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The Actuary Feb 2011

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The Actuary Feb 2011 Powered By Docstoc
					                                                 Published in London by the Staple Inn Actuarial Society

                            THE MAGAZINE FOR THE ACTUARIAL PROFESSION                                 February 2011

                                                                    False start
                                                               Have longevity indices
                                                                    jumped the gun?

                                                          Fast-track your career
                                                  Solvency II for run-off insurers
Inside: Craig Thornton Q&A • Pension buy-ins • Successful negotiation • LinkedIn tips • Latest jobs
Need a hand?


Solvency II is not far away. Do you know what is required? Are your processes, models, and risk
management up to the task? We can help you answer all these questions and prepare for Solvency II
in a way that adds value, not red tape.

The future is in your hands. We can help you create the advantage you need.

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Milliman is one of the world’s largest independent                                     Employee Benefits
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See page 5 for the editorial team
Incisive Financial Publishing
32-34 Broadwick Street,
London W1A 2HG
T +44 (0)20 7316 9000

Publisher/display sales
Philip Harding
T +44 (0)20 7316 9393
                                                                                                   February 2011
Managing editor
Sharon Maguire

                                        Supply and demand
T +44 (0)20 7316 9016

Recruitment sales manager
Aisling Durrant
T +44 (0)20 7316 9493
E     Careers, mortality/longevity and Solvency II are our themes for February.
                                        At the time of year when many of us will be setting objectives for the
Recruitment sales executive
Satvir Kaur                             coming months, Paul Stephenson of Deloitte discusses the importance of
T +44 (0)20 7316 9868                   managing talent.

Designer                                  We also hear from Craig Thornton in his role as chief risk officer for
Nicky Brown
                                        Aviva’s UK business. Craig shares his thoughts about the transition from
Sub-editor                              working within the business into the risk function and some tips for
Sam Robson
                                        aspiring risk actuaries.
Production manager
Matt Parle
T +44 (0)20 7316 9766                     Solvency II continues to dominate the insurance industry.
E          Many insurers are still in the early stages of their implementation projects.
Group editor-in-chief                   The recruitment market has been abuzz with the demand for medium-
Anthony Gould                           term skilled resources, creating momentum among contractors and driving
Group publishing director               up the cost of attracting quality personnel. Can supply continue to meet
Mark Burton                             the ever-present demand?
Print and distribution
Benham Goodhead Print Ltd, Oxon           The development of internal solvency models provides an
Subscriptions                           opportunity for many firms to innovate and for senior management to
For subscriptions from outside
the actuarial profession: UK, Eire
                                        better understand the impacts of the new regime. Join me on 9 February
and Europe: £50 a year/£5 a copy.       when I’ll be hosting our second live careers webinar, looking at actuarial
For the rest of the world: £75 a
year/£7.50 a copy.
                                        careers in a changing environment.
Please contact: Alison Jiggins
The Actuarial Profession,
Staple Inn, High Holborn,
                                          This month we welcome Terren Friend, our new industry news editor,
London WC1V 2QT                         to the team. Many thanks to Peter Tompkins for having livened the pages
T +44 (0)20 7632 2100
                                        with his engaging commentary over recent months.
                                        Peter remains involved with the magazine as chair of
Students on actuarial science courses
at universities may join the Staple     the editorial advisory panel. Interested parties are also
Inn Actuarial Society for £6 a year.    invited to get in touch regarding the soon-to-be-
They will receive The Actuary as
part of their membership. Apply to:     vacant student editor role.
Membership Department,
The Actuarial Profession,
Maclaurin House, 18 Dublin Street,        This issue also sees the launch of a new
Edinburgh EH1 3PP.                      technology column, appearing every other month.
T +44 (0)131 240 1325
E           To get the ball rolling, we take a look at the new
                                        wave of tablet computers and assess the main
Changes of address should be
made known to the membership            challengers to the iPad’s crown.
department as above.

For delivery queries please contact:      Finally, thanks to those readers who provided
Kim Ferrara                             valuable feedback on January’s page-turning
                                        digital edition (
Internet                                Many were effusive in their praise, while some
The Actuary website:                  had technical difficulties viewing or navigating
SIAS website:           the edition. For this reason, please note that
Actuarial Profession website:                    the content from January can also be found at
              20 888
              ( July 2009 to            Marjorie Ngwenya
              June 2010)
                                                                                                                  February 2011   3
Solvency II doesn’t have to be a struggle

OAC Actuaries and Consultants are committed to helping firms deliver Solvency II. We provide
a comprehensive range of actuarial support and interim resourcing services as well as the
powerful dynamic financial modelling capability firms will need using ®.

For more information
Christopher Critchlow | +44 (0)20 7278 9500 | |
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The   Actuary
Editorial advisory panel
Peter Tompkins (chairman),
John Batting, Margaret de Valois,
Matthew Edwards, Martin Lunnon,
Richard Purcell, Andrew Smith,
Chris Sutton, Matthew Wheatley
                                                                                                     Contents                        February 2011

Marjorie Ngwenya
                                                                                        False start
T +44 (0)7794 031 225
Features editor                                                           Is there really a market for
Tracey Brown
Lane Clark & Peacock LLP,                                              longevity indices, ask Michalis
                                                                                                         12 Profession news
E                                             Ioannides and Mattias Eng
T +44 (0)20 7432 3071
Deputy features editors                                                                                  18 Industry news
Adam Jorna
James Monk
Sonal Shah                                                                                               20 People/society news
Profession news editor
Michael Scanlan                                                                                          22 SIAS events
T +44 (0)20 7632 1453
Industry news editor                                                                                     50 Appointments and moves
Peter Tompkins
People/society news editor                                                                               Comment
Kelvin Chamunorwa
Towers Watson
E                                                                              3 Editorial
T +44 (0)7502 107 322                                                                                       Marjorie Ngwenya on supply and demand
Student page editor
                                                                                                         6 Letters
Stephen Paines
Government Actuary’s Department
                                       Features                                                             In which actuaries discuss piracy and policies

T +44 (0)20 7211 2707
                                                                                                         8 President’s comment
Arts page editor                       24   Solvency II: On the right track                                 Ronnie Bowie says that there is still much more
Richard Elliott                             Roger Houlihan and Ferdia Byrne discuss MCEV                    to learn from the banking crisis
Scottish Life
E                   reporting and the Solvency II workstream                     10 Soapbox
T +44 (0)7814 509 081                                                                                       Paul Stephenson on nurturing young
Puzzles editor                                                                                              actuarial talent
Tom Bratcher                           26   Solvency II: Running it off
Towers Watson                               Colin Czapiewski believes Solvency II will have a            47 Book review
E                                                                                The Blank Swan by Elie Ayache
                                            significant effect on run-off insurers
Published by the Staple Inn
Actuarial Society.
                                       28   Solvency II: Value judgment                                  Regulars
The editor, Faculty of Actuaries,           How do the IASB’s fair value judgment proposals sit
Institute of Actuaries and Staple
Inn Actuarial Society are not               with Solvency II, ask Kamran Foroughi and Colin Murray       44 Technology: Tablet computers
responsible for the opinions put                                                                            Anthony Dhanendran takes a look at the latest
forward in The Actuary. No part of
this publication may be reproduced,    30   Conference preview: Health and care                             batch of tablet rivals to the iPad
stored or transmitted in any form           Damien Bartlett previews the Health and care conference      45 Arts
or by any means, electronic,
mechanical, photocopying, recording         taking place on 18-20 May 2011, at The Grand, Brighton          Clare Whitelam previews upcoming opera and
or otherwise, without prior written                                                                         music festivals in 2011
permission of the copyright owners.
While every effort is made to          31   Soft skills: Tricks of the trade                             46 Student page
ensure the accuracy of the content,         There are nine steps for planning a successful                  James Cumming and Christine O’Grady tell us
the publisher and its contributors                                                                          how actuarial exams compare with accountancy
accept no responsibility for any            negotiation, says Juliet Erickson                               and law
material contained herein.
                                                                                                         47 Actuary of the future
Important information for              32   Careers: The human web                                          Ella Spencer of Fitch Ratings
contributors to The Actuary                 Will Kintish explains why we all need to be LinkedIn
By submitting content for                                                                                48 Puzzles
publication you confirm that:
                                                                                                            Win a £50 Amazon voucher in our prize puzzle
(a) You (and/or other named
contributors) are the sole author(s)
                                       34   Careers: Simple models, excellent people
of the content submitted;                   Anthony Howitt examines the current job market for
(b) The content you submit is
original and has not previously
                                            actuaries and how to select the right recruitment firm
been published (unless you                                                                                      WRITER OF THE MONTH
specifically advise us to the
                                       41   Pensions: Buying a headache remedy
                                                                                                               Colin Czapiewski is the editorial team’s
(c) You haven’t previously licensed         Kathryn Jones examines hurdles that could occur during
the use of the content you submit;                                                                             choice for February for his article on
(d) So far as you are aware,
                                            a pension buy-in and how to avoid them
the content submitted will not
                                                                                                               Solvency II, and receives a £50 book
infringe any third-party rights, be                                                                            token
defamatory or in any way illegal.      42   Q&A: Craig Thornton
                                                                                                               courtesy of:
                                            Marjorie Ngwenya speaks with Craig Thornton about
© SIAS February 2011
All rights reserved                         his role as chief risk officer for Aviva UK
ISSN 0960-457X                                                                                                                         February 2011   5
                                                                                                    Sponsored by
    Letters                    Your view                                                                                  Sponsored by

Letters to the editor
In which actuaries discuss piracy and policies

     Marine piracy
     As a former passenger on a container ship
     from Tilbury via Suez to Melbourne, I read
     the article ‘All at sea’ in December’s
     issue with particular interest
        My own experience was in May 2008,
     when pirate attacks were becoming
     common (six in 14 days) but before they
     were widely reported. At that time they
     took place mainly in the Gulf of Aden
     (not the Red Sea, which is effectively
     a closed body of water into which no
     competent pirate, Somali or otherwise,
     would venture). Latterly, as the article
     correctly states, piracy has extended much
     further south along the African coast and      ransom because the domestic political cost       and Solvency During the Transition
     eastwards into the Indian Ocean. Back in       of any other outcome would be too great.         Between Higher and Lower Investment
     2008, putting Socotra astern was effectively   Spare a thought instead for the Filipinos        Returns’ (D O Forfar and others).
     the end of the danger: our captain threw       and other non-Europeans who crew the                Companies calculated the basic sum
     a party for all on board to celebrate safe     vessels but often become (in the modern          assured such that 80% of the current bonus
     passage after 48 hours of great tension.       idiom) collateral damage of any hijacking        rates, exclusive of terminal bonus, would
        Nonetheless, it is too easy to condemn      because they have no bargaining power.           be just sufficient to repay the mortgage
     the Somali pirates by viewing their              John Colls                                     in full if the premium were not increased.
     activities through the prism of our              10 January 2011                                However, companies were aware that they
     ‘Western’ lifestyle. In other parts of the                                                      had been competing on reversionary bonus
     world they would likely be known as            Endowment mortgages: Response                    rates and those high bonus rates could
     entrepreneurs and, indeed, some would          to B. Michell, December 2010                     not be maintained. Clearly, a policyholder
     probably become actuaries given a wider        I reply to the letter from Bob Michell in the    cannot bank on a terminal bonus, or the
     range of career choices.                       December 2010 issue of The Actuary.              maintenance of reversionary bonus rates at
        As ‘Westerners’ we also have another           I can assure readers that actuaries were      80% of the then-high current reversionary
     great advantage of which we should be          well aware of the risks of with-profits           bonus rates. There was indubitably a
     mindful. If we were kidnapped, there would     endowment mortgages in 1987. See the             substantial risk that the policy would result
     be a high probability of prompt rescue or      Transactions of the Faculty of Actuaries         in a shortfall.
                                                    paper TFA 40 submitted to the Faculty on            Here is an especially memorable
                                                    16 March 1987. ‘Bonus Rates, Valuation           quotation from that discussion. “What will
         NEW PAGES IN THE ACTUARY                                                                    happen when all these policies mature in
       With several new pages making                                                                 20 odd years’ time? Well, I do not know,
       their debut in the magazine recently,               YOUR LETTERS                              but I am glad to say that I will not be
       such as Technology (see page 44),                 The editorial team welcomes readers’        around to deal with the problem.”
       the International focus as well as the            letters but reserves the right to edit        Anthony Pepper
       Elegant English column, we welcome                them for publication. Please e-mail           6 January 2011
       new ideas for content. To suggest       
       a topic, please e-mail                            The deadline for receiving letters for      More letters online at                         the March issue is 8 February 2011.         category/comment/letters

                            London » Zurich » Dublin » Hong Kong » Sydney
                            Tel: 020 8544 0417

6      February 2011                                                                                                          
    Letter of the month
    Of fractals, risk and financial markets                               50 or so years prior to the near-financial meltdown of 2007, one
    What better as a means of promoting actuaries’ risk management        can only lament the addition of yet another distinguished name
    credentials than to propose another mathematical analogy for the      to the growing list of people who, in their different ways, ‘did
    behaviour of volatile financial markets?                              see it coming’. However, if Mandelbrot thought his mathematics
       Perhaps this was the motivation behind Professor Sweeting’s        offered a better model for how markets behave, his name should
    article in December’s edition of The Actuary magazine ‘A fractal      also be added to another growing list: the list of people of great
    view of risk’. Or perhaps it was merely a timely tribute to the       minds whose world view was unduly influenced by their own
    recently departed man who founded the branch of mathematics           preconceptions. There is no shame in that: it would put him
    in question. Either way, it offered little that is either new or of   in distinguished company. Albert Einstein wrote with passion,
    any great practical benefit to actuaries or anyone else seeking       commitment and no small amount of well-earned gravitas when,
    to understand the darker side of the behaviour of modern              at the height of the quantum revolution, he declared in a letter to
    financial markets.                                                    Niels Bohr that “God does not play dice” — but he was still wrong.
       Credit where credit is due — Benoit Mandelbrot’s gift to the          If we are looking to better understand the behaviour of
    world through the language of mathematics was perhaps as great        modern financial markets, I suspect that chaos theory, quantum
    as that of any other mathematician in history. What Mandelbrot’s      mechanics and the mathematics underpinning the spread of
    fractals might lack in terms of their mathematical scale and          infectious diseases offer rather more fruitful avenues for research
    applicability — for example, in comparison with Newton’s              than Mandelbrot — but little of any comfort to actuaries resides
    development of the calculus — they surely make up for in their        in any of them. I therefore suggest to Professor Sweeting and
    capacity to surprise and delight both mathematicians and              other actuarial colleagues that our precious research time might
    non-mathematicians alike. They achieve this through a                 be better spent understanding the psychology of a situation
    combination of the sheer beauty of their many and varied physical     whereby eminent representatives of a Profession of great vision
    projections, the elegant simplicity of the rules that generate them   and financial acumen still think that solutions to the financial
    and, from clouds to what sometimes falls from them, the many          challenges we now face have their root in better mathematical
    and varied representations of fractal geometry in nature.             modelling and analysis.
       However, any attempt to draw parallels between fractal                They don’t: they lie in gaining a better understanding of the
    mathematics and the behaviour of financial markets may be             frailties in what we assume. Perhaps as actuaries we invest so
    fundamentally compromised. While recent history has shown             much in trying to model present reality that we sometimes lose
    that the tail of conventional probability distributions is indeed     sight of where trend is leading us. Without wishing to undermine
    an inadequate reflection of risk, to argue that a fractal-based       the role that each has to play, solutions to the big challenges
    alternative offers a better fit overlooks two important and           that now confront us don’t lie in better financial models or better
    fundamental points.                                                   governance: they lie in fundamental reform (economic, financial
       The first is that fractals no more explicitly allow for the        and — dare I say it — social).
    increased degree of correlation between risk factors that in             This is a place that as a profession we still prefer not to visit.
    benign times appear independent than do our conventional              It certainly sits well and truly outside what one might regard as
    distributions. It is this degree of correlation and the effect        the traditional actuarial comfort zone. But perhaps therein sits the
    that it in turn has on the behaviour of market participants that      problem — far more in tune with our background, our perceived
    characterises the behaviour of markets in times of stress.            strengths and our history as a Profession to presume that the past
       Second, and again mirroring a weakness of our conventional         is still a guide to the future, and to seek parallels in mathematics
    distributions, fractal mathematics has no concept of time, and        that might support this perspective. Mandelbrot loved his
    therefore has no mechanism of allowing for factors that vary over     fractals like Einstein loved determinism and some of us love
    time. Unfortunately, when it comes to the behaviour of financial      our financial models, but we should be mindful of lessons from
    markets and predicting future investment returns, there are many      history. If Einstein can be wrong, so can learned traditionalists
    good reasons to believe that the past is an unreliable guide to       in our own profession. And if the profession convinces itself that
    the future. Financial markets are influenced by a range of factors,   Mandelbrot’s mathematics is going to help it better understand
    some endogenous and some exogenous, and we are living                 financial markets of the future, it may well find itself barking up
    through a period of unprecedented evolution in many of them.          the wrong arboreal fractal.
    That fractal mathematics provides no toolkit to accommodate this          John Gordon
    undermines its suitability for the task.                                19 December 2010
       To be fair, one thing that time has shown is that Mandelbrot’s
    reservations about modern finance theory were well founded and        The writer of the letter of the month receives a £25 Amazon
    if, as Professor Sweeting notes, he’d been expressing them for        voucher                                                                                                              February 2011   7
    President’s comment            Ronnie Bowie

     Ronnie Bowie says there is still much to learn from the banking crisis,
     and reveals the risks to pensions funds he fears the most

     Remorse and reparation
     As I write this piece, the leader of one of the    business life depends, fails                       sound risk practices.
     UK’s biggest banks has stated in public that       ■ That China asks the US to repay some of             Ten more actuaries have recently qualified
     the time for bankers’ remorse is over.             its debt (or at least stops lending as much as     as CERAs, joining the nine who qualified
        The remark was made principally in              it currently does), thereby undermining the        last summer. They are the standard bearers
     the context of whether bonuses should be           dollar’s role as a reserve currency                for our commitment to risk management
     modified from what market forces might              ■ That the UK bond market suffers an               and, through them and future CERA
     otherwise suggest. I am not competent              assault like Greece or Ireland or Portugal,        students, we will make the qualification the
     to comment on this professionally, even            and that UK government bonds are no                gold standard in risk management.
     though, like others, I may have strong             longer perceived as ‘risk-free’                       One of the actuaries who qualified as a
     personal views on the matter.                      ■ That the global financial crisis                  CERA last summer, Steve Mathews of EMB
        I would agree that, if the concern was          precipitates serious social unrest with            Consultancy LLP, has spoken about the
     that ‘remorse’ is an emotion that drags on         consequent economic turmoil and a                  benefits of the qualification, saying: “It gives
     people’s ability to do their job well, it would    return to protectionism                            me the authority and confidence to speak
     be better that they were freed of that burden.     ■ That there is a major war                        on these topics.”
        However, I would be dismayed if that            ■ That inflation takes off.                            In autumn last year, the Actuarial

                                                        » If we are unwilling to
     remark was intended to suggest that there is                                                          Profession helped launch the global CERA
     no further learning to be had from the crisis.                                                        website, providing
     I would be similarly dismayed if it signalled
     a belief that raw commercial interest is more
                                                        continue to learn then                             information for candidates and for
                                                                                                           employers. I would encourage you to take
     important than the public interest. If we          we will surely precipitate                         the time to look at the website and find out
     are unwilling to continue to learn and if we
                                                        further crises and will                            more about the qualification.
     do not acknowledge our interdependence                                                                    Council has recently committed to
     then we will surely precipitate further crises     deserve the consequent                             putting major resources into creating a
     and will deserve the consequent dreadful           dreadful financial and                             plan to help actuaries who wish to branch
     financial and social consequences.
        It is also vital that we do the right sort of
                                                        social consequences                 «              out into risk management to do so.
                                                                                                           Individual actuaries will need to display
     learning; more than just tweaking models to            It was a spur-of-the-moment response,          enterprise in seeking out opportunities but
     give greater weight to tail risk.                  but it struck my questioner and I that             your professional body can do a lot to create
        I was asked recently (and unexpectedly)         only the sixth of these perceived risks is         a following wind. We are committed to doing
     in a pension fund context what were the            susceptible to modelling and hedging and           so and we will share our plans with you
     risks I worried about most. My answer was:         is consequently the only one that the entity       as soon as they are formed. That plan will
     ■ That the internet, on which so much              could do anything to protect itself against.       emphasise not only our skills as actuaries, but
                                                        The first five are potentially more dangerous        also our ethical code and the professionalism
                                                        yet any risk mitigation is mostly by way of        which is expected of members of a body with
                                                        scenario testing and contingency planning.         a Royal Charter.
                                                        Our analysis, modelling and risk management           The time for remorse may or may not be
                                                        skills are valuable and important but they can     over but the time for humility is certainly not.
                                                        only ever be part of the picture.                  If we fail to continue to learn and if we fail
                                                            That said, as a profession we must do what     to recognise that there are forces at work
                                                        we can to improve our overall understanding        that we cannot control, then we will have
                                                        of the risk picture. The chartered enterprise      failed the public interest. Such failures
                                                        risk actuary (CERA) qualification is not a          would surely bring reasons for further
                                                        silver bullet but it seeks to teach risk in both   remorse all too quickly.
                                                        breadth and depth. It is an important step in
                                                        equipping our members with the practical           Ronnie Bowie is the president of the Institute and
                                                        tools needed in order to be at the forefront of    Faculty of Actuaries

8      February 2011                                                                                                                  

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 Soapbox                      Paul Stephenson

     Paul Stephenson looks at alternative measures for students in carving
     out a career

     Careers and talent                                                                              goals and being able to prioritise cannot be
                                                                                                     overstated. A career map, structured either
                                                                                                     through an organisation’s performance
                                                                                                     management process, or simply done on a
     With university fees set to increase in            Students must also work just as hard to      personal level, should provide an employee
     2012 and the continued uncertainty of the       educate themselves about employers.             with the skills and experiences they need
     economic outlook, many students will be         There are many ways to do this — for            to develop. It will also ensure that people
     questioning whether university is the right     example, at university they can visit careers   focus on their career and actively manage
     choice for them and perhaps scrutinise          fairs and attend skills sessions and talks      their development.
     more closely their options following GCSEs      sponsored by employers. Engagement early           Career development opportunities
     and A-levels. As employers, we have a duty      on with employers and careers advisors can      exist for all people across all disciplines
     to invest in future generations, not only       be the best way to match their skills to a      and should be commonplace among
     in providing them with opportunities, but       future career. Meeting existing employees is    businesses. If people feel undervalued
     also to help them navigate the choices.         also an excellent way to get to understand      and different from their peers at work,
     There is a responsibility businesses shoulder   the culture of an organisation.                 then they will not be encouraged to work

                                                     » Many organisations
     to give students enough guidance to help                                                        to their best ability. Movement within
     them make an informed choice, both in                                                           a company will always benefit the
     joining a company and offering career
     guidance as they progress. The focus must
                                                     offer a wide range of                           business as it allows people to pick
                                                                                                     up different skills and get an in-depth
     now be on thinking differently about            curriculums, spanning                           knowledge of key business issues and
     recruitment schemes and development             from support for                                messages, which they can put into
     programmes for new employees.                                                                   practice in their client interactions.
        In light of recent developments, many        qualifications to                                  Another important factor for success in
     businesses are doing just that, offering        self-guided e-learning                          business is having the ‘soft skills’ that can
     school-leavers new paths to entry and
     qualification, in addition to the traditional
                                                     courses      «                                  be used within the workplace. Examples of
                                                                                                     ‘soft skills’ are working as a part of a team,
     graduate route. It starts as early as school       Recent headlines report a decline            being able to talk and communicate with
     age, arming career counsellors with             in graduate employment, which has               others, managing and motivating teams
     information to help guide students.             deterred students from applying for jobs.       and being able to interact with people
     The student must firstly question if what        But there is always a place for good talent.    outside of your direct team. Gaining work
     they want to do requires a degree or            Students should continue to be optimistic       experience or simply being a member of
     whether their time is better spent starting a   and commit to networking and researching.       a club at school or university can all help
     career straight after school.                      Once a student has navigated the             to develop these skills before they are
        Employers must educate students on           job search and successfully found               needed at an employment level. On-the-job
     the different ways they can join their          employment, it is the duty of both the          training and mentoring helps employees
     business, as although the company may be        employer and the employee to ensure             build these important skills throughout
     well known among peers and within the           success. It is recommended for employees        their career.
     market, students may not be so familiar         to explore learning options available              Finally, businesses must be aware that
     with the types of opportunities and career      both in the classroom and on the job.           students straight from school or college
     options available.                              Many organisations offer a wide range of        are often the most eager and enthusiastic,
                                                     curriculums, spanning from support for          and are willing to put in the hard work to
                                                     qualifications to self-guided e-learning         progress upwards on the career ladder.
                                                     courses. The opportunities for ongoing          This enthusiasm can be put to good use
                                                     learning are immense. Seeking a coach           within the workplace and should be
                                                     or a mentor to help guide them can be           captured early on!
                                                     extremely beneficial to the employee.
                                                     Someone who is knowledgeable about the          Paul Stephenson is a partner in the Financial Services
                                                     organisation and their offerings can be an      Audit division of Deloitte. He is also the UK graduate
                                                     invaluable resource.                            recruitment partner and has responsibility for the firm’s
                                                        The need to set short and long-term          Bright Start school-leaver programme

10      February 2011                                                                                                             
                          The Actuary presents
Actuarial careers in a changing environment
A live interactive webinar hosted by editor Marjorie Ngwenya
            7pm Wednesday 9 February 2011 (GMT)

The world in which actuaries operate is changing
rapidly. Issues such as Solvency II, the retail
distribution review and pensions auto-enrolment
are creating new challenges and an increasing
need for actuaries to combine commercial
acumen and softer skills along with more           How to register
technical knowledge.
                                                   To register, and to pre-submit
So what attributes does the new                            questions, please visit

generation of actuaries need? And
how can you make the most of
the exciting opportunities these
changes present?

The Actuary’s second live
careers webinar, produced
in association with Legal &
General, will explore the
notion of actuaries in a
changing environment. This is
your chance to find out more
and to put your questions to
our expert panel, chaired by
editor Marjorie Ngwenya.

   In association with:
 News                          Profession

     Forthcoming events                              UK Maths Trust Senior Maths Challenge 2010
     Professionalism: should you speak up            The Senior Maths Challenge, sponsored          Mathematical Olympiad (BMO)
     or whistle-blow? How do you decide?             by the Actuarial Profession took place         Round 1 paper which took place on
     9 February 2011, Staple Inn Hall, London        on 4 November 2010. There were a               2 December 2010.
     16.00 (registration) for 16.30-19.00            record breaking 95,520 entries from 1978          The mean score rose to 54.7 from
     The mis-selling of financial products and       institutions, beating 2008’s record 92,520     51.4 last year. The first five questions are
     the continuing aftermath of the financial       students from 1917 schools and colleges.       intended to be very straightforward, but
     crisis — all these disasters illustrate why        The challenge is a 90-minute,               a surprising number were phased by the
     speaking up and whistle-blowing are             25-question multiple choice paper with         crossnumber in Q1 and only two-thirds
     fundamental duties of all professions who       questions of increasing difficulty aiming to    answered with only 60% of them giving
     serve the public interest.                      stimulate mathematical thinking beyond         the correct answer. Trigonometry may also
        Knowing when to speak up or whistle-         the school curriculum.                         be a weak point with half of students not
     blow is particularly important to the              Fifteen candidates gained full marks        attempting Q14 and only 20% of candidates
     Actuarial Profession as the public and our      in the challenge and overall scores            giving the correct answer.
     clients increasingly learn more about our       were higher than in previous years.               If you want to try your hand at the
     duty under the compliance principle of the      Those scoring over 96 out of a possible        maths challenge, the paper (and solutions)
     Actuaries’ Code.                                125 were invited to take part in the British   can be found at
        Tony Hewitt, member of the Professional
     Regulation Executive Committee’s whistle-
     blowing group and its professionalism
     awareness committee, will demonstrate
     real-life case studies designed to help you
     make your own decision on how to handle
     professional disasters and near misses.
     A drinks reception will follow.
        For further information visit

     Implications of the TASs for insurance
     actuaries                                       Financial Risk Academy launched in Edinburgh
     9 March 2011, Hilton Paddington, London
     20 April 2011, Hilton Caledonian, Edinburgh     On 4 November the Scottish Financial Risk      Rating Agencies.
     15.00 (registration) for 15.30-19.00            Academy was launched at a colloquium in           Bill Jamieson of The Scotsman newspaper
     The Board for Actuarial Standards (BAS) will    Edinburgh. The Academy is the brainchild       chaired a panel discussion including
     be completing the publication of its suite      of professor Alex McNeil, Maxwell Professor    Colin Ledlie, an actuary with Standard
     of technical actuarial standards (TASs) early   at Heriot-Watt University and an honorary      Life, and four other eminent panellists.
     in 2011. With the insurance TAS coming          fellow of the Profession.                      Topics included reasons why the financial
     in to force on 1 October 2011 much of the          At the ceremony, held in the famous         crisis was not seen coming, the role of the
     work performed by actuaries working in          Bank of Scotland building on the Mound,        Central Bank in the crisis, whether the retail
     insurance will be covered by standards          he introduced the Academy of which the         and investment functions of banks should
     relating to the data and models used and        Actuarial Profession is a founder member.      be separated, and how Scotland could thrive
     the reporting of the results of the work to        Services to be provided by the Academy      in the aftermath of the crisis.
     clients, boards and management.                 include seminars and colloquia, access to         During one of these discussions professor
        These seminars will offer delegates          training and research, interaction with        John Hibbert of Barrie & Hibbert paid a
     the opportunity to learn about the              academia, and a focus for inter-activity       great compliment to the actuarial profession
     implications of the TASs for them and their     on financial risk management. Knowledge         by referring to our ethical culture.
     work. We have put together a panel of           Transfer Workshops will take place monthly        The colloquium concluded with a
     speakers including representatives from         and Special Topics Courses are also planned.   typically robust speech from Lord McFall,
     BAS and practitioners who have already             Business people are targeted who may        former chairman of the House of Commons
     considered and started implementing the         not afford the time to attend the technical    Treasury Committee on the risk lessons
     changes required and who will share their       sessions in the afternoon but would be         from the financial crisis.
     experiences. A drinks reception will follow.    interested in the strategic early evening         The second colloquium will be on
        All members working in the fields of         discussions.                                   17 March on Absolute Returns and Hedge
     life and health insurance will find these          The afternoon sessions on this occasion,    Funds — once again covering technical and
     seminars informative. Please note all           given by professor Damiano Brigo of            bigger picture aspects.
     delegates will be expected to have some         King’s College, London, Martin Baxter, of         The November colloquium launched
     knowledge of the TASs.                          Nomura International and Markus Krebsz,        what promises to be an exciting enterprise
        For further information visit:               a securitisation consultant, covered the       for the Scottish financial community.
        London:           Credit Crisis in the context of Credit         The Actuarial Profession is proud to be a
        Edinburgh:        Models, Counterparty Risk and Credit           part of it.

