no - it’s not just like accountancy!...the actuarial profession •promotes the work of actuaries...

No - It’s not just like accountancy!

© 2012 The Actuarial Profession www.actuaries.org.uk

Marjorie Ngwenya Director at Mazars


The Actuarial Profession and an Introduction

About me

3 © 2010 The Actuarial Profession www.actuaries.org.uk

• FIA, ATT • Director and leader of life and health actuarial

practice at Mazars LLP

• Consultancy and reinsurance • Member of Council • Former editor of The Actuary • Assistant Examiner • Visiting lecturer – Kenya, Armenia, India

About actuaries


Actuaries are problem solvers and strategic thinkers with a deep understanding of financial systems. -ever-changing environment -across geographies and roles -one of most diverse, exciting and rewarding careers in the world. Experts in risk - calculate the probability of future events occurring.

What’s the difference between an actuary and an accountant?

Or… The brunt of many jokes

Frequently voted best career to have

The global profession

• 41% of Institute and Faculty members based outside of the UK

• Institute and Faculty of Actuaries • International Actuarial Association (IAA) • 64 member associations/26 associates • Portable qualification • Prestigious qualification

5 © 2010 The Actuarial Profession

www.actuaries.org.uk

Engaging with the profession


Ask not what your profession can do for you…

• Volunteer vacancy database • Networking events • CPD opportunities

Your speakers


• Trevor Watkins – Director of Education, Institute and Faculty of Actuaries

• Saheel Master – Chairperson, PwC • Angel Kansagra – Pensions, Deloitte • Mark Hart – General Insurance, Zurich • Saheel Master- Risk, PwC • Jean Eu – Life Insurance, Correlation Risk Partners

Trevor Watkins Director of Education Wednesday 24 October 2012


Education

The Actuarial Profession

•Promotes the work of actuaries • Oversees the education of actuaries belonging to the body at all stages • Expands actuarial knowledge • Enforces ethical and professional standards • Identifies matters where the work of actuaries would be of benefit to the public

•The Institute and Faculty of Actuaries is the professional body that all actuaries in the UK belong to

•If you want to be an actuary you must become a member and take all 15 exams and 3 years work experience to qualify as a Fellow.


The Actuarial Profession

• Professional qualification • Well respected profession • Variety, flexibility and a

challenging career

• Internationally recognised business qualification with overseas opportunities

• Excellent rewards and benefits

10


Actuaries are experts in assessing the financial impact of tomorrow’s uncertain events by:

• Analysing the past • Modelling the future • Assessing the risks involved • Communicating what the

results mean

11


What does an actuary do?

• Actuaries apply their statistical and mathematical expertise to the financial world

• Actuaries analyse past events, assess current risks and use problem solving skills to propose the best solution to business decisions

• Actuaries help inform future investment decisions companies need to make to ensure that all risks, big or small, are calculated

• Actuaries communicate complex financial issues in an understandable way

12


Where do actuaries work?

• Consultancies

• Insurance companies

• Investment and retail banks

• Government/Civil Service

• Capital Projects

13


Where do actuaries work? Of the 22,611 members of the Profession

• 59% are in the UK • 8% in the rest of Europe • 33% in the rest of the world

• 22% work in Pensions • 27% work in Life Insurance • 12% work in General Insurance • 5% work in Investment •2% work in Education •1% work in Health and Care •33% work in other sectors

Pensions

Life Insurance

General Insurance

Investment Management

Health and Care


Who are our members? • Over 22,000 members • 41% are based outside of the UK • 48% are student members • 71% are under the age of 40

•290 students joined under the age of 21 • 31,093 exams were sat from September 2010 – April 2011 • We have approximately 135 exam centres all over the world • Over 11,000 “likes” on Facebook


Why become an actuary?

