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The Actuary April 2011

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					                                                Published in London by the Staple Inn Actuarial Society




                    The
www.the-actuary.org.uk
                          Actuary
                           THE MAGAZINE FOR THE ACTUARIAL PROFESSION                                      April 2011




                                                                     Hit for six
                                               What actuaries can learn from
                                                         the world of cricket




   Plus:
   The rise of
   the aggregators




Inside: A-list apps • Baroness Greengross Q&A • Insurance pricing • Apostrophe risk • Latest jobs
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                                                                                       Editorial
See page 5 for the editorial team
Incisive Financial Publishing
32-34 Broadwick Street,
London W1A 2HG
T +44 (0)20 7316 9000

Publisher/display sales
Philip Harding
T +44 (0)20 7316 9393
E philip.harding@incisivemedia.com
                                                                                                                  April 2011
Managing editor
Sharon Maguire



                                                 Testing times
T +44 (0)20 7316 9016
E sharon.maguire@incisivemedia.com

Recruitment sales manager
Melanie Jacob
T +44 (0)20 7316 9618
E melanie.jacob@incisivemedia.com                The first quarter of 2011 is behind us and, while year-end financial
                                                 reporting has gone into hibernation, actuarial students are ‘all hands to
Recruitment sales executive
Satvir Kaur                                      the pump’ for the upcoming exam season. It has been an eventful quarter
T +44 (0)20 7316 9868                            with severe natural disasters in Queensland, Australia, New Zealand and
E satvir.kaur@incisivemedia.com
                                                 Japan. The loss of lives has been incredibly humbling but I am once again
Designer                                         heartened to see the solidarity of fellow human beings in these situations,
Nicky Brown
                                                 despite political unrest stealing the headlines elsewhere in the world.
Sub-editor
Sam Robson
                                                   In the realm of insurance, the results from the fifth Solvency II
Production manager                               quantitative impact study emerged, indicating a near 70% participation
Matt Parle
T +44 (0)20 7316 9766                            rate by European insurers. It appears that the industry remains sufficiently
E matt.parle@incisivemedia.com                   well capitalised and that, currently, only 15% of insurers would fail to
Group editor-in-chief                            meet the minimum requirements.
Anthony Gould

Group publishing director                          Insurers were also getting to grips with the gender discrimination ruling
Mark Burton                                      from the European Court of Justice, which could also signal changes for
Print and distribution                           the pensions world at a later date. Meanwhile, Lord Hutton’s plans to
Benham Goodhead Print Ltd, Oxon                  move public sector pensions from a final salary to a career-average basis
Subscriptions                                    were generally well received by the industry, if not by the trade unions.
For subscriptions from outside
the actuarial profession: UK, Eire
                                                 In the wider economy, the Federal Reserve, European Central Bank and
and Europe: £50 a year/£5 a copy.                the Bank of England kept interest rates unchanged in March, but there is
For the rest of the world: £75 a
year/£7.50 a copy.
                                                 ongoing speculation about how long that will continue.
Please contact: Alison Jiggins
The Actuarial Profession,
Staple Inn, High Holborn,
                                                   In Profession news, the Council is leading a review of the strategy for the
London WC1V 2QT                                  UK Actuarial Profession and will be organising various ways for members
T +44 (0)20 7632 2100
E alison.jiggins@actuaries.org.uk
                                                 to contribute to the strategy development over the next few months —
                                                 visit www.actuaries.org.uk to stay informed.
Students on actuarial science courses
at universities may join the Staple
Inn Actuarial Society for £6 a year.                We continue to seek your input on the content
They will receive The Actuary as
part of their membership. Apply to:              you would like to read about in our new technology
Membership Department,                           column and on other pages. We also welcome your
The Actuarial Profession,
Maclaurin House, 18 Dublin Street,               views in the form of letters to the editor, which
Edinburgh EH1 3PP.                               I am reminded are among the most interesting
T +44 (0)131 240 1325
E membership@actuaries.org.uk                    missives in a professional publication.
Changes of address should be
made known to the membership                       Finally, the editorial team would like to
department as above.                             give its thanks to James Monk who steps down
For delivery queries please contact:             from the features team this month.
Kim Ferrara
E kim.ferrara@incisivemedia.com

Internet
                                                 Marjorie Ngwenya
The Actuary website:                             Editor
www.the-actuary.org.uk
SIAS website: www.sias.org.uk                    editor@the-actuary.org.uk
Actuarial Profession website:
www.actuaries.org.uk


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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,
                                                                                                        Contents                                    April 2011
Chris Sutton, Sherdin Omar

