucts offered have proved popular and, in mostmarkets, average sums insured are increasingas are maximum issue limits. Coupled withever-increasing complexity of products andpackaging of coverage, this makes ensuring thejustification process more complex Often, caselaw does not exist, and the insurance lawremains vague concerning concepts such asinsurable interest.

Normally, the “solution” is based upontaking a pragmatic approach to the gatheringand evaluation of evidence. Often circumstan-tial evidence of an applicant’s financialsubstance and business activities has to be thebasis of the decision. Knowledge and trust inthe introducing agent are also critical factors.

Whilst the direct writer may feel, on balance,the risk is valid problems often exist in convinc-ing reinsurers who are unfamiliar with theterritory and have retrocessionnaires who arevery cautious in taking large Asian risks.Constant dialogue, with specific examples,involving all interest parties is the best solution.

Non-Disclosure and FraudWhen one discusses developing/emergingmarkets, inevitably it will be suggested thatthere must be rampant dishonesty driven by anunderlying culture of corruption and much busi-ness is therefore written with fraudulent intent.

In all my years in Asia, I have not seen thatto the extent imagined—the majority of ourpolicyholders are basically honest, and if theyunderstand our needs in terms of information,they generally will provide full and honestanswers. As with other markets, there arealways exceptions, and unscrupulous agentsand dishonest applicants will exploit weak-nesses in risk processes and/or deliberatelynon-disclose.

As markets develop so does the sophistica-tion of the frauds perpetuated. Awareness andunderstanding of the business will always leadto exploitation of opportunity to defraud by alimited few. It is critical that companies, whenthey discover such abuses, take a very publicstance to punish the perpetrators. All too often,there is a reluctance to act because of fear of



There are even

issues of sales

being made

based purely

on ensuring the

coverage is

bigger than a

personal or

business rival.


damaging public perception. This is amistake—positive action taken early in thehistory of a market sets the foundations for asecure future.

There remains a responsibility of insurersto educate the buying public—unintentionalnon-disclosure is often a major issue in veryyoung markets. Insurers have a vested interestto educate the media and public around whatconstitutes a material fact and the implica-tions of material non-disclosure.

Random screening is commonly performed(medicals on one to two percent of clean applica-tions) to ascertain a level of non-disclosure. Thisis valuable in terms of not only giving an indica-tion as to overall quality but as a deterrent tothose who might deliberately non-disclose.

Generally, there are reasonable levels ofhonesty but the public (and agents) must beeducated and continually reminded of theduties of disclosure. The assessment of claimsoccurring in remote locations, early into thecontract with minimal evidence to support theevent, is a common challenge for companies asit has been for any market writing business onclients of different nationalities.

Regulators and Government-RelatedOrganizationsI will finish this section by touching on anissue which I think we as an industryconstantly under-estimate in its potentialimpact. Regulators draw much from themature and arguably “over-regulated” markets.

The mandate now stretches far beyondfinancial viability of the insurer. This requiresan increasingly in-depth understanding of themechanics of insurance. The solution has to bea more open and regular dialogue around criti-cal issues and market responses. So who takeson that responsibility?

Clearly, the life insurance associations havethose implied responsibilities but have oftenproved unsuccessful in engaging regulators,government, media and consumer groups in an“educational” dialogue. All too often, communi-cation takes place when the industry has todefend its position—why do we never learnthat we gain, on occasions, by being proactive?

In Asia, I believe the issues linked to genetictesting are a golden opportunity for the indus-try to be proactive, but indications are only afew agree and others will wait until weinevitably come under attack.

This leads me to the issue of consumergroups, often linked with government, who nowconsider the very important issues of discrimi-nation and privacy, but who, all too frequently,come to challenge the fundamental “Right toUnderwrite.”

These issues are already impacting marketsin Hong Kong and Singapore. Why must wewait until challenged?

Experiences from Australia and UnitedKingdom will show how bad a mistake thatwould be.

In Part III, we will consider what the futuremight hold. o


About the AuthorDavid Rosier has had a career in life and health insurancecovering in excess of 30 years and which commenced in theUnited Kingdom. An underwriter by background, David has hadsenior management roles in the United Kingdom coveringunderwriting, claims and operational management.