12     February 2011                                                                                                     
    Actuarial Profession announces three new mortality and morbidity research projects
    The Actuarial Profession has announced that       Waddingham LLP — Bayesian Modelling of            is under-explored, and will form the main
    it will be funding three new research projects,   Mortality Projection Uncertainty                  focus of our research.”
    which will examine mortality and morbidity.       n Heriot-Watt University — Mortality Models          Dr Torsten Kleinow of Heriot-Watt
       While increased longevity and health are       for Multiple Populations using Covariates         University said: “Our project will develop
    welcome indicators of health and societal         n King’s College London — Genetic risk            new mortality models for multiple
    improvements, they present new challenges         profiling for common diseases.                     populations. These models will be based on
    and mortality investigations is an area with         Dr Gerard Kennedy ASA of the University        covariates; in particular smoking prevalence.
    considerable scope for interdisciplinary          of Southampton, professor Jon Forster, also       Our aims are to refine predictions of
    studies.                                          of the University of Southampton, and Mr          mortality rates, and explain differences
       The Profession called for research             Neil Robjohns FIA of Barnett Waddingham           between mortality rates for different cohorts
    proposals that would consider the                 LLP said: “Mortality projection is of vital       and populations.”
    following areas:                                  importance to the actuarial profession, but is       Professor Cathryn Lewis of King’s
    n Understanding the drivers for change in         subject to uncertainty, and it is critical that   College London said: “Genetic studies
    mortality and longevity                           such uncertainty be accurately quantified.         have identified genes contributing to the
    n How will successive cohorts differ              Currently, uncertainty quantification, if          common, complex disorders that confer
    and why?                                          performed at all, is done within the context      a major public health burden, such as
    n How far can the approach to drilling down       of a single mortality projection model.           heart disease and diabetes. This raises
    to individualised risk help in exploring          However, there is no universally agreed           the prospect that individual-level genetic
    the connections between populations               such model, and fully coherent uncertainty        screening can be used to identify those at
    and individuals, including the impact on          quantification should also account for model       increased risk of such diseases, which will
    mortality of biological and lifestyle risk        uncertainty. Bayesian statistical methodology     have implications for actuarial practice.
    factors, such as nutrition, exercise, and         provides a fully coherent framework               This research proposal will develop
    alcohol consumption?                              for estimation in the presence of model           statistical models for genetic risk profiling,
       The successful proposals were:                 uncertainty, but practical implementation         providing a framework for investigating
    n University of Southampton and Barnett           within the context of mortality projection        genetic risks at a population level.”

    Mr. Norman William Head FIA,                      Determination                                     sanctions in accordance with rule 4.4(a)(i)
    19 August 2010 (the Respondent)                   Having considered the case report, the            of the Institute’s Disciplinary Scheme
    On 19 August 2010 the Adjudication                appendices submitted by the Investigating         n a reprimand; and
    Panel considered a complaint against the          Actuary and the comments from the                 n a fine of £3,000
    Respondent concerned with his conduct             Respondent, the Panel determined that                A full copy of the allegations and
    when appointed to undertake a valuation in        the case report disclosed a prima facie case      the Panel’s reasons can be found on the
    terms of Section 143 of the Pensions Act 2004,    of misconduct and that the Respondent             determinations page of the Profession’s
    which arose during a former employment.           should be invited to accept the following         website at

    Mr. Wesley Paul Hughes (student),                 competence or professional judgement              indictment, is prime facie evidence of
    30 November 2010 (the Respondent)                 which other Members or the public might           misconduct.
    On 30 November 2010 the Adjudication              reasonably expect of a Member.                       2. The Panel determined that although
    Panel considered a complaint that the                                                               the offence was a serious one no sanction
    Respondent:                                       Determination                                     was necessary. The Respondent had served
       1. On 11 August 2009, committed an             Having considered the case report and the         4 months on remand in Australia and the
    assault, for which he was convicted on            appendices submitted by the Investigating         Panel concluded that it was inappropriate
    27 November 2009 in Sydney, Australia of          Actuary, the Panel determined that the            to impose further sanctions beyond those
    the criminal offence of Assault Occasioning       case report disclosed a prima facie case          imposed by the Sydney Central Local Court.
    Actual Bodily Harm; such conduct                  of misconduct but that no sanction was               3. The Panel accepted that this was
    falling short of the standards required           necessary.                                        a moment of poor judgment by the
    by paragraphs 1.2, 2.1 and 2.2 of the                The Panel’s reasons were as follows:           Respondent which was entirely out of
    Professional Conduct Standards version               1. Under rule 1.12(c) of the disciplinary      character. The Respondent complied with
    3.0 and Principle 1 of the Actuaries’ Code        scheme a conviction in a court of                 the investigation in Australia and was well
    version 1.0; and, in any event, constituting      competent jurisdiction for an offence,            behaved throughout his trial and detention.
    misconduct, being conduct falling below           which had it been committed in the                The Respondent was remorseful for his
    the standards of behaviour, integrity,            United Kingdom would be triable on                actions.                                                                                                                 February 2011    13
 News                         Profession

     Determination under Rule 6.22 of                the CPD Handbook 2007/08 (Version 14)                 Representatives for the Investigating
     the Disciplinary Scheme of the                  at pages 9, 11, 14, and 24.                        Actuary stated that the Institute were
     Institute of Actuaries in respect of a                                                             inferring that the final paragraph of
     Charge of Misconduct brought by                 The hearing                                        Section 1.4 of version 14 of the Handbook,
     Mr. R. Andrew Scott, (the                       The Respondent participated via                    and, in particular, the sentence “This
     Investigating Actuary) in the case              conference call from New York, USA.                check will take place after 30 June in each
     of Mr Saul Chanan Goodman FIA.                  The Institute was represented by                   year and examine activity in the previous
     Heard at Staple Inn Hall,                       Miss Julie Matheson of Kingsley Napley.            twelve months ending at 30 June”
     High Holborn, London WC1V 7QJ                   The Tribunal found the following facts:            established a deadline of 30th June for
     on 29 September 2010                              The Panel found the facts alleged under          both the completion of the CPD activities
     The Investigating Actuary laid the              paragraphs 1.1 and 1.2 of the charge was           and the submission of online records.
     following charge of misconduct that the         not proved                                         Similar wording appears in earlier versions
     respondent:                                                                                        of the Handbook. As a concession, for the
        Being at the material times a Fellow of      Determination                                      2007/08 year the Institute had taken an
     the Institute of Actuaries:                     The Panel found there was no case to               executive decision to extend this inferred
        1.1. For the Continuing Professional         answer as the Institute of Actuaries had not       deadline to 31st August 2008, before
     Development (CPD) year 1 July 2007              proven the case as alleged in the charge.          initiating disciplinary action for the breach
     to 30 June 2008 failed to declare his           The case was therefore dismissed.                  of a mandatory requirement.
     appropriate CPD category as required by                                                               The Panel was not satisfied that this
     the Institute of Actuaries and set out in the   Reasons                                            wording did establish any deadline.
     CPD Schemes contained within the CPD            The Panel, having considered the charges           The CPD Handbook is the only statement
     Handbook 2007 (Version 12) at page 7; the       and the submissions made, concluded                of the mandatory CPD requirements.
     CPD Handbook 2007 (Version 13) at pages         that they were not satisfied that the               The Panel was not satisfied that the
     7 and 12; and the CPD Handbook 2007/08          allegations made against the Respondent            material issued by the Institute in the form
     (Version 14) at pages 8, 9, and 13; and         had been proved and therefore did not              of e-mails, magazine articles or letters was
        1.2. For the CPD year 1 July 2007 to         find misconduct.                                    an appropriate manner for creating such a
     30 June 2008 failed to maintain an online          The charges related to the Respondent’s         deadline, the breach of which might lead
     record of CPD undertaken as required by         failure to submit on-line CPD information          to a charge of misconduct.
     the Institute of Actuaries and set out in the   within a deadline. The Respondent
     CPD Handbook 2007 (Version 12) at pages         claimed that the CPD Scheme, as set out in         Costs
     10, 13, and 23; the CPD Handbook 2007           the CPD Handbooks versions 12 to 14 did            Neither party made an application to
     (Version 13) at pages 8, 10, 13, and 23; and    not establish any such deadline.                   recover costs in the case.

     Financial risk models with R: factor models for Pensions conference 2011
     asset returns and interest rate models          1 – 3 June, Southport Theatre and
     Registration is now open for the first           introduction to R by focusing on two core          Convention Centre, Southport
     Scottish Financial Risk Academy workshop,       areas of financial analysis. In Part I, the focus   The Pensions conference is one of the
     which will be held in Edinburgh on              will be on factor models for asset returns and     premier professional events for
     15 March 2011.                                  Professor Zivot will give insights into the        pensions actuaries with UK qualifications.
         The one-day workshop will be led by a       development of risk management systems             The programme includes a range of
     world expert in computational finance            based on factor models. In Part II, he will        technical matters, softer skills and
     and econometrics, Professor Eric Zivot.         survey some of the powerful functionality          professionalism topics; it will also cover
     Professor Zivot is an eminent academic,         available for interest rate modelling.             many wider issues affecting pensions.
     based at the University of Washington in           Participants will be able to obtain the         The agenda is focused on both the issues of
     Seattle, and is also a research consultant to   R code and reproduce and extend examples           today and those that might shape the future,
     BlackRock where he has helped develop a         on their own laptop computers.                     covering ideas and insights across most
     factor-model-based risk management model           Registration is now open. Full details,         aspects of pensions – all actuaries working
     for funds of hedge funds.                       including fees and the workshop registration       in pensions should find plenty of food for
         Professor Zivot is one of the world’s       form, can be found at                              thought and opportunity for lively debate.
     foremost authorities on developing financial                             The successful hot topics session will
     econometric and risk models using R,                                                               return in 2011 and will include some of
     a powerful (and free) open-source software                                                         the industry’s leading figures giving their
     environment for statistical analysis that                                                          take on issues of the day. The conference
     is rapidly gaining in popularity among                                                             is open to all professionals interested in
     financial analysts and is the tool of choice                                                        this sector, not just actuaries who work in
     for the research community.                                                                        pensions. For further information visit
         The workshop will provide a fast-track                                               

14     February 2011                                                                                                        
    Mr. Poh Huat Khoo FIA,                          competence or professional judgement              Disciplinary Investigation Team.
    21 September 2010 (the Respondent)              which other members or the public might              3. The Panel accepted that the
    On 21 September 2010 the Adjudication           reasonably expect of a member.                    Respondent had completed the necessary
    Panel considered a complaint that the                                                             CPD for the year in question and that he
    Respondent:                                     Determination                                     had complied with the requirements of
       1. For the CPD year 1 July 2008 to           Having considered the case report and the         his local regulator, the Singapore Actuarial
    30 June 2009 failed to declare the              appendices submitted by the Investigating         Society. The Respondent in his email of
    appropriate CPD Category as required by         Actuary, the Panel determined that the            24 November 2009 admitted that he had
    the Actuarial Profession and set out in         case report disclosed a prima facie case          completely forgotten that he was required
    the CPD Scheme contained with the CPD           of Misconduct and that the Respondent             to comply with the CPD scheme of the
    Handbook 2008/2009 at pages 9 and 13;           should be invited to accept that there            Institute of Actuaries.
    and                                             has been Misconduct and the following                4. The Panel noted that the UK
       2. For the CPD year 1 July 2008 to 30        sanctions:                                        Profession treats CPD non-compliance
    June 2009 failed to maintain an on-line            n a reprimand; and                             seriously and is committed to enforcing the
    record of CPD undertaken as required by            n a fine of £400                                CPD scheme to ensure public confidence
    the Actuarial Profession and set out in the        The Panel’s reasons were as follows:           in the Profession. The Panel thought it
    CPD Handbook 2008/2009 at pages 10,                1. The case report contained prima facie       reasonable for both other members and
    11, 14, and 25; and in failing to do any        evidence that the Respondent had failed to        the general public to expect all actuaries
    of the above he failed to maintain and          comply with the requirements of the CPD           to comply with the CPD requirements
    observe the standards of conduct expected       scheme and the Respondent had admitted            of the Profession. The Panel held that
    of a member, in breach of paragraphs 1.2        his failure to declare the appropriate CPD        the Respondent’s compliance with the
    and 2.1 of version 3.0 of the Professional      Category and to record an on-line record of       Singapore Actuarial Society did not absolve
    Conduct Standards and in any event              his CPD.                                          his responsibility to comply with the
    constituting misconduct in terms of Rule           2. The Respondent had been sent a              Institute of Actuaries’ CPD Scheme.
    1.6 of the Disciplinary Scheme of the           personally addressed reminder on                     5. The Panel found no reason to depart
    Institute of Actuaries, being conduct falling   25 August 2009 that non-compliance with           from the Disciplinary Board guidance in
    below the standards of behaviour, integrity,    the CPD scheme would be referred to the           determining the level of the fine.

    Save the dates                                  The latest issues surrounding
                                                    catastrophe modelling,
                                                                                                         This seminar will be of particular
                                                                                                      interest to any actuary involved in
    Mortality and longevity seminar,                29 March 2011, Staple Inn, London                 advising final salary pension schemes.
    22 March 2011, London                           Catastrophe modelling has developed               The emphasis of the seminar will be on
                                                    rapidly over the last 20 years, both              current developments in asset management.
    Current issues in general insurance             academically and within the insurance                For further information visit:
    (CIGI), 12 May 2011, Royal College of           sector. However, the challenges facing the
    Physicians, London                              industry are also significant including:
                                                    n The effects of climate change                   Current issues in general insurance
    General insurance pricing seminar,              n A greater awareness of interdependency          (CIGI), 12 May 2011, Royal College of
    21 June 2011, London                            of risks                                          Physicians, London
                                                    n New exposures in emerging markets
    The future economic, health and                 n The use of catastrophe models in                Emerging trends in mortality and
    social care costs of dementia open              Solvency II.                                      longevity 2011 symposium,
    forum, joint event with the ILC-UK,             This conference will cover the latest             13-14 September 2011,
    RCPE, Edinburgh, 9 February                     issues surrounding catastrophe modelling          Warwick conferences, Warwick
    16.00 registration for 16.30-18.30 start,       from the latest academic research to the          This conference will aim to build on
    followed by a drinks reception.                 practicalities of everyday modelling.             the success of the Joining Forces on
                                                                                                      mortality and longevity conference
    Worshipful Company of Actuaries                 Investment strategy for pensions                  held in Edinburgh in October 2009 by
    annual lecture: The World needs                 actuaries, 5 April 2011, London                   encouraging collaboration between
    Actuaries, 10 February,                         The seminar will cover the following points:      disciplines in the actuarial, medical,
    Heriot-Watt University, Edinburgh               n The economic impact of sovereign debt           social science and demographic fields.
    Beginning at 17.30, this year’s lecture will    n Equities: is it the age for active managers?    By hosting the conference adjacent to
    be given by Ronnie Bowie.                       n Bond outlook: interesting times?                the Society of Social Medicine’s Annual
                                                    n How fee structures affect manager risk          Scientific Meeting in 2011 we hope to
    Sessional Research meeting: Entity-             taking                                            attract further participation from the
    wide risk management for pension                n Commodities: their strategic place in a         medical, epidemiology and demography
    funds, 21 February, RCPE, Edinburgh             pension scheme portfolio                          academic communities as well as the
    Paper by Malcolm Kemp and Chinu Patel.          n Private equity: latest from the private side.   Actuarial Profession’s core membership.                                                                                                               February 2011   15
 News                         Profession

     Delivering e-resources to members                                                            n Non-life actuarial models
                                                                                                  — Yiu-Kuen Tse
     Members can access a wide range of             n Journal of Risk and Uncertainty             n Regression modeling with actuarial and
     e-resources through the Athens portal on the   n Journal of Social Policy                    financial applications
     Profession’s website. We regularly add new     n Journal of the Royal Statistical Society:   — Edward W. Frees
     resources and the following are available:     Series C (Applied Statistics)                 n Simple tools and techniques for enterprise
     n Annals of Actuarial Science (AAS)            n JSTOR Mathematics & Statistics, Business,   risk management
     n Applied Mathematical Finance                 and Arts & Sciences collections (over 200     — Robert J. Chapman
     n British Actuarial Journal (BAJ)              top-quality journals)                         n Solvency: models, assessment and
     n Insurance: Mathematics & Economics           n Pensions: an international journal          regulation
     (from vol. 34 (2004))                          n Risk Management & Insurance Review          — Arne Sandstrom
     n Journal of Applied Corporate Finance         n Scandinavian Actuarial Journal              n The actuaries’ survival guide
     n Journal of Financial Services Marketing      n Significance.                                — Fred Szabo
     n Journal of Pension Economics & Finance       Plus eBooks:                                  n The essentials of risk management
     n Journal of Poverty and Social Justice        n Actuarial mathematics for life contingent   — Michel Crouhy, Dan Galai, Robert Mark
     n Journal of Risk & Insurance                  — David C.M. Dickson, Mary R. Hardy,          And databases:
                                                    Howard R. Waters                              n ‘BusinessSource’ (a business research
                                                    n Copula methods in finance                    database which features the full text of more
                                                    — Umberto Cherubini, Elisa Luciano,           than 2,200 journals) and ‘Risk Management
                                                    Walter Vecchiato                              Reference Centre’ (a comprehensive risk
                                                    n Generalised linear models for               management resource which includes
                                                    insurance data                                hundreds of full-text journals and other
                                                    — Piet de Jong, Gillian Z. Heller             material on every dimension of risk
                                                    n Investment guarantees: modeling and risk    management).
                                                    management for equity-linked life insurance      Please contact for
                                                    — Mary L. Hardy                               a login to these resources.
                                                    n Market-valuation methods in life and
                                                      pension insurance
                                                            — Thomas Moller, Mogens
                                                                                                  Worshipful Company
                                                             Steffensen                           of Actuaries lecture
                                                                                                  Ronnie Bowie, president of the Institute
                                                                                                  and Faculty of Actuaries, will be delivering
                                                                                                  this year’s lecture, ‘Why the world needs
     Notice of public consultation meetings                                                       actuaries’, on 10 February at the post-
                                                                                                  graduate centre, Heriot-Watt University,
     On 15 December 2010, the Actuarial             been arranged to discuss these EDs.           Edinburgh.
     Profession issued the following two            The first meeting will be held on                 The event starts at 17.30. Please contact
     pensions Exposure Drafts (EDs) for             Tuesday 1 February from 17.00-18.00 at        Mary Wilson at for
     consultation:                                  Staple Inn Hall, High Holborn, London.        more details.
     n Exposure Draft 24 of APS P1: Duties          Refreshments are available from 16.30.
     and Responsibilities of Actuaries                 The second meeting will be held on
     Advising Pension Scheme Trustees (ED24         Thursday 3 February from 17.00-18.00          Sloan Prize winner
     (APS P1)),                                     at Maclaurin House, 18 Dublin Street,
     n Exposure Draft 25 of APS P2: Compliance      Edinburgh. Refreshments will be available     The Sloan Prize is in recognition of the best
     Review: Pensions (ED24 (APS P2)).              from 16.30.                                   spoken contribution at a sessional meeting
        These can be accessed via the following        In order for us to gauge participant       in Scotland by a student or an actuary who
     links:                                         numbers, we should be grateful if you could   has been qualified for less than 15 years. It
     ED24:               please reply via e-mail to                    aims to encourage actuaries of the future to
     ED24:      if you are       contribute to discussion and debate within
        Two open consultation meetings have         planning to attend either of the meetings.    the professional body.
                                                                                                     At the November Sessional Research
                                                                                                  Programme meeting in Edinburgh, during
     Newly qualified chartered enterprise risk actuaries                                          discussion of ‘An executive’s handbook for
                                                                                                  understanding and risk managing unit linked
     Congratulations to David Barton,               actuaries to gain the CERA qualification and   guarantees’ by J. Maher, J. Corrigan, A. Bentley
     Sandeep Basak, Alvin Choong,                   become chartered enterprise risk actuaries.   and W. Diffey, the judges decided that the
     Christopher Halliday, Cassandra Hannibal,         For more information on this               next Sloan Prize should go to Scott Manson,
     Andrew McDonald, Andrew Morris,                qualification and how it could help your       of Scottish Life, for his contribution regarding
     Thakane Setsabi, Paul Teggin and               career or practice, please visit the new      the impact of rational policyholder behaviour
     Ruth Ward who have become the latest           CERA website              on the cost of the guarantees.

16      February 2011                                                                                                   
it figures.
                                    Angus Macdonald is a Professor and Head of the Department of A   Actuarial Mathematics &
                                    Statistics at Heriot-Watt University. He has been Fellow of the Faculty of Actuaries since
                                    1984; worked as an actuary in life insurance; member of Faculty Council 1998-2007;
                                    Director of the Genetics and Insurance Research Centre; Editor of Annals of Actuarial
                                    Science; author of over 45 research articles and many other works. Here he discusses the
                                    University’s new MSc in Actuarial Management.

Why should I choose Heriot-Watt?
Heriot-Watt University in Edinburgh has established a reputation for world-class teaching and practical, leading-edge research, making us one
of the top UK universities for business and industry. We are a vibrant, forward-thinking university and well known for the quality of our degrees
with employers actively seeking out our graduates. The Actuarial Mathematics & Statistics Department is a world-leading centre of teaching and
research in actuarial mathematics, financial mathematics, probability and statistics, and we were the first in the UK to offer a specialised course
in actuarial science. Many leading Actuaries are employed to teach our programmes, which keeps our teaching relevant and practical.

How did the new MSc Actuarial Management programme come about
and what are the benefits to me?
Entry to the Actuarial profession is by a demanding series of examinations, but the rewards after qualifying are excellent. The MSc in Actuarial
Management at Heriot-Watt can speed your progress to this most prestigious of careers – it is designed to take the aspiring actuary almost
all the way to qualification. Heriot-Watt University boasts a leading international research group in actuarial and financial mathematics. Our
current programmes are firmly established and fully accredited by the UK Actuarial Profession. They have achieved a world-wide reputation for
high quality - this new programme provides a welcome addition to our successful portfolio.

What can I expect from the programme?
The Institute and Faculty of Actuaries in the UK has four levels of examinations that students must pass to qualify as an actuary. The Core
Technical (CT) subjects are taught in our BSc or MSc in Actuarial Science, which lead to successful students gaining exemptions from the
profession’s own CT examinations.
The MSc in Actuarial Management allows successful students exemptions in two of the Core Applications subjects (CA1 and CA3) and a choice
of up to three Specialist Technical (ST) subjects – you need two ST subjects to satisfy the profession’s requirements.
A student who graduates with a full set of exemptions has only three more examinations to pass, as well as gaining the necessary work
experience, to qualify as a Fellow of the Institute and Faculty of Actuaries.
In the taught element of the programme each student takes eight semester-long courses. These are linked in pairs, one per semester. One
pair of courses – covering Actuarial Risk Management – is compulsory and corresponds to subject CA1. It applies the principles of actuarial
mathematics to a wide range of financial and insurance settings. Students choose a minimum of two pairs of courses from a list including
Pensions (subject ST2), Life Office Management (subject ST4), Investment and Finance (subject ST5), Derivatives (subject ST6) and Enterprise
Risk Management (subject ST9). The choice of courses may depend on the coverage of actuarial subjects in the student’s first degree,
however, students choosing to take three pairs of courses, potentially leading to exemptions from three ST subjects, will have an exceptionally
broad range of employment opportunities. Students may graduate with the Postgraduate Diploma at the end of the 2nd semester, or may
progress to the dissertation stage to graduate with the MSc. The dissertation is an extended research project, with regular supervision, that is
undertaken in the summer.

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

How do I find out more?
You can visit our website:
email us:
or call us on 0131 451 4152.                                                                                       
                                                                                                                 Distinctly ambitious
 News analysis                 Industry

     New insurance and pensions authority for EU
     Gabriel Bernardino named as new head of the European Insurance and Occupational Pensions Authority
     EIOPA is the new insurance and pensions       Hector Sants from the UK Financial              have varied considerably. For example, the
     authority in the European Union.              Services Authority. Chairing the Authority      possibility of higher funding standards
     The European Insurance and Occupational       will be Gabriel Bernardino, currently           than can currently be afforded by UK
     Pensions Authority (EIOPA) is likely to       the chair of the former pensions                pension schemes has been resisted by
     be of relevance to many actuaries across      authority CEIOPS and director-general           UK governments in favour of the kind
     Europe and beyond, depending on the           of the Directorate for Development and          of active supervision conducted by the
     degree to which it creates and imposes        Institutional Relations at the Instituto de     Pensions Regulator focused on corporate
     reserving and funding requirements.           Seguros de Portugal.                            affordability. The development of EIOPA
        The management board largely                  EU supervision of insurance has until        will be followed with interest and we hope
     comprises representatives of national         now been of greater standardisation than        to bring an interview with Mr Bernardino
     supervisory authorities, such as              of pensions, where funding standards            to these pages.

     Is 2011 a crunch      Equitable — all over, including the shouting
     year for Solvency II?                         The UK Coalition Government has passed          Life Group that “the provisions in the
                                                   the necessary legislation to provide around     Equitable Life (Payments) Act 2010 were not
     According to Towers Watson, 2011 is           £1.5 billion in compensation to those who       incompatible with her recommendations
      going to be a critical year of activity      suffered losses at Equitable Life as a result   for compensation.” Whatever that was
     for insurers preparing themselves for         of regulatory shortcomings. This is less than   meant to mean, it clearly means an end to
     the new European insurance capital            some action groups and Equitable itself         any quibble from her that the government
     regime coming in under Solvency II in         were calling for at times but it appears to     is not contributing enough.
     2013. As many in the actuarial profession     be final.                                           Payment arrangements will be
     have experienced, demand for actuarial,          In a marvellously scripted comment,          revealed after the end of January, though
     risk management and finance skills has        the Parliamentary Ombudsman,                    policyholders have been warned that
     risen, particularly where those people        Ann Abrahams, whose enquiry started the         many of them have not in fact lost out
     also have a particular application to         compensation process going, told the All-       and therefore are unlikely to gain any
     Solvency II.                                  Party Parliamentary Justice for Equitable       ‘compensation’.
       Towers Watson also points out that
     companies looking to have internal
     models approved by the start of
     Solvency II will face the dual challenges
                                                   Retirement age looks set to be abolished
     of developing and testing such a model        Despite strong opposition from business         year, it will become unlawful to bring
     and persuading supervisors that their         groups, which warned of the difficulty           employment contracts to an end solely
     model is robust and meets the approval        of abandoning default retirement ages           because of the person’s age.
     criteria. This needs to be viewed in the      in the current economic climate, the UK            Groups representing students have also
     context of the relatively short               Government is pressing ahead with the           expressed fears that pressure to retain
     timescale remaining.                          abolition of the previously permissive          older workers in employment may be
       According to Neil Chapman, “Solvency II     retirement age of 65, at which an               detrimental to the aim of increasing the
     budgets are likely to rise significantly as   employer could bring employment to              level of youth employment. There is wide
     the majority of insurers are expected to      an end on the grounds of age. To be             divergence of agreement on the economics
     concentrate the bulk of their efforts over    phased in from April to October of this         of this point.
     the next two years to tackle the more
     complex aspects”.
                                                   What does the future hold for interest rates in the UK?
                                                   Base rate remains stuck at 0.5%, where it       prices. Prominent in the period in January
        INSURANCE NEWS                             has lodged for nearly two years. Growing        before the Bank again decided to leave rates
                                                   numbers of commentators are drawing             unchanged, Ros Altmann of Saga called for
      Although we receive a stream of news         attention to the way in which inflation is       an increase in interest rates for the sake of
      and opinions from within the pensions        rising well beyond the Bank of England’s        elderly savers.
      community for this column, there is a        management target and suggesting that it is        Business commentators continue to
      relative dearth of actuarially-interesting   time for an increase in interest rates to try   caution against any rise, given their view
      news from the insurance sector.              to stem inflation.                               as to the fragility of the recovery. But it is
      Do please let us have any news or               In the same vein, pensioner groups           a testing time for anyone trying to make
      interesting opinions/press releases to       are pointing to the fact that low interest      predictions — or carrying out valuations of                      on savings comes at a time of such rising       pension schemes.