Editor
Marjorie Ngwenya
                                                                                                             News
                                                               p34
E editor@the-actuary.org.uk
T +44 (0)7794 031 225
Features editor
                                       Hit for six                                                           12   Profession news
Tracey Brown                           Test purists grumble                                                  16   Industry news
Lane Clark & Peacock LLP,              about the rise of
E features@the-actuary.org.uk                                                                                18   People/society news
T +44 (0)20 7432 3071                  limited-overs cricket,                                                20   SIAS events
Deputy features editors                but could actuarial life tables                                       44   Appointments and moves
Adam Jorna
Sonal Shah                             do with a similar makeover,
E features@the-actuary.org.uk          asks Greg Becker                                                      Comment
Profession news editor
Michael Scanlan                                                                                              3 Editorial
E michael.scanlan@actuaries.org.uk
T +44 (0)20 7632 1453                                                                                             Marjorie Ngwenya on these testing times
Industry news editor
Terren Friend
E news@the-actuary.org.uk
                                                                                                             6 Letters
People/society news editor                                                                                        In which actuaries question equality and mortality
Kelvin Chamunorwa
Towers Watson
E social@the-actuary.org.uk
T +44 (0)7502 107 322
Student page editor
                                       Features                                                              8 President’s comment
                                                                                                                  Ronnie Bowie looks at the way the Profession
                                                                                                                  can flourish within the public domain
Stephen Paines
Government Actuary’s Department
                                       22      Research: Walking a nomadic path
E studentpage@the-actuary.org.uk               Kelly Rendek offers an insight into her year in Mongolia
T +44 (0)20 7211 2707                          with a microinsurance development project
                                                                                                             10 Soapbox
Arts page editor                                                                                                  Richard Fitzherbert asks whether we should
Richard Elliott
Scottish Life                          24      Insurance: Running on empty                                        make history studies compulsory as part of an
E arts@the-actuary.org.uk
                                               George Maher, Andy Staudt and Ryan Warren analyse                  actuarial education
T +44 (0)7814 509 081
Puzzles editor                                 the impact of motor insurance aggregators
Tom Bratcher                                                                                                 43 Book review
Towers Watson
E puzzles@the-actuary.org.uk           28      Insurance: Unfair trading?                                         Andrew Smith reviews The Immortalization
                                               The OFT’s proposal to restrict insurers’ access to market          Commission by John Gray
Published by the Staple Inn
Actuarial Society.                             pricing information is flawed, says Jan Iwanik
                                                                                                             Regulars
The editor, The Institute and
Faculty of Actuaries and Staple        29      Insurance: Cheap at half the price?                           38 Technology
Inn Actuarial Society are not                  Andrew Maclaren looks at float-based valuations                    The best apps for actuaries
responsible for the opinions put
forward in The Actuary. No part of
this publication may be reproduced,    30      Q&A: Baroness Greengross                                      39 Arts
stored or transmitted in any form
or by any means, electronic,                   Marjorie Ngwenya talks to Baroness Greengross about the            Richard Elliott argues that small really is beautiful
mechanical, photocopying, recording            issue of ageing and her links with the actuarial profession
or otherwise, without prior written
permission of the copyright owners.                                                                          40 Puzzles
While every effort is made to
ensure the accuracy of the content,
                                       32      Modelling/Life: H1N1 — The swine who?                              Win a £50 Amazon voucher in our prize puzzle
the publisher and its contributors             Dan Knipe explores what information can be found on
accept no responsibility for any
                                               the impact of swine flu on deaths in the UK population        42 Student page
material contained herein.
                                                                                                                  Stephen Paines applies a familiar testing
Important information for
contributors to The Actuary
                                       33      Elegant English: Apostrophe catastrophe                            subject — to another familiar subject
By submitting content for                      Sonal Shah puts the apostrophe in its rightful place
publication you confirm that:                                                                                43 Actuary of the future
(a) You (and/or other named
contributors) are the sole author(s)   36      International: Out of Africa                                       Priya Mistry of Towers Watson
of the content submitted;
(b) The content you submit is                  Marjorie Ngwenya and Sundeep Raichura report on the
original and has not previously                opportunities and challenges facing actuaries in Kenya
been published (unless you
specifically advise us to the                                                                                         WRITER OF THE MONTH
contrary);
(c) You haven’t previously licensed
the use of the content you submit;           MORE CONTENT ONLINE                                                     Jan Iwanik is the editorial team’s choice
(d) So far as you are aware,                                                                                         for April for his article on market pricing
the content submitted will not              ■ Life insurance: A better way? by Nick Rendle                           information, and receives a £50
infringe any third-party rights, be
defamatory or in any way illegal.           www.the-actuary.org.uk/875477                                            book token
© SIAS April 2011
                                            ■ Insurance: Part VII transfers by Bruno Geiringer                       courtesy of:
All rights reserved                         www.the-actuary.org.uk/875483
ISSN 0960-457X



www.the-actuary.org.uk                                                                                                                                     April 2011     5
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Letters to the editor
In which actuaries question equality and mortality