David has been involved in Asia for more than 15 years and forthe past 11 years has lived in Hong Kong. He has held seniormanagement positions for both leading insurance and reinsur-ance companies in the region and is currently vice president forrisk management, Asia, for Manulife Financial.

David has written extensively on risk management issues andspoken at numerous industry conferences globally on risk eval-uation, reinsurance and business development strategies. He isa previous OTR contributing editor for Asia. o

Congratulations!

The fol lowing are thenewly-elected members ofthe International SectionCouncil. Each will serve athree-year term beginningin October, 2003.

William R. HorbattShort Hills, NJ

Thomas E. LeonardMilliman BrasilSao Paulo, Brazil

Anna LouieGeneral Cologne ReWanchai, Hong Kong

Ronald L. Poon-AffatGeneral Cologne ReSao Paulo, Brazil

THANK YOU!

Ougoing councilmembers:

Shumei R. Kuo,2002-2003 SectionChairpersonING AmericasAtlanta Georgia

August C. ChowOffice of the Commissionerof InsuranceHong Kong

Jorge Manuel NoronhaING Latin AmericaAtlanta, GA


Don’t Miss the InternationalSection Sessions at the SOAMeeting in Orlando!!

Monday, October 2710:30 a.m–12:00 p.m. SESSION 5 PDSpecialty Track: International/NontraditionalMarketingTRENDS IN DISTRIBUTION IN INTERNATIONAL MARKETS

Tuesday, October 2810:30 a.m.–12:00 p.m. SESSION 69 PDSpecialty Track: International/Management andPersonal DevelopmentMANAGEMENT OF INTERNATIONAL OPERATIONS

Wednesday, October 2910:30 a.m.–12:00 p.m. SESSION 117 OF/DSpecialty Track: Financial Reporting/InternationalINTERNATIONAL ACCOUNTING STANDARDS DEBATE

Wednesday, October 292:00 p.m.–3:30 p.m. SESSION 127 PDSpecialty Track: Health/InternationalINTERNATIONAL SOLUTIONS TO FINANCING HEALTHCARE

Wednesday, October 292:00 p.m.–3:30 p.m. SESSION 128 PDSpecialty Track: InternationalIT’S THURSDAY MORNING, I MUST BE IN SEOUL

What’s New in the SOA’s International Arena?by Martha Sikaras

International StrategyThe Board Level Advisory Group on InternationalIssues, chaired by Stuart Wason, continues workon its White Paper on International Strategy andInitiatives. The group is focused on addressingfour strategic questions:

1. What do we know about our members’ needs, wants and preferences that is relevant? Here, the group will examine information on our current member and candidate demographics and related trends; information on the needs of both of these groups and the identification of other international constituents such as emerging actuarial organizations,academic programs and government entities.

2. What do we know about the current realities and evolving dynamics of the SOA’s environment that is relevant? There are an almost overwhelming number of environmental factors that influence inter-national strategy decisions. For example,the impact of globalization; the emergence of international standards; the conver-gence of financial services firms and a host of regionally specific issues.

3. What do we know about the “capacity” and “strategic position” of our organization that is relevant? No picture is complete without a thorough examination of finances and organizational capacity. The SOA is currently involved in the support of many efforts; some directed by its staff while others are done in cooperation with other organizations such as the International

Actuarial Association and our Hong Kong joint office.

4. What are the ethical implications of our choices? The SOA is one of the largest actuarial organizations. As such, we must take a responsible look at the conse-quences of our decisions and actions.

A final paper is due to the Board ofGovernors for consideration at their Octobermeeting.

You are invited to provide comments on anyof these topics by contacting Martha Sikaras [email protected].

New AmbassadorsThe SOA is pleased to welcome Phong ThanhHuynh, F.S.A., F.C.I.A., (Vietnam) and JulianD.Gribble, F.S.A., F.C.I.A., (Australia) as itsnewest ambassadors. Both ambassadors will beworking to promote the actuarial professionwithin their countries as well as acting a localresource for SOA members and candidates.Congratulations!

Joint Groupe Consultatif/IAAEducation SeminarThe International Actuarial Association (IAA)and the Groupe Consultatif will co-sponsor anInternational Education Conference on“Educating Actuaries with a BusinessOrientation.” The seminar will be held at theHotel Maritim proArte in Berlin on November26-27, 2003. o

Additional details are available at http://www.gcactuaries.org/documents/berlin_regdetails.pdf

Martha Sikaras is

manager of Global

Iniatives at the Society

office in Schaumburg, Ill.