Variety

Influence

Reward

Intellectual satisfaction

International opportunities

Support

Network

High standards


What can an actuary earn? Chief actuary, senior partner

£227,614

Senior function head, practice director

£125,736

Function head, practice head

£125,736

Department manager, managing consultant

£87,902

Section manager, senior consultant

£80,113

Section leader, consultant

£66,038

Senior actuary, junior consultant

£56,351

Actuary

£45,329

Student actuary

£31,755

Source: XpertHR Salary survey of actuaries and actuarial students, 2010. For more information visit www.xperthr.co.uk


http://www.xperthr.co.uk/�

How do I become an actuary?

• Get your A Levels or Scottish Highers, including a good grade in Maths • Complete your degree, ideally in a numerate subject from a university with a good reputation

•Gain a 2:1 or higher – this is a minimum requirement from most employers • An actuarial science degree or diploma offers opportunities for exemptions from exams • Find a trainee actuarial position with a company • Join the Profession as a student member – employers will help you with this


•If you’re considering a career as an actuary then sign up to our IACN – a global network for potential actuarial students • Signing up for this network is a first step towards achieving your career goal

What are we offering you? Access to Career Ambassadors Networking and links with employers etc Information on local events Careers newsletter What are the benefits to you? Align yourself with the UK Actuarial Profession Find out industry knowledge Get your questions answered by industry specialists

International Actuarial Careers Network - IACN


http://www.actuaries.org.uk/becoming-actuary/pages/career-ambassadors�

What do employers want? •A good academic record

•Work experience/internships • Good communication skills • IT skills • An interest in business/relevant industry knowledge • Language skills • Commitment to the exams and your career • Enthusiasm


Where can I find out more?

•Via the Actuarial Profession

•Visit www.actuaries.org.uk/becoming-actuary/pages/becoming-actuary •E-mail [email protected] •IACN network – www.actuaries.org.uk/IACN •Our brochures

•Speak to your Careers Adviser •Contact a Careers Ambassador

•www.actuaries.org.uk/becoming-actuary/pages/career-ambassadors


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Angel Kansagra Deloitte


Pensions

A bit about me

• Consultant at Deloitte since May 2012 • Joined PwC as a graduate in September 2010 • MSc Actuarial Science (Cass Business School) • Part qualified


Topics to be covered:

• An introduction to pension schemes

• Stakeholders

• Different areas pensions actuary get involved in

Agenda


• Benefit (pension) is promised i.e. defined

• e.g. at retirement you receive a proportion of your final salary based on number of years you have worked for the company

• for life

• Awesome – isn’t it?

Defined benefit pensions

25

000,40£000,60£*6040

=


How much do I need now to pay pension later?

26

Unknowns 1) Interest rate over next 40 years 2) Salary in 40 year’s time 3) Inflation (pension increases) 4) Life expectancy 5) Will the member be alive to receive a pension at retirement?

25 65 66 67 68 ?

Total pension payments

Today


Stakeholders

27

Trustees Company

ABC plc

You

Pension scheme

Government


Trustee consulting

Act as an adviser to the Trustees Objectives of Trustees • Safeguard member benefits • Keep a check on liabilities • Ensure there is enough money to pay pensions


Trustee consulting Actuarial valuation

• Required every 3 years in UK • Value liabilities and compare with assets

• Develop models • Advice on assumptions

Assets Liabilities

Shortfall


Trustee consulting Individual calculations


Transfers

Trustee Consulting Investment consulting

• What assets to invest contributions in? – Equities – Bonds – Property – Cash

• How much to invest in each asset class? • Selection of investment managers • Monitor the investments


Corporate consulting

Act as an adviser to the Company Objectives of the Company • Obligation to make good any shortfall • Lower contributions and costs

(so that it can pay shareholders and invest in new business)

• Less uncertainty • Retain staff


Corporate consulting Benefit design

Considerations:

• Level of benefits • Market Competitive • Contributions and costs • Any future uncertainties


Corporate consulting Risk management

Manage/reduce pension risks through innovative solutions

• Close the scheme – freeze benefits • Buyout – transfer liability to insurer i.e buy

insurance • Investment risks - use of derivatives • Liability de-risking - talk to me later to understand


Corporate consulting Mergers and acquisitions

• Due diligence (investigation)

• Harmonisation

– what if someone doing the same job, paying less contribution, gets more pension?