                                                                                                               YOUR LETTERS
                                                     A question of mortality                                 The editorial team welcomes readers’
                                                     I see that in Richard Plat’s article on                 letters but reserves the right to edit
                                                     mortality trend that the graph of model                 them for publication. Please email
                                                     outcomes shows Dutch male 65 year-olds                  actuaryletters@incisivemedia.com.
                                                     may expect to enjoy lighter mortality than              The deadline for receiving letters for the
     Alphabetical discrimination                     Dutch female 65 year-olds by the middle of              May issue is 15 April 2011.
     I am currently scrutinising a research          the 21st century.
     sessional meeting paper on insurance               This biologically questionable outcome
     accounting, which is to be presented at         illustrates once again that reliance on a           Forward features
                                                                                                         in The Actuary
     Staple Inn on 11 April and in Edinburgh         single model remains an outstanding risk
     on 11 May.                                      in mortality, as in many other areas.
        The first thing I noticed was that the last     Gavin Jones
     of the 13 authors listed alphabetically was       25 February 2011                                  The Actuary’s team welcomes contributions
     J S K Straker. This surprised me a little and                                                       from members or contacts in and around
     I checked the authors of the other three        More equal than others                              the profession.
     sessional meeting papers I have read this       I note the article ‘More equal than others’           Below is a list of themes for the next
     session and found that if all 26 were to be     by Guy Thomas in the March issue of                 few months along with the deadline for
     listed alphabetically Mr Straker would still    The Actuary. I cannot agree with his final           submission. If you would like to contribute,
     be the last.                                    sentence: “Is there a limit to the number           please contact Tracey Brown at
        Is someone selecting volunteers              of times that a creditable profession can           features@the-actuary.org.uk with
     from lists prepared alphabetically?             cry wolf?”                                          suggestions.
     Incidentally, I find the practice in these          I would say that actuaries have not been           For a full list of 2011 issue themes,
     papers of listing authors (other than           unduly pessimistic, in fact just the reverse,       visit www.the-actuary.org.uk/875190
     the chairmen of working parties) and            especially after various mis-selling scandals.
     acknowledgements in alphabetical                  Anthony Pepper
     order offensive; they should be listed in         6 March 2011                                      June 2011 (Published 26 May, editorial
     order of size of contribution and,                                                                  deadline 15 April, advertising deadline
     failing that, randomly.                                                                             10 May)
        If anyone thinks that I am making a                                                              ■ Solvency II
     mountain out of a molehill, they may care                                                           ■ Risk management
     to consider the list of UK prime ministers                                                          ■ Careers/CPD training
     since 1902. From the later part of the
     alphabet we have Mrs Thatcher and                                                                   July 2011 (Published 30 June, editorial
     Harold Wilson. By contrast, 11 (over half                                                           deadline 13 May, advertising deadline
     the total) comprise two As, four Bs and                                                             14 June)
     five Cs. Of the balance there are one                                                                ■ Careers: working overseas
     each of D, E, G, H and L and three MAs.                                                             ■ General insurance
     I have carried out a similar analysis of                                                            ■ Pensions
     US presidents and Australian prime
     ministers and can find no alphabetical                                                               August 2011 (Published 28 July, editorial
     bias. Can anyone explain what the                                                                   deadline 17 June, advertising deadline
     Americans and Australians have                                                                      12 July)
     done differently?                                                                                   ■ Investment
       P W Wright                                    More letters online at www.the-actuary.org.uk/      ■ Life
       1 March 2011                                  category/comment/letters                            ■ Careers: work/life balance




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6      April 2011                                                                                                                     www.the-actuary.org.uk
From Complexity to Clarity.




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    President’s comment           Ronnie Bowie




     Ronnie Bowie looks at the way the Profession can flourish
     within the public domain