She can be reached at

[email protected].


Editor’s Note: the following article is reprintedwith permission. It last ran in Vol. 19, No. 2(2003) in On The Risk. Part I of “TheMysterious East appeared in the March 2002issue of On The Risk.

Executive Summary: Asian insurancemarkets generally possess enormous growthpotential, and insurers from around the worldare continuously being tempted to enter theregion.

From a risk management perspective, muchmisconception exists concerning the nature of

the markets, the approach to risk evalua-tion and management, and the issues andchallenges that are being encountered.

This multi-part article attempts to dispelsome of the “myths” around the perceivedunique nature of Asian markets. Part Iaddressed the nature of the markets, the busi-ness drivers and the issues and challengesbeing encountered. Part II took a risk manage-ment perspective, reviewing the currentsituation, including product diversification,competitive pressures, pricing issues, volumedrivers, distribution, customer relations, tech-nical skills development and special risks likeAIDS, Hepatitis B and C and more. Part IIIdiscusses the future opportunities for marketgrowth, appropriate risk models and chal-lenges from claims management.

The world continues to “shrink” and our

customers will become increasingly moremobile. Appreciation of international marketswill be a key requirement for risk managers inthe future.

OpportunitiesIf you glean nothing else from this article, Ihope you come away with the appreciationthat Asia represents an area of vast growthpotential.

Consumers generally want and value ourproducts. They are motivated by a desire tosave and then appreciate the value of packag-ing protection against death and disability.

The “emerging middle class” will sustainand grow most markets despite economicvolatility.

Companies will bring products, operationalexpertise, marketing skills and technology toAsia in pursuit of growth and profit. Asia willhave access to the “best of the best” so long asit can deliver steady profitable growth andallows companies to operate in a commercialenvironment that demands professionalismbut recognizes the need to manage risk in anappropriate manner which protects ALL poli-cyholders.

Customers will become more knowledgeableand whilst more demanding in terms of valueand service they will have greater appreciationof the products and overall persistency shouldimprove.

Alternative forms of distribution will ulti-mately enhance profitability as companiespursue the objective of delivering the “rightproduct, at the right time and at the right price.”

ChallengesMarket GrowthOverall, I see the largest threat to the industryand particularly risk management as the unre-alistic “returns” that companies may set fortheir operations in Asia.

Unrealistic plans regarding market share,growth of new business and cost efficiency candrive companies to a strategy of short-termgrowth at all cost whilst potentially sacrificinglong-term profitability.

Risk management will be regarded as ahindrance rather than a “gate keeper” of prof-itability. Companies may seek to not onlyeconomise on risk evaluation but highly incen-tivise new (and inappropriate) products

The Mysterious East, Part III –Future Market Opportunities & Challengesby David Rosier


through minimization of selection criteria.There are already signs of this in certainmarkets.

Skill DevelopmentWe must create more relevant skills and alsoincrease the breadth and depth of those skills.

We need national Organizations who willdrive up the professionalism of its riskmanagers whilst ensuring a sound educationalbase. Reinsurers should not have to shoulderall of that burden.

Companies should invest in developmentprograms which impart knowledge and createskills. Skills should be regularly evaluated andlinked to a meaningful career path andadequate and appropriate reward and recogni-tion.

There is so much still to be done in thisarea.

Relevant Risk ModelsFor far too long, we have all been dependentupon the “wisdom of the West.”

As we face up to the defense of the “Right toUnderwrite,” this may not be enough as we willbe challenged to substantiate that conclusionsbased on statistical data from other areas ofthe world are valid in Asia.

Countries should organize study groups—work with actuarial associations and seek helpfrom, but not pass responsibility to, reinsurers.

We need and should have underwritingtools which truly reflect the dynamics of writ-ing business in Asia.

Claim “Ignorance”High assumptions on expected claim levels(and therefore high premiums)—with resulting“low” actual claim levels cannot be the onlymeasure of effective risk management.

As competition intensifies, these fatmargins will be eroded—as risk managers, it isour duty to monitor and identify claim trendsand propose—PROACTIVELY—measures thatcontrol future risk.