– How would you feel?

Would you want to buy a company whose pension shortfall is larger than the value of the company?


Corporate consulting Other areas

• Accounting – valuation – audit

• Defined contribution schemes (auto-enrolment)

• Wider areas © 2012 The Actuarial Profession www.actuaries.org.uk

Saheel Master PwC


Risk Management

A bit about me

• Employment history • KPMG, PwC

• Key areas of experience • Risk Management, Solvency II, Reserve Uncertainty

• A Levels • Mathematics, Further Mathematics, Physics, Chemistry, English Literature,

Computing (AS)

• University – Imperial • MSci Mathematics


What is “risk”?

? © 2012 The Actuarial Profession www.actuaries.org.uk

What is “risk”? The possibility of uncertain future events

Taking risks is part of everyday life: • Crossing the street

• Choosing university modules

• Asking someone out? © 2012 The Actuarial Profession www.actuaries.org.uk

Current issues

• Enterprise risk management

• Solvency II

• Basel III


So what is “risk management” all about ?

“ A logical process or approach that seeks to eliminate or at least minimise the level of risk associated with a business operation.”

Specifying the problem

Developing the solution

Monitoring experience

Actuarial Control Cycle: A risk management framework

General external and commercial environment

Professionalism


Types of Risk

Risks

Financial Non-

financial

Business risk

Market risk Credit risk Liquidity

risk Operational

risk External risk

Actuaries are typically interested in the following types of risks:


What sort of work could you be doing?

Capital Modelling Validation Risk mitigation

Use statistical techniques to quantify risks

Ensure models comply with regulations and are appropriate

Find ways that companies can reduce the negative impact of a risk once it hits


Actuaries and wider fields…..

• An actuarial qualification opens up many doors outside insurance and pensions


Mark Hart Zurich


General Insurance

A bit about me

• Actuarial Assistant with Zurich since 2006

• General insurance focussing on Municipals, Corporate and run-off business

• A Levels in Maths, Physics, Geography & General Studies, AS Levels in Further Maths and Business Studies

• Studied Mathematics (MMath) at University of East Anglia

• Passed all 9 CTs, CA1, CA2 and recently sat ST7 and ST8.

• Became an Actuary as I wanted to make use of degree, build on knowledge through further study liked the idea of being a ‘Professional’

• Reserving focus but touched on risk/capital, planning and aiding in sale of business


Issues in General Insurance

• The Global Economy

• Catastrophes

• Latent Claims

• European Regulation

• Technology

• Capital Efficiency


Roles in General Insurance

Traditionally: • Reserving • Pricing • Capital

More recently: • Risk management in general Remit continues to expand as businesses realise what we can offer!


Things I have been working on

Run-off business: • Old policies • Many of the experts no longer around • Commutations • Pressure on expenses • Investment strategy changes • Bad debt Sale of part of the business: • Assessing commutations • Assisting on developing communication strategies • Part of the steering group for the project


Jean Eu Correlation Risk Partners


Life and Health Insurance

Agenda

• Who am I? • What do life / health actuaries do? • My career so far • How I did in the actuarial exams • Actuarial Profession involvement • My top tips


Who am I?

Jean Eu Senior Actuary


What do life / health actuaries do?

In short...