18      February 2011                                                                                                   
                                                                                                               Industry                       News

    From the world of general insurance
    Solvency II                                      incident. The commission found that BP,
    The Committee of European Insurance              Halliburton and Transocean had attempted
    and Occupational Pensions Supervisors            to cut costs and this helped to trigger
    (CEIOPS) announced in mid-December that          the explosion and ensuing leakage. They
    a quantitative and qualitative analysis based    did not reach a conclusion as to whether
    on the pooled data collected in the Fifth        this action was purposeful or not. In the
    Quantitative Impact Study (QIS5) would           report, BP was accused of nine faults but
    be run in January. CEIOPS also disclosed         blame for the incident was not attributed
    that almost 70% of insurers and reinsurers       to anyone. Rather, it concluded that better
    had participated in QIS5, a substantial          management of decision-making processes
    increase on the 33% for QIS4. The high           within BP and other companies, better
    participation will provide useful input for      communication within and between BP
    refining the calibration of the Solvency          and its contractors and effective training of
    Capital Requirement standard formula and         key engineering and rig personnel would
    the requirements for technical provisions        have prevented the incident. BP released
    and own funds in the level 2 implementing        a statement in response, saying that it
    measures. The final report on QIS5 is             had already instituted significant changes
    expected in March.                               designed to further strengthen safety and       public companies, and that the National
       Under the proposed European Financial         risk management. Transocean, however,           Association of Insurance Commissioners
    Supervisory reforms, CEIOPS becomes the          blamed BP for making the decisions              required analysis and reporting of climate
    European Insurance and Occupational              before the actual explosion occurred and        change risks.
    Pensions Authority (EIOPA).                      government officials for permitting those           The Cancún climate change talks
                                                     decisions. Halliburton stated that it was       established a deadline of the end of 2012
    Deepwater Horizon                                acting only on the orders of BP when it         for the creation of a potential international
    On 15 December, the US government filed           injected the cement into the wall of the        insurance mechanism as part of the United
    lawsuits against a number of the companies       well, and also blamed the government            Nations Framework Convention on Climate
    involved in the Deepwater Horizon oil spill.     officials and BP.                                Change process. This will require a number
    These suits seek removal costs, economic            A new reinsurance consortium for sudden      of trigger dates to be met over the next
    losses and environmental damages under           oil spills was launched before Christmas        two years, the first of them being the
    the Oil Pollution Act 1990 (OPA) and             — this will provide unprecedented levels        submission of ideas for elements of the work
    civil penalties under the Clean Water Act.       of liability coverage (expected to be           programme by 21 February.
    QBE syndicate at Lloyd’s was specifically         more than US$10bn), a spin-off of the
    named (the only insurer on the list) because     Deepwater Horizon incident. The current         Reinsurance cost to fall
    it appears on Transocean’s Certificate of         maximum level of coverage is US$1.5bn.          Reinsurance premiums are expected to
    Financial Responsibility (CoFR), and the         The consortium (SOSCover) will be managed       fall by as much as 5-10% at the January
    OPA allows direct action against an insurer      by Aon Benfield and involves a number of         renewals in light of another benign loss
    appearing on a CoFR. Although QBE is the         reinsurers, led by Munich Re.                   year to the market. Although there were
    only insurer named, it is expected that                                                          some major events, the insurance industry
    any damages or recompense for chemical           Climate change                                  was spared the brunt of it due to a lucky
    exposure or property damage related to the       Richard Faulk, a partner at law firm Gardere     escape. Although the Deepwater Horizon
    clean-up efforts found against the other         Wynne Sewell, has warned the Casualty           oil spill might be the worst environmental
    defendants are also likely to be paid by their   Actuarial Society that the climate change       disaster to date, BP chose to self-insure.
    relevant insurers.                               controversy is only in its early stages, and    There were 19 named storms in 2010, none
        On 5 January, the White House Oil Spill      quoted a recent report from Deutsche Bank       of which made US landfall. There were
    Commission released a final report detailing      that showed a dramatic increase in climate      three major earthquakes (Haiti, Chile and
    faults by the companies that led to the          change litigation and related risks.            New Zealand) with total expected insured
                                                        He also noted that the Securities            losses less than $17bn. With reinsurance
         FOR MORE GENERAL                            and Exchange Commission had issued              capital now stronger than in 2007, and
         INSURANCE NEWS                              guidelines requiring reporting of the impact    capacity in excess of demand, further rate
      More news on the following items can be        of climate change on investments by             reductions can be expected.
      found on the website:
      ■ Regulatory and legal developments            Large losses                                     to the continuing stream of new claims
      ■ Marine developments                          Earthquake in New Zealand — 4 September          reported in November and December and
      ■ Quinn Insurance                              More recent estimates have suggested             the extent of the land damage reported
      ■ US dog bite claims                           that there has been a further increase in        in engineering surveys. In addition, there
      ■ 2011 hurricane season                        the insured cost of this quake, with the         have been two significant aftershocks, on
      ■ Large losses                                 possibility that it may even cost in excess      19 October and 14 November — these will
                                                     of NZ$5bn (US$3.75m), almost double the          probably be treated as separate events for
      Visit            original estimate. The increase is attributed    insurance and reinsurance purposes.                                                                                                              February 2011    19
 News                           People/Society                                                           

     Secret Mathematicians unveiled by Marcus du Sautoy
     Event also launched an appeal to secure funding for the new Mathematical Institute building based in Oxford

     Over 100 members and guests attended the           the Mathematical Institute, presented a           the relationship between the Actuarial
     recent event at Staple Inn Hall in London on       case for support for the new building and         Profession and Oxford continues to grow
     Wednesday 10 November 2010,                        the benefits it will bring. Guests were able       and flourish.
     when Marcus du Sautoy, Simonyi                     to view the architect’s model for the new            Information and photographs from the
     Professor for the Public Understanding of          building and were given information about         event are now available on the Mathematical
     Science, gave a talk entitled ‘The Secret          a joint naming opportunity for the members        Institute website,
     Mathematicians’. His presentation was a            of the Actuarial Profession within the new        alumni/secret-mathematicians. A recording
     voyage of discovery exploring the hidden           building. For more information and to             and slides from the talk are also available at
     mathematical ideas that can underpin               support this initiative please visit the Oxford   the Actuarial Profession website,
     artistic creativity, as illustrated in the works   Giving website at                       
     of Dali, Messiaen and Laban, among others.                         By Paul Thornton
     Marcus’ presentation included everything              Actuaries were
     from recordings of cicadas to a video of           joined on the
     mathematics in Borges as interpreted               evening by members
     through dance, and was well received by the        of the Oxford
     audience who appreciated his engaging and          Mathematicians in
     energetic approach to the subject.                 the City Network,
        The event also served as the launch of          and we were
     an appeal to members of the Actuarial              delighted that many
     Profession to secure funding for the new           were able to attend.
     Mathematical Institute building in Oxford.         Oxford course
     After introductions by Jane Curtis, president-     offerings for actuarial
     elect, and Paul Thornton, past president           science continue
     of the Institute and Faculty of Actuaries,         to increase in their
     professor Nick Woodhouse, chairman of              popularity, and

     50-year connection SIAS Centenary Ball                                                               were in need of respite, there was the
                                                                                                          opportunity to enjoy some games on the
     K.A.Pandit, the oldest Indian actuarial            SIAS celebrated its 100th birthday in             Nintendo Wii. Others gathered around an
     consultancy, recently celebrated 50 years          2010 and as part of these celebrations the        exquisite chocolate fountain, where there
     of its association with the Sri Lankan             showpiece event was the SIAS Centenary            was a wide selection of food for dipping.
     market at Hotel Ceylon Continental                 Ball. This was a stylish black tie event held     The ball continued until after midnight,
     Colombo. The function was inaugurated              at the Old Billingsgate Market in London.         with a few continuing to party in a local
     by Dip pragtyam lighting of the lamp               Beautifully laid out for the occasion, it         pub until the small hours of the morning.
     of knowledge by the chairperson of the             looked splendid with its creative lighting           This was my last event as SIAS social
     Insurance Board of Sri Lanka and the               and large plasma screens — very different         convenor and I hope you have enjoyed
     Security and Exchange Commission of                from its days as a fish market.                    the events over the year. I now pass on the
     Sri Lanka.                                            The evening began with wine and                pleasure to Mark Dainty and look forward
        The title of the presentation was               cocktails while stilt walkers mingled             to seeing you at the events this year.
     ‘Actuary and You’. More than 100                   elegantly among the crowd. Over 700 guests        By Iain Ritchie
     delegates attended, including the deputy           attended, which was the largest event ever
     governor of the Central Bank of Sri Lanka,         held by SIAS.
     the president of the Insurance Association            As the wine and cocktails flowed, guests
     of Sri Lanka as well as the vice chairman          were treated to a three-course meal and
     and managing director of Ceylinco                  some interesting entertainment. First up
     Insurance Group.                                   was Axel, an expert in the art of poi, who
     By D.K. Pandit                                     put on an entertaining glow-in-the-dark
                                                        performance, followed by four jugglers
                                                        who put on a very impressive show. The
 Births                                                 entertainment finished in style with a
 n Eleanor Beamond-Pepler (FSA) and                     dazzling spectacle by two trapeze artists.
 James Pepler (GAD) are pleased to                         After the meal, no time was wasted
 announce the birth of their daughter                   in hitting the dance floor to the
 Bronwen Jean Beamond-Pepler.                           accompaniment of an excellent live band.
 Bronwen was born on 5 December 2010.                   For those who preferred not to dance or

20      February 2011                                                                                                          
    For people moves, see page 50

    Long cues at the SIAS Pool Tournament                                                             WCA carol service
    The SIAS 2010 Pool Tournament was held                                                            Christmas carols may feel a bit passé as we
    on Thursday 28 October. The main problem                                                          enter 2011, but it is good to report that the
    for me as organiser, came when the planned                                                        Worshipful Company of Actuaries’ carol
    venue was flooded the day before the                                                               service was a wonderful success. St Lawrence
    event. I would therefore like to thank the                                                        Jewry (a City Wren Church just next to the
    85 players who were willing to travel to                                                          Guildhall) was full — and it was great to
    Shepherds Bush at the last minute.                                                                see several families join the congregation.
        As in previous years, the first round                                                          The music led by Catherine Ennis was
    involved a group stage — and thanks go                                                            sparkling and the service, comprising
    to Chris Tang from PwC for helping with                                                           traditional carols and readings, ended with
    this. A welcome change was that all four                                                          her playing Durufle’s spectacular Toccata on
    competitors from the SIAS committee made                                                          the Klais organ — a great performance.
    it through, with my playing partner Xin Jin                                                          A total of £800 was raised in the collection
    from ACE sinking the crucial black to win                                                         for the Worshipful Company’s charitable trust
    our group. Social convenor Iain Ritchie of       Bar Sports Inc (Daniel Hall of ACE and           — the profession’s main charity supporting
    Aon Hewitt also won his group. The games         Tom Chamberlain of Allianz) had to play          a wide range of causes such as the Children’s
    were very competitive, and there was a high      each other to determine the winner.              Liver Disease Foundation, a number of
    standard throughout.                             The final was of high quality, with The Pru       hospices and various educational and
        The knockout stage came next, which          Tigers pipped as runners-up, and honours         research projects. The Worshipful Company
    meant that one mistake could end the             going to the winners, Bar Sports Inc.            of Actuaries thanks OAC Actuaries and
    tournament. However, this didn’t seem to            This left the Best Team Name prize to be      Consultants for its sponsorship of the event.
    faze the competitors, for whom qualifying        judged, and the award went to Foo Cue,              After the service many went on to
    was mostly rewarded with a trip to the bar.      although this may have more appropriately        supper at the Armourer’s Hall and, amid the
    I was particularly impressed with one team       described James Lieu of PwC and David            convivial surroundings, the actuaries proved
    who celebrated winning their semi-final           Severe’s response to being knocked out at        that they can sing loud and clear. Under the
    game by downing Jägerbombs…                      the quarter-final stage.                          baton of past master Andrew Benke’s wife,
        The field was whittled down until we             Thanks to all the entrants and                Janet, and more than ably accompanied by
    reached three teams in the final. This was        the spectators for another enjoyable             Peter Thompson, about 80 people raised the
    played as a group, which meant                   tournament, and to Rileys at Shepherds           roof with numbers such as Ding Dong Merrily
    The Pru Tigers (Vu Vuong and Ming Hau            Bush for hosting the event. We hope to see       on High and Good King Wenceslas.
    of Prudential), The Badgers (Chris Littlefair    you at the next SIAS Pool Tournament.            Definitely a date to look out for in December.
    and Mark Bronklehurst of Amlin) and              By Alvin Kissoon                                 By Michael Tripp

    Bristol Actuaries Walking Club completes 12-year, 350-mile round trip
    The Bristol Actuaries Walking Club was           Instead, they consist of day trips or, if the    Doing it like this meant that local and
    founded in 1987, initially as part of the        distance from Bristol is too long, involve       distant walks could be intermingled,
    Bristol Actuarial Society, though it soon took   staying away for a night or two (following       rather than having a period when every
    on a life of its own. Among other things,        the excellent example of the Fifty Nine Club).   trip required an overnight stay. As things
    members have enjoyed long-term projects            Our last project started in 1998, and a        developed, the return route deviated
    such as completing the Cotswold Way and          few stalwarts have now completed it.             from the original plan and we used the
    the Offa’s Dyke Path. These projects are not     The concept was ‘A Great Circle’. This would     Samaritans Way South West to get back
    undertaken as one continuous walk.               start in Bristol, take The Monarch’s Way to      to Bristol. This walk was 560km (350 miles)
                                                                               Charmouth, the         in length and included 11,500m (37,750ft)
                                                                               South West Coast       of climbing.
                                                                               Path to Teignmouth,       On 4 October the final link in this
                                                                               and the Templer        chain, from Chew Magna to Bristol, was
                                                                               Way to Widecombe.      completed. Just three members — Mariette
                                                                               At the same time,      Farrell, Alan Morris and David Purchase —
                                                                               we would walk the      had walked all 31 legs, but three others
                                                                               Two Moors Way          — Steve Elliott, Martin Farrell and Peter
                                                                               from Ivybridge to      Smithard — were very close. Robin Gillespie
                                                                               Lynmouth, more of      joined us on the Clifton Suspension Bridge,
                                                                               the South West Coast   which we had left almost exactly 12
                                                                               Path to Minehead,      years earlier, and took the photos of the
                                                                               and then the           completion party. Sensibly, in view of the
                                                                               Somerset Way back      location, he didn’t bring the champagne.
                                                                               to Bristol.            By David Purchase                                                                                                                 February 2011    21
       Tuesday 1 February                    Programme event

     The actuary as an expert witness      In an increasingly litigious world, it is likely that at   practitioner in mind — who will not have the support
                                           some point in his or her career a member of the            of a large consulting organisation and colleagues
     Staple Inn,
                                           profession will be invited to act as an expert witness     who have undertaken such roles in the past — but
     High Holborn,                         in connection with potential litigation. For some          we hope that it will also be of interest to those with
     London                                actuaries, particularly those involved in the field of     experience of this type of work.
                                           accident compensation, such work will represent                The paper may also be of interest to any actuary
     5.30 for 6pm start
                                           a significant proportion of their regular workload,        who is called as a witness of fact in connection
                                           but for many it will be an occasional or one-off and       with litigation concerning his or her employer or a
                                           possibly somewhat daunting possibility.                    particular consulting assignment.
                                               This paper is intended to provide general guidance         There is no need to register in advance for this
                                           as to whether or not an invitation to act as an expert     event. Refreshments will be available from 5:30pm
                                           should be accepted and what to expect once a case          for a 6pm start. Following the meeting there will
                                           has been taken on. It is written more with the sole        be a free drink and buffet at a nearby pub.

       Thursday 17 February                  Social event

     Ceilidh night                         Time to get your dancing shoes on again for a floor-       buffet served during the evening. To purchase
                                           filled night of ceilidh. Let the band whisk you far        your tickets please e-mail
     Cecil Sharp House,
                                           away to the Scottish Highlands. This night promises        Please note that we will allocate places on a
     2 Regents Park Road,                  to be so much fun, you could potentially dance your        first-come, first-served basis, so be sure to reserve
     London,                               socks off! There will be plenty of food and drink to       quickly to avoid disappointment.
                                           replenish your energy, so all you need to do is come
     NW1 7AY
                                           along with comfortable shoes and a big smile.
     Time TBC                                   There is no need for any previous dance
                                           experience for you to attend. All the dances are
                                           explained beforehand and there is a caller on hand
                                           to shout out the right moves at the right time to help
                                           keep you on course. For those of you who are slightly
                                           shy, SIAS will be providing welcome drinks to help
                                           loosen your feet, so there is no excuse to miss out.
                                                The venue has a bar and there will be a finger

       Tuesday 15 March                      Programme event

     Dynamic Management Actions            Realistic modelling of dynamic management actions          the Use Test and Principles & Practices of
                                           (DMA) is critical to many areas of the financial           Financial Management)
     Staple Inn,
                                           management of a life insurance company today.                  4) Illustrate how improved modelling of
     High Holborn,                            Dominic Clark, Jeremy Kent and Ed Morgan will           DMA can, under some circumstances, materially
     London                                provide an overview of this topic. They will:              influence calculated solvency
                                              1) Explain what is meant by DMA and what the                5) Show how understanding DMA and its
     5.30 for 6pm start
                                           main types are                                             interactions with dynamic policyholder
                                              2) Introduce the areas in which DMA is                  behaviour can improve a company’s enterprise
                                           important (For example, Solvency II, MCEV, ALM,            risk management.
                                           ERM, IFRS)                                                     There is no need to register in advance for this
                                              3) Describe how DMA can be linked to                    event. Refreshments will be available from 5.30pm
                                           real expected management behaviour                         for a 6pm start. Following the meeting there will
                                           (including considerations around concepts such as          be a free drink and buffet at a nearby pub.

             For details of events, visit

22      February 2011                                                                                                            
Now, let’s talk about the importance of financial modelling.


     The world has changed. Rely on a proven financial modelling solution.
 Solvency II                    MCEV

On the right track
Roger Houlihan and Ferdia Byrne look at the opportunities for companies to integrate their
MCEV reporting into the Solvency II workstream

     Roger Houlihan (left) is principal adviser
     focusing on financial transformation at KPMG.
     Ferdia Byrne (right) is a partner leading on
     Europe at KPMG

              he publication by the European           those used in the valuation of the net assets.   liabilities. If a shareholder view of liabilities
              Insurance CFO Forum of the               Allowance is also made for the time value of     is taken, these approaches can be equivalent,
              Market Consistent Embedded Value         financial options and guarantees (TVOG), the      but this is not always the case. There is
              (MCEV) principles in June 2008           cost of residual non-hedgeable risks (CRNHR)     therefore an opportunity to move MCEV
     was a significant step forward for financial        and frictional costs of required capital.        to an ‘economic balance sheet’ approach
     reporting. Many firms embraced MCEV and               The current reserving requirements,           (analogous to Solvency II) from the current
     set about implementing the requirements as        which drive distributable earnings, will         ‘distributable earnings’ approach, subject to
     part of their reporting processes, although       no longer be used from 2013 onwards.             ensuring that the approach is equivalent to
     the pace of adoption was slowed by the            However, most MCEV models cannot be              the projection of distributable earnings.
     financial crisis.                                  easily converted to move to the Solvency II          The Solvency II balance sheet can be
        From a process perspective, MCEV               basis for calculating technical provisions,      used as a starting point, but adjustments
     sometimes became another bolt-on to               and so cannot be readily adapted for use         will certainly be needed. Solvency II own
     existing reporting processes, which are again     from 2013 onwards. In addition, most             funds, free surplus plus required capital, for
     set to change under Solvency II. In the sprint    models project current Pillar 1 capital          instance MCR and SCR, will be based on a
     to the Solvency II finish line, we wonder if       requirements, or use them as a proxy for         market-consistent valuation of assets, and
     firms have adequately considered potential         projecting an economic capital requirement.      a market-consistent view of the liabilities
     alignment of reporting processes to maximise         At the same time, many insurers are in        calculated allowing for best estimate
     the efficiency of their reporting functions?       the process of developing models capable         cashflows. Note, however, that Solvency II
        This article looks at Solvency II and          of reporting and projecting Solvency II          is designed from the point of view of
     MCEV, and outlines the potential for              metrics, best estimate liabilities (BEL),        policyholder protection. Own funds can
     convergence as well as the challenges faced       risk margin, minimum capital requirement         therefore include the value of eligible debt
     by firms in this area.                             (MCR) and solvency capital requirement           instruments, which will be excluded from
                                                       (SCR). These will be needed for internal         MCEV, and may not provide a shareholder
     Distributable earnings vs economic                model approval and to support the own            view of the value of with-profits business.
     balance sheet                                     risk and solvency assessment (ORSA) process.     For liabilities, the shareholder view on
     Most MCEV models are designed to                  There is therefore a major opportunity           with-profits business is quite different,
     project shareholder cashflows based on             to combine market-consistent reporting           for instance valuation of shareholder
     current statutory technical provisions.           processes, at least for MCEV, and Solvency II.   transfers and the treatment of burn-through
     Indeed, this is a specific requirement of the      In our experience, nearly all of the focus has   cost on with-profits funds. Challenges also
     MCEV principles, which refers to the              been on the requirements of Solvency II,         arise in relation to some of the components
     “…present value of shareholders’ interests        rather than MCEV, for new models. But there      of the MCEV calculation, especially taxation,
     in the earnings distributable from assets”.       are a number of areas where firms will have       frictional cost of required capital, TVOG and
     Under this approach, the MCEV calculation         to take key decisions quickly if they are to     the CRNHR to maintain compliance with
     starts from a net asset position; free surplus    achieve integration and efficiencies in the       the MCEV principles.
     allocated to covered business and required        reporting process.                                   Although in theory Solvency II uses
     capital, based on a valuation of assets and          Fundamentally, MCEV focuses on the            the same risk subdivision basis as MCEV,
     liabilities. The present value of future profits   valuation of the shareholder interest in         hedgeable and non-hedgeable, the ‘charge
     (PVFP) is then calculated, ensuring that          distributable earnings, whereas Solvency II      for uncertainty’ (CRNHR) and risk margin
     the liabilities projected are consistent with     focuses on the direct valuation of the           are not the same. MCEV requires only

24      February 2011                                                                                                          
                                                              Figure 1 — Comparison of MCEV and Solvency II cashflows
    consideration of a charge for uncertainty                          Assets                        Liabilities                 Embedded value
    where asymmetry of risk arises, whereas                                             IFRS 4 Phase II            Solvency II   MV Balance Sheet
    Solvency II requires an explicit charge for
    the remuneration of an acquirer to transfer                                                                                      Market-
                                                                                           Equity                   and SCR
    the risk. Under Solvency II the requirement                                                                                     embedded
    is very high at a 6% charge per annum on                                                                                          value

    non-hedgeable risk capital; this allowance for                  Market value
                                                                     of assets          Best estimate
    uncertainty is much greater than typically
                                                                                         liability and            Technical
    allowed for under MCEV.                                                                 service                                     MCEV
                                                                                                              provisions and
                                                                                         margin and                                  liabilities
       Other key issues that need to be                                                                         risk margin
                                                                                         risk margin
    addressed under the economic balance
    sheet approach include:
    n Differences in the definition and valuation      companies will anticipate any changes to               demanded by analysts
    of future premiums                                capital requirements before 2013, although             n There is an opportunity to align pricing
    n Definition of ‘covered business’ under the       they will be significant for some companies.            and risk management decisions with
    different reporting bases                           Life company taxation will also be                   performance reporting, which in turn will
    n Valuation of items that depend on the           changing in the Solvency II world, and will            support the use test for companies adopting
    timing and quantum of future profits               need to be reflected in the new models.                 an internal model
    (such as tax losses)                                                                                     n The quality of MCEV will be improved as
    n Analysis of change in MCEV, as expected         Benefits of aligning MCEV and                          Solvency II raised the bar in terms of data
    surplus over the reporting period is no longer    Solvency II processes                                  requirements, review and documentation.
    projected                                         In many respects, a key challenge firms will
    n Disclosure and presentation, in the format      likely face is a logistical one, for example,          Conclusion
    prescribed by the MCEV principles.                how much of the work can realistically                 Embedded value reporting was originally
       Figure 1 provides a high-level comparison      be carried out on top of core Solvency II              developed because the reserving approaches
    of MCEV and Solvency II and illustrates a         development within the time available.                 were seen as uneconomic and, therefore, a
    possible approach.                                The priority this is given will depend upon            poor basis for measuring performance.
       This is not just an issue in the UK, but in    the extent to which management can foresee             The MCEV principles then attempted to
    all European markets. One difference is that      the clear benefits of alignment, and how                develop a comparable standard for the
    current UK approaches to statutory valuation      companies’ Solvency II programmes progress.            insurance industry, with enhanced approaches
    will completely disappear in 2013, whereas        For those companies that can afford to                 to providing for risk in the valuation.
    statutory reserving
    will be retained        » Companies urgently                                dedicate resource and/
                                                                                or budget, the benefits
                                                                                                                There is a clear opportunity to align
                                                                                                             reporting processes, but there still remains
    in some European        need to assess how they                             of convergence are           significant uncertainty regarding the scope of
    countries such as       will report meaningfully to                         clear:                       MCEV under Solvency II. Firms will need to
    Germany and France.
                            shareholders and analysts                           n Convergence of             develop the detailed methodology required
    This is because the
    statutory reserves      in the Solvency II world                   «        reporting measures
                                                                                will create obvious
                                                                                                             for the MCEV economic balance sheet
                                                                                                             approach, but the industry can support this
    will still be needed to determine the profit-      efficiencies to reporting processes and                 by developing its thinking further.
    sharing, and so will continue to be relevant      resource synergies                                        It is clearly not desirable to maintain dual
    to the projection of future profits.               n To the extent that the initial MCEV                  processes to report MCEV as well as available
                                                      implementation built on existing                       and required capital under Solvency II.
    Other changes                                     cumbersome or unwieldy processes,                      Therefore we wonder if MCEV will survive
    There are other changes that need to be           Solvency II implementation provides firms               after 2013?
    considered. As noted earlier, MCEV reporting      with an opportunity to get their processes in             As we noted earlier, the Solvency II
    often reflects the cost of statutory capital       order and to avoid more manual intervention             balance sheet is not appropriate for
    based upon Solvency I Pillar 1 metrics.           and spreadsheet-based processes to reflect the          measuring shareholder value and business
    Until Solvency II goes live at the end of 2012,   new reserving and capital requirements                 performance. Companies urgently need to
    MCEV will continue using Solvency I metrics;      n Producing MCEV from the Solvency II                  assess how they will report meaningfully to
    however, with these set to quickly disappear,     balance sheet will allow greater comparability         shareholders and analysts in the Solvency II
    the move to report on an economic balance         of the two metrics, and reconciliation,                world. IFRS Phase 2 may be a possible
    sheet approach may mean we are likely to          providing improved transparency and                    solution, but we doubt whether it will be
    see a step change. We think it is unlikely that   comparability that will inevitably be                  implemented in time.                           ■                                                                                                                              February 2011   25
 Solvency II                   Run-off insurers

Running it off
Colin Czapiewski believes Solvency II will have a significant impact on run-off insurers,
affecting their capital requirements far more than insurers that continue to write new business

                             Colin J W Czapiewski
                             is a self-employed
                             consultant, a
                             director of Beaufort
                             Underwriting Agency
                             Ltd at Lloyd’s and an
                             actuarial advisor to
                             Charterhouse Risk

                 change in lifestyle happens to all   large reserves as compared to current            and renewal business. Compliance, return
                 of us over time as we evolve from    premium income or those writing speciality       on capital and other costs will change the
                 a working environment into           types of business — reserving risk may be        landscape of the run-off market in the
                 well-deserved retirement, and it     more important than underwriting risk.           Solvency II world.
     often happens to companies at some stage,            Solvency II will significantly increase the
     with insurers being no exception.                amount of insurance business in run-off as       What do we mean by this in detail and
        At first sight, there is little difference     insurers seek to utilise their capital more      in practice?
     between an insurer writing new and               efficiently and position themselves for the       While underwriting risk is normally the
     renewal business and an insurer that has         new solvency regime, and this will add to the    major contribution to the overall capital
     ceased such activities and is in run-off.        enormous amount of reserves (about €200bn        requirements for an insurer, it is not an
     The former would seem to be the latter plus      in the EU, of which €50bn is in the UK)          issue for those in run-off. Hence, the other
     the function of writing new and renewal          currently tied up in the run-off market.         elements increase in relative importance,
     business. Data quality is the key issue for          In practice, the supervisors will be         and especially reserve and credit risk.
     both but, thereafter, there are significant
     differences. The emphases of the two types
                                                      involved in major
                                                      discussions with        » Compliance, return on                           It is important to
                                                                                                                                calculate the reserves,
     of insurers are different in most aspects of     larger run-off entities capital and other costs                           both gross and net
     the business.                                    regarding their capital will change the landscape                         of reinsurance, as
        Effective, efficient and focused capital       requirements, as they                                                     accurately as possible,
                                                                              of the run-off market in
     management is vital to a successful              will have their capital                                                   and to identify and
     run-off insurer, whereas attributes of new       and reserves in place   the Solvency II world                             target the specific
     business are the focal point and the most        to the Solvency I                                                         areas where potential
     relevant issue for ongoing insurers.             standards, but in theory they would have to      variability may occur. This process will help
     Expenses of running off the claims are           provide far more capital under Solvency II.      to reduce the capital required to run off the
     the most important expense item for              It is inevitable that the supervisors will be    claims. The reinsurance asset may be crucial,
     run-off insurers, whereas commission             sympathetic to existing run-off insurers and     and especially where lower-rated reinsurers
     and other new business and renewal               their managers, but those entering run-off in    are utilised or where more heavily reinsured
     expenses dominate for ongoing insurers.          future will be subject to the new and more       property catastrophe claims are involved,
     More importantly, the uncertainty and            stringent capital requirements of Solvency II.   hence credit risk would be relevant.
     risk relating to reserves are key for run-off        Any insurer with gross premiums over            Although operational risk would seem to
     insurers but they are normally of far less       €5m or gross reserves over €25m comes            have less importance than reserve and credit
     relative importance for ongoing insurers,        within the remit of Solvency II, and this will   risk, it can have a substantial effect on claims
     where underwriting risk is usually the main      include most run-off insurers. Proportionally,   expenses in the event of unexpected and
     focus. However, for some ongoing insurers        Solvency II is likely to affect insurers in      unforeseen events. Whereas these are usually
     — such as those with disproportionately          run-off far more than those writing new          a minor irritation for ongoing insurers,