     Green shoots
     In the northern hemisphere, spring is a         not only draw attention to the work being       proactive approach to media relations,
     time to look forward to new growth. In the      done by our members (including the three        we are seeking to anticipate relevant news
     garden ‘hardy annuals’ begin to blossom         new longevity projects we are funding), but     events and issue statements from the
     and bulbs planted in the previous months        also to other advances that are being made      Profession in a more timely fashion when
     begin to emerge.                                outside the profession and across the world.    this is appropriate.
        We are seeing some similar encouraging       The first Bulletin is about to be published         A recent example of this approach has
     spring-like signs within our profession, too.   and will include a diverse range of topics      been our response to the judgment of
     Readers will be aware that we have been         including a comparison of international         the European Court of Justice on gender
     ramping up our efforts in research and in       forecasts and a research piece that suggests    discrimination, when we issued a very
     public affairs. The purpose of the former is    that the ‘speed of walking’ is one of the       prompt news release quantifying the
     to advance the thinking in actuarial science    most reliable indicators of future longevity    potential impact. We were able to do this
     and the purpose of the latter is to build       among the over 65s. In time this Bulletin       because we planned ahead and because
     our influence, in the public interest, using     should help establish the Institute and         volunteers were able and willing to produce
     material that is well researched and well       Faculty of Actuaries as the ‘go to’ place for   the numbers in advance so that the
     evidenced. We have an increasingly strong       the best thinking in longevity studies.         release was both timely and effective in
     set of examples of early progress.
        Our research project on discount rates       » We have had actuaries                         demonstrating an evidence-based approach.
                                                                                                        In response we had radio and
     is due to be completed by the end of June.      appearing in the media                          television interviews and good press
     We have already seen the interim paper
     by the discount rate steering committee
                                                     on proposed reforms                             coverage. The theme was that it seemed
                                                                                                     an odd definition of ‘fairness’ which did
     proposing a framework for the uses of           to the UK state pension                         not charge according to clear evidence
     discount rates and for the language we use      system and on public                            of risk. However, the good news for
     to describe them. We will seek to put our
     final conclusions into the public domain,
                                                     sector reform          «                        consumers was that the insurance industry
                                                                                                     was resourceful and would find new ways
     as helping actuaries and users of actuarial        Our General Insurance community              of making sure that risk and cost were as
     services converse more effectively using        has an excellent tradition of research          well aligned as possible.
     common language was one of the key              projects. Most recently, our working party         We have also had actuaries appearing
     objectives. We intend that this should be a     on third-party motor insurance produced         in the media on proposed reforms to the
     sustained effort to be of mutual benefit to      an excellent report and gave evidence to        UK state pension system and on public
     all involved.                                   the House of Commons Transport Select           sector reform.
        The Profession’s journals are being          Committee, which was well received.                As we build our research programme
     re-launched in partnership with                    One aspect of the Working Party’s            and align it with emerging issues of public
     Cambridge University Press (CUP), a major       report was evidence which linked the            interest, we will have an increasing
     international academic publisher, to give       rapidly rising cost of settling personal        number of opportunities to build the
     them a higher profile. There is so much          injury claims to the growing influence of        profile and influence of actuaries and their
     good research work going on within our          claims management companies. Partly             professional body.
     profession, it deserves the best possible       as a result of our evidence, the Select            As experienced gardeners will know,
     showcase. Annals of Actuarial Science           Committee is now calling for much               a few green shoots in spring does not,
     volume 5, part 1 was the first issue to be       greater transparency in the various             however, guarantee a beautiful garden in
     published with CUP and British Actuarial        referral fees so that the public can better     summer. There is still much work to be
     Journal volume 16, part 1 is following on.      understand who is gaining what from             done but we are on the right track towards
     The Profession also collaborates with CUP       whom in this process. It seems to me            making the actuarial voice heard in the
     on the International Series on Actuarial        that this is an excellent example of our        public interest.
     Science, a series of authoritative textbooks.   influence in the public interest.
        We are about to publish a new                   Inevitably, the media are integral to our    Ronnie Bowie is the president of the Institute and
     six-monthly Longevity Bulletin. This will       success in public affairs. As part of a more    Faculty of Actuaries



8      April 2011                                                                                                                        www.the-actuary.org.uk
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 Soapbox                      Richard Fitzherbert




     Richard Fitzherbert asks whether we should make history studies
     compulsory as part of an actuarial education



     Preparation is the best defence
     In 2009 my attention was drawn to the          economic historians and economists such         If something does not fit the data, it seems
     Queen’s challenge to the economists            as JK Galbraith, is that the recollection       natural for actuaries to improve a model by
     of this world — why had so few of them         of events such as the Wall Street crash         adding a more sophisticated mathematical
     seen the global financial crisis coming?        of 1929, or the collapse of Long-Term           feature. The issue of causation versus
     In reading one of the replies, written         Capital Management helps prevent their          correlation is largely ignored, but causation
     by Geoffrey Hodgson and several other          recurrence. To quote from the preface of        is of vital importance in the investment
     economists (dated 10 August 2009),             the 1975 reprint of Galbraith’s classic text,   field when dealing with such issues as
     I could not help wondering if exactly the      The Great Crash 1929: “The story of the         long-term rates of return when markets are
     same criticism could not be levelled at        boom and crash of 1929 is worth telling         significantly mispriced.
     the actuarial profession and a significant      for its own sake. Great drama joined in             There now seems to be a majority belief
     part of its education system. They wrote:      those months with a luminous insanity.          in the existence of an equity premium