The attitude of waiting until there is a prob-lem with claim levels has to change, but it takescompanies who want to be true market leadersto have the courage to do this. Sadly, there aretoo few companies that see this as their role.The action we take gives a clear message to ourdistributors, the buying public and governmentthat we know our business and it is not “sales atany cost.” Surely, we all have a vested interest totake positive action to minimize unacceptableselection against the insurer.

ConclusionWhilst there are so many issues impacting thedevelopment of risk management skills and

processes, I trust this article has at leastprovided an insight, at a high level, of theissues and challenges of this area of the world.

There exists a strong foundation to buildupon. Issues, and often solutions, are global innature and so “best practice” models can andshould be exported to Asia and adapted locally.Growth potential is considerable in themedium to long term, but profitability and crit-ical mass will take time, patience andinvestment to create. This area of the world isnot for those with a short-term perspective—durability and realism will characterize thosethat will succeed long-term. Whilst a fewunique challenges exist at a country level, andto a lesser extent in the whole region, generallyour colleagues around the world can assist inwhat are predominately common issues andproblems.

There should ideally be a network to permitand encourage sharing of expertise. The IUCcoming to Singapore in November 2003 is amajor step toward that goal if this gatheringcan spur an international group willing andable to create this global forum.

I hope this article sets the scene for thosewho are unfamiliar with Asian markets andwho will be in Singapore in November 2003.For others, I hope this may have stimulated aninterest in Asian markets with a realization weshare so much in terms of approach, issues andchallenges.

As the world “shrinks” and international“barriers” collapse, it is vital we understandthe environment in which we live and work.For risk management, we must all develop abasic understanding of global markets giventhe increasing mobility of products, processesand customers. o

Acknowledgements:My sincere thanks to the following for sharingtheir thoughts and wisdom regarding Asianmarkets:

Hong Kong: Sarah Ho, Dr. John McKeand,Nick Perkins, Donald Sutherland, MikeCulhana, Winnie Wong

Thailand: Robert Grey

Singapore: Catherine Chng, Kamsani Tati

Indonesia: Dr. Yuan Kurniawan

Malaysia: Kok Mun Sum, Chin Kam Seng

Philippines: Judith Baliton

China: Cindy Zhang


W hen my plane landed in Almaty, itwas about 3 a.m on Monday, April28, 2003. By the time all the neces-

sary customs and passport controls werebehind me and I checked into the RegentAlmaty, the clock was approaching 6 a.m. Injust a couple of hours I was due in a classroomto meet a group of actuaries who came fromvarious parts of Kazakhstan, some travelingacross the country, to participate in the courseI was about to teach. I left home over 30 hoursago and the 12-hour time difference withChicago was certainly affecting me. But theexcitement of meeting this group of people,about whom I had heard so much before mytrip, was so strong, I could hardly wait untilthese hours passed.

The opportunity for this trip came knockinglast December at the SOA headquarters inSchaumburg, Illinois. As part of their trip tothe United States and before they proceeded toWashington D.C. to meet with the Academyrepresentatives, a group of actuaries fromKazakhstan was to visit the SOA office. Thetrip included a separate meeting with the SOAstaff actuaries, during which I surprised thevisitors with my knowledge of Russian, step-ping in to help with translation, when theinterpreter retained for the delegation was notable to follow our notoriously “confusing-to-outsiders” actuarial jargon.

I was very excited to meet the actuaries whospoke my first language and, during ourconversations, I learned they were preparing toadminister the sixth and final actuarial courseon finance and investment topics. Culminatingin a final exam, this two-week course wasgoing to complete the first full series of actuar-ial educational requirements in Kazakhstan. ARussian tutor was needed for this course, andI, as the Finance Practice Area actuary at theSOA, who happened to be Russian, was invitedto fill this role.

I immediately received a “thumbs up” fromthe SOA for this international actuarial initia-tive, but getting the approval and securing thetravel funding from the U.S. Agency forInternational Development (USAID), who wassponsoring this course, took some time. Finally,with the help of the Kazakhstan actuaries andMike Sze, the main instructor for the upcomingcourse and a member of the InternationalAcademy of Actuaries’ task force “ActuariesWithout Frontiers,” my trip was set.

Arriving into Almaty, I did not know what toexpect from this two-week seminar. I spentmonths before the trip translating lecturenotes and, having received my higher andgraduate education in the United States, wasaware of the upcoming translation challenges.Much of Russian financial and insuranceterminology, almost nonexistent during theSoviet era when I was growing up, is still beingdeveloped, and I was hoping to draw on theEnglish knowledge of the students to help withmy task.