26      February 2011                                                                                                         
                                                                                                        insurer will have to deal with such business
                                                                                                        differently in that it will not be able to
                                                                                                        commute or transfer without involvement
                                                                                                        with, and permission from the supervisor.
                                                                                                        Similarly, the policyholder protection issues
                                                                                                        for direct business will affect how these
                                                                                                        policies are dealt with by a run-off insurer
                                                                                                        given their obligations and those of the funds
                                                                                                        underpinning the guarantee.
                                                                                                            Diversification is an area that presents
                                                                                                        benefits, but also difficulties, in the
                                                                                                        calculation of capital requirements, and
                                                                                                        this will be important for the reserves of
                                                                                                        run-off insurers within Solvency II, whether
                                                                                                        it is diversification for geographical, type of
                                                                                                        business or other reasons.
                                                                                                            Solvency I requires very limited regulatory
                                                                                                        capital for run-off business as the current
                                                                                                        requirements are for a percentage of
    they can be crucial for the financial health       book of business where there is less scope        premiums or incurred claims. As such,
    of an insurer in run-off, where margins are       for flexibility.                                   run-off books of business can now be bought
    thin. Cash flow and liquidity risk will be             The type of organisation involved in          and sold cheaply on a best-estimate basis with
    affected and geared up by the lack of inwards     those communicationsis important.                 little regard for reserve volatility or capital
    premiums, and must be carefully planned and       Maintaining reinsurance protection with           requirements. This will change with Solvency
    monitored. This process should not normally       top quality reinsurers is capital-efficient,       II where the capital is dependent on the
    be a major issue if managed properly.             whereas it is far better to commute that with     probability distribution of net reserves. So for
    Capital requirements for the remaining types      lesser quality reinsurers. On the inwards side,   a typical run-off insurer, the Solvency II
    of risk will not normally be an issue, but this   commuting business with greater potential         capital may be five or 10 times of that for
    will depend on the circumstances.                 or actual volatility, such as many types of       Solvency 1. Further, the more volatile the
       Run-off insurers may be solvent or             liability business, is more capital-efficient      reserves, the higher the capital requirement.
    insolvent depending on whether they are           than parting company with the shorter tail        This may well mean that just 15% volatility
    likely to be able to pay their claims and to      reserves subject to lesser volatility, such as    of reserves could lead to a 50% increase
    meet their other obligations. Those in solvent    most property business, including property        in capital. Hence, the annual return on
    run-off will be more affected by Solvency II      catastrophe business.                             capital demanded within a run-off insurer
    as they are expected to pay off 100% of their         Long-tailed (eg. liability) insurance         will increase dramatically in the future, and
    liabilities (although the requirements of         business will continue to have claims             perhaps exceed 5% of capital, and so it is
    Solvency II may result in a change for some       notified well into the run-off process, while      likely that management of run-off books
    from solvent to insolvent run-off).               short-tailed (eg. property) business will have    of business will change as Solvency II
       The run-off may be natural, although this      far fewer claims notified and the bulk of          approaches. Portfolio transfers, proactive
    may be tempered by an active or passive           the movements will be to claims already on        management, increased reinsurance, more
    approach to their liabilities. This approach      its books. This will be reflected within the       diversification and other features will become
    will largely be affected by their attitude        Solvency II calculations by the effects on        far more prevalent and careful attention will
    to pursuing commutations, both inwards            reserve volatility.                               be paid to the possibility of the benefits of
    and outwards. The insurers may mitigate               Some insurers will be wholly UK domiciled     synergy. Schemes of arrangement to run off
    their obligations by minimising their net         and it will be clear that they come within        the insurance claims portfolio quickly and
    liabilities by means of portfolio transfers or    the remit of the FSA, while others will have      equitably will become exceedingly popular.
    by the purchase of additional reinsurance.        overseas operations or come within an                 Run-off insurers will be operating in
    Alternatively, the run-off may be structured,     overseas group. Hence it may be unclear           a new and far more intensive capital
    say by the insurer entering a scheme of           which legislative jurisdiction is involved, and   environment. The message must be for
    arrangement. The type of run-off and the          perhaps it will be one with different attitudes   those contemplating run-off to get their
    effects of Solvency II will also be determined    to run-off within Solvency II from the UK.        data, portfolios, transfers and schemes
    by whether the insured business is part of            Some classes of business are compulsory,      sorted sooner rather than later before time
    a company or group, or it is a standalone         such as employer’s liability, and the run-off     catches them up.                                ■                                                                                                                    February 2011     27
 Solvency II                    Fair value

Value judgment
Kamran Foroughi and Colin Murray dissect the fair value proposals developed by the
International Accounting Standards Board in relation to Solvency II

     Kamran Foroughi (left) leads Towers Watson’s
     EMEA financial reporting initiative, covering
     IFRS, EEV and MCEV. He also chairs the UK
     Actuarial Profession’s IFRS working party.
     Colin Murray leads Towers Watson’s Solvency II
     Pillar 1 Initiative across Europe

              he International Accounting             the measurement date’.                          the effect of non-performance risk (for
              Standards Board (IASB) has recently        Where observed market prices are deemed      example, risk of default)
              developed fair value proposals that     to represent orderly transactions, observed     n The fair value measurement should
              will apply to the valuation of an       market prices should be used in determining     consider the most advantageous market,
     insurance company’s financial instrument          fair value. For financial instruments with no    which maximises the value of the asset or
     assets and liabilities in its accounts.          observable market price, a mark-to-model        minimises the value of the liability
     This article discusses these proposals and       approach should be used.                        n A three-level hierarchy is required to
     considers their interaction with Solvency II.       Judgment is required for financial            determining fair value and disclosure:
                                                      instruments where market prices are                Level 1: Unadjusted quoted prices
     Background                                       observable, but the presence of a number        in active markets for identical assets or
     In October 2008, the IASB’s Expert Advisory      of conditions suggests disorderly markets.      liabilities that the reporting entity can access
     Panel produced a report on how to measure        An illustrative example may be the corporate    at the measurement date
     and disclose the fair value of financial          bond market in late 2008, where observed           Level 2: Inputs other than quoted prices
     instruments in markets that are no longer        yields rose significantly over a short time      included within Level 1 that are observable
     active. The report emphasised that fair value    period. At that time, companies found that      for the asset or liability, either directly or
     in inactive markets should not be based          volumes of trades fell significantly over the    indirectly
     solely on valuation date market prices;          same period, with both buyers and sellers          Level 3: Unobservable inputs for the asset
     in such circumstances a ‘mark-to-model’          unable to transact meaningful-sized trades      or liability.
     approach was preferable.                         at observed market prices. The Draft IFRS
        In May 2009, the IASB produced an             would require companies to judge whether        Aligning Solvency II with fair value
     exposure draft on a future fair value            fair value using the core principle would       Under the QIS5 specification, asset
     measurement standard and, in August              differ from the observed market price.          valuations are generally linked to
     2010, the IASB issued its Staff Draft Fair       The Draft IFRS provides guidance on what        IFRS valuations. However, to date, the
     Value Measurement International Financial        constitutes an orderly transaction and how      requirements relating to the economic
     Reporting Standard (Draft IFRS). A final          to mark-to-model.                               calibration of the liabilities within
     standard is expected in 2011. The next                                                           Solvency II appear to have been
     two sections set out key elements of this        Fair value — other features                     developed independently of the fair
     Draft IFRS.                                      Other aspects of the Draft IFRS include:        value developments above. This creates
                                                      n When determining fair value, all available    the risk that an internally consistent
     Fair value core principle                        and relevant market prices should be            Solvency II economic balance sheet will
     The core principle of fair value is ‘the price   considered                                      not be achieved.
     that would be received to sell an asset or       n The use of bid prices in the measurement         We have developed an approach to
     paid to transfer a liability in an orderly       of financial instrument assets is not required   the economic calibration within Level 2
     transaction between market participants at       n The fair value of a liability should reflect   Implementing Measures (described below),

28      February 2011                                                                                                       
    assuming the preference is to achieve            This would reduce the dependence on               than a hypothetical ‘100%-credit-risk-free
    internal consistency. Alternatively, a greater   extrapolation techniques in determining the       rate curve’
    reliance could be placed on Solvency II          risk-free rate, particularly in less-developed    n It is easier for practitioners to calibrate to
    Pillars 2 and 3.                                 markets where government bonds are                n The residual credit risks can be allowed
    1. Financial instrument assets should be         often available at much longer durations          for within additional capital requirements
    measured using the IASB’s fair value core        than swaps.                                       instead of the market-consistent liability
    principle                                        5. The economic calibration of                    n It is more consistent with fair value
    Given that a large proportion of the assets      insurance liabilities should use the most         developments, recognising that insurance
    held by insurance companies are financial         advantageous market                               liabilities are not 100%-credit-risk-free.
    instruments, it would be helpful for the         Where there is more than one available and        7. The measurement of financial
    insurance industry to develop common             reliable market instrument providing a good       instrument liabilities should be at fair value
    approaches for assessing whether markets         match for insurance liabilities, this principle   This helps ensure consistency with the rest
    are judged to be disorderly and, if so, how      would enable calibration to the instrument        of the valuation and, in orderly markets,
    fair value would be determined.                  that minimises the value of the liability.        represents the value that insurers can buy
    2. Assets held to match insurance                This reduces the risk of any one calibration      back debt. This approach would require a
    liabilities should be measured using             instrument being subject to unusually high        new interpretation of Article 75/1(b) of the
    mid-prices                                       demand simply because it forms the basis of       Solvency II Directive.
    In recent years, existing accounting and         the economic calibration of liabilities.          8. Disclosure requirements should include

                                                     » Where observed
    regulatory standards have required the use                                                         details of the calibration asset used to
    of bid prices, not mid-prices. The valuation                                                       measure the insurance liability, including
    of liability rules within Solvency I and
                                                     market prices are                                 a three-level hierarchy
    existing IFRS have generally permitted the                                                         This would indicate the materiality of
    use of a consistent liability discount rate.     deemed to represent                               the judgment applied to the economic
    With the Solvency II discount rate equal         orderly transactions,                             calibration of insurance liabilities.
    to a ‘risk-free rate’ typically based on
    mid-prices and independent of an insurer’s
                                                     observed market prices                            Advantages of our proposals
    assets held, measuring financial instrument       should be used in                                 We believe the above approach would:
    assets at mid-price would remove an
    accounting mismatch.
                                                     determining fair value                 «          n Enhance the usefulness of the Solvency II
                                                                                                       Pillar 1 calculation, by ensuring greater
    3. The economic calibration of insurance         6. The economic calibration of insurance          consistency of the measurement of assets
    liabilities should be based on the fair          liabilities should permit a                       and liabilities
    value core principle                             small amount of credit risk in the                n Limit the administrative burden on
    The approach to the economic calibration of      calibration instrument                            insurance companies, by better aligning
    insurance liabilities should be aligned with     We advocate calibrating to an actual low-         Solvency II with future IFRS
    that required in the Draft IFRS, to avoid an     credit risk market instrument that is readily     n Move some of the prudence from the
    accounting mismatch.                             available and provides a good match for the       Pillar 1 balance sheet into the capital
       A specific instance relates to the             insurance liabilities (eg. collateralised swaps   requirements
    requirement for determining the illiquidity      or government bonds issued by countries           n Make it easier for the insurance industry
    premium component of the liability               controlling their own money supply),              to communicate financial and regulatory
    discount rate. In extreme market conditions      without amendment to notionally remove            reporting concepts to users
    where levels of asset illiquidity premia         the instrument’s credit risk. We accept           n Enhance financial stability and fair and
    are high, the formula applied in the QIS5        that this principle is contentious; reasons       stable markets
    specification would require insurers to apply     for our preference over the alternative of        n Encourage the use of judgment during
    a market-calibrated illiquidity premium          constructing a hypothetical ‘100%-credit-         financial crises where markets rapidly
    regardless of whether observable market          risk-free rate curve’ include the following:      become illiquid, accompanied by relevant
    prices represent orderly transactions.           n It reflects the price of a viable low-risk       disclosure.
    However, the illiquidity premium implicit        asset liability management (ALM) strategy.           However, we believe the industry
    within the fair value core principle may         This is of relevance to insurers when             would need to develop these proposals
    differ significantly from that calculated         assessing performance against the ALM             further so that they could be
    using the QIS5 formula.                          strategy they have actually undertaken. This      implemented in a practical and consistent
    4. The economic calibration of insurance         should also be of relevance to regulators in a    way. This would help stakeholders
    liabilities should use all available and         run-off context                                   understand these proposals and better
    reliable market data                             n It is more realistic as well as more reliable   interpret financial statements.              ■                                                                                                                  February 2011     29
 Conference preview               Health and care

A new dawn — new opportunities?
Damien Bartlett previews the Health and care conference taking place on 18-20 May,
at The Grand, Brighton

                                Chairman’s preview
     This year’s Health and care conference          and claims management. The programme
     takes place in one of the most vibrant          also introduces Solvency II for the health
     and colourful cities in Europe — Brighton       and care markets, reserving issues and
     offers everything, from regency heritage to     insightful feedback from a number of
     beachfront cool.                                industry working parties.
        Despite the lure of the beach, I am             Networking is always a key part of a
     hoping that you will have no problem            conference and so there are numerous
     keeping your interest in this year’s            opportunities for this, including an
     conference. The programme committee             informal pub crawl around some of
     has put together a captivating line-up          Brighton’s watering holes — hopefully in
     of sessions for you. We have listened to        warmer weather. The gala dinner will take
     feedback from recent years and built a          place on the final night of the conference
     really exciting programme with even more        with entertainment that will truly blow
     choice of workshop sessions.                    your mind.
        The conference will take a fresh look           I hope to see as many of you as possible   Damien Bartlett is chair of the Health and care
     at topical industry developments and            in Brighton in May.                           conference 2011 programme committee
     outline the wide-ranging implications
     that they will have over the coming years
     but also identify the opportunities that            Schedule at a glance                      ■ Plenary 5: The changing landscape
     exist for us as an industry. It is our aim to                                                 of distribution
     inform and provoke discussion on current            ■ Plenary 1: Opening keynote              Chair: Kevin Carr, Kevin Carr Consulting
     market topics and so should appeal to all           address                                   Speakers: Kenn Herskind, Defaqto;
     professionals who are interested in the             Speaker: Professor Sir Mansel Aylward     Dennis Smith, HSBC; Stuart Tragheim,
     health and care sector.                                                                       Liverpool Victoria
        We are pleased to announce that                  ■ Plenary 2: The potential impact
     kicking off this year’s conference will be          of Solvency II on the health and          ■ Plenary 6: 2010 saw the dawn of a
     our keynote speaker, Sir Mansel Aylward.            care market                               new era in politics — what does the
     Professor Aylward is the first ever chair            Speaker: Jeff Davies, Ernst & Young       future hold?
     of Public Health Wales — a new unified                                                         Speaker: Dr Patrick Nolan, Reform
     NHS Trust responsible for the delivery of           ■ Plenary 3: Providing the
     public health services at national, local           inspiration to succeed in                 ■ Plenary 7: No apologies
     and community level. His knowledge                  difficult times                           Speaker: Richard Verdin, Aviva UK Life
     and understanding of the psychosocial,              Speaker: Jim Lawless
     economic and cultural factors that                                                  
     influence health, illness, recovery,                 ■ Plenary 4: What is the future for       events/residential/
     rehabilitation and reintegration will be the        long-term care?                           health-and-care-
     ideal way to open the conference.                   Speakers: Jules Constantinou, Gen         conference-2011-1
        The other sessions will cover a range of         Re and Professor Les Mayhew, Cass
     technical topics looking at all aspects such        Business School
     as risk selection, product design, pricing

30      February 2011                                                                                                    
                                                                                                                     Negotiation                      Soft skills

Tricks of the trade
Juliet Erickson looks at the nine steps for planning a successful negotiation

                                                         issues come up when you least expect them.            At the right-hand side of the line write the
                                                         Tip: Your mission is to understand as early as        worst possible outcome you could accept.
                                                         possible what the other party cares about and         Create two more positions in between.
                                                         what they are or are not willing to trade.            Repeat this for each issue and then think
                                                         Step 3 — Think about strengths and                    about what the other side might do in reverse.
                                                         weaknesses for issues on both sides                   Now comes the time to test whether this step
                                                         Be practical and acknowledge your strengths           is in keeping with your overall attitude.
                                                         and weaknesses. Would you trust someone               I’ve seen many people say they can be flexible
                                                         taking a strong position on an issue that is          on a less important issue, then put a really
                                                         known by everyone to be a weakness?                   tough opening position on the left-hand side
                              Juliet Erickson is
                                                         Tip: At this point you should be clear on what you    of the bargaining model. If your strategy on
                              an international
                                                         don’t know. What steps will you need to take to       this issue is flexible, make sure your position
                              communication coach
                                                         get the information you need?                         reflects it.
                              and author of The Art
                                                         Step 4 — Agree the ‘attitude’ you will take           Tip: Use what you discover from the model as an
                              of Persuasion and Nine
                                                         into the negotiation                                  opportunity to have a ‘clarifying conversation’
                              Ways to Walk Around
                                                         We all bring an ‘attitude’ to negotiating.            with the other person.
                              A Boulder
                                                         Your attitude can come from your experience,          Step 7 — What tactics will be used?

                 ne of the world’s great opportunities   your personal style or comfort zone.                  Tactics are the behaviours that bring
                 is the fact that most people don’t      The other person has an attitude as well and          your attitude to life. There is no point in
                 know how to negotiate. Big or           you need to take this into consideration to           saying you want a co-operative
                 small; a complex multi-level/           avoid problems later. Ask yourself: “What             negotiation if your tactics are mean or
    multi-party deal or the just the sale of your        do I want my relationship with this person            rude. Hiding information, refusing to say
    car, most people erect one big barrier to their      to be like after the negotiation?” The world          what you think, stalling unnecessarily,
    ability to succeed or fail: shoddy planning.         is a small place and no doubt you will be             raising new points at the last minute are all
        Usually, it means a piece of valuable            negotiating with them again. Everything you           competitive tactics that annoy and
    information or insight that is missed, being         do needs to be consistent with this attitude.         frustrate people, and rarely add any value.
    distracted or caught up in a trivial issue,          If you say you want to co-operate, don’t              Think about the tactics that may be used on
    giving too much away or losing control.              behave like a bully.                                  you and how you will neutralise them.
        The following steps represent a well-tested      Tip: Share your attitude with the other party early   Tip: Make sure your tactics are consistent with the
    approach to preparation — your best                  on in informal discussions. The goal is to make       attitude you agreed to take into the negotiation.
    opportunity to negotiate well, more often.           sure you’re aligned.                                  Step 8 — Plan your questions and evidence
    Step 1 — Determine your negotiation
    objective                                            » Don’t make                                          While planning, you’ll discover gaps in your
                                                                                                               knowledge of the other person’s needs and
    Too often people proceed in a negotiation            negotiation harder                                    priorities. I encourage you to talk with them
    without a clear idea of their objective.
    Your objective should be a broad statement of
                                                         than it needs to be                 «                 directly to fill these gaps. Think about the
                                                                                                               questions they will ask you and what you
    what you expect as an overall outcome.               Step 5 — Decide on a strategy for each issue          need to ask them.
    Tip: If you are asked after the negotiation:         Not all issues are created equal. This means          Tip: Your word is not enough. You may need
    “How did it go?”, your answer should be              you will need a different strategy for each           statistics, facts, precedent, case studies or
    something like: “I got what I wanted on the two      issue. For example, on issues where you are           examples to support your position and make them
    critical issues for me.”                             strong or that are critically important to you,       rethink theirs.
    Step 2 — Identify the issues for you and the         be a bit tougher. On issues that you don’t            Step 9 — Decide on your plan B
    other person/party                                   care about very much or don’t impact you,             It is always good to do some worst-case
    An issue is something that can be traded             be more flexible.                                      scenario planning. No matter how well you
    and can also be a factor that may affect their       Tip: Don’t make negotiation harder than it needs      planned, things can still go wrong. You will
    perception of you or the value of what you           to be.                                                have a lot more confidence if you go into the
    offer. Early on in your face-to-face discussions,    Step 6 — Plan your bargaining position for            final stages of negotiation with a plan B.
    be sure to ask directly: “What are the issues        each issue                                            Tip: Care about the result, but not too much.
    that are important to you?” In particular,           Here is a fun tool called a ‘bargaining                   These simple but very effective planning
    which ones are critical? It’s also worth asking      position model’. Get a flipchart or some               steps will keep you focused on what’s
    if they have any deal-breaker issues. It may         blank sheets of paper. Take a sheet for               important and the actions that need to be in
    take several discussions to get these out of         each issue and draw a horizontal line across it.      place to ensure you achieve your negotiation
    the other person, and you may find that new           At the left side write your ideal position.           objective sooner with less stress.                ■                                                                                                                             February 2011     31
 Careers                      Networking

The human web
Will Kintish explains why we all need to be LinkedIn and provides some handy tips
for getting started

                             Will Kintish is a
                             leading UK authority
                             on effective and
                             confident networking
                             both offline and

           n the present economic climate, all        and contribute to the marketing effort.          your profession and the market in general.
           professionals and organisations have          Networking is an ideal tool to push your         I do appreciate cocktail parties, small
           got to be more visible to their clients,   career and organisation. It is a painless one,   talk and playing ‘nice’ isn’t for everyone.

                                                                              » More than ever, firms
           fellow professionals and contacts.         indeed, for many an                                                     So, social networking
     Visibility with key parties is crucial to        enjoyable activity.                                                     is a good alternative.
     gaining more work. Actuaries are not                Last time I wrote    and organisations want                          Some might say,
                                                      for The Actuary, I
                                                                              professionals to be
     especially renowned for their networking or                                                                              “But it’s just for the
     marketing prowess, and why should they be?       focused on face-to-                                                     kids”, “It’s flaky”, or
        Let’s start with careers first. If someone     face networking.        rounded, to represent the                       “It doesn’t suit our
     is a talented actuary but his or her ability     This article focuses
                                                                              company and contribute                          way of working”.
     and hard work go unnoticed, then it is
     unlikely they will reach the career heights
                                                      on networking
                                                      with one the most       to the marketing effort                  «      It’s not when you use
                                                                                                                              LinkedIn —
     they aspire to in the timeframe they wish.       effective online tools available: LinkedIn.      a tool that replicates networking for
     We can all grumble about being overlooked                                                         professionals, like yourself.
     for a well-deserved promotion, but that’s        A little about networking
     how the world often works — it is those          If you, however, have any doubts about           Social media — including LinkedIn
     that are visible, in the eye line of decision-   why you need to network, I hope the              — is becoming a mainstream activity
     makers, that prosper.                            following will dispel any misgivings or lack     As I write, there are now over five million
        Secondly, I talk to many professionals        of motivation before we can move on to           registered UK LinkedIn users — that is
     such as lawyers who tell me that they are        LinkedIn — here are just five reasons why         40% of all UK professionals (figures from
     good professionals and the work will just        you need to network:                             the Institute of Career Guidance). Those
     come to them, so “Why on earth would or          n Spot potential contacts for your business      statistics alone should be reason enough for
     should we get out there and ‘sell’?”             and career                                       exploring LinkedIn.
        Well, ladies and gentlemen of the             n Likewise, spot career and business                So if you are interested in giving LinkedIn
     actuarial profession, the time when well-        opportunities                                    a try, or have registered but not done
     qualified professionals such as yourselves        n Raise your own and your company’s              anything since, the following practical
     could just work all day in your office and        profile                                           advice should be of use. Let’s start with your
     did not need to venture beyond have              n Get to know what others do — needless          profile.
     probably gone or will go. More than ever,        to say, knowing the business community is
     firms and organisations want professionals        a key to success                                 What goes on your profile?
     to be rounded, to represent the company          n Find out the latest news and ideas about       Your profile is an advert for you and your

32      February 2011                                                                                                       
                                                                                                        2. When your LinkedIn program is linked
                                                                                                        to Outlook, you can click on the LinkedIn
                                                                                                        button on Outlook
                                                                                                        People you would like to know
                                                                                                        1. If you are a level 2 connection, you can
                                                                                                        send a message reminding them how you
                                                                                                        have been previously connected
                                                                                                        2. If you share a group, you can send a
                                                                                                        direct message requesting to connect
                                                                                                        3. If you share a connection, you can
                                                                                                        request an introduction
                                                                                                        4. If someone responds to your questions,
                                                                                                        answers and discussion posts, you can send
                                                                                                        them a message
                                                                                                        5. If you pay for an account, you can send
                                                                                                        them a direct ‘In mail’ requesting to connect.
                                                                                                            The more you connect, the more
                                                                                                        opportunities to find new contacts and
                                                                                                        enter into discussions will follow.
                                                                                                            So now it is up to you to get going,
                                                                                                        build a profile and actively connect and
                                                                                                        seek out contacts that can help your
    ability and achievements. Google can pick it       same as testimonials. It doesn’t matter how      company — it really is all a few clicks and a
    up when someone types your name, perhaps           good you tell the world you are, when third      little imagination away.
    after a networking event. So spend time            parties put pen to paper, that carries a great       Remember, linking to relevant and
    on it and get it right; you can and should         deal of weight.                                  influential contacts is where LinkedIn
    revise it regularly. If it is done well, it will                                                    derives its strength and purpose —
    add tremendously to your credibility and           Linking with others                              don’t neglect to do it.
    reputation. As you start to fill in your profile,    Your profile looks professional and
    LinkedIn tells you how comprehensive it is.        interesting. Now what?                           People buy people
    You will be guided on what sections you need          You start to find names of people you          LinkedIn is a powerful tool, one that can
    to complete until it is given a 100% rating.       know, friends, present and past colleagues,      make connections, sometimes otherwise
    To have it fully complete there needs to be:       clients and associates from professions          impossible, to a wide range of people that
    n A photograph — I believe it is important         where you can collaborate.                       can help your practice and career.
    people know what you look like                        By linking with them they become your            It is powerful, perhaps more so than
    n Current position — sell yourself and your        level 1 contacts. The main benefit now            face-to-face networking, because you
    practice                                           is you can look at your level 1 contact’s        can see who your contacts know and act
    n Two past positions — another chance to           contacts. These are your level 2 contacts.       accordingly. This means that a professional
    demonstrate your skills and interests                 You link with me and I know a prominent       can be highly proactive in finding people.
    n Education history — there’s every chance         senior executive you’d like to meet but          For an online resource that is essentially
    you had a good rounded education that can          you feel it inappropriate to approach cold.      free, it is a wonderful tool to increase
    show some of the skills you first brought to        You can ask your contact (using LinkedIn,        visibility and that is the key for so many
    your career. You never know the facts that         to send an e-mail or make a phone call) to       careers, organisations and businesses.
    some people relate to                              make the introduction — it’s as simple as           I realise time is precious, but if you want
    n Profile summary — give a general                  that. This is all about being proactive.         to invest in your career and company,
    overview of your work, your experience and                                                          networking, whether online or offline, is a
    how you operate within the firm                     Seven ways to connect                            good use of resources.                        ■
    n Experience — this is where you show your         Once you are happy to have people in your
    true expertise and enthusiasm. This is a           precious network, you have seven ways                    THE ACTUARY ON LINKEDIN
    modest-free zone. When you show your key           to connect.
    words, Google and other search engines will        People you know                                       If you would like to join The Actuary’s
    pick them up as well                               1. Use the green ‘connect’ button at the              LinkedIn group, please visit
    n Three recommendations — these are the            head of each page                                                                                                                                              February 2011    33
 Careers                      Recruitment market

Simple models, excellent people
Anthony Howitt examines the current job market for actuaries and how to select the right
recruitment firm

                                                    recruitment needs is a result of the same       have a healthy approach to recruitment.
                                                    scientifically precise and scrupulous            As well as securing professionals to fill their
                                                    process that they apply to their everyday       immediate requirements, they are not averse
                                                    trade. However, it is clear from the            to creating positions for an experienced
                                                    outside that they are yet to find a              actuary that they feel could add another
                                                    cross-industry consensus. As one of the         dimension to their company.