                                                                            » If we wish to have
     “We believe the narrow training of             But there is a more                                                     caused by risk-averse
     economists — which concentrates on             sombre purpose.                                                         investor behaviour,
     mathematical techniques and the building
     of uncontrolled formal models — has
                                                    As a protection
                                                    against financial
                                                                            actuaries in senior roles,                      which has partially
                                                                                                                            replaced an older
     been a major reason for the failure of our     illusion or insanity,   should we not hope that                         belief — very
     profession. This defect is enhanced by the     memory is far           those who reach such                            prevalent when

                                                                            seniority are able to play
     pursuit of mathematical technique for          better than law.                                                        I was completing
     its own sake in many leading academic          When the history                                                        my last FIA exam in
     journals and departments of economics.         of the 1929 disaster    a preventative role when                        1973 — that equities
        “There is a species of judgment,            failed, law and
                                                                            the next speculative                            are a hedge against
     attainable through immersion in a
     literature or a history, that cannot be
                                                    regulation no
                                                    longer sufficed.         bubble is upon us?                «             inflation. Both of
                                                                                                                            these propositions
     adequately expressed in formal models.”        For protecting people                                                   were never more than
        It does seem to be accepted that            from the cupidity of others and their own,      historical regularities because the causal
     actuaries need relevant experience.            history is highly utilitarian. It sustains      links are questionable and, in consequence,
     Events such as the Wall Street crash of        memory and memory serves the same               they are dangerous assumptions to factor
     1929 and the global financial crisis of         purpose as [regulation] and, on the record,     into mathematical models.
     2008 do not happen every few years             is far more effective.”                             Has the danger of reliance on
     but, when they do, their impact on the             If we wish to have actuaries in senior      mathematical models in investment
     profession’s clients is huge. If we wish       roles, should we not hope that those            and finance (which tend to be based on
     to turn out a crop of trained actuaries        who reach such seniority are able to            regularities) not been demonstrated?
     every year, with some experience of            play a preventative role when the next          Do we not need a major compulsory study
     these events, we cannot delay their final       speculative bubble is upon us? Would the        of investment history to help anticipate
     exams until they have been through             study of such episodes not enhance the          future financial disasters?
     the next bubble, so learning from history      public value of the profession?
     is the only practicable alternative.               A third point, which goes beyond            Richard Fitzherbert is a retired investment actuary,
     Also, historical crashes have been different   investment topics, is the nature of             currently an honorary fellow at The University of
     and a broad historical study increases the     historical study itself that tends to ask       Melbourne
     likelihood (over actual experience) that       why something happened, not just what
     the next bubble has similar characteristics    and when. In What is History?,
     to something seen before. Would a broad        EH Carr wrote “history is the study
     study of such events not prepare actuaries     of causes”. With its emphasis
     better for the next one?                       on probability, mathematics and
        A second reason for including history in    statistics, actuarial modelling
     any study of capital markets, as argued by     tends to be based on correlations.



10      April 2011                                                                                                                        www.the-actuary.org.uk
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                   Hartford | New York | London | Dublin | Cologne
 News                          Profession