Immediately, it became clear that the chal-lenges were much greater than Mike and I hadanticipated. The study materials, which weresupposed to have been delivered to thestudents months before the course were miss-ing, many students were not fluent in English,and, as a result, hardly anyone had preparedadequately for the course, which was supposedto be only a high-level review of the material ineconomics, finance and investments roughlyequivalent to the Chartered Financial Analyst(CFA) Level 1 exam. I also learned that, notbeing able to get study time so common for theactuarial programs in the United States, manyof the students had to take vacation to attendthe seminar, and some were even required toreport back to the office after the regularclasses to work nights.

It took several days for the confusion tosubside. The study materials were found some-where in the offices of the sponsoringorganization and the students organized intostudy groups, trying to study between theregular class hours and going back to theoffice. Mike and I also had our own after-hoursroutines—after lecturing in the morning,administering daily tests after lunch, andgiving a tutorial and review of the previousday’s test in the afternoon, we prepared for thenext day’s lecture and graded that day’s testsuntil 1 or 2 a.m. Mike’s wife, Elsie, and mymother Zoya—a retired teacher, who still livesin Russia and came to visit me in Kazakhstanfor a few days—both were selflessly helping usgrade the test papers.

Since many students could not followEnglish, translating daily tests, the midtermand the final exams into Russian also became atask on its own. We were fortunate to be able todraw on the translating resources of the spon-soring organization Pragma, who represents theUSAID in Kazakhstan. However, the process

Actuaries in Kazakhstan—Profession Without Frontiersby Valentina A. Isakina

Since many

students could

not follow

English,

translating daily

tests, the

midterm and the

final exams into

Russian also

became a task

on its own.


was not as simple as it sounds. Since the examcovered many topics, multiple interpretersspecializing in various disciplines such asaccounting, finance, insurance, economics andstatistics had to be involved in this process.With this group, I spent hours brainstormingabout which terms to use in what circumstancesto make sure that all the appropriate nuanceswere reflected in the English and Russianversions of the examinations identically.

The immense amount of effort put into thiswork was soon showing in the pale, exhaustedfaces and red eyes of both the students andteachers. With only one day of break during theentire two weeks of the seminar, the finalexamination day approached too fast. Thestudents did their very best but they realizedthat, given the circumstances, passing thiscourse presented a great challenge. Thirty-twostudents enrolled in the seminar with the hopeof successful completion of final exam, but, inthe end, only three were able to achieve a pass-ing result. Notwithstanding the low passingrate, however, the event was a tremendoussuccess.

The seminar was a success because manypeople and organizations contributed theirenthusiasm, knowledge and hearts to thedevelopment of the actuarial profession inKazakhstan. It was a success, because it drewtogether a group of students who becamefriends during the first actuarial course threeyears ago and now are building the future oftheir young country. Many of these actuarialstudents are now key leaders of the country’seconomy—ranging from the CFO of the biggestlife insurance company to the director of thenational pension fund of Kazakhstan. Theydecided to join the actuarial profession severalyears ago in order to learn from the best theworld has to offer, and they never regretted itsince. Above all, however, this event was asuccess, because it is contributing to thegrowth of our profession, spreading thatspecial actuarial trait we possess of being able

to establish an immediate connection, a bond,an understanding and a sense of commonalitywith any other actuary, even if that personpractices halfway around the world.

I first heard about the establishment of theactuarial profession in Kazakhstan a couple ofyears ago via the articles in the InternationalSection News. The articles left me wonderinghow this country, given so many other financialand economic issues it had to deal with, wasable to make such gigantic steps in advancingthe actuarial profession in such a short time.Of course, there is always much to be done, andmany countries of the former Soviet bloc arenow also on their way to discovering theprofession, but the progress of Kazakhstan, inmy opinion, is simply unprecedented. Thiscountry of beautiful and rich natural resourcesis rich in another, much more importantresource—its people. These wonderful individ-uals, with their love, devotion and pride fortheir country are the key ingredient to thesuccess of Kazakhstan.