                                                                            » Better to have a simple
                                                    leading accountancy                                                        This candidate-
                                                    firms looks to                                                           led approach is most
                                                    increase its general
                                                    insurance practice,
                                                                            model backed by excellent                       prevalent in the
                                                                                                                            emerging markets
                            Anthony Howitt is
                                                    another looks to        people than the other way                       where actuaries are in
                            director at Compliant
                            Global Ltd
                                                    push its resources
                                                    into life actuarial.
                                                                            round      «      — Paul Carrett                short supply and very
                                                                                                                            high demand. In a
                                                    As one global bank looks to bring on a          story that sounds like it has come from the
                                                    host of newly qualified actuaries, its direct    back pages of a tabloid newspaper, two firms
                                                    competitor has all but stopped lower-end        based in India recently went head to head
                                                    recruitment and is performing a search          to ‘sign’ a candidate. As a result, he saw
                                                    to bring in a host of new management            his salary quadruple overnight, alongside
                                                    positions that will bulk up their senior end.   a guaranteed bonus and a full benefits
                                                       In a marketplace that has been               package. Understandable when securing

               rowing regulatory uncertainty        traditionally candidate-short, the lack of a    a new business leader, but hard to justify
               has made the past 12 months          common trend among firms throughout              for an actuarial trainee with six months’
               challenging for business leaders     2010 meant that the predicted salary            experience and six CT papers. In years to
               when setting out their actuarial     rises for qualified actuaries did not fully      come we may mention his name alongside
     recruitment strategies. As each regulatory     materialise. The market remained relatively     William Thomas Thomson and Geoffrey
     instruction from the Financial Services        stagnant in comparison to expectations,         Heywood, but for the present he serves as a
     Authority and its overseas counterparts        but the fact remains that there will always     stark illustration of the shortage of qualified
     unfolds, strains are placed on budgets         be a place for the industry’s most respected    professionals in the emerging markets.
     by a new set of hiring requirements.           professionals, even if there is not a direct       While the actuarial market in the UK is
     With a reluctance to be at the mercy of the    hiring requirement.                             one of the largest in the world, it caters for
     regulatory body and the subsequent risk of        The recruitment market across mainland       a relatively small number of professionals
     falling behind their competitors, practice     Europe has been particularly buoyant. While in comparison to other areas of financial
     leaders have had to make ‘considered           still answerable to their respective regulatory services. Consequently, the majority of
     predictions’ as to their future needs.         bodies and with no common trends in             firms will always have a greater demand
        The senior management group at each         required candidate profiles from firm to          for professionals than the market can cater
     firm will claim that their 2011 list of         firm, hiring managers across the continent       for. The disparity between the number
                                                                                                    of vacancies and the number of qualified
                                                                                                    candidates can only widen as pressures
                                                                                                    are increased on actuarial practices.
                                                                                                    Despite most good candidates being known
                                                                                                    by their competitors, it is for this very reason
                                                                                                    that for the majority of senior appointments
                                                                                                    there will be a recruitment firm attached.
                                                                                                       As an actuary you have gone through
                                                                                                    hours of rigorous examination, put in the
                                                                                                    overtime on complex projects, spent weeks
                                                                                                    familiarising yourself with the industry’s
                                                                                                    intricate regulations and then years building
                                                                                                    a name for yourself among your peers.
                                                                                                    As such, the decision of which recruitment
                                                                                                    firm you entrust with the responsibility of
                                                                                                    securing your next role should not be taken
                                                                                                    lightly, and in contrast with a decade ago,

34      February 2011                                                                                                      
                                                             Table 1 — Actuarial Salary Survey 2010
    there are now an abundance of recruiters to       Life insurance         Min (£)       Max (£)          General             Min (£)         Max (£)
    choose from.                                                                                            insurance
        As with many candidate-driven sectors,
                                                      Head of                 82,000       130,000          Head of              80,000          130,000
    the trend of outsourcing the recruitment
                                                      department                                            department
    process has grown in popularity.
    While sometimes more expensive than               ALM actuary             80,000       125,000          Risk                 65,000          115,000
    undertaking a search using internal                                                                     management
    resources, it is seen as a time-efficient                                                                actuary
    way of securing a company’s strategic             Solvency II actuary     78,000       125,000          Personal lines       65,000          100,000
    appointments. In addition, a couple of years                                                            actuary
    ago as the recession reached new depths,
                                                      Risk management         65,000        90,000          Commercial           58,000          105,000
    and the financial services ceased hiring
                                                      actuary                                               lines actuary
    overnight, recruitment firms looked to new
    sectors in order to generate income. A vast       Pricing actuary         60,000        90,000          Senior actuarial     35,000           50,000
    number of firms that once specialised in                                                                 analyst
    low-level generalist positions were suddenly      Capital modelling       50,000        85,000          Pensions            Min (£)         Max (£)
    trying to make in-roads in senior level           actuary
    risk management and everything that it            With-profits            50,000        75,000          Head of              80,000          120,000
    encompasses, with varying success.                actuary                                               department
        In the same way businesses will receive
    a vast number of calls from recruitment
                                                      Financial reporting     50,000        70,000          Scheme               70,000          110,000
    firms offering their services, the leading
                                                      actuary                                               actuary
    industry talent will be approached on a           Senior actuarial        35,000        56,000          Pensions             45,000           75,000
    regular basis by recruiters, who offer            analyst                                               actuary
    ‘new and exciting’ opportunities.                 Actuarial student       24,000        40,000          Senior actuarial     30,000           50,000
    Whether you are a practice leader or a                                                                  analyst
    potential employee, there are three ways
                                                      MoSes/Prophet           325 p/d      1,700 p/d        Actuarial            24,000           40,000
    to test the credentials of your recruiter:
                                                      contractor                                            student
    n Assess their industry knowledge base
    n Find out which firms make up their              Source: Compliant Global salary survey 2010. Sample size: 1,241
    current client list
    n Ask if they work on a retained basis.          not always in a position to articulate this       done so for a number of years in order to
        While not a qualified actuary, any good       information. As such, it is recommended           win the contract.
    consultant will have a solid understanding       that you allow them the opportunity to               The ability to remain competitive
    of the industry. By asking a few rudimentary     name-drop. It is not the most socially            while working with the industry’s leading
    questions about their clients or their           acceptable practice at a dinner party, but it     recruiters could prove instrumental over the
    personal perceptions on the latest regulatory    will allow them to demonstrate the extent         course of 2011 for employers and potential
    guidelines, you will be able to quickly assess   of their contact base.                            employees alike. Over the course of the next

                                                     » The decision of
    if they are an experienced sector-specific                                                          12 months, expect to see gradual salary rises
    consultant, or a junior recruiter who sees                                                         across the industry in line with 2010, as
    you as a means of hitting their daily key
    performance indicators.
                                                     which recruitment firm                            demand continues to outstrip the supply.
                                                                                                       For the professionals working within a niche
        Firms are only worth the potential           you entrust with the                              area, or those at the forefront of the most
    workload of their client list, and the quality   responsibility of securing                        recent industry regulations, the percentage

                                                     your next role should
    of a recruitment company can be measured                                                           increase in total financial package could

    against the same. By sourcing the clients                                                          be as much as 20%. Business and practice
    they supply to you, you will develop an          not be taken lightly                              leaders will continue to command an
    understanding of where they rank among                                                             increase in percentage remuneration
    their competitors. A top recruiter will have        In addition, find out what percentage           drastically higher than the rest of industry,
    an extensive list of reputable clients that      of the firm’s work comes via retained              yet these candidates will be few and far
    they service on a regular basis. It should       assignments. A high percentage is the             between as companies look to incentivise
    be noted, however, that firms sourcing for        clearest indicator of a firm that is able to       their staff to stay put, investing in the
    the uppermost echelons of the market, are        deliver on its promises, and has most likely      retention of their staff.                     ■                                                                                                                  February 2011    35
 Longevity                      Longevity indices

False start
Michalis Ioannides and Mattias Eng look at the sensibilities behind developing longevity
indices before there is a market to accommodate them

     Michalis Ioannides and Mattias Eng work at
     BNP Paribas, Fixed Income Structuring

           nsurance companies and pension funds      of a market in the actual asset using agreed     of derivatives on these indices put the horse
           are increasingly looking for ways to      market conventions and standardised              and cart, regardless of their order, on a bridge
           transfer longevity risk, for instance,    terms, and this has been followed by the         too far? The history of how other markets
           the risk of people living longer than     creation of an index. To take bonds as an        have developed does seem to suggest so, but
     expected, to the capital markets via a          example, at first market participants traded      to provide some further evidence we can look
     transparent and generally accepted method,      government bonds issued at standardised          at the effectiveness of index-based hedges for
     and many have done so successfully over         terms and under agreed market                    large pension funds.
     the last few years. The market for longevity    conventions and then market participants            The first unrewarded risks to be dealt with
     risk is maturing rapidly — over the last        started looking at developing indices on         and traded out of insurance and pension
     few years, we estimate that about               bonds and interest rates.                        funds were the interest rate and inflation
     £25 billion of longevity liabilities have
     been transferred. This is an interesting and    » Is the development of                          risks, through a well-defined liability-driven
                                                                                                      investment (LDI) strategy. In turn, LDI is a
     exciting development, and the market has        longevity indices before                         benchmark strategy that builds on interest
     gone through a transformation, starting
     from a virtual oligopoly of a handful of
                                                     there is a market in                             rate and inflation swaps characterised by a
                                                                                                      specific maturity profile as well as a specific
     reinsurers a few years ago, to the current      indemnity instruments                            risk exposure, measured by sensitivity to
     situation with an increasing number of          like putting the cart                            the underlying variables (for example,
     reinsurers and capital market investors.
     The market has initially taken off in the
                                                     before the horse?             «                  interest rate and inflation deltas).
                                                                                                         Benchmarking the inflation and interest
     UK, but we also expect demand to surge             We do not have to look far to find             rate exposure of the liabilities, or of the net
     in Denmark, the Netherlands and Sweden.         examples of other markets in which               asset value (NAV) to an LDI strategy implies
     The key next step for the establishment         actual assets were first traded prior to          a correlation between the sensitivity of the
     of a deep and liquid longevity market is        the emergence of an index. In addition           liability, or of the NAV, to the underlying
     agreement around market convention, the         to the bond market, primary examples             variables and the sensitivity of the
     standardisation of documentation, as well       are equity, real estate, mortgage and            benchmark LDI strategy. High correlations
     as the eventual introduction of broad-          securitisation markets as well as the most       are usually associated with small differences
     based and well-accepted indices on which        recent development of a credit default           in the liability, or NAV, and LDI deltas,
     derivatives should be based. These steps        swap market. There are two (and possibly         which we usually refer to as basis risk.
     should also help the market to gain more        more) distinct examples of markets that          The quality of the benchmark will usually
     active participants.                            were developed on the back of an index.          assess the quality and the effectiveness of
        It is fair to state that most transactions   The inflation market is driven off the            the hedge, which in turn can be used to gain
     to date have been based on bespoke or           well-known RPI index, while the weather          the relevant accounting treatment and the
     indemnity type indices, rather than the         derivatives market is mostly based on            necessary regulatory capital relief.
     published market indices. Figure 1 takes data   measurable weather scales.                          We can compute a similar measure
     from the public domain to illustrate this.         Is, therefore, the development of longevity   to assess the effectiveness of a longevity
        Looking at how many other markets            indices before there is a market in indemnity    swap. In a longevity transfer transaction,
     have developed, we observe that the initial     instruments like putting the cart before the     the choice of a benchmark index based on
     steps have tended to be the establishment       horse? And does the concurrent development       a standardised portfolio of lives versus a

36      February 2011                                                                                                       
                                                               Figure 1 — Capital market longevity swaps executed to date
    benchmark constructed on an indemnity                                      9
    basis comes down to an analysis of the                                                 Aviva, 0.475
    effectiveness of the hedge. For a sufficiently                              8      Canada Life, 0.5
    large pool, we can reasonably expect the
                                                                               7           Babcock, 1.2
    longevity experience of the pool to match
    the longevity experience of the index, since                               6
    as the size of the sample grows, eventually                                      British Airways, 1.3
                                                                   £ billion
    it will converge with the (population-based)                               5
    index. Thus, for a very large pool we expect
                                                                               4             RSA, 1.9
    basis risk to be limited. However, for a
    smaller pool the basis risk is an important
    metric to analyse.
        The basis risk is mostly driven by the                                 2
    heterogeneity of the two population                                                      BMW, 3
    pools but is also caused by model risk                                     1
    (a model is used to generate the calibration),                                                                         Lucida, 0.1
    regional and socio-economic factors, other
                                                                                           Indemnity                         Index
    demographic and structural risks (such as
    if the maximum tenor of the swap was
    20 years, then the effectiveness of the
                                                               Figure 2 — Basis risk as a % of the present value of liabilities
    contract at long durations may be limited).
        Figure 2 addresses our primary conjecture,
    and shows the basis risk that arises solely
    from comparing the proportion of lives at          35%
    each age assumed in the index with the
    population of lives in an individual pension
    scheme or annuity fund. This suggests              25%
    that, for a liability fund of reasonably large
    size, the basis risk between an index-based        20%
    solution and the longevity experience of
    the underlying portfolio of lives is close to
    zero. However, for small pension schemes           10%
    or annuity funds, even if an index-based
    solution correctly reflects the part of              5%
    the population from which the scheme
    membership is drawn, volatility is likely
                                                             250                   2,150                    4,650                 7,150              9,650
    to result in significant deviation between
    the longevity experience of the underlying                                               Present value of the annuity liabilities (£)
    pension scheme and the index. We can
    conclude that basis risk varies with size of
    the annuity fund or pension scheme, and            are inappropriate for smaller pension funds           additional capacity from coming into the
    that the basis risk is likely to be higher, the    because of the basis risk. Some market                longevity market is lack of liquidity, and this
    smaller the size of the fund.                      participants argue that index-based hedges            is better addressed by the market agreeing
        While this is an interesting result, we also   will allow much larger transactions to be             standard terms for indemnity longevity
    observe that the larger pension schemes            concluded than at present. Given that                 hedges than by trying to get acceptance for
    have sufficient liabilities to actually execute     the indemnity market is able to absorb                population-based indices. The only markets
    indemnity-based hedges and are large               multibillion pound transactions it feels              where the development of an index has
    enough to be able to spread fixed costs over        like there is a large capacity for indemnity          been the first step in starting a new market
    a large transaction. With limited pricing          transactions and, in our experience, we see           have been in markets where there is a
    differences between index-based and                little evidence of capacity that is anywhere          compelling rationale for using indices.
    indemnity hedges, it is hard to see a cost         near that level from investors interested in          Judging by our analysis of basis risk, we
    rationale for a large pension fund wanting         index-based hedges.                                   question whether this is the case for the
    to pursue an index-based hedge, and they               We believe that the issue preventing              longevity risk market.                       ■                                                                                                                        February 2011    37
           Measuring Long Tail Liability Risks
             Including SII & IFRS4 Metrics

                An Intensive One and a Half Day Course
                                   presented by Dr. Ben Zehnwirth

    Location:         Boardroom 1, Corpnex, 10 Fenchurch Avenue,
                      London EC3M 5BN                                                         Attendance
    Time:             8.30am to 4.30pm 10th March
                                                                                                is FREE
                      8.30am to 2.00pm 11th March                                             Light breakfast, drinks
                                                                                             and lunch are provided.
    The course will provide detailed answers to some of the most
                                                                                                   Participants will
    common questions regarding uncertainty, variability, reserve                                 receive a free copy of
    distributions and correlations, and SCR, Technical Provisions                                  ICRFS-ELRF
    (Fair Value of Liabilities) and Market Value Margins for the
    one-year and ultimate-year risk horizons.

    •   Introduction to linear regression, normal distributions, lognormal distributions and correlations;
    •   Link Ratios, Mack, Murphy and the Extended Link Ratio Family (ELRF) Modelling Framework;
    •   An introduction to the Bootstrap Technique and how it can be used test model fit;
    •   The Probabilistic Trend Family (PTF) modelling framework – fitting a distribution to every cell;
    •   Modelling principles including significance of parameters, discriminatory statistics and parsimony;
    •   What are the drivers of calendar year liability stream distributions and correlations?
    •   Modelling multiple LOBs using Seemingly Unrelated Regressions (SUR);
    •   The drivers of reserve distribution correlation including parameter uncertainty, and how we know if
        two LOBs have common drivers;
    •   Three types of correlations between LOBs; process correlation, parameter correlation and reserve
        distribution correlation;
    •   Reserve distributions and underwriting (pricing) distributions for each LOB and the aggregate of all
        LOBs (and/or segments);
    •   Real life examples of risk diversification of Solvency Capital and Market Value Margins;
    •   Formulation of SCR, Technical Provisions and Market Value Margins for the one-year risk horizon
        and the ultimate year risk horizon;
    •   Economic balance sheet, Technical Provisions (Fair Value of Liabilities) and Market Value Margins,
        and capital allocation by LOB and calendar year.

    Register early by emailing Jenny Weinstein at
                                                                                                                      Buy-ins               Pensions

Buying a headache remedy
Kathryn Jones examines hurdles that could occur during a pension scheme buy-in and how to
avoid them
                                                                                                                Table 1 — Recent significant
                                                      and the effort of preparing the trade goes
                                                                                                                non-vanilla buy-in transactions
                                                      to waste.                                           Pension           Size of        Insurer
                                                         Overall, this typical process does not           scheme            transaction
                                                      guarantee execution of the transaction
                                                                                                          RSA Insurance     c. £1,900      Rothesay
                                                      within the client’s target price.
                                                                                                          Group             million        Life
                                                      Remedy                                              British Airways   c. £1,300      Rothesay
                                                      A solution is to use a target-based approach,                         million        Life
                                                      whereby the transaction documentation is            Cable &           c. £1,000      Prudential
                                                      agreed with the insurer but is only executed        Wireless          million
                            Kathryn Jones is an
                                                      when the provider and target premiums               GSK               c. £900        Prudential
                            actuary at Rothesay
                                                      are aligned. This allows the scheme                                   million
                                                      to use market conditions to transact
                                                      at an affordable level, and ensure the
                                                                                                          Merchant Navy     c. £600        Lucida
                                                                                                          Officers          million

             uccessfully executing a large            opportunity to transact is not missed.
             pension scheme buy-in can be             For this to be successful, the target must          CDC Group         c. £370        Rothesay
             challenging, with a number of            be well defined and readily calculated,                                million        Life
             moving parts and overlapping             and the chosen provider must be able                Friends           c. £350        Aviva
    workstreams. Selecting a provider with            to execute immediately when market                  Provident         million
    relevant experience and expertise can make        conditions permit.
                                                                                                         Execution headache 3: post-
                                                      » Selecting a provider
    a transaction that meets stakeholders’
    needs significantly more likely.                                                                      transaction arrangements
       This article sets out some of the              with relevant experience                           Large buy-ins require effective structural
    execution headaches that can arise and                                                               security such as collateral, which will add
    suggests some steps that could avoid them.        and expertise can make                             to the ongoing administration costs of
    Here, ‘large’ is defined as a transaction in       a transaction that meets                           the scheme, and must become operational
    excess of £500 million.
                                                      stakeholders’ needs                                shortly after transaction execution to

                                                                                                         provide the necessary security. In addition,
    Execution headache 1: delays lead to              significantly more likely                          the collateral arrangements should facilitate
    a budget shortfall                                                                                   swift action by the scheme in the event of
    Typically, a number of providers are asked        Execution headache 2: large                        insurer default.
    to provide initial pricing on a ‘vanilla’ basis   transactions could lead to additional
    using market conditions at a date in the          investment complexity                              Remedy
    past. Security structure discussions then         Large buy-ins require a significantly               Verify the capability of the scheme’s
    commence, which can present a range of            different execution skillset to smaller,           custodian or consider the combined use
    options with different value propositions         vanilla cases due to the investment issues         of a collateral manager with relevant
    for the pension scheme trustees or sponsor.       involved. For example, the insurer may             experience along with a step-in asset
    During this phase, the providers’ relative        need to source a very large number of bonds        manager, ready to take control of the
    premium levels will not remain fixed,              in which to invest the premium shortly             collateral assets in the event of insurer
    and if the client has a target level for the      after transacting; over £1bn in a recent           default. Using an efficient third party will
    transaction premium — either in absolute          case. This is a potentially significant issue.      reduce the cost of managing the collateral.
    budget terms or relative to a valuation basis     Additionally, the transition of the scheme’s       Due to the number of considerations
    — the premiums may be volatile relative to        assets to the insurer is a non-trivial task, and   around the operation of collateral and
    this target.                                      could jeopardise execution if transition costs     the documentation needed to appoint a
       The next step is usually the selection         are more significant than expected.                 collateral manager, it is worth planning this
    of one or two providers to progress the                                                              stage early in the quotation process.
    transaction, followed by an intensive             Remedy                                                In summary, the execution of a large
    period of work to agree documentation             The trustees should select a counterparty          pension scheme buy-in need not cause
    capturing the client’s specific requirements.      experienced in underwriting the execution          trustees, sponsors or their advisers any
    Pricing will continue to fluctuate relative to     of a large transaction, with the ability to        headaches provided there is effective
    the target premium during this period and,        transition large volumes of assets efficiently      planning of the quotation process, clear
    indeed, market movements may be such              and access bond markets in the required            requirements and a thoughtful choice
    that the transaction becomes unaffordable         size (eg. via a private placement).                of counterparty.                            ■                                                                                                                  February 2011    41
 Q&A                           Craig Thornton

Scaling new heights
Marjorie Ngwenya speaks with Craig Thornton about his role as a chief risk officer, and hears
some words of advice for ambitious actuaries

     How did you come to enter the                    recognised do not always give enough               and leadership skills that are gained from
     actuarial profession?                            opportunities for actuaries to take on broad       experience working across a variety of areas.
     Throughout school I had always found             management roles to demonstrate the
     maths to be a subject that held my interest.     capabilities necessary to succeed at that level.   How do you balance your time
     I first heard of the actuarial profession            The CRO role is becoming an increasingly        between implementing risk
     during my A-levels, when an actuary from         important contributor at the executive             programmes in the field and
     a local firm presented at a careers day at my     level of organisations and it represents an        engaging in strategic discussions at
     school. While studying maths at university       excellent opportunity to take responsibility       board level?
     I applied for holiday work at the same firm       across a wide range of areas of the business.      This is one of the key challenges for all
     and was lucky enough to get several months       This gives individuals fulfilling the role a        individuals operating at this level and
     of experience working alongside actuaries        great opportunity to demonstrate the full          not just those in the risk management
     and statisticians. The experience I gained led   breadth of capability that can be gained from      field. The challenge of delivering the
     me to apply for full-time actuarial work on      joining together technical skills attained from    requirements of the area of business
     leaving university.                              actuarial training to the more commercial          for which you are directly responsible
                                                                                                         balanced against the general requirements
     What has been the most significant                                                                  of operating at a senior executive level is
     change in your mindset/approach                                                                     not straightforward. It is made even more
     since moving from managing life and                                                                 difficult by the need to create space to
     health reinsurance operations to                                                                    really reflect on the longer-term challenges
     insurance risk management?                                                                          facing the broader economy as well as the
     My current role represents my first                                                                  industry in general when there is still a
     experience of risk management in primary                                                            packed short-term agenda to deliver.
     insurance business. I have already found                                                                The only way in which I think this can
     that there are significant differences in                                                            be achieved is by being disciplined on
     being responsible for risk management                                                               where you spend your time and by having
     as someone managing an operation and                                                                the right people around to support you.
     risk management from the perspective of                                                             It is important to build a team that you
     formal oversight responsibilities.                                                                  can trust and empower to help you deliver
     However, I feel that the experience gained                                                          what has to be done but, more importantly,
     from spending a number of years working                                                             that this team is given the space, flexibility
     in areas directly responsible for owning                                                            and support to do that. In addition, having
     and managing risk within a commercial                                                               the right culture within the team and
     environment has been invaluable in                                                                  across the organisation that encourages
     helping me start my new role in the risk                                                            challenge, candour and feedback is a good
     world. A good balance of technical and                                                              way to genuinely ensure that the business
     commercial skills is tremendously useful in                                                         keeps the right level of focus on all aspects
     being able to perform a role such as                                                                of its operations, both short and long-term,
     this effectively.                                  Craig Thornton is Aviva UK’s chief risk          tactical and strategic.
                                                        officer and a fellow of the Institute of
     The actuarially trained CRO is                     Actuaries. Prior to his current role,            What do you believe the Chartered
     becoming less of a rare breed. What’s              Craig worked for Swiss Re where he               Enterprise Risk Actuary (CERA)
     your take on the trend?                            started in 1998 as financial solutions           qualification will do for actuaries?
     The skills acquired through training to            actuary and performed several roles until        The CERA risk management accreditation
     become a qualified actuary provide an               in 2007 he became managing director              is the most comprehensive and rigorous
     extremely useful background for                    for Swiss Re’s Life & Health operations in       globally recognised enterprise risk
     becoming a successful CRO, particularly in         the UK and branch manager for Swiss Re           management (ERM) designation offering
     fields such as life and general insurance.          Europe. Craig was also a member of the           actuaries the opportunity to further
     I think this is a very positive thing. I have      ABI Board from late 2007 until leaving           tailor their training to risk management
     always been of the view that the actuarial         Swiss Re at the end of 2009. He is               roles. The forward-looking curriculum
     profession should produce extremely good           currently a member of the ABI Audit              helps support students and qualified
     candidates for senior leadership positions         Committee and continues to be                    actuaries to develop cutting-edge risk
     within organisations but that the technical        involved in various working groups               management skills and should lead to
     skills for which the profession is generally       within the industry.                             recognition of the actuarial profession as

42      February 2011                                                                                                         
    the premier profession offering certified
    risk professionals.

    Some believe that the insurance
    industry needed Solvency II to take a
    sufficiently risk-focused view of
    running their businesses. What is
    your view?
    Solvency II is likely to have a very significant
    impact on the way the insurance industry
    is run, regulated and viewed. Having a
    regulatory regime that requires organisations     professional background for working at           thought it best to ask some of my team
    to be run in a very risk-informed way but         senior levels within a variety of industries.    directly.
    that gives credit to organisations that do        However, the more challenging and senior             “It is great to have Craig as UK CRO to lead
    that very well can only be a good thing.          the roles become, the more important             the Risk team. I am particularly impressed
    However, in my view, it is important that         broader skills become in equipping you to        by his commercial awareness and focus on
    management teams take their own view              be successful. In particular, the ability to     people. With commercial awareness, Craig
    and responsibility for how they would             communicate complex and technical matters        always looks for both downside and upside
    like to run their organisations. While the        in easily understandable terms and becoming      risks and encourages risk managers to add
    regulations and regulators will clearly have      a good leader are increasingly important.        value to the business and be ‘critical friends’
    a significant influence on how individuals                                                           to the first line. Focus on people means in this
    view their business, neither is responsible       What are you looking for in a                    organisation risks are managed by people, not
    for the decisions made and so the key             candidate when you recruit for                   by mathematic tools or ‘internal models’.”
    requirement for all management teams is to        your team?                                           “Craig has brought a wealth of expertise
    support and drive the organisation forward        There are a number of key attributes I look      and insight to Aviva and also the risk function.
    in a way in which they are comfortable.           for when interviewing for senior roles. First,   It is refreshing to have both the technical and

                                                                              » Being an actuary is
        Given the calibre and experience              I always look to                                                           commercial support
    of senior management teams within                 recruit people who                                                         from the risk profession
    the industry, it is likely that satisfying        are smarter than me,
                                                                              tremendously useful as a                           at an executive level.”
    the requirements of Solvency II and               particularly in areas                                                         “As a manager,
    local regulators is less of a fundamental         where I know my         professional background                            Craig encourages
    shift than is often perceived. The more           knowledge is not as     for working at senior                              a candid and
                                                                                                                                 energetic working
    significant challenge is likely to be              strong. Second, pure
                                                                              levels within a variety
    industrialising and evidencing a number of        technical skills are                                                       environment and is
    practices that are used within organisations      not enough — I look     of industries                                      always challenging
    already, albeit with some changes to reflect       for strong commercial                                                      his team. He has
    the needs of a more modern portfolio              acumen, communication and relationship-          high expectations of his team but remains an
    theory approach.                                  building skills and, in particular, for          approachable leader.”
        A further thing to have in mind is that       individuals who have leadership potential
    the complex models being developed and            as succession planning for leadership            How do you measure your success?
    implemented to support the requirements           roles both within the team and across the        For me, feedback from others is the most
    of Solvency II also do not run the                business is fundamentally important.             important consideration when measuring
    business — they merely provide input and                                                           success. This is not just from the person
    information to management teams to help           If you could choose an alternative               you work for — it is also from your peers,
    inform their decision-making.                     vocation, what would fulfil you?                 from the people within your team and from
                                                      The other two careers that attracted me          whoever is happy to give it. Most useful are
    You have held senior roles in the                 when I was at school were medicine and           honest pointers as to where I can improve.
    insurance industry, so what words of              becoming a pilot. I think both would have
    advice would you impart to actuaries              been as equally interesting and challenging      What do you do to relax?
    aspiring to similar heights?                      as the route I eventually chose.                 I spend time with my wife and two
    Don’t rely purely on technical skills as a                                                         children and, when I can, I like to play golf.
    licence to be successful. Being an                How would your team describe you?                I also enjoy live music and have a keen
    actuary is tremendously useful as a               I could venture an answer to this but I          interest in wine.                           ■                                                                                                                    February 2011     43
                                                                                                                          Sponsored by
 Technology                    Tablet computers

A far cry from the stone tablet
In a new bi-monthly feature on technology, Anthony Dhanendran casts an eye over the new
breed of tablet computers hoping to take a bite out of Apple’s iPad market
                                                                                                                                  Samsung Galaxy Tab
                                                       the next generation of Android tablets.
                                                       Little is known about those new devices,
                                                       though: models are expected from Toshiba,
                                                       Samsung and others, but the only confirmed
                                                       one so far is the Motorola Xoom, likewise
                                                       due in the first quarter of 2011.
                                                          The other interesting competitor,
                                                       though it’s not here yet, is made by
                                                       RIM, maker of the Blackberry handsets.
                                                       Announced in September 2010, the                  The first edition of the Playbook will only
                                                       BlackBerry Playbook was shown off at the       be able to connect to wireless networks but
                             Anthony Dhanendran
                                                       recent Consumer Electronics Show in            it will be possible to ‘pair’ the Playbook with
                             is the reviews editor
                                                       Las Vegas. However, RIM is not expecting to    a Blackberry phone and access the internet
                             of Computeractive
                                                       have it on sale in the USA for a few weeks,    through the phone’s connection.

             ablet computers are not new, but          and it hasn’t even committed to release           It will have a 7-inch screen compared
             current models do things differently:                                                    with the iPad’s 10-inch display, but it will
             previous tablets used full versions                            Motorola Xoom             improve on the iPad in other ways: it
             of the Windows operating system,                                                         supports the Flash format used by lots of
     which wasn’t designed for such small,                                                            websites, which the iPad doesn’t, and it
     keyboard-less computers. That meant they                                                         links to the Blackberry Enterprise Server
     were effectively just cut-down versions of                                                       for easy access to e-mail, calendar, contacts
     proper computers.                                                                                and other tools. It has a camera that can
        The Apple iPad started from scratch with                                                      also shoot high-definition video (the iPad
     a new operating system designed for touch-                                                       doesn’t have a camera).
     screens, which it ran quickly and efficiently                                                        For now, though, the best contender
     (making the best of a limited battery) and                                                       to the iPad is the Samsung Galaxy Tab.
     did what people wanted. It gives users access     dates for the rest of the world. In a recent   This uses Android version 2.2, which suffers
     to a huge library of ‘apps’, small programs       interview a senior RIM product manager         from being designed for phones, not tablets.
     that do anything from showing flight details       alluded to the Playbook being available in
     to working as a spirit level or a stethoscope.    the UK “quite soon” but didn’t give any
        Several imitators appeared, though most        indication about other countries.                                                   BlackBerry
     of them have been flawed. They generally               What we do know about the Playbook
     run either Windows (thus falling victim           is that it is designed with business users
     to the earlier tablets’ flaws) or the Google       in mind, something the iPad isn’t. While
     Android operating system. Android is              the iPad has several excellent business
     designed for mobile phones, and the current       applications available (it can view and
     edition (version 2.2) is not particularly         edit Office documents and has some good         It has a (non-HD) camera but most of the
     suitable for tablets.                             charting tools, for instance), most of the     available apps are designed for phones, so
        There’s a new version 3 of Android,            things it does are geared towards home         they have to be magnified to fit the larger
     codenamed Honeycomb, due some time                users. Rim’s clear business pedigree means     screen and so don’t look good.
                      in the first quarter of 2011,     its tablet will be work-minded.                   That being the case, at the moment I’d
                                        designed to        The iPad and Samsung Galaxy Tab            wait for the Playbook and Android 3 tablets
                         Apple iPad
                                        fix all those   both connect to wireless networks and          to become available. For now the iPad has
                                          problems     mobile phone networks, meaning that            the best interface and apps, and though it
                                           and         if you insert a phone sim tied to an           lacks Flash it is still very impressive. But as
                                           which       appropriate contract (one that includes a      the Playbook and ‘Honeycomb’ devices are
                                           will be     data allowance) you can get online from        due soon, it’s worth waiting a few weeks to
                                            used by    anywhere there’s a phone signal.               see what the next generation offers.            ■