     Profession publishes whistleblowing guides Council election and
     If you suspected something was seriously wrong, what would you do?                                     constituency voting
                                                                                                            All members were recently sent an email
                                                     find that working through the checklist                 with information about preparations
                                                     of questions set out within the guide will             for this year’s election to the Council of
                                                     help them in deciding whether they are                 the Institute and Faculty of Actuaries.
                                                     under an obligation to take action. The                In particular, the email explained the need
                                                     guide also points to sources of confidential            for members to keep their email addresses
                                                     advice — both inside and outside the                   up to date as the intention is to issue
                                                     Profession — which can help members                    ballot papers electronically for the first
                                                     think their way through any difficulties                time this year.
                                                     they may encounter.                                       Clarification was also given on which
                                                         Although the information within the                constituency members were in. At the time
                                                     guide will be of use to any actuary who                of merger, Institute members formed the
                                                     is faced with a whistleblowing dilemma,                General Constituency and Faculty
                                                     it is also intended to help raise members’             members formed the Scottish Constituency.
     As part of the Actuarial Profession’s           awareness of whistleblowing and remind                 Unless you have since contacted the
     commitment to helping its members               them of the different reporting obligations            Profession to ask to switch constituency,
     maintain the high professional standards        which may apply to them. If an actuary                 you will still be in your original
     associated with actuaries, this month sees      considers that he or she is under an                   constituency. A particularly important
     the Profession’s publication of two guides      obligation to make a report — whether to               time when the two constituencies come
     on the topical issue of whistleblowing.         their own employer, the Profession or an               into play is when voting in the Council
        The guides form one strand of a package      external regulator — they ought to find                 elections. Fellows, associates and honorary
     of support materials — also including the       the advice in the guide on the steps to take           fellows are allowed under the Bye-laws to
     development of case studies and the regular     particularly useful.                                   vote in these elections.
     provision of seminars on the subject —                                                                    You can only belong to one constituency
     produced by a working party established         Whistleblowing: A guide for                            and you can only vote in the elections
     by the Professional Regulation Executive        employers of actuaries                                 for the members of the Council for that
     Committee (PREC) of the Profession.             Alongside this guide for actuaries, the                constituency. Six members of the Council
        The Profession recognises that, from         Profession has also produced a guide                   representing the General Constituency and
     time to time, its members may be faced          aimed at employers of actuaries, which                 a further three members of the Council
     with difficult decisions about reporting         provides an overview of the obligations                representing the Scottish Constituency will
     certain matters which come to their             owed by members of the Profession.                     retire and, later this year, voting members
     attention. It is important that members         The Profession believes this guide is                  in both constituencies will be issued with
     feel able to cope with those situations         likely to be of particular use to smaller              ballot papers to vote for their constituency
     and report relevant information, when           actuarial firms, which may not have                     candidates to fill those vacancies.
     required. Ensuring that the Profession’s        specific whistleblowing policies in place,                 You do not need to do anything
     members, and those for whom they work,          or to organisations which employ a small               unless you want to switch constituency
     have the tools and support to deal with         number of actuaries and which are not                  and, for the Scottish Constituency, fulfil
     whistleblowing situations is not only of        familiar with the obligations all actuaries            the necessary criteria to move to that
     benefit to members and the Profession            are under to report certain matters to the             constituency. Contact the membership
     but, crucially, also helps to protect the       Profession or with the specific obligations             team membership@actuaries.org.uk only if
     public interest.                                falling on reserved role holders.                      you want to apply to switch constituencies.
                                                                                                            Members will be advised of the deadline
     Whistleblowing: a guide for                     Application                                            for switching constituencies in due course
     actuaries                                       Neither publication imposes any new                    so that an ‘electoral roll’ can be taken.
     The first of the two guides has been             obligations on actuaries. Rather it is                 Additionally, please remember to keep your
     drafted, as its title suggests, as a resource   hoped that these resources will help                   email address up to date.
     for members of the Profession when              the Profession’s members to navigate
     considering their obligations, both             their way through the complex and
     professional and statutory, to ‘blow the        difficult situations which may arise
     whistle’, that is to speak up or report         from time to time in their professional
     information in certain circumstances.           lives where speaking up or reporting
        The guide sets out the relevant legal        (blowing the whistle) may be necessary
     and professional expectations of actuaries.     in the public interest.
     Acknowledging that such situations are
     difficult and challenging, it contains           ‘Whistleblowing: a guide for actuaries’ and
     advice for any actuary faced with a             ‘Whistleblowing: a guide for employers of actuaries’
     whistleblowing dilemma. Actuaries who           are available to download from the Profession’s
     are faced with such a dilemma should            website www.actuaries.org.uk



12     April 2011                                                                                                                         www.the-actuary.org.uk
    Profession launches two new standards for pensions actuaries
    The Actuarial Profession has launched two            Compliance%20Review%20Pensions                     the Profession’s APSs, the BAS’s Pensions
    new Actuarial Profession Standards (APSs)               These new APSs mark a shift from a              TAS comes into effect on 1 April 2011, as
    for pensions actuaries:                              reliance on detailed rules, to                     seen at www.frc.org.uk/images/uploaded/
    ■ Version 1.0 of APS P1: Duties and                  principles-based ethical and professional          documents/Pensions%20TAS%20final%20
    Responsibilities of Pensions Actuaries               standards, and form part of the Actuarial          version.pdf
    which is effective on 1 April 2011 can be            Profession’s Guidance Note (GN)                       Consequently, the following BAS-
    found at www.actuaries.org.uk/                       Transitions Project. This cross-practice-area      adopted GNs are withdrawn from 31
    APS%20P1%20Duties%20and%20                           project is designed to replace Guidance            March 2011:
    Responsibilities%20of%20Pensions%20                  Notes containing ethical material, with            ■ GN9, GN21, GN26, GN34, GN36, GN49
    Actuaries, and                                       APSs which will complement the Board                  Further details on the phasing out of
    ■ Version 1.0 of APS P2: Compliance                  for Actuarial Standards’ (BAS) Technical           the BAS-adopted GNs can be found in the
    Review: Pensions, which replaces GN48                Actuarial Standards (TASs).                        following letter from the chair of the BAS to
    and sets out the circumstances in which                 As a result of the introduction of APS          the president of the Institute and Faculty of
    scheme actuaries are required to seek a              P1 and APS P2, the following APSs are              Actuaries dated 17 February 2011 at
    review of their work, is effective on 1 April        withdrawn from midnight 31 March 2011:             www.actuaries.org.uk/sites/all/files/documents/
    2011 and can be found at                             ■ GN29, GN48 and GN51                              pdf/20110217gn-transition-letter-ap-president.
    www.actuaries.org.uk/APS%20P2%20                        Coinciding with the introduction of             pdf