To understand the personal qualitiespossessed by the incredible group of actuaries Imet in Kazakhstan, you need to know them. Iwas very impressed with how much dedicationand work the students were able to put intothese two weeks, given the difficulties theyfaced. When the low pass rate was announced,the reaction to the news from the studentssimply overwhelmed me—they apologized!They did not look for excuses and reasons tocomplain about their failure—they felt guiltyfor not being able to reach a passing mark, andpromised to ace the course next year.

In the best of actuarial student traditions, acelebration party was held after the finalexam. There, one toast was announced thattruly touched my heart—“Becoming an actuarywas the best thing we ever did.” I feel honoredand proud to have participated in this reward-ing experience. These actuaries are now myfriends.o

Valentina A. Isakina, ASA,

MAAA, is a staff actuary

at the Society office in

Schaumburg, IL. She can

be reached at visakina@

soa.org.

2004 Membership Directory

Work has already begun on the print edition of the 2004 Directory of Actuarial

Memberships. Please update your SOA membership information so that it is

reflected accurately in the upcoming edition. You can do so by logging in at:

http://directory.soa.org/CGI-BIN/LANSAWEB?PRCOFUN+mdweb3+mdx000+prd

All information must be updated by October 17, 2003 to be included in the 2004

print edition. o


H ere’s a picture of me with my newborn twins—two of the faces here arethose that, I wish, will always be

smiling beautifully: Divya, which means“Divine,” and Ananth, which means “Endless”or “Infinite,” the names of the 175-day oldfraternal twins, with me as their undeserv-ingly lucky and proud father.

Very early in the gestation, my wife and Ifound out that they had their own amnioticsacs; we came to know that this alone did notindicate fraternal twins. This is because identi-cal twins, depending on the date of theirseparation, could also be in separate sacs. Aninteresting statistic is, given separate sacs, theodds are 3:1 in favor of fraternal twins.Assuming the odds being equal for eithergender, the “products,” as the gynecologist andradiologist insensitively called them at thetime, could be one of the following, with theassociated probabilities (see table below).

The mode was our preferred due to thesheer symmetry by gender; hence we justwanted not to be lucky. Being humans, despiteour education, we feel lucky.

Continuing with my calculations: my bloodtype is O+ and my wife’s, B+. Assuming 50percent chance that my wife was a pure B+,this would imply that with fraternal twins,there would be a 75 percent chance for them tohave the same blood type. In the case of thesame gender twins, the odds would be 17:3, infavor of having the same blood type. And giventhe same gender and the same blood type, theodd would be 18:16 in favor of non-identicaltwins. We were curious about the latter, giventhe same gender and blood type, for we wouldhave had to wait quite a few months to confirm

or negate their genetic similarity (we wereagainst subjecting our newborns to genetictesting). Fortunately, these latter workingsturned out to be in vain.

Regressions from http://www.medal.org/helped me estimate the fetal vital statistics.Using the IISÒ web server and ASPÒ, myhome page published the estimated vitalstatistics—everyday we eagerly waited. Thefetal vital was important to monitor, as adifference of 500g or more in the weights of thefetuses would cause problems during child-birth. As it turns out, the fetuses were 530gapart and arrived without complications (thetwins would definitely appreciate that six is apassing score—should they choose to takeactuarial exams later on).

The above and other tidbits I had learned—from the books of my medic wife and endlesslyquestioning many people including my wife,our gynecologist, radiologist and my gynecolo-gist sister-in-law, plus tirelessly browsing theInternet—cost me my Course 8 exam last fall.This year I have the smiles, naughty pranksand fights to replace dabble for an excuse,much to the chagrin of my employer and mywife. Oops! I forgot to mention that I am theweb liaison for the International Section, theambassador in Mexico for the SOA and ISC,besides being an associate professor ofActuarial Science at ITAM, Mexico City,Mexico. o

Editor’s Note: Such a loving account full of suspense was

unexpected when I asked each person on the ISC to write

something for this collection. However, one would understand

where it’s coming from simply by looking at the picture of

Shyamal with his twins!)

What Are the Probabilities ofCouples Having Twins?by Shyamal Kumar

Identical (I) or Fraternal Sex Combination Probability

I M & M 12.5%

I F & F 12.5%

F M & F 37.5%

F F & F 18.75%

F M & M 18.75%

Shymal & twins

i nternational n ews - soa · paul sauve 4922-1973-18510 [email protected] regional...

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