       ReMetrica for Solvency II

44      February 2011                                                                                                                                                                                                Richard Elliott                          Arts

If music be the food of love…
Clare Whitelam previews upcoming opera and music festivals in 2011

    It is easy to be enchanted by summer              Buckinghamshire borders, the new site                        FESTIVAL LISTINGS
    festivals, and Glyndebourne, in particular,       plans a Japanese-inspired pavilion-cum-                    n Glyndebourne Festival Opera —
    comes top of my list. It is country-house         auditorium, which is intended to float above      
    opera at its very best and the pleasure begins    the landscape of the estate. Building is now               n Garsington Opera —
    by spotting your fellow opera-goers in full       under way in time for the season that starts     
    evening dress on the early afternoon train        in June. Operas planned this year include                  n Iford Manor Opera and Jazz Festival —
    bound for Lewes. For 2011, the programme          the British premiere of La Verita in Cimento     
    seems themed by love, starting with its first      (Vivaldi), The Magic Flute (Mozart) and                    n West Green House Opera —
    ever staging of Wagner’s Die Meistersinger        Il Turco in Italia (Rossini).                    
    von Nürnberg (a crafty cobbler helps a                Some other alternatives around the                     index.php?page=opera
    young knight become the master singer             country that will give a taste of the summer               n Glastonbury —
    and thus wins the beautiful goldsmith’s           opera experience include the beautiful           
    daughter), alongside Mozart’s Don Giovanni        Iford Manor with its Georgian house and                    n Reading and Leeds Festivals —
    (the infamous womaniser creates mayhem            Italianate gardens near Bradford-on-Avon,        
    and murder for which revenge is sought in a       home to the Iford Opera and Jazz Festival        
    thunderous climax). A good choice for opera       from early June to early August.
    newbies is Donizetti’s light, witty and short         A taste of baroque opera can normally be
    L’elisir d’amore: will Doctor Dulcamara’s         found at West Green House in Hampshire                 Seriously, you’ve
    love potion make Adina fall for the
    penniless Nemorino? Later in the summer
                                                      and, if travel plans cannot extend beyond
                                                      the M25, Holland Park provides country
                                                                                                             never read… Great
    there are productions of Handel’s Rinaldo,        house opera in an urban location.                      Expectations?
    Dvorák’s beguiling Rusalka conducted by               But if you like your music more
    Andrew Davis and the eerily disturbing            amplified, your sleep patterns disturbed
    The Turn of the Screw by Benjamin Britten.        and your attire more fancy dress than                  This month Matthew Welsh from Zurich
        Seats sell out fast and are offered first to   fancy, then you still have plenty of options.          gives his thoughts on Charles Dickens’ work,
    Glyndebourne members and those who are            Tickets for Glastonbury 2011 (22-26 June)              published in 1861.
    on the long waiting list to join. Tickets are     sold out months ago, but a resale of
    then offered to the general public in             cancelled tickets should be going ahead in             Did it live up to its reputation?
    late March. Prices can be high, but if you are    April or May and, if you are lucky, you may            My previous experiences were abridged
    under 30 you can purchase special tickets at      get to see world-class acts on one of the              versions of A Christmas Carol on tape as a
    reduced rates. My tips for making the most        45 stages. August bank holiday is time for             young child and a school production of the
    of the experience are to dress up (but also       the extravaganza of the Leeds & Reading                musical Oliver. This was my first full-fat novel
    bring a coat for chilly picnics during the        Festival where acts flit between the two                by Dickens and I really was surprised by a
    interval), buy a CD of the opera if you are       locations, pleasing both sets of crowds.               couple of things.
    not familiar with the music, and don’t miss       Not forgetting Wireless (London’s Hyde                   His characters are the best feature of the
    the last coach home.                              Park, 1-3 July), Isle of Wight (10-12 June)            book. The main characters are unique and
        Less well known is the summer opera           and T in the Park (Kinross, 8-10 July),                frustrating, from the emotionally scarred
    festival at Garsington, which, from               summer should be well and truly sorted.                Miss Haversham to Pip, the central character
    this year, has moved from its original                                                                   driven to better himself but not knowing
    Garsington Manor to a new home at the             Please note that the article on Joan Miró and          what being ‘better’ necessarily means.
    Wormsley Estate, UK residence of the              Gerhard Richter in the January issue was incorrectly   They are surrounded by minor players who
    Getty family. Located in the Oxfordshire/         bylined and was actually authored by Richard Elliott   satirise the human condition; they’re all funny
                                                                                                             and none of them feel unnecessary.
                                                                                                             Why read it?
                                                                                                             Dickens was a Christian and his work is
                                                                                                             steeped in morality. Great Expectations is
                                                                                                             no exception. The central theme of loyalty
                                                                                                             and conscience over wealth and station
                                                                                                             are particularly poignant given the recent
                                                                                                             economic climate. Reflecting on how to live
                                                                                                             a ‘good life’ can only be positive and this
                                                                                                             book offers a clear perspective.
                                                                                                             Who would you recommend it to?
                                                                                                             Anyone aged 13 and over.                                                                                                                      February 2011   45
 Student page                 Stephen Paines                                                       

     James Cumming and Christine O’Grady tell us how actuarial exams compare with
     accountancy and the law

     Compare and contrast
     Accountancy                                      university routes. None of the papers is         contract with a sponsor firm that pays
     There are lots of routes to becoming an          optional. The papers are tough — like            their fees. But whether or not they secure a
     accountant, and one of the most                  actuarial exams, they’re harder than many        training contract that pays their fees before
     well-known qualifications is the Associate        degree exams.                                    getting the LPC qualification, they will need
     Chartered Accountant (ACA). This name               Once ACA-qualified, people often stay          to complete a training contract afterwards
     is often used interchangeably with the           on into practice — in areas such as tax,         to fulfil the necessary practical aspects of
     Institute of Chartered Accountants in            audit, corporate finance or insolvency —          their training. Training contracts last for two
     England and Wales (ICAEW), although in           or move into other areas like industry.          years, and include the Professional Skills
     practice ICAEW is the institute while ACA is     Further qualifications are available in these     Course (PSC), the final layer of training
     the qualification.                                specialisms beyond ACA.                          needed before becoming a solicitor.
        Most people who study for ACA have               There are other accountancy                      The LPC has four phases — compulsory
     a degree background, but this is not             qualifications and routes — but too many to       areas, core areas, skills areas and electives.
     mandatory. To start studying, the minimum        go into here!                                    The latter requires choice of three subjects

                                                      » Students get a
     requirement is two A-levels and three                                                             from a range: the choice will often reflect
     GCSEs in different subjects, not necessarily                                                      future career choice. For example, those
     mathematical ones; in practice most people       training contract with                           wishing to work for the Government Legal
     will have qualifications well in excess of                                                         Service will choose different subjects to those
     this. What typically happens is that students    an accountancy firm,                             wanting to become commercial lawyers.
     get a training contract with an accountancy      an industry firm or                                 The pass rate for LPC exams is around
     firm, an industry firm or public sector
     body, and study while they work for three
                                                      public sector body, and                          80%, and each subject may be taken up to
                                                                                                       three times. This may seem high but, in
     years. Since three years’ minimum work           study while they work                            reality, the desire to qualify quickly — to
     experience is required, as for actuaries, most
     study for ACA while they work, rather than
                                                      for three years          «                       avoid running up large debts and because of
                                                                                                       the competition for contracts — means that
     trying to do it on their own (and three          Law                                              the LPC is a very challenging qualification.
     years is the average time to complete the        Law degrees are not essential to go into
     qualification).                                   the law. Many people come in from                James Cumming is professional practice and
        There are 15 exams for ACA. Six are at        different backgrounds and complete a             FR programme leader at BPP’s Business School.
     the Knowledge Level: these are computer-         conversion course, called the Graduate           Christine O’Grady is senior PR manager at BPP
     based, multiple choice exams that can            Diploma in Law (GDL) — also called the           University College
     be sat at any time of the year. Next there       Common Professional Examination (CPE)
     are six Application Level exams: these are       — before starting professional training.         Stephen would like to thank Darrell Chainey of ActEd
     paper-based, and can be sat four times a         Would-be barristers then take the Bar            for his help with this article
     year. Finally, there is the Advanced Level,      Professional Training Course (BPTC),
     which consists of two paper-based exams          while would-be solicitors then take the
     and a case study. Exemptions are available,      Legal Practice Course (LPC). Some choose
     for example for those who have the               to change careers later on, for example
     Association of Accounting Technician (AAT)       from lawyer to solicitor, while some may
     qualification or have exemptions through          wish to be dual-qualified — both options
                                                      require a qualification called the Qualified
         WANT TO JOIN OUR TEAM?                       Lawyer’s Transfer Test (QLTT).
                                                         If we consider the LPC in more detail, this
     We are looking for a new student page            is usually taken as a full-time course over
     editor to replace the outgoing Stephen           one year, but part-time routes are available
     Paines. If interested, please e-mail             and are taken to combine the course with                   working. Some students obtain a training

46      February 2011                                                                                                             
                                                                                                       AOTF/Book review             People/Comment

     Actuary of the future                            Book review
     Ella Spencer
                                                      Matthew Edwards draws a blank with
                                                      The Blank Swan by Elie Ayache
       Employer and
       area of work                                   Many readers will have heard of the Sokal                “If the exchange
       Fitch Ratings,                                 hoax, a publishing prank perpetrated by              lies at the heart of
       ratings analysis.                              an American physics professor. Alan Sokal            the other… if it is
                                                      submitted the deliberately nonsensical               indeed the other       The Blank Swan is
       Date entered                                   article ‘Transgressing the boundaries:               of ontology… then      published by John Wiley
       Profession                                     towards a transformative hermeneutics of             un-totalization        & Sons. RRP £29.99
       September 2008.                                quantum gravity’ to an academic journal              will obtain.”
                                                      of cultural studies. He had written the                  “The impossible exchange of absolute
       Describe yourself in three words               article in a particularly meaningless,               contingency will be made possible by
       Sprightly, ambitious, friendly.                sesquipedalian fashion with obligatory               embedding the exchange in the very molecule
                                                      references to Heisenberg et al; the article          of the medium.”
       Tell us your formula for success               was taken completely seriously and was                   “The market surface is the reciprocal of the
       ei π = -1.                                     published. Sokal took great delight in               thought of the absolute.”
                                                      then revealing that the article was                      Where did Ayache go so wrong?
       What’s your best attribute?                    “a pastiche of left-wing cant, fawning               His thinking has leaned heavily on modern
       Enthusiasm.                                    references, grandiose quotations, and                French philosophers, generally a guarantee
                                                      outright nonsense… structured around                 of intellectual suicide. Less flippantly, his
       And your worst habit?                          the silliest quotations [by postmodernist            philosophical errancy seems to derive from
       Playing fast and loose with the rules of       academics] he could find about                        his disavowal of the concept of causality.
       space and time.                                mathematics and physics”.                            Denying causality is a sure route to disaster,
                                                          Ten pages into The Blank Swan — ten              whether in the field of classical metaphysics
       What three items would you take to             pages of dense pseudo-philosophy, replete            or that of modern empirical science, and
       a desert island?                               with various references to Borges and                indeed the author cites the arch ‘anti-
       Tess of the d’Urbevilles, a commemorative      quantum mechanics — I assumed that I                 causalist’ David Hume approvingly (when
       cup and saucer from William and Kate’s         was reading a similar hoax. Twenty pages             not citing Nietzsche or obscure French
       wedding and raclette (Swiss cheese).           later, I thought the hoax was going on               philosophers). Without some underlying
                                                      a bit. Fifty pages later, I was mortified to          framework of cause and effect, and the
       Best piece of advice you have ever             realise that the author was deadly serious.          analogous concept of possible future events
       been given?                                    Ayache’s contention is that the idea of              that may at some point be caused, pricing
       If you get the chance to sit it out or         pricing (derivative pricing in particular) as        — indeed, decision-making and life in
       dance… I hope you dance.                       a process predicated on the evaluation of            general — can simply not function.
                                                      future possibilities is fundamentally flawed,             Despite the unreadably dense, abstruse
       What is your greatest extravagance?            and instead one should regard price as the           and philosophically pretentious prose,
       A specially commissioned handmade rug          starting point, the only conceivable reality.        and the general absence of clear logical
       with a crab and a lobster from India.              An idea of the book’s lucidity                   structure, the book is not completely
                                                      and profundity can be had by the                     without interest. Ayache does provide one
       Tell us something unusual about                impressionistic route of sampling the                page of interesting history concerning the
       yourself                                       following (sadly typical) lines:                     ‘volatility smile’ (tip: head straight to page
       I’m a trustee for The Gambia Upcountry             “The contingent is the radically other, and if   355 and save yourself a headache), and also
       Development Charity (GUD) and spend            it departs from the plenitude of identity… and       touches on the notion of mathematics as a
       two to three weeks of every year working       from the plenitude of the present… it does so        route to perceiving absolute reality.
       on a project in Kanubeh, a village in          originally and from the start, at a stage where          But the best thing about The Blank Swan
       upcountry Gambia, as well as working on        possibility (ie. metaphysical time) may not yet      was that it imbued me with a fervent
       numerous fundraising activities in the UK.     be defined or a stage where being may not even        love for the literary skills of CEIOPS.
                                                      be in place yet.”                                    I took The Blank Swan with me on a trip
       What is the greatest risk you have                 “The market, once its name is uttered, can       to Trieste, along with the QIS5 Technical
       ever taken?                                    only itself become the source and itself become      Specification. By my return, I had become
       Predicting the mathematical future on a        the given.”                                          enamoured of the CEIOPS book; compared
       daily basis.                                       “To mediate contingency, we will need to         with The Blank Swan, the QIS5
                                                      be in a place of an ‘exchanging’ and                 specification was extremely well written
             WHO WOULD YOU LIKE TO                    invaginating nature; we will need a relation         and interesting. What else could bring
             SEE FEATURED HERE?                       with literally no interior, what Deleuze calls       about such enchantment?
           If you would like to nominate someone      the ‘self of difference’.”
           for Actuary of the Future, please e-mail       “A path may be opened from inside Kant’s         Matthew Edwards is a former editor of
                     correlational circle.”                               The Actuary.                                                                                                                      February 2011     47
 Puzzles                        Coffee break

      February prize puzzle                     Identity crisis                  For a chance to win a £50 Amazon voucher, please e-mail your
                                                                                 solutions to by 14 February 2011.

      For each of the descriptions below, answer the question “who am I?” The answers are loosely related.

      1. Having received the same dietary advice from two brothers, I was forced to leave the thoroughfare.
      2. I sold some personal jewellery to a pair of animal lovers for a shilling.
      3. I was rescued by a pair of time travellers from being beheaded.
      4. I ate through fifteen pieces of fruit in five days.
      5. A blonde got into my parents’ home and broke my stuff.
      6. I helped my more famous cousin retrieve his discarded shoes and blue coat.
      7. I suffered repeated spankings by my relations before my life was transformed by an impromptu nose job.
      8. Having been offered a choice of two by a friend and having chosen both, I had difficulty leaving.
      9. Whenever my friends have a feast they first bind and gag me.
      10. I am famous for letting my hair down.
      11. Unlike my three equally colourful colleagues I share my name with a river.
      12. I am the only one of my kind and the companion to a famous anti-hero.
      13. I’m a handsome stripy fellow. My best friend wears a scarf — it’s yellow.
      14. My chances of inheriting a manufacturing empire came to an end at the hands of an army of irate squirrels.
      15. I entertain a pair of latchkey children, despite the protests of their pet fish.

      Tie-breaker: Devise your own question along the same lines (and provide the answer). Creativity will be valued more highly than obscurity.

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

     Bridge challenge 12                       Pre-emptive strikes       Please send any
     A useful beginners’ guide to playing bridge can be found at                  comments you have to Tom Bratcher at

     A pre-emptive bid is a bid made at a high level, usually on the                Apart from the long suit, there are various factors to consider
     back of a weak hand containing one long, strong suit. Most                   when thinking about pre-empting. Most important is the suit
     bidding systems contain opening pre-empts at the 3 level or                  quality — the long suit should be able to stand up against bad
     higher for cards with a 7 (or more) card suit. The main aims                 breaks. Secondly, the potential risk and reward of a pre-empt
     of a pre-emptive opening bid are to remove space from your                   are affected by vulnerability — best is non-vulnerable against
     opponent’s bidding sequence, and to pave the way to a possible               vulnerable opponents for low risk and high effect
     sacrifice contract of your own.                                              respectively. Finally, bidding position can influence your
       Have a look at these hands (with no prior bidding). Would you              decision. Third in the bidding is best (your partner has
     consider opening 3♠ with any of these hands?                                 passed) but you are pre-empting against one opponent.
                                                                                                           Second position is worst because one
                                                                                                           opponent has passed and there is a 50%
               ♠           ♥          ♦          ♣        Yes/No?     If Yes, at which
                                                                                           If Yes, at
                                                                                             which         chance that you will be pre-empting
                                                                                           position?       against your partner. (After three passes,
                                                                                                           there is no need to pre-empt at all!)
       1   KQJ10962        653         2         64
      2     AQJ8543       J1096        8          7
      3    A986432         Q6         98         74
      4     AKJ7432         6        J102        K4

      To access the puzzles archive, visit                  Puzzle 467                                 Field of dreams
      puzzles. The puzzles editor is pleased to receive ideas for                   A nice straightforward one this time. I have a field bounded
      new puzzles from readers at                        by a fence running due north from point A to point B, a fence
                                                                                    running due east from A to C and a stream running straight
             JANUARY PRIZE PUZZLE RESULTS                                           from B to C. If A is 15 metres from C and B is 16 metres from
                                                                                    the edge of the stream closest to point A, what is the area of
      The January results will be published in the March issue.                     the field?

48    February 2011                                                                                                                  
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     business.               recently announced                          Mr Ilyas will be              Please remember to update your
     Most recently           the appointment of                          working closely               details on the Profession’s website
     Mr McNamara             Baldeep Johal to                            with prospective              at
     worked for Standard     the newly created    Umar Ilyas             partners and clients          transactions
     Life where he was       position of group    and enhanced           to fully utilise

                                                                                                  Forward features
     group strategy and      chief risk officer.   its exposure           the investment
     corporate finance        Mr Johal will join   monitoring             services Investment

                                                                                                  in The Actuary
     director. Prior to      the executive        capabilities.          Solutions offers.
     that, he worked         management           Shane Kingston         He will also focus
     as marketing and        committee and        will be promoted       on developing
     distribution director   report directly to   to replace             its institutional        The Actuary’s team welcomes contributions
     at HBOS Financial       the group CEO.       Mr Johal as the        investment platform      from members or contacts in and around the
     Services and was           Mr Johal joined   group chief actuary.   and fiduciary             profession.
     also group strategy     Brit Insurance       He joined Brit         management                 Below is a list of themes for the next
     director at AXA UK,     in 2001 and was      Insurance in 2004      capabilities.            few months along with the deadline for
     working across life,    subsequently         as pricing actuary     He joins Investment      submission. If you would like to contribute,
     investment, general     promoted to group    and his recent         Solutions from           please contact Tracey Brown at features@
     insurance and           chief actuary.       responsibilities       Bluefin, where   with suggestions.
     healthcare.             He led the group’s   include actuary        he was a senior            For a full list of 2011 issue themes, visit
     Mr McNamara             approach to          for the group’s        investment     
     started his career      reserving, and       global markets         consultant.
     in Dublin where         has overseen         and reinsurance        He brings 14             April 2011 (Published 31 March, editorial
     he trained as an        the building         businesses.            years’ experience        deadline 11 February, advertising deadline
     actuary, before         of the Group’s       Both appointments      of advising UK           15 March)
     spending 10 years       capital models       are subject            pension schemes,         ■ Education/research
                                                                         including previous       ■ Life
                                                                         roles at HSBC            ■ Careers
                                                                         Actuaries &
                                                                         Consultants, Buck        May 2011 (Published 28 April, editorial
                                                                         Consulting and           deadline 18 March, advertising deadline
                                                                                                  12 April)
                                        Actuary                          Watson Wyatt.
                                                                         Mr Ilyas is also a       ■ Regulation/Standards

                                        of the                           CFA charterholder.       ■ Health and care
                                                                                                  ■ Banking/Financial services
                                        future?                          GAAPS has
                                                                         announced the            June 2011 (Published 26 May, editorial
                                        If you think you deserve
                                                                         appointment of its       deadline 15 April, advertising deadline
                                        to appear as an Actuary of
                                                                         new Asia Pacific          10 May)
                                        the Future, then we would
                                                                         business head,           ■ Solvency II
                                        like to hear from you.
                                                                         Tony Snoyman.            ■ Risk management
                                        Either ask a colleague to
                                                                         Mr Snoyman has           ■ Careers/CPD training
                                        nominate you or send
                                                                         previously worked
                                        your contact details with
                                                                         as a life insurance     director of            most recently been
                                        a reference direct to
                                                                         actuary and in          Alexander Forbes       at Towers Watson
                                                                         pensions consulting.    in Johannesburg,       where he headed
                                                                         He is based in          then moved to          the Public Sector
                                                                         Sydney, Australia.      Mercer in Sydney.      Superannuation
                                                                         He was senior           Mr Snoyman has         practice.

50      February 2011                                                                                               
                                                                             To advertise your vacancies in the magazine and online please contact:
                                                               Aisling Durrant, Tel: +44 (0)20 7316 9493, E-mail:

                   High Finance Group
                   Specialist Recruiters                                      
        First InHouse Actuary                                        General        Deputy Chief Actuary                                        General
       Salary: £100k - £140k + Bonus + Benefits                                     Salary: £115k - £140k + Bonus + Benefits
       Location: London                                                             Location: London
       This small Lloyd’s syndicate is looking for a first inhouse Actuary. The     This large US Insurer is looking to continue its expansion programme
       role will report directly to the Board and the successful candidate          and is seeking a qualified Actuary to work as Deputy Chief Actuary.
       should be prepared to get involved in a range of projects. The ability to    The role will manage a team of five Actuaries and work across both
       liaise with external consultants is essential as you will be required to     pricing and capital modelling. To be successful you should have the
       work closely with them and manage relationships. Ref: WG1270                 ability to liaise with Non-Actuaries and be experienced in either
                                                                                    pricing or capital modelling. Ref: WG1269

        Reserving and Capital Modelling Analyst                      General        The Big Four and Beyond                                     General
        Salary: £30k - £40k + Bonus + Benefits                                      Salary: £30k - £60k + Bonus + Benefits
        Location: London                                                            Location: London
        Are you in the relatively early stages of your career and attracted by      Are you looking for a role that provides variety and exposure?
        the prospect of working in the Lloyd’s market? This role involves           Consultancy work gives you the chance to expand your experience
        exposure to rotations within the team, as well as working with some of      across all areas, as well as providing the variety of working with
        the best Actuaries in the business. The successful candidate will have      different clients on a regular basis. We are currently recruiting for a
        knowledge of the practical application of modelling and a numerate          range of consulting opportunities, differing in size, culture and
        and statistical background. Ref: JK1024                                     approach. If consultancy work interests you, contact us to find out
                                                                                    what kind of opportunity could be right for you.Ref: JK1023

        Pricing Lead                                                 General        Head of Actuarial Reserving                                General
        Salary: £120k - £130k + Bonus + Benefits                                    Salary: €100k - €130k + Bonus + Benefits
        Location: London                                                            Location: Dublin, Ireland
         This world renowned Insurer is looking for a qualified Actuary with a      Looking to head a reserving team and gain responsibility? You will
         proven pricing background. The right candidate will be required to         provide Actuarial support to the Management Committee and work
         work closely with the Underwriters updating and improving the              closely with the Finance and Underwriting Divisions. Leading the
         pricing models. The role will work across a variety of commercial          Reserving Actuarial Function including the development of Actuarial
         lines and be responsible for a growing team. Pricing experience            students, you will perform reserve reviews for European business in
         essential. Ref: WG1268                                                     conjunction with the reserving Actuaries for Europe. Ref: DB6439

        Life and P&C - All Levels                                  Europe           Contracting Opportunities                                  General
        Salary: From €50k - €200k                                                   Salary: £500 - £1200 per day
        Location: Throughout Europe                                                 Location: UK Wide
         High Finance Group has a strong network across Europe, offering            A number of clients are in need of Solvency II Actuaries as well as
         UK based Actuaries the chance to advance their career in countries         Pricing Actuaries in the LMKT, Commercial and Personal Lines arena.
         such as Switzerland, Spain, Italy, France, Germany or The                  Exposure to Solvency II is required to assist or grounded GI
         Netherlands. Your skills and your experience are highly regarded in        experience in order to be considered. The current market is excellent
         Europe, so this could be your chance to get the position with the          to move in to contracting. We represent contractors on Fixed term , Ltd
         focus and the responsibilities you’re looking for. Ref: DB6440             company or PAYE basis. Ref: RP108

      General                                General                               Europe                                Executive Search
      William Gallimore: 020 7337 8826       James Kitt: 020 7337 1202             Damien Bernard: 020 7337 1206         Mark Dainty: 020 7337 8816

                 Actuarial l Finance l Risk l Audit l Compliance l IT l Strategy & Consulting l Solvency II l Claims & Underwriting

    020 7337 8800                                                                                                                                                                February 2011    51
               Unrivalled contract opportunities
Demand is still high for contractors of all levels, from students to senior qualified, and we continue to look for talented and ambitious
individuals who have a real interest in forging a career in this dynamic and lucrative market. A broad range of opportunities are currently
available on high-profile assignments with major clients.

Hazell Carr is a preferred supplier to a number of major companies and therefore has some of the best opportunities available
in the actuarial market. We offer competitive rates and are committed to finding the most suitable match between our clients
and contractors, building rewarding, long-term relationships in the process. We continue to offer a range of benefits to our
contractors through Xchange, our on-line contractor community.

Skills in high demand include:

Solvency II and ICA
There is high demand for contractors with experience in Risk & Capital management, Economic capital, ICA, QIS 4 and
approaches to QIS 5.

Life Reporting
Both Solvency II projects and ‘BAU’ teams are looking for various types of reporting experience, with a particular demand for

There is great demand for qualified and part-qualified actuaries with experience of model development, especially in systems
such as Prophet, MoSes and MG-ALFA and also an immediate need for DCS Coders.

Actuarial Analysts
We have a range of opportunities available for actuarial analysts and technicians to undertake work on specifying actuarial
calculations, systems testing and completing complex pension calculations.

  If you are interested in joining Hazell Carr or would just like to find out more about becoming a
   contractor, contact us in confidence on 0118 951 3817 or email us at

Pensions Buyout Client Director                                                  Chief Actuary
c 85,000 - 90,000 + Bonus & Benefits Package – London                            £150,000 + Benefits                                              – London

This specialist provider of bulk buy-in or buyout solutions is looking to hire   A Qualified Actuary is required to contribute to the leadership of this
a client director to lead transactions. This established team is forecasting     existing Actuarial team. The successful candidate will help drive the
strong growth over the next 12 months and is keen to find someone who            leadership and management a team of able and highly motivated
has experience of advising pension clients, can develop strong relationships     Actuaries. You must demonstrate a high level of credibility in this role, and
with the consulting community and has the commercial ability to lead and         be a role model in thought leadership on Solvency II. The successful
facilitate deal negotiations. Candidates will be qualified actuaries and         applicant must be able to coach and develop qualified Actuaries and also
come either from a consulting background or from the asset management            liaise internally with managers. Technical competencies include solid ICA
industry in a client development role working with institutional clients.        knowledge and with profits fund management knowledge.
Contact: – London Office         Ref: Z471577     Contact: – London Office            Ref: GB465802

Actuarial Analyst                                                                Investment Analysts
£30,000 - £40,000 & Benefits                          – Central London           £ Competitive Packages                                                – City

Join this expanding team as it enters a crucial stage of development.            This key client has asked us to assist in the growth of their investment
Alongside the core actuarial work you will also be able to use your actuarial    consulting team. They are keen to hire investment analysts with at least two
expertise in providing solutions to non-actuarial issues. On the back of         years experience from within an investment consultancy. As the profile of
recent developments at a strategic level, the business is in a healthy           this team is raised internally, the variety and scope of work will increase
financial position to grow so your career development opportunities will be      allowing the job holder to develop a broad range of experience. You will
enhanced on joining. You will have at least one year’s pensions actuarial        be taking the actuarial or CFA exams and be keen to make your mark within
experience, with a decent academic record and have passed several                this growing team.
actuarial exams.                                                                 Contact: – Leeds Office         Ref: SA472134
Contact: – Leeds Office          Ref: SA471669

General Insurance Pricing                                                        Regional GI Actuary
£ Competitive                                                    – London        SGD Negotiable                                               – Singapore

Big name Insurer is looking for a Qualified Actuary to work on pricing,          A leading international insurer requires a Head of Actuarial to join their
reserving and business planning. In conjunction with the Chief Actuary this      operation in Singapore, where you will lead a regional actuarial team in
role will assist in the management of the Actuarial department including the     charge of reserves assessments, pricing and reporting. You will be a
agreement of the annual work plan. The role will support the structuring of      qualified actuary with significant experience across reserving and pricing in
pricing and annual capital modelling and be a key player in the business         the general insurance sector. Proficiency in both English & Mandarin is
unit’s strategy. An excellent remuneration package is on offer and excellent     highly desirable.
career prospects are available for the right individual                          Contact: – Singapore Office    Ref: RB471097
Contact: – London Office           Ref: GB472291

Life Actuaries – Contract or Permanent                                           Head of Actuarial Reporting & Risk
£ On Experience                       – London/South East/ Bristol               £110,000 + Benefits                                              – London

Two major insurance companies are looking to increase their existing             Life Company has senior roles in three areas: Actuarial Reporting, Solvency
actuarial teams with part and qualified actuaries. Roles are available for       II Management & Risk Management. The roles can be based either in
those with direct life insurance experience, whether it is from a consultancy    central London or on the south coast. Each position requires a qualified
or an insurance company. The various opportunities exist in areas such as        Actuary with at least 5 years post qualification experience in Life Insurance.
EV, annuities, pricing, protection, Prophet and solvency II. Some of these       The roles combine significant technical knowledge alongside a proven track
positions can also be looked at on a short term basis for those who are keen     record in management. Please call for more information and for a
on contracting. If you are interested in such position please either call or     confidential discussion about these positions.
email your details through to me and I will contact you to discuss.              Contact: – London Office             Ref: GB465902
Contact: – London Office             Ref: GB471407

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

                                          Leeds Office: IPS Group, 8 St Paul’s Street, Leeds, LS1 2LE
                                 Tel: 0113 202 1577 Fax: 0113 202 1598 Email:
More jobs online at

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                 Rob Bulpitt,                                  Dennis Ball,
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                 Rupert Rickard,                               Mansi Koshy,
              Managing Consultant                           Senior Consultant
             Tel +44 (0)20 7092 3219                      Tel +44 (0)20 7092 3283   

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           Tel +44 (0)20 7092 3208                         Tel +44 (0)20 7092 3262     

     Working with
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                         t +44(0)1689 862937



54      February 2011                                                          
                     Are you feeling confined in your current role?
                     Do you have the confidence to embrace change
                     and the creativity to explore new ideas? Then
                     it’s time to talk to Legal & General. We can
                     promise you the space and resources you
                     need to take your actuarial career to a new
                     level. You’ll have the freedom to expand your
                     skills, the opportunity to engage with multiple
                     business areas and the space to develop your
                     own career path. So whether you’re qualified
                     or part-qualified, take a deep breath. Things are
                     about to get interesting.