    Forthcoming conferences — save the date
    Health and care                                      Pensions conference                                Risk and investment
    conference                                           1–3 June, Southport                                conference
    18-20 May, The Grand                                 Theatre and Convention                             19-21 June, Hilton
    Hotel, Brighton                                      Centre, Southport                                  Newcastle, Gateshead
    The Health and care conference is the leading        The Pensions conference is one of the              The Risk and investment conference is the
    market event for insurance practitioners             premier professional events for                    premier conference for all actuaries working
    with an interest in the health protection            pensions actuaries with UK qualifications.          in finance and investment and enterprise
    industry. The conference will take a fresh           The programme includes a range of                  risk management, or those with an interest
    look at topical industry developments and            technical matters, softer skills and               in these areas. In a world where it is now
    outline the wide-ranging implications that           professionalism topics; it will also cover         abundantly clear that there is no such thing
    they will have on the critical illness, income       many wider issues affecting pensions.              as a risk-free investment, and where there
    protection, private medical insurance and            The agenda is focused on both the issues           are perhaps stronger headwinds than at any
    long-term care markets. The sessions will            of today and those that might shape the            time in living memory, equipping ourselves
    cover a range of technical topics looking at         future, covering ideas and insights across         to make those investment decisions is
    all aspects, such as risk selection, product         most aspects of pensions — all actuaries           more important than ever. During the
    design, pricing and claims management and            working in pensions should find plenty of           conference a range of high-profile speakers
    Solvency II. The conference is designed to           food for thought and opportunity for lively        will depict the economic, regulatory and
    appeal in particular to those involved in the        debate. The successful hot topics session will     environmental headwinds we face and
    control cycle including, pricing, product            return in 2011 and will include some of the        provide practical insights on investment and
    design, monitoring experience and claims             industry’s leading figures giving their take        risk to equip ourselves to manage and take
    management. It is our aim to inform and              on issues of the day.                              advantage of these.
    provoke discussion on current market topics,            The conference is open to all                      For further information, visit www.
                                   and attendance                                     professionals                                      actuaries.org.
                                   by insurers,                                       interested in                                      uk/events/
                                   reinsurers and                                     this sector, not                                   residential/risk-
                                   consultants                                        just actuaries                                     and-investment-
                                   would be                                           who work in                                        conference-2011
                                   valuable.                                          pensions.                                             For further
                                      For further                                         For further                                    information
                                   information, visit                                 information, visit                                 on all other
                                   www.actuaries.                                     www.actuaries.                                     forthcoming
                                   org.uk/                                            org.uk/                                            events, please
                                   events/residential/                                events/residential/                                visit
                                   health-and-care-                                   pensions-                                          www.actuaries.org.
                                   conference-2011-1                                  conference-2011                                    uk/events



www.the-actuary.org.uk                                                                                                                         April 2011     13
 News                          Profession




     Understanding and applying Technical Actuarial Standards (TASs)
     The Profession is currently looking at            practitioners or who work in firms where
     ways in which it can support members              there are few actuaries. Please send
     in their understanding and application            any suggestions to
     of the Technical Actuarial Standards              maria.singleton@actuaries.org.uk
     (TASs) produced by the Board for                     Some members may be aware that a
     Actuarial Standards (BAS). A number               TAS implementation working group of
     of events have already been held and a            the Association of Consulting Actuaries
     series of events in the coming months             (ACA) has produced some material on
     on implications of the TASs for                   ‘reserved work and its application to
     insurance actuaries, including some               pensions actuarial advice’ and ‘applying
     being held in conjunction with regional           TAS principles’. These documents, as
     societies, are planned for April and May.         well as the terms of reference for the
     Further details are available via the events      ACA’s working group that developed the
     calendar on the Profession’s website              material, are available via www.aca.org.uk/
     www.actuaries.org.uk/events                       aca-briefing_papers.html. Members may
        The Profession are keen to understand          find the material of use when
     what further support members would                considering applicability of, and
     welcome in relation to understanding and          compliance with, the TASs, although
     applying the TASs and is particularly keen        no endorsement of the material by the
     to hear from those members who are sole           Profession should be inferred.