Pricing / Product Development Reserving / Financial Reporting


My career so far

CTs 1-8 FIA


Tasks in a typical (non-quote) work day as a Pricing Actuary in a Reinsurance Company

• Modify an old pricing model for new features / assumptions – calculations and coding

• Respond to emails from clients regarding : – reinsurance rates – whether we have certain statistics (e.g. proportion of people anti-selecting on

rolling term policies) – any change to reinsurance terms if they decide to cover an additional disease

• Respond to internal emails and meeting requests • Work on some research items (e.g. how marital status impacts mortality) • Prepare for team / client / management meeting presentations • Help colleague(s) when they have a query on how to do a piece of work • Speak to colleagues in other departments (about work!) • Admin e.g. Email filing, making sure documentation is up to date for

recent quotes, making sure relevant management info is uploaded online


How I did in the actuarial exams

“Success consists of going from failure to failure without loss of enthusiasm”

– Winston Churchill

“To learn to succeed, you must first learn to fail”

– Michael Jordan


How I did in the actuarial exams

Sitting Subject Result Apr 2006 CA1 - Core Applications Concepts FB May 2006 CT9 - Business Awareness Module Pass Sep 2006 ST2 - Specialist Technical Life Insurance FB

CA3 - Communications Pass Feb 2007 CA2 – Model Documentation Pass Apr 2007 CA1 - Core Applications Concepts FA Sep 2007 CA1 - Core Applications Concepts Pass

ST2 - Specialist Technical Life Insurance Pass Apr 2008 SA2 - Specialist Applications Life Insurance FB Sep 2008 ST3 - Specialist Technical General Insurance FA

SA2 - Specialist Applications Life Insurance FB Apr 2009 ST1 - Specialist Techinical Health and Care Pass

SA2 - Specialist Applications Life Insurance Pass

Started 1st job in Sep 2005


Actuarial Profession involvement



• CA3 Lead Assessor • ActEd marker for CA1 & ST1 • Cass Advisory Board for Actuarial Science • ST1 Visiting Lecturer at Cass Business School • TANC (The Actuarial Network at Cass) • MSEC (Actuarial Profession’s Member Support

Executive Committee)


My top tips

Studying at uni • Use resources available • Get a solid understanding of actuarial concepts (if studying an

actuarial degree) Studying while working • Time management • Quality not quantity • Past papers • Core Reading


My top tips

Finding a job / working • Don’t lie on your CV • Microsoft Excel/Access/VBA • Ask questions • Manage expectations Passing the exams • Read the question carefully • Answer the question directly


Questions?


No - It’s not just like accountancy! Slide Number 2About meAbout actuariesThe global professionEngaging with the professionYour speakersSlide Number 8The Actuarial Profession The Actuarial Profession Actuaries are experts in assessing the financial impact of tomorrow’s uncertain events by:What does an actuary do?Where do actuaries work?Where do actuaries work? Who are our members? Why become an actuary?What can an actuary earn?How do I become an actuary? Slide Number 19What do employers want? Where can I find out more? Slide Number 22A bit about meAgendaDefined benefit pensionsHow much do I need now to pay pension later? StakeholdersTrustee consultingTrustee consulting�Actuarial valuationTrustee consulting�Individual calculationsTrustee Consulting�Investment consultingCorporate consultingCorporate consulting�Benefit designCorporate consulting�Risk managementCorporate consulting�Mergers and acquisitionsCorporate consulting�Other areasSlide Number 37A bit about me What is “risk”?What is “risk”?Current issues So what is “risk management” all about ?Types of Risk What sort of work could you be doing?Actuaries and wider fields…..Slide Number 46A bit about me Issues in General InsuranceRoles in General InsuranceThings I have been working onSlide Number 51AgendaWho am I?What do life / health actuaries do?My career so farTasks in a typical (non-quote) work day �as a Pricing Actuary in a Reinsurance CompanyHow I did in the actuarial examsHow I did in the actuarial examsActuarial Profession involvementActuarial Profession involvementActuarial Profession involvementActuarial Profession involvementActuarial Profession involvementMy top tipsMy top tipsQuestions?

no - it’s not just like accountancy!...the actuarial profession •promotes the work of actuaries...

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