                                       Live Web Seminar
                                       Actuarial Careers in
                                       a Changing Environment
                                       7pm Wednesday 9 February
                                       Log on to The Actuary website and join us as
                                       we discuss the role actuaries play in a changing
                                       environment. We will also be answering your
                                       questions in a live Question and Answer session.

                                       Your actuarial background could be in Life,
                                       Pensions or General Insurance – or you may still
                                       be working towards qualifying. As long as you
                                       have the right attitude, we can offer you a wide
                                       range of roles with our teams in Kingswood,
                                       Surrey or our General Insurance team in
                                       Birmingham. Interested? Then discover more by
                                       visiting our careers website below.

Find out more at

Solvency II team
Bristol £Competitive + benefits

The company
Friends Provident is a dynamic and rapidly growing business following its acquisition by Resolution.
Operating both in the UK and Internationally, the organisation is going through a rapid transformation
as it looks to develop over the next few years through both organic growth and strategic acquisition.

The team
Solvency II is a prime focus and the steering group has put in place a common framework to which
the firm will adhere. We are now building a dedicated Solvency II team that will concentrate on the
implementation and how best to embed this throughout the business. This is a green field opportunity that
sits within the heart of the group. Given the involvement and visibility within the business, the exposure
that these roles offer will provide an excellent platform from which to build a reputation and lasting
networks within a rapidly evolving organisation.

About you
■   Whilst we are structuring this team we are keen to speak with qualified actuaries who have the
    experience of working in change management, finance transformation projects or other similar
    large scale programmes
■   Hands on Solvency II exposure is not essential and to a degree we are flexible as to the backgrounds
    of the individuals within the team
■   Experience within related areas such as economic capital, reporting, ICA etc would be welcomed,
    but more important is the commercial mindset to understand the impacts upon the business and
    to influence and build the process
■   With ongoing opportunities for personal and professional development we seek outgoing and confident
    individuals who wish to build a career in a rapidly growing UK Life company
■   Several positions exist within the team and there is flexibility in the way in which we structure the roles
    initially. In some cases these may be tailored to suit the experience and strengths of the individuals. A
    competitive package is on offer for the right individuals, with relocation assistance on offer where required

We would be happy to discuss this with actuaries who have differing levels of post qualified
experience, and are open to those from non-traditional backgrounds.
If you would like to discuss this, please contact James Everett on +44 (0) 207 429 4434
or email
All direct and third party applications will be forwarded to Pure Search for consideration. 160 Queen Victoria Street London EC4V 4BF
Pure Recruitment Group Limited acts as an employment agency for permanent roles and an employment business for temporary roles.
We aim to promote diversity and equal opportunity through our work - we monitor and evaluate our performance on a regular basis.
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                                            It’s what the Deloitte Actuarial Consultancy team is great at. Insurance Actuaries at Deloitte work
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                                           practice, enjoying a role with variety that would be impossible to find anywhere else. We’re looking
                                          for experienced actuaries and students, with genuine curiosity and a gift for making the most complex
                                             issues simple. Visit It’s your career. Where will you take it?

          © 2011 Deloitte LLP. Deloitte LLP is an equal opportunities employer.

        Senior Pricing Actuary
        An exciting opportunity has arisen for a Pricing Actuary/Manager with skills in personal/
        commercial pricing. Working closely with the Allstate US Senior Actuary the successful candidate
        would be responsible for growing and managing a new Belfast based team. Initially, the successful
        candidate would spend time in the Chicago area headquarters of Allstate to become fully prepared
        to assume leadership of the Belfast operation.
        This is an opportunity which provides excellent career advancement and diversification as there
        will be a requirement to have attained or be able to attain the designation of Fellow of the Casualty
        Actuarial Society (FCAS) via mutual recognition as well as potentially taking initial responsibility
        at a senior level for the Belfast based Quantitative Research and Analytics team.
        The role involves:
           Managing staff to operate effectively using appropriate techniques to get results in change situations
           Building, maintaining, testing and documenting Actuarial models to an auditable standard
           Conforming with and enhancing the Allstate controls framework to support the requirements
           of management sign off                                                                                   Insurance
        Essential criteria
           Degree in Actuarial or related studies and Associate or Fellow of the Institute
                                                                                                                      it’s a risky
           and Faculty of Actuaries (with specialisation in General Insurance) or Casualty
           Actuarial Society
           Minimum of 5 year’s experience within the insurance industry
           At least 2 years team management experience
           Advanced Excel user
        Remuneration is negotiable depending upon ability and experience.
        If you are interested in this role please send you CV to and state the job title & reference                                          Find your
        number (11/02/SP) in the subject line of your email.
        The closing date for receiving CV’s is Friday, 25th                                                    Future at
        February 2011. If you would like to discuss this
        opportunity in more detail please contact
        Jim Rowland at
        Allstate NI is an Equal Opportunities Employer.                                                                                                            February 2011   57
More jobs online at

      Cardiff, £80,000 package + study support

      Admiral Group plc is one of Wales’ most successful                With Solvency II project experience gained in a corporate or
      businesses. Headquartered in Cardiff, this highly                 advisory capacity, you will also have exposure to standard
      entrepreneurial insurance group currently employs 4000            formula calibration (QIS submissions) and experience of
      individuals in Wales and is the only Welsh firm in the FTSE        internal/capital models (Remetrica software preferred but not
      100. The group grew turnover last year by 33% to over £1bn        essential). With an ICAS and a general insurance background,
      and owns insurance brands including Admiral,         an ability to explain and present complex capital issues to
      and                                               senior management is essential.

      This recently created, unique opportunity for a part qualified     To discuss this in more detail, contact Kevin Smith on
      actuary or actuarial studier will see you analysing capital and   020 7481 9984 or email or contact
      capital requirements at both insurer and group level. You will    Sian Drinkwater on 02920 222422 or email
      be a key member of the group’s Solvency II implementation Alternatively, you can find out
      committee and also be responsible for updating its individual     more online at
      capital assessment.


                                                                              Six Figure Salary & Bonus & Benefits
                                                                              (5.75% tax)

                                                                              At the Bermuda Monetary Authority we can offer the opportunity for broad
                                                                              exposure to international regulatory issues, special projects and a variety of work
                                                                              experience. Bermuda is a leader in the global reinsurance market, known for its strong
                                                                              reputation and dynamic and innovative marketplace. Make no mistake, your work
                                                                              will drive the development of Bermuda’s Insurance regulations and help to protect
                                                                              millions of consumers.

                                                                              Assistant Director, Actuarial Property and Casualty

                                                                              This role will be primarily focused on the regulation of Property and Casualty
                                                                              insurers. The Assistant Director reports to the Deputy Director and will be
                                                                              responsible for the supervision of regulated entities focusing on underwriting,
                                                                              reserving and risk aggregating process in actual Capital model analyses.

                                                                              You will support the department of Policy, Research and International Affairs in the
                                                                              development and application of statistical and financial analytics. You will also be
                                                                              responsible for the development of industry benchmarks for methodologies and
                                                                              assumptions used to research and develop best practice for regulatory analytics.

                                                                              Experience & Qualifications:

                                                                               •   A degree in a relevant discipline plus the FCAS/FIA qualification.
                                                                               •   Minimum of 10 years relevant post graduate experience of which at least 5 years
                                                                                   should be at a senior level in the property, casualty and financial guarantee
                                                                                   lines of business.
                                                                               •   Knowledge and experience with insurance and reinsurance actuarial issues.

                                                                              The Bermuda Monetary Authority is the integrated regulator of the financial
                                                                              services sector in Bermuda. The Authority develops risk-based financial regulations
                                                                              that apply to the supervision of Bermuda’s banks, trust companies, investment
                                                                              businesses, investment funds, fund administrators, money service businesses and
                                                                              insurance companies. It also regulates the Bermuda Stock Exchange and issues
                                                                              Bermuda’s national currency. If you are interested in this position, please email your
                                                                              CV and remuneration details to to apply.

                                                                              Closing date of 21st February 2011

58   February 2011                                                                                                                  
                              Latest jobs from The Actuary are now on Twitter

    Pensions                                                                  Prudential Actuarial
    Actuarial Trainee                                                         Recruitment – It all adds
                                                                              up to a great career!
    FarrSight Solutions Limited is an actuarial consultancy
    specialising in self-administered pensions and has recently moved         An Actuarial career at Prudential means
    into modern offices in central Manchester. An opportunity has arisen      working at the forefront of one of the
    for a Pensions Actuarial Trainee to strengthen our actuarial team.
                                                                              UK’s leading life & pensions companies.
    Ideally, you will have up to two years pensions experience
    (consideration will be given to other strong candidates). You will        Prudential has over seven million customers and a
    be making good progress with your actuarial exams and will have
    a flexible approach with an ability to provide creative solutions for     leading range of products and services.
    a growing business. You will possess good IT skills (a working
    knowledge of Access and Visual Basic would be an advantage) and           With over 160 years experience, it’s our people that
    will be able to communicate with all levels of seniority.                 ensure we continue to perform. That’s why we’ve put
    Working in a small team, the successful candidate will be involved in     in place a people development programme designed
    a wide variety of work, taking on a high level of client responsibility   to reward high performance and why we constantly
    from an early stage and will swiftly become an integral part of the
    business having a direct impact on its success.
                                                                              seek out new and exciting talent.

    We will offer complete support with your studies and training.            To find out more about an Actuarial career with
                                                                              Prudential visit
        If you are ambitious and self-motivated, believe you have             And add your name to our growing list of achievers.
        the talent required to face a challenge and feel you could
        fit into our expanding team, please apply by sending your
           CV to or call 0161 877 9440
           to speak to one of our actuaries. Our website can be
                     accessed via                                                                                             February 2011   59
More jobs online at

                                               Actuarial opportunities with Partnership
                                               Partnership is the UK’s fastest growing direct writer of life insurance. A specialist provider of financial
                                               solutions for people with health or lifestyle conditions. We are experts in medical underwriting and a
                                               thought leader in the retirement market. Partnership is a privately owned company where innovation and
                                               ideas are unlimited, and where talent is recognised and rewarded. We are recruiting within our Actuarial
                                               team to support Partnership’s ambitious growth plans. This is an ideal opportunity to join a growing team
                                               within a dynamic company, where each role will provide breadth and challenge.

       Head of Actuarial Systems (up to £105k + benefits)                                              Assistant Actuaries (up to £80k + benefits)
       We are looking for a senior actuary to take ownership for                                      We are seeking several newly/recently qualified FIA/FFA’s
       Partnership’s actuarial modelling systems across both analysis                                 for a number of important roles in our R&D, Analysis, Systems
       and pricing functions. This includes the implementation of new                                 and Pricing teams. The opportunities will include cutting edge
       regulatory requirements (including SII Internal Model), new products                           work on mortality, product development, pricing and risk-based
       and new reinsurance structures. The role will support the business                             measurement of profitability, suiting actuaries of varying skill
       by delivering efficiency through actuarial process review, system                               sets. The jobholders will have extensive contact with senior
       enhancement and development of a robust environment in which                                   actuaries and others within the growing business. We will
       to operate our actuarial tools. This is a senior role supporting the                           also consider candidates at AlA/AFA level who are progressing
       Chief Actuary (Andrew Chamberlain) and Deputy Actuary to ensure                                towards fellowship for some of these positions.
       delivery of accurate reporting, pricing and value adding analysis.

     In addition to these senior roles, we have a number of openings for those at less senior levels in our various teams.
     To find out more about the company, or to arrange a meeting with one of our actuaries to discuss these
     opportunities, please contact
     Partnership is a trading style of The Partnership Group of Companies, which includes: Partnership Life Assurance Company
     Limited (registered in England and Wales No. 05465261) and Partnership Home Loans Limited (registered in England and Wales
     No. 05108846). Both companies are authorised and regulated by the Financial Services Authority. The registered office for
     both companies is Sackville House, 143-149 Fenchurch Street, London EC3M 6BN.

60      February 2011                                                                                                                          
                               Latest jobs from The Actuary are now on Twitter

                                           Bermuda and London based Actuaries
             Alterra is a global enterprise dedicated to providing diversified specialty insurance and reinsurance products to corporations, public entities, and
             property and casualty insurers. We operate from offices in Europe, North America and South America with US$3bn of shareholder capital and over
             500 employees. Each operating platform has a small company feel while retaining the benefits of being part of a much larger organisation.

             Alterra’s actuaries are based in London, Bermuda, Dublin, New Jersey and Virginia, with a high level of interaction across the group. They are
             primarily responsible for reserving, pricing models and capital setting. However, as the actuarial skill-set is highly valued at Alterra, they also have a
             much wider role in the operation of the business.

             We are currently recruiting for two positions for our Bermuda platform and one for our London platform.
             The key attributes for each of these positions are enthusiasm, being a team player and strong communication skills.

                                  Bermuda                                                     Bermuda                                                      London

               We are looking for a pro-active, part-qualified             For our second, more junior, position in Bermuda            For our London platform we are looking for a
               actuary with London market experience.                     we are looking for a candidate who is making                nearly or newly qualified actuary with a suitable
                                                                          progress with the actuarial exams but wants a more          background in reserving, pricing or capital modeling.
               The ideal candidate will have a background in              challenging and interesting work environment.
               reserving as well as having a good understanding of                                                                    The candidate would have experience of working
               pricing or capital modelling                               We would consider a graduate entrant for this               with underwriters and have the ability to work in a
                                                                          position if the candidate can demonstrate a                 multi-disciplinary team.
                                                                          particularly strong CV.

             Alterra is an excellent environment in which to learn about the general insurance industry. We are committed to providing the tools, opportunities and training to help
             employees fully develop their talents to allow them to get the most from their career.

             The successful candidate will receive a competitive salary in addition to a comprehensive benefits package.

             To apply:
             Please send a standard CV with a brief personal profile to
             We do not accept unsolicited calls or CV’s from recruitment agencies.

              Flying high as an
              OAC contractor

              A refreshingly different service

              As an award-winning actuarial and financial services consultancy we pride ourselves on being different to other interim
              resourcing agencies.

              OAC supports its contractors by providing them with PII cover and offering important supplementary benefits such as paid
              release for CPD, advice from OAC actuaries at any time, and free trial access to® financial modelling software.

              As an actuarial firm we fully understand the changing needs and requirements of our contractors. We are committed to working
              with them so that they can achieve their personal and business objectives.

              Contractors are quickly realising that OAC is the preferred choice for benefits and winning contracts. Experience the difference
              yourself and register your interest on our website today.

              For more information
              Colette Lurshay | +44 (0)20 7278 9500

              OAC Actuaries and Consultants, a trading name of OAC plc, is a member of the Recruitment and
              Employment Confederation (REC) and offers the services of an Employment Business.                                                                                                                                                     February 2011   61
More jobs online at

                                          A name you can trust
                                          Life                                                                Life
                                          Senior Actuarial Assistant, South East                              Insurance Consultant
                                          to £50,000 + benefits                                                Manchester or Bristol
                                          Ref: 4410555                                                        £Negotiable
                                          Do you want to work for a Reinsurer helping to develop              Ref: 4245954
                                          products for its UK Life operations? Based in the South             Due to rising activity in the UK market, our client is
                                          East this global company is seeking a PQ with previous              undergoing a step-change expansion in its regional
                                          product experience. Strong communication skills and a               offices. This is an opportunity for part or fully qualified
                                          can-do attitude are a must.                                         Actuaries to accelerate their careers and gain a more
                                          t: 020 7220 4774                                                    varied technical skill set.
                                          e:                                      t: 020 7220 4774
                                          General Insurance
                                          Head of Pricing, North East                                         Contract
                                          c. £100,000 (negotiable)                                            UK-Wide vacancies
                                          Ref: 4316659                                                        Ref: 4235929
                                          Our client seeks a general insurance Actuary with                   Solvency II Actuary, Bristol, to £1,100 per day, 6-12
                                          cutting-edge pricing skills to undertake a major                    months – qualified Actuaries with reporting experience.
                                          leadership role. This position offers the chance to                 Prophet Modeller/Developer, Bristol, Edinburgh, Surrey,
                                          join a provider at a senior level and offers a route                to £1,100 per day, 6-12 months – experienced Prophet
                                          to directorship in this huge international organisation.            or MoSes modellers.
                                          t: 020 7220 4774                                                    t: 020 7220 4774
                                          e:                                       e:

                                          Reed Specialist Recruitment Ltd is an employment agency and employment business.


     Sales Actuary, London                                                                 Manager / Senior Manager - Consulting, London or Edinburgh
     £six-figure package                                        Ref: 46463                  £50,000 - £90,000                                          Ref: 45522
     An opportunity for a qualified pensions consultant to move into the                    This Big 4 company is expanding as a result of recent success, with
     BPA market with one of the most successful companies in this space.                   large client projects underway covering Solvency II, modelling,
     You will need to manage, negotiate and lead closure of potential                      reporting and capital management. Whatever your specialism,
     bulk purchase annuity and longevity insurance transactions. You will                  if you are a qualified life actuary with an appetite for innovative
     develop new business and project manage the deals which are being                     projects and varied exposure, then this market leading company
     pursued. Ideally you will have experience of corporate transactions                   has an opportunity for you. Being a consultancy, strong
     or the BPA market, be a strong communicator and presenter and be                      communication skills and the ability to apply your knowledge
     able to articulate complex concepts to non-actuaries.                                 in practical and commercial situations are essential.
     E: T: +44 (0)20 7324 0505                              E: T: +44 (0)20 7019 8842

     Move into General Insurance, London                                                   Risk Actuary, London
     £30,000 - £45,000                                             Ref: 45834              Up to £90,000 + bonus                                      Ref: 45910
     Our client is growing its general insurance consulting practice and is                A relatively new start-up company is looking to expand by hiring
     keen to hire a number of actuarial students into the team. The main                   a Risk Actuary. You will support the Chief Actuary and CRO with
     areas of work will be capital modelling, Solvency II and risk consulting              the development of risk policy and you will liaise closely with
     although there will be other projects for the successful applicants                   the CRO and ALM team to ensure the efficient use of risk capital.
     to get stuck in to. Ideally you will be an actuarial student with a                   You will also help in developing the risk governance framework
     strong academic record, excellent exam progress and a minimum of                      under Solvency II. The ideal candidate will be a qualified life
     12 months experience in any actuarial discipline. Previous insurance                  actuary with ICA and economic capital experience.
     experience is not essential.                                                          E: T: +44 (0)20 7324 0505
     E: T: +44 (0)20 7019 8861

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

62     February 2011                                                                                                                               
 Switzerland Requires UK Actuaries


English speaking GI and Life actuaries are required by our global Swiss insurance clients. Expect higher remuneration
packages, lower tax rates and a higher standard of living, within a truly international environment. Students (as well as
qualifieds) are in high demand, with starting salaries from CHF 90k (£60k+). German or French is not needed. Our team can
provide consultancy on the market and guide you through the application and relocation process. Please call for a
confidential discussion.

                                                                                        Oliver James Associates AG
Emma Gilbert                                                                              Gottfried Keller-Strasse 5
Senior Consultant                                                                                       8001 Zürich
International Actuarial                                                                                 Switzerland
+41 (0) 43 508 0509                                                           
                                                       High Finance Group is a specialist consultancy, providing Finance, Actuarial, Audit, Risk
                                                       Management, Compliance and IT Recruitment solutions to major Insurers and Asset Managers,
           High Finance Group                          professional services firms and SMEs. We aim to provide a market leading recruitment service,
           Specialist Recruiters
                                                       bridging the gap between large agencies and executive search.

  Strategy Consultant                                       Life              Investment Manager                                     Life
  Salary: Up to £125k Base + Bonus + Profit Share                             Salary: Up to £100k + Exceptional Bonus + Benefits
  Location: London                                                            Location: South East
  Role for a entrepreneurial Actuary with UK Life Insurance experience        Fantastic opportunity for an Actuary to become an Investment
  to lead the European programme for this niche Strategy Consultancy.         Manager; managing a team of analysts, developing investment
  You will be a self starter wanting to expand your experience outside        strategy and monitoring and assessing the performance of a
  of the Actuarial field in a challenging and highly commercial role that     multibillion pound with profit fund. Extensive investment knowledge
  will see you shape the strategic direction of your Insurance client's       and experience of complex LDI and / or ALM required plus excellent
  product proposition in the UK and Europe. Ref: CB7078                       people management and organisational skills. Ref: CB7092

  Solvency II – Pillar 3                                  Life                Pricing and Research Analyst                           Life
  Salary: Up to £95k Base + Benefits                                          Salary: £40k - £55k + Bonus + Benefits
  Location: South East                                                        Location: London
  Excellent opportunity for a Life Actuary to transition their financial      Unique opportunity to join a leading Life Re-insurer within their
  reporting, QIS5 or regulatory knowledge into this forward facing            Pricing division. Responsibility is split between producing individual
  Solvency II role. You will be interpreting and implementing Pillar 3        quotations and completing market sensitive research into the pricing
  requirements as they unfold. This high profile Group role determines        basis, aiding future strategic decisions. You will be expected to use
  how the insurance provisions are calculated from a Group wide               your own initiative and work directly with senior management. To be
  perspective, liaising with your counterparts across the globe.              eligible for this role you must have experience of pricing protection
  Opportunity to travel. Ref: CB7083                                          products and have worked within a life re-insurer. Ref: GB1679

  Project Modelling Analyst                               Life                Senior Pricing Actuary                                 Europe
  Salary: £25k - £45k + Bonus + Benefits                                      Salary: £100k + Bonus + Benefits
  Location: London                                                            Location: Zurich, Switzerland
  A fantastic new role to join the projects team of this growing,             Interested in the Swiss Reinsurance Market? You will be responsible
  progressive Life Insurer.You will be offered a wide range of projects       for pricing and structuring of Credit & Surety contracts, supporting
  including the inhouse Solvency II development and individual                client relationship managers and underwriting specialists, taking
  specialist tasks applying a variety of modelling solutions. You will be     care of group wide credit related issues and projects. The role
  working very closely with senior students and qualified Actuaries. To       involves the development of new pricing methods, parameters and
  be considered you must have some relevant experience and have an            products, contributing to cross functional projects and providing
  excellent academic record. Ref: GB1680                                      training to Underwriters and new Actuarial staff. Ref: DB6438

  US Benefits Modeller                                    Pensions            Client Management Actuary                              Pensions
  Salary: £40k - £60k + Bonus + Benefits                                      Salary: £35k - £65k + Bonus + Benefits
  Location: London                                                            Location: Nationwide
  A unique opportunity has arisen to join this growing, innovative            Superb opportunities have arisen to join a well-known global
  Pension Service Provider. Our client is currently seeking a nearly /        employee benefit consultancy, who are currently seeking nearly /
  newly qualified Pensions Actuary to help take forward their                 newly qualified actuaries to work on an exceptional client base. You
  international practice. To be successful, you will have an outstanding      will enjoy working with industry experts in a challenging and
  academic record and have significant experience of US benefit               rewarding environment whilst benefiting from market leading
  arrangements. MW5891                                                        training and accelerated career development. MW5819

  Life Insurance                                          Contract            Pensions Buyout                                        Pensions
  Salary: £500 - £1200 per day                                                Salary: £30k - £60k + Bonus + Benefits
  Location: UK Wide                                                           Location: London / Surrey
  We have a number of clients looking for Actuaries with a keen               We are currently working with a number of buyout service providers
  interest in Solvency II. Exposure in this area or the ability to lead       who are seeking Actuarial students to join their team. You will be
  programmes is ideal. However Actuaries with no prior Solvency II            involved in a variety of tasks including pricing, product development
  experience will be considered to support the business in this area.         and additional project work. The successful candidate will have an
  This is a fantastic time to take advantage of this growing area. Advice     outstanding academic record, made sound progress with their exams
  provided on all areas of contracting where required. Ref: RP808             and be committed to progressing in the BPA market. MW7118

Life                                 Life                                   Pensions                               Contract
Clare Bethell: 020 7337 8829         Graeme Braidwood: 020 7337 8820        Miranda Wilkinson : 020 7337 8815      Rupa Pithiya: 020 7337 1200

Actuarial l Finance l Risk l Audit l Compliance l IT l Strategy & Consulting l Solvency II l Claims & Underwriting

020 7337 8800                                    
Wanted: an
open mindset,
not a mind
that’s set.

You’re bright. Well qualified. But we want
more. As the only major professional services
firm with an integrated financial services
practice across Europe, the Middle East, India
and Africa, we’re looking for talented actuarial
professionals with the intellectual curiosity
and entrepreneurial spirit to help our clients
make their business a better business.
If you have experience in pensions, life
insurance, general insurance and in particular
Solvency II, join us to accelerate your career
within financial and professional services.
We have career opportunities in the UK and
throughout Europe.
Text 11FS and your email address to 88802
for more information.
Do you qualify? We’re open to suggestions.

© Ernst &Young 2011. Ernst &Young is an equal opportunities employer and welcomes applications from all sections of the
community. The UK firm Ernst &Young LLP is a limited liability partnership and a member firm of Ernst &Young Global Limited.
“, integrity and a long term perspective.”

   QUANT ACTUARY                                      ASSET MANAGER                          HEAD OF DESIGN INTEGRITY                                     SOLVENCY II

   EDINBURGH                                         £ to attract the best                   EDINBURGH                              £ excellent + benefits + bonus

  Leading asset manager seeks actuary with exceptional                                       Major insurance group seeks qualified actuary to ensure that
  quantitative skills to identify, model, communicate and manage                             all aspects of Solvency II design remain consistent with the
  the risk of complex financial instruments. The successful                                  Solvency II Vision and Target Operating Model. Reporting to
  candidate will have proven experience within either an asset                               the Director of Solvency II, you will be responsible for
  manager or a life insurance company and will enjoy working as                              ensuring that appropriate business capabilities are delivered
  part of a talented team. Join a worldwide organisation that will                           to demonstrate the “use test”, consistent with the roadmap
  provide the training, support and opportunity for you to reach                             and implementation plan.
  your potential.                                    Ref: Star259                                                                                         Ref: Star216

   SOLVENCY II RISK MANAGEMENT                                                               DREAM TEAM (RISK)                                 LIFE CONSULTANCY

   EDINBURGH                            £ excellent + benefits + bonus                       SCOTLAND                                                 £ very attractive

  Major insurance group seeks actuary or risk professional to                                Leading professional services firm seeks actuaries to join its
  ensure that all aspects of Solvency II design are effective.                               risk practice. Work in a multi-disciplinary team providing
  You will have a particular focus on issues relating to risk and                            commercial advice on a wide range of projects. Make the
  will ensure consistency across business units and functional                               most of your strong communication skills and technical
  areas. This is an excellent opportunity to move into risk                                  expertise.
  management within a market-leading insurance group.

                                                              Ref: Star215                                                                                Ref: Star180

   SENIOR CONSULTING ACTUARY                    FINANCIAL STRATEGY                           THOUGHT LEADERSHIP                                LIFE CONSULTANCY

   EDINBURGH                                                    £ excellent                  LONDON, BRISTOL, EDINBURGH, MANCHESTER                         £ excellent

  Our client is seeking a Senior Consulting Actuary to join their                            Our client is seeking qualified actuaries to join its Risk and
  Financial Strategy Group where you will take the lead in the                               Compliance group, proactively helping clients to increase
  provision of the full-range of services to sophisticated clients.                          profits whilst reducing reputational, operational, financial and
  You will deliver advice on pension risk management to                                      other risks. You will create and contribute to high quality
  sponsors and/or trustees, driving the pension risk consulting                              thought leadership. An excellent opportunity to join this
  agenda with clients. You will also act as a mentor and role                                leading provider of innovative solutions for the insurance
  model, creating an environment that recognises and rewards                                 market.
  both individual and team accomplishments.            Ref: Star250                                                                                       Ref: Star237

Louis Manson                       Antony Buxton FIA                      Irene Paterson FFA                   Martine Scott-Gordon AFA                   Lance Randles MBA
M +44 (0)7595 023 983              M +44 (0)7766 414 560                  M +44 (0)7545 424 206                M +44 (0)7900 696 825                      M +44 (0)7889 007 861
E   E      E   E   E

S TA R A C T U A R I A L F U T U R E S                                                                                                                    Follow us on Twitter
T +44 (0)20 7868 1900 F +44 (0)20 7868 1800 W A 68 Lombard Street London EC3V 9LJ

 MAKE A DIFFERENCE                             LIFE / NON LIFE       HEAD OF PRICING AND UNDERWRITING                      NON-LIFE

 LONDON                           up to £140k + bonus + benefits     LONDON                                       £ to attract the best

 Our client is seeking nearly qualified and qualified actuaries      An exciting opportunity has arisen to join a major insurance
 to work within its Risk Department. You will provide clear          group as head of pricing and underwriting for the household
 and helpful actuarial advice and support across the                 class of business. As part of this varied and dynamic role, you
 organisation and work on major projects as part of multi-           will monitor business performance, including overall
 disciplinary teams. Successful candidates will have a proven        performance and reserving related issues, and take corrective
 ability to manage a large number of competing demands to            action where necessary. You will also work with the Board to
 agreed deadlines and to the required level of quality. A            set strategic objectives. This is a fantastic chance to advance
 fantastic opportunity to make a difference.       Ref: Star199      your career within a major, thriving company.       Ref: Star166

 INNOVATIVE PRICING                        NON LIFE COMPANY          LONDON MARKET PRICING ACTUARY                         NON-LIFE

 LONDON                               £ very competitive package     LONDON                                                £ excellent

 Major insurance group seeks a qualified actuary to provide a        Our client is seeking a qualified actuary with pricing
 consistent, timely and comprehensive analytical service to the      experience to engage with portfolio managers, underwriters
 company, with responsibility for developing and delivering          and claims staff and identify areas where actuarial involvement
 evolutionary and step-change innovation for general                 can add to the performance of the business. You will be
 insurance pricing processes across the Group. A great               involved in pricing, portfolio analysis and quantitative support
 opportunity to improve the statistical validity and efficiency of   and will also lead the quarterly reserving process including
 all modelling, projection processes and techniques within a         analysis, report writing and communication. This is a varied
 market-leading company.                             Ref: Star209    and exciting role for a strong team player.          Ref: Star195

 SOLVENCY II ACTUARY                              HEALTHCARE         SOLVENCY II AND BEYOND                      MOVE TO NON-LIFE

 LONDON                                               £ excellent    LONDON WITH SOME FLEXIBILITY                     £ very attractive

 Our client is seeking an actuary to assist in the oversight of      Leading professional services firm seeks dynamic actuaries
 the group's actuarial function, with particular emphasis on         of all levels to join its risk practice. You will have strong
 the development and use of actuarial and risk-based models,         technical and communication skills and the capability to
 actuarial analyses, stress and scenario testing. An exciting        manage large concurrent projects. You will lead the dialogue
 opportunity to engage with the actuarial community across a         with clients, bring deeper insights and develop your own
 major group to enable efficient and dynamic development.            network. Join this growing business for development
                                                                     opportunities, including overseas work and international
                                                    Ref: Star193     secondments.                                          Ref: Star194

 THE FIRST LINE OF DEFENCE                       ALM ACTUARY         HEAD OF ACTUARIAL                               LIFE COMPANY

 BRISTOL OR LONDON                 up to £80k + bonus + benefits     SOUTH EAST                                       £ very attractive

 Leading insurance group seeks a nearly qualified or qualified       Leading insurance group seeks a qualified actuary to take the
 actuary to join its ALM Team, focusing on ‘first line of            lead in the production and further development of valuation,
 defence’ management and reporting of the financial risk of          embedded value and business planning processes. You will
 the business. In this varied and responsible role, you will set     manage the life actuarial team and report to the Actuarial
 up and operate required risk systems to monitor portfolio           Function Holder. You will take a lead role in the evolution of
 risk. You will also embed Solvency II risk based capital and        the ICA capital model in order to meet the ORSA and group
 risk appetite as management tools.                                  solvency assessment requirements of Solvency II.
                                                    Ref: Star218                                                         Ref: Star251

Please contact us at any time (including evenings and weekends) to discuss
vacancies of interest or for an informal discussion regarding your career goals.
“, integrity and a long term perspective.”

  CHIEF ACTUARY                                              LIFE        INTERNATIONAL PRICING ACTUARY              NON-LIFE COMPANY

  LONDON                           up to £150k + bonus + benefits        GREECE / CYPRUS                                       £ excellent

  Our client is looking for a Chief Actuary to lead its life             Start-up insurance company seeks a part qualified or
  insurance actuarial team. You will coach and develop a team            qualified actuary with experience of personal lines pricing to
  of actuarial staff with a range of skills and experience. You          join a driven, commercial team. The successful candidate
  will play an active part in setting the direction for the              will have strong technical and communication skills and
  research and development activity of the team. This is an              entrepeneurial flair. This position offers potential for fantastic
  exciting and challenging high-profile opportunity for actuaries        career development and fast-track promotion to Chief
  with strong leadership skills, strategic and technical abilities.      Actuary.
                                                     Ref: Star257                                                            Ref: Star255

  FUTURE WORKING LIFETIME                             PENSIONS           CASUALTY PRICING                           NON-LIFE COMPANY

  BIRMINGHAM                                           £ excellent       BIRMINGHAM                                            £ excellent

  Our client is seeking nearly qualified and qualified actuaries         Our client seeks a commercial lines pricing manager to
  to join its expanding pensions actuarial team. Successful              provide professional actuarial support and advice in respect
  candidates will have proven technical and communication                of pricing casualty insurance. You will ensure all rating tools
  skills and will relish the opportunity to work in multi                are fit for purpose, monitoring developments in the UK
  disciplinary teams on corporate transactions and pensions              market and elsewhere across the group to incorporate best
  strategy reviews. Take charge of your career and broaden               practice within the rating process. An excellent opportunity to
  your expertise within a market-leading company.                        join this market-leading insurance group.
                                                     Ref: Star248                                                            Ref: Star222

Star Actuarial's Referral Bonus Scheme:

StarToStar                                           BONUSES OF UP TO £2,500 PER CANDIDATE

Do you know any star candidates that are looking for a new opportunity? We would be delighted to help them with their search. Refer a
friend or associate to Star Actuarial and we will pay you a referral bonus of up to £2,500 if we place them in a new role!

Full details of the scheme can be found on our website at

  CAPITAL MANAGEMENT                        NON-LIFE COMPANY             SENIOR PRICING ANALYST                                NON LIFE

  BIRMINGHAM                        up to £65k + benefits + bonus        LEEDS                                                 £ excellent

  An exciting opportunity has arisen for a nearly qualified or           Major insurance Group is seeking a part qualified actuary to
  qualified actuary to join a major insurance Group to develop           support the Pricing Manager to optimise Group profitability
  and manage appropriate capital modelling and reinsurance               from GI products. You will analyse insurance risk, customer
  strategies, techniques and controls. You will play a key role in       and market behaviours and pricing of GI products.
  the Group's Solvency II project. Candidates from a pensions            Successful candidates will have excellent knowledge of
  or life insurance background will be considered.                       statistical analysis systems and tools together with knowledge
                                                                         of Generalised Linear Modelling techniques.
                                                     Ref: Star201                                                            Ref: Star256

S TA R A C T U A R I A L F U T U R E S                                                                                       Follow us on Twitter
T +44 (0)20 7868 1900 F +44 (0)20 7868 1800 W A 68 Lombard Street London EC3V 9LJ

 HEDGING ACTIVITIES                                         LIFE     PARTNER                               INVESTMENT MANAGER

 LONDON AND INTERNATIONAL                        £ very attractive   LONDON                                  £ basic + bonus + equity

 Global consultancy seeks talented individuals to join their         Dynamic investment manager seeks a qualified actuary to
 financial risk management practice in London. You will design       join as partner. You will have significant experience of
 risk management solutions and project manage hedge                  insurance liabilities and a deep understanding of structuring
 effectiveness investigations. You will expand your experience in    risk hedging trades. You will identify appropriate transactions
 the physical implementation of hedging activities. This is an       through interaction with capital markets counterparties. You
 ideal opportunity to work with a leading global consulting          will be responsible for the regulatory analysis and capital
 practice in this innovative, dynamic and cutting edge field.        impact of transactions, working with clients’ actuaries and
                                                    Ref: Star243     regulators.                                         Ref: Star137

 CHANGE ACTUARY                                 LIFE COMPANY         CAPITAL ANALYST                                       NON-LIFE

 SOUTH EAST                        £ excellent + bonus + benefits    CLOSE TO LONDON                                       £ excellent

 Our client is seeking a Change Actuary to identify, analyse         Our client seeks a Capital Analyst to join the actuarial team to
 and deliver changes to processes and systems to support the         work on the capital model build, parameterisation,
 ongoing development of the business. In this challenging and        documentation, model refinement and output development.
 varied role, you will develop and maintain relationships across     The role involves working closely with the Capital Actuary, and
 the business, taking a proactive approach to supporting its         the rest of the actuarial function. Outstanding candidates
 ongoing growth through the practical application of actuarial       from a pensions or life insurance background will be
 skills.                                                             considered.
                                                    Ref: Star231                                                         Ref: Star225

 COMMERCIAL LINES PRICING                                            INSURANCE RISK MANAGER                                NON LIFE

 SOUTHERN ENGLAND                                     £ excellent    WALES                                       £ excellent package

 This is a challenging and exciting opportunity for a                Market-leading insurance Group is seeking an actuary to
 part-qualified actuary to work within a Commercial Lines            make recommendations to enhance the quality of risk
 Pricing team, providing high quality, insightful and timely         management in the business. This will include first line of
 actuarial services to the Pricing Actuary. Analysing and            defence risk activities and Solvency II related submissions.
 monitoring the performance and pricing dynamics across the          You will also be responsible for the implementation of
 spectrum of products, you will liaise closely with Underwriters     groupwide strategies, policies, systems and controls in order
 and the wider business team.                                        to manage, monitor and control risks.
                                                    Ref: Star224                                                         Ref: Star258


 NATIONWIDE                                      £ contract rates    NATIONWIDE                                   £ to attract the best

 We are working on various contract assignments. Your                We have numerous opportunities for high calibre part
 modelling skills are in great demand. We are particularly           qualified and qualified pensions actuaries to move into life,
 keen to speak with candidates with MoSes, Prophet and               non-life and risk roles.
 financial reporting experience.

 Now is the time to consider whether contracting is for you.
 Give us a call for an informal, confidential discussion.
                                                    Ref: Star151                                                         Ref: Star221

Please contact us at any time (including evenings and weekends) to discuss
vacancies of interest or for an informal discussion regarding your career goals.
More jobs online at

           Economic Capital Modelling Actuary, Surrey                          Development Actuary, London
           To £99,000 + car allowance + bonus + benefits                        To £75,000 + bonus + benefits
           This is an exciting role to drive the development of the            This global insurer is seeking an individual to manage the
           economic capital modelling capability within this forward-          establishment of new processes and development of tools
           thinking insurer’s annuity business. Reporting directly to          to support a common approach to reserving across all of
           the head of capital modelling and managing a small team,            its product divisions and distribution channels. Reporting
           you will quantify potential actions to reduce economic              directly to the head of actuarial, you will lead on systems
           capital requirements via product design, investment strategy        such as business planning and portfolio monitoring. General
           and use of third party capital (including reinsurance), by          insurance reserving experience coupled with a strong
           using your understanding of the financial dynamics of                understanding of actuarial systems such as Excel, Access,
           the annuity business. You will be a qualified actuary with           VBA, SQL and ResQ is required. Confidence, credibility and
           experience in capital, liability and asset modelling within life.   the ability to engage positively with managers, underwriters
           ICA, Solvency II and knowledge of annuities business and            and business leaders is essential in this business-facing role.
           ALM is an advantage. Ref: 1327527                                   Ref: 1326701
  or call 020 7481 9984                 or call 020 7481 9984

           Actuarial Analyst, London City                                      Life Consultant, London/Bristol/Manchester
           £35-55,000 + bonus + benefits                                        £35-50,000
           A global insurer is currently recruiting students to join its       Join a prestigious consultancy in one of its countrywide
           London office. You will be responsible for multiple areas of        offices. If you are interested in varied projects and
           work including capital management, pricing, reserving and           developing relationships with clients then this could be the
           Solvency II. Reporting directly to the team leader of the           ideal role. A typical project may include Solvency II, MCEV
           motor lines actuarial department you will be a key figure            and ICA work. Therefore you will be able to make use of
           in a successful team. This is a fantastic opportunity for an        past skills whilst facing new challenges in exciting client
           individual looking to gain new technical skills and develop in      based environments. Strong exam progress and reporting
           this area of business. Previous general insurance experience        experience is advantageous.
           is essential. Ref: 1273068                                          Ref: 1132518
  or call 020 7481 9984              or call 020 7481 9984

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


70   February 2011                                                                                                           
                                                                                                             T:        020 8420 1818

                            Actual Search
                                       SEEKING THE             EXCEPTIONAL

International Life Actuary                                                          Group Life Pricing
South West                                               £60-120K + benefits        London / City                                                             £50-75K
Superb role leading the product pricing team. You’ll oversee the pricing of an      Key pricing role in market leading life & health insurer. Duties incl group product
exciting range of international products across many countries. New                 design & development, pricing risk assessment, reassurance & some team
challenge with great career potential for an enthusiastic life actuary with         management. Terrific opportunity to influence & shape the future. Suit
background in pricing, financial reporting or consultancy. Ref:1151                 nearly/newly qual actuary with life or health pricing experience. Ref 1157

Asset Liability Modelling – Analyst & Actuary                                       Varied Life Role
London, City                                                £35-80K + bens          Midlands                                                 c£50-65K + exc bens
2 roles – for a p/qualified & qualified actuary for the Investment & ALM team       Award winning, niche life insurer offers varied role to aspiring, talented snr
at this leading insurer. You’ll get involved in risk, Solvency 2, monitoring        analyst / actuary. Duties inc valuation, modelling, product development &
liquidity & cashflow whilst liaising closely with Investment. Suit self-motivated   pricing. Brilliant chance to broaden your exp. Full training offered if needed.
team players with strong ALM, analysis & problem solving skills. Ref:1152           P/q or qual life actuaries should apply. Relocation help if wanted. Ref:1158

Life Reporting Actuary – Annuity / Longevity                                        Energetic, competitive and committed
London                                                        £50-70K + bens        Surrey or London                                         £40-100K + Exc bens
Want to advance your career? Opportunity to join small select team dedicated        Award winning global commercial insurer seeks non life pricing & reserving
to financial reporting - UK Statutory, ICA, implementation of Solvency 2 &          actuaries & analysts. Chance to train into solvency related duties. Varied
conveying the results to senior management. Best suited to a nearly / newly         interesting work, vibrant environment, flexi working options. Technical &
qual actuary with UK financial reporting exp. Modelling skills adv. Ref:1153        managerial roles based Surrey or London. Great firm to work for. Ref:1159

Life/Health - skills more important than quals                                      Pensions - Your Intro to Investments
London & Home Counties                                      £40-90K + bens          London                                                          £30-55K + bens
Dynamic young company with a unique product offering seeks actuaries with           Pensions students & actuaries. Great chance to learn the investment sector.
3 yrs + experience in life/protection, reinsurance or consultancy. Get involved     Major consulting firm needs p/q & newly qual pensions actuaries for key roles
in pricing & product development, manage reinsurance relationships &                in investment dept. Liaise with investment mgrs, produce pensions valuations,
develop a good insight of actuarial & risk. Prophet/MoSes adv. Ref:1154             attend client meetings, ALM work. Exam progress not essential. Ref:1160

Life & pensions students – IT & analysis                                            Change Sector
Surrey                                                       £30-55K + bens         South Coast                                                            up to £50K
Keen to combine systems development & actuarial analysis? Exceptional               Chance to move out of pensions or life. Due to expansion this major GI insurer
project & client-based roles with a mix of valuations, calculations, database       needs pricing & reserving analysts with min 2 yrs UK actuarial exp. in any
design & systems development. You’ll need to have strong Excel & actuarial          sector. Duties are personal lines pricing & reserving for motor, travel & health.
skills plus knowledge of either life or pensions insurance products. Ref:1155       Strong Excel + exam progress essntl. Full training offered. Ref:1161

Financial / Capital Modelling – GI or Life                                          Life Solvency
East Anglia / London                                              £60-100K+         London                                                                    £50-90K
Join this world-leader & specialise in financial risk modelling work – capital      Key solvency / ICA role at blue chip life protection insurer. You’ll manage & validate
models, ICA & Solvency 2. Suit an individual with 4+ yrs GI or life actuarial       model office work & help develop the ICA. Also you’ll assess new business
experience who’d relish an interesting role with technical challenge &              profitability & assist with FSA returns. Knowledge of UK life reporting or risk
solvency 2 involvement. X-training into GI offered if you have a strong             management needed. Suit actuary seeking next upward move. Ref:1162
financial modelling background & good interpersonal skills. Ref:1156

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

             w w w. a c t u a l s e a r c h . c o . u k                         
The Actuarial Recruitment Company

 Financial Services Provider                                                                                                Actuary
 London                                                                                Attractive base salary plus excellent benefits

  Our Client, is a rapidly growing Financial Services provider and a market leader in the UK wrap sector with more than
  £9.5 billion under administration.
  The Role, is a unique opportunity to help set up and develop the Actuarial function. Reporting to the Chief Actuary,
  initially you will be responsible for:

        • Delivering all aspects of reserving and EV modelling / reporting
        • Delivering all actuarial inputs for capital modelling, from ICA and ICAAP through to Solvency II and ORSA
        • Implementing, developing and overseeing processes for:
            o reserving functions to meet FSA and auditory requirements
            o risk management
        • Leading the development of ORSA modelling
  The Successful Candidate, will be a recently qualified actuary with a life background and excellent communication
  skills with the ability to discuss complex issues at senior management level.

  For more detailed information, or a confidential discussion,
  please contact Chris Cannon on +44 (0) 7711 228449
  or email

                                                         General Insurance

Group Chief Actuary                                      London                                                                £200k plus
Group Chief Actuary role within a global business with oversight of all actuarial functions. Ref: ARC25140
ERM Actuary                                                Zurich                                                        CircaCHF200K
Reporting into the CRO of a reinsurance business this risk role is open to capital or pricing actuaries. Ref: ARC25200

SII Actuary                                               London                                                                 To £80K
Nearly/Newly qualified needed for capital, SII, reinsurance, planning involvement across multiple platforms. Ref: ARC25180

Capital Analyst                                        London                                                                  Circa £40K
Good interpersonal skills and strong academics needed for this London Market capital role. Ref: ARC25060

Pricing & Reserving                                      London                                                                Circa £85K
Pricing and reserving involvement across multiple business lines open to nearly/newly qualifieds. Ref: ARC24880

Pricing Analyst                                             London                                                           £Competitive
Junior role supporting a range of activities and business lines within large broking actuarial team. Ref: ARC25202

Reserving & Capital                                      London                                                                  To £70K
Reserving and capital modelling involvement for senior actuarial student within large LM operation. Ref: ARC25203

Consultants                                                London                                                            £Competitive
Very different consulting opportunity in niche specialist business. High calibre individuals required. Ref: ARC25201

Call us anytime including evenings and weekends on 020 7717 9705 or
                                                                                        A fresh approach

Global opportunities and trusted advice from experienced actuaries

 Large International Insurer                                                                                             Corporate Actuary
 London                                                                                        Significant base salary plus excellent benefits

 Our Client, is a large international insurance group with operations in all developed insurance markets around the globe
 and a very strong presence in the UK and Europe, with large books of both Commercial and Personal Lines.
 The Role, is for the position of Corporate Actuary for the UK Commercial business and reports directly into the Chief
 Actuary. The roleholder will lead a team and have responsibility for managing the reserving process and communicating results
 trends for one of the largest commercial books of business in the UK. There will be a significant amount of communication,
 influence and sharing business insight with key stakeholders on matters relating to reserving, business decision making and
 performance monitoring.Support with relocation will be available where appropriate.
 The Successful Candidate, will be a qualified actuary with a significant amount of experience in providing advice to
 senior management. In addition to the assumed technical skills, strong leadership, communication and interpersonal skills
 will be essential to succeed in this position. The successful candidate may currently be working within the market or may
 currently be working within consultancy and be looking to make the move into a leadership position within a dynamic team.
 They will be both a top class leader and manager, and be seeking a senior role within a multinational insurer.

 For more detailed information, or a confidential discussion,
 please contact Roger Massey on +44(0)781 398 9016
 or e-mail
 Any cvs sent to The Client, either directly or through another agency will be forwarded to The ARC

 Senior Pricing Actuaries wanted

                                                                                                                                                 The Actuarial Recruitment Company is an employment agency
 London                                                                                        Significant base salary plus excellent benefits

 Our Client, The ACE Group is a large and successful international insurance/reinsurance company with operations in
 50 countries. In 2009 the Group had GWP of more than $19 billion worldwide. Of this, ACE European Group (AEG)
 underwrote $2.5 billion through both the company market in the UK and Europe and through Lloyd’s. AEG is itself part of
 ACE Overseas Group (AOG) which covers all ACE business outside North America. The actuarial team in London is split into
 three dedicated teams: reserving, risk management and capital modelling, and pricing.
 The Role, There are 3 senior insurance pricing roles available - one focused predominantly on Financial Lines, one on
 Casualty business and the third on Property. Whilst part of the AEG actuarial team, ACE adopts a matrix reporting structure
 and the roles will have reporting responsibilities to both actuarial and the AOG lead underwriters.
 The Successful Candidate, Prior commercial pricing experience is essential for these senior positions and whilst there
 will be support from a central pricing resource, the role holders will need to be hands-on and have strong technical skills.
 Due to the high level of interaction with senior underwriters and senior management, strong interpersonal and influencing
 skills will also be needed.

 For more detailed information, or a confidential discussion,
 please contact Roger Massey on +44(0)781 398 9016
 or e-mail
 Any cvs sent to The Client, either directly or through another agency will be forwarded to The ARC

GI                                                            Andy Clark BSc FIA                      0781 333 7891
Life, Pensions, Investment and Graduate                       Chris Cannon BA                         0771 122 8449
All other enquiries                                           Roger Massey BSc MBA FIA                0781 398 9016
                                                                    General Insurance

Actuarial Director                                 Jamie Howard                    Deputy Chief Actuary                                     Rick Davis
London                                     £150,000 + Bonus + Bens                 London                                    £150,000 + Bonus + Bens
Actuarial Director required for world leading multinational. Scope of role is      Outstanding business leadership opportunity within a top London Market
managing a large team of actuaries in commercial lines – both large scale          insurer. While managing a large team, you will work closely with senior
and SME risks. You are required to have general insurance experience and be        underwriters and have a high degree of influence on business strategy. Team
a qualified actuary. Management experience preferred.                              management experience is essential. Pricing skills are preferred.

Senior Pricing Manager x 2                          Jamie Howard                   Capital Actuary                                         Rick Davis
London or North of England £110,000 + Bonus + Bens                                 London                                      £90,000 + Bonus + Bens
Superb Pricing Manager opportunities for experienced actuaries looking for         A leading London Market insurer requires a qualified Capital Actuary due to
responsibility of a high GWP portfolio and to manage a team of actuaries.          team growth. You will hold a high profile role in the business, taking a lead
Must be from a general insurance background and be a qualified actuary or          role in the development of the Capital Model and working closely with
statistical specialist. Flexible location and great financial incentive.           senior management on business planning and strategy issues.

Senior Manager                                        Phu Le-Ngoc                  Head of Reserving                                   Diane Lockley
Germany                                    €100,000 + Bonus + Bens                 Dublin                                   £Excellent + Bonus + Bens
Exciting opportunity: you will manage and lead a small team. Main areas of         Are you looking to work for a leading insurance company with a huge
involvement include Solvency II, Capital Modelling and business develop-           European presence? A senior opportunity has arisen to head up the reserv-
ment. Extensive network in the German market desired. Prior consulting             ing team for the Irish domestic business and for Europe this role will work
experience is a plus.                                                              closely with all management, finance & underwriting. Apply now.

Reinsurance Manager                                Jonny Plews                     Nearly / Newly Qualified                              Jonny Plews
London                                       £85,000 + Bonus + Bens                London                                      £80,000 + Bonus + Bens
London market insurer seeks a nearly/newly qualified actuary to manage             Calling all nearly/newly qualifieds, there couldn’t be a better time to find a
the reinsurance function. You will lead all aspects of reinsurance buying and      new job. Candidates are so rare right now that companies are willing to be
you will analyse the capital model to evaluate potential investment options.       very flexible on their requirements. So whatever your non-life background
Very commercial role needing technical skills too.                                 we will have a number of roles to discuss with you.

Syndicate Actuary                                         Rick Davis               Student Actuary Vacancies                             Jonny Plews
London                                       £60,000 + Bonus + Bens                London                                      £55,000 + Bonus + Bens
Lloyd’s Syndicate requires a nearly qualified actuary. Reporting to the Chief      The London Market is currently short of Student Actuaries across all
Actuary you will gain experience in a broad role involving Pricing, Reserving      disciplines. If you have a strong academic background, at least 18 months
and Capital duties. You will also mentor junior staff. 2 – 4 years GI experience   experience in an actuarial role (GI preferable but not essential) and wish to
in a consultancy or company role is essential.                                     make a career for yourself in the London Market, please contact us.

Solvency II Actuary                                  Gary Rushton                  Solvency II Actuary                                 Rob Bentham
London | 6 Months                                     Up to £1000/day              London | 6 Months                                    Up to £1000/day

ReMetrica Specialist                                 Rob Bentham                   Pricing Actuary                                     Gary Rushton
London | 6 Months                                     Up to £1000/day              London | 6 Months                                     Up to £800/day

Capital Actuary                                            Ik Onyiah               Igloo Specialist                                    Gary Rushton
Watford | 6 Months                                        Up to £700/day           London | 6 Months                                     Up to £600/day

                                General                                                                       International
Jonny Plews                                                0207 649 9467           Diane Lockley                                      +353 (0)1 685 2413                                             
Rick Davis                                                 0207 649 9353           Emma Gilbert                                    +41 (0)43 508 0509                                                                          0207 310 8782
Jamie Howard                                               0207 310 8725           Phu Le-Ngoc                                      +49 (0)892 206 1068                                                                       0207 649 8643

                                                                                 Ireland          |    Continental Europe |                            UK

                                                       Life Insurance & Investments

Chief Actuary                                           Clare Nash                Head of Group Actuarial                             Emma Gilbert
London                                    £165,000 + Bonus + Bens                 Munich, Germany                           €160,000 + Bonus + Bens
I am working exclusively on behalf of my high profile client who seeks an         An exceptional opportunity to manage and lead the team of 12 actuaries,
experienced indivudual to lead an industry leading team. You will have a          overseeing around 70 different business units. You should have a strong
sound technical background and a deep understanding of the Life market. A         focus on IFRS or Product Development and extensive knowledge of MCEV
challenging and rewarding position.                                               and EV. German language is not required but communication skills are key.

Capital Model Review Lead                              Harriet Hall               Life Modelling Manager                                Harriet Hall
London                                    £110,000 + Bonus + Bens                 London                                    £100,000 + Bonus + Bens
My client is looking for an accomplished actuary with extensive capital           A leading risk software provider is looking for a systems/modelling actuary
modelling experience. This is a strategic role where you will gain a unique       with S2 experience to lead a small team of life actuaries. An ability to
overview of the market. Perfect opportunity to be at the leading edge of          communicate complex ideas to a wide range of audiences is crucial. A
capital models and gain extensive exposure to senior management.                  unique opportunity within a growing brand.

Solvency II Actuary                             Patrick Flanagan                  Corporate Development Manager      Clare Nash
South East                                £100,000 + Bonus + Bens                 London                     £95,000 + Bonus + Bens
I am working on a number of roles with a key focus on Solvency II. These          A unique opportunity has arisen within a presitigious name in the market;
roles would suit ambitious individuals either side of qualification. Excellent    my client seeks a driven professional to further develop a growing team. You
opportunity to get unique exposure to the cutting edge work of SII while          will be heavily involved in SII, Capital management as well as other cutting
maintaining a permanent career. Apply now for immediate consideration.            edge projects on an international scale. Newly qual to 5 yrs PQE.

Chief Risk Officer                                  Diane Lockley                 Senior Actuary                                        Phu Le-Ngoc
Dublin                                    €100,000 + Bonus + Bens                 Germany                                     €80,000 + Bonus + Bens
Reporting into the CEO, this Dublin based life & non life insurance business      You will introduce Solvency II (Internal/Standard Models) into subsidiaries of
is seeking a Risk Director who is ideally an actuary with post qualification      a large insurer, and will develop, perform and interpret Economic Risk
experience and skills in Risk managemnet strategy, risk appetite frameworks       Capital calculations. Experience with modelling software tools and good
and Solvency II. Please call for more details.                                    project management experience would be a plus.

Longevity Pricing Actuary                     Patrick Flanagan                    Pricing / Product Development                           Clare Nash
London                                      £85,000 + Bonus + Bens                London / South East                         £75,000 + Bonus + Bens
Interested in joining a niche and growing Life company? You will be dealing       Are you seeking your next commercial opportunity within a household
with reinsurers, hedging risk, providing long term assumptions. Looking at        name? Offering unrivalled career progression, my client seeks a
demographic risks as well as mortality risks. New role and very project           nearly/newly qualified actuary who wishes to excel in a commercial capacity.
based. Great opportunity to gain unrivalled and sought after experience.          Similar experience highly sought after. Please call to find out more.

Capital Actuary                                     Rob Bentham                   Solvency II Actuary                                 Gary Rushton
London | 4 - 6 Months                                Up to £1000/day              Midlands | 6 - 12 Months                             Up to £1000/day

Prophet Developer                                   Rob Bentham                   SII Actuary - Methodology                               Ik Onyiah
South West | 6 - 12 Months                            Up to £900/day              Edinburgh/Bristol | 6 Months                           Up to £900/day

SII – Internal Model Development                         Ik Onyiah                Reporting Actuary                                        Ik Onyiah
Edinburgh/London | 9 Months                             Up to £900/day            Midlands | 6 Months                                     Up to £700/day

                                   Life                                                                         Contracts
Clare Nash                                               0207 649 9350            Gary Rushton                                             0207 310 8793                                             
Patrick Flanagan                                         0207 649 9355            Ik Onyiah                                                0207 310 8785                                       
Harriet Hall                                             0207 310 8783            Rob Bentham                                              0207 649 9351                                           
   This year, make the
   world your oyster

London Tel +44 20 3189 2900
Dublin Tel +353 1 6099 400
Sydney Tel +61 2 9262 1612
Hong Kong Tel +852 3051 9809

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