     Getting to know the Profession’s disciplinary procedures
     Judith Goulden of the Actuarial Profession’s Disciplinary Panel explains how complaints are handled
     So you did something wrong, something             Complaint-handling                              similar adjudications. Lay people bring a
     incompetent, something unprofessional.            Where a complaint is received or even,          different perspective.
     Or perhaps you didn’t. Whatever the               proactively, where no complaint is
     merits may or may not be, someone —               received by the Profession but it               Confidence in the Profession
     a client, another actuary, a regulator —          considers it appropriate to do so in the        The rationale behind the new rules is
     has complained to your regulatory body.           interest of the public and/or the profession,   that the general public must have
        Effective enforcement and discipline           trained staff start an investigation under      confidence in the profession and that
     is a critical component of any framework          the direction of an investigation actuary.      processes that deal with allegations of
     that relies on standards. Following the           The member under investigation is               wrongdoing are dealt with robustly and
     Morris Review — a Treasury-commissioned           informed immediately.                           in a timely manner.
     report launched in May 2003, which                    In due course, a report is passed for          Any member of the Profession can be
     followed Lord Penrose’s investigation             determination by a separate adjudication        assured that the thread that runs through
     into Equitable Life and which highlighted         panel who meet in private. That panel           a disciplinary panel hearing is that of care.
     serious shortcomings in the actuarial             might either find no case to answer or           Everyone appointed to any particular
     profession — the Profession established new       it may sanction the member with that            disciplinary panel hearing is fully aware
     disciplinary arrangements from 1 January          member’s consent. Only the most serious         of the ‘there but for the grace of God’
     2004 that removed the administration              cases are referred to the disciplinary          syndrome. Anyone in a professional
     and management of the schemes from the            tribunal panel, which is advised by a           capacity can be accused of wrongdoing,
     control of the Councils (although by law          highly experienced lawyer on aspects of         whether justly or unjustly.
     the disciplinary process remains a function       law, but who has no input in the decision          If not thrown out by the adjudication
     of the professional body).                        of the panel.                                   panel as being a complaint made with
        The disciplinary arrangements removed              Disciplinary panels now comprise not        no merit, or if the adjudication panel
     from the Councils to the control of a             only members of your own profession             determines a sanction which is considered
     Disciplinary Board were extensive and             (providing that they have no conflicts of        unacceptable to the Respondent, it is for
     they explicitly excluded all members of the       interest) but also a lay member. A balance      the disciplinary panel to make a
     Faculty and the Institute’s Councils from any     is struck between those who do exactly the      determination and that determination is
     role in the formal disciplinary machinery,        same type of work as you and the wider          considered in great depth.
     provided management by an independently           public whose interests are served by the           It goes without saying that the papers
     chaired Disciplinary Board and introduced          lay member. The lay member is a person         are read with the greatest of care. Mine are
     lay participation at all stages of the process.   from a wholly different field, perhaps           usually covered in notes on points to raise
     This last provision had been specifically          with no formal knowledge of your own            with my professional colleagues. There are,
     included in an attempt to ensure that the         profession, although probably familiar          however, a few layperson’s tips which may
     public interest is better served.                 with regulation of other professions or         be of assistance.



14     April 2011                                                                                                                     www.the-actuary.org.uk
    Continuing professional development (CPD) reports now published online
    Due to the consistent nature of CPD cases,       Profession’s CPD requirements.                   Mr. Ian William Conlon FIA,
    these have been published on the Profession’s                                                     a reprimand and a fine of £200,
    website and are not to be taken as a reflection   Mr. Joe Brennan FIA, a reprimand and a           www.actuaries.org.uk/875475
    of their lesser importance under the             fine of £400, www.actuaries.org.uk/875473
    disciplinary scheme. The following members                                                          In addition, the full determinations are
    have faced disciplinary action for failure to    Mr. Wenjian Yin FIA, a reprimand,                available on the Profession’s website at
    record their CPD in accordance with the          www.actuaries.org.uk/875474                      www.actuaries.org.uk


    Working party set to discuss mis-selling issues                                                   misconduct complaints?
                                                                                                      ■ How will the new FCA move the
    Are you interested in joining a working party    ■ How should the Profession work with the        goalposts (for example, through ‘product
    looking at the next potential mis-selling        new Financial Conduct Authority (FCA) and        intervention’), and should we anticipate they
    scandal? If so, The Profession would love to     risk committees of financial                      will be enforced retroactively?
    hear from you as it is setting up a group —      institutions to help serve the public interest   ■ Is there a risk that courts will create new
    most likely to be cross-practice — to look at    more effectively?                                case law to deal with future scandals — note
    the issue from a number of angles, beginning     ■ Will managing the risk of future               the $550 million SEC settlement agreed by
    with some broad-brush questions:                 mis-selling scandals also manage                 Goldman Sachs?
    ■ Should the Profession be pro-active in         reputational risk, the risk of regulatory           Please contact Pat Rustem
    helping to manage the risk of potential mis-     fines and mandatory customer                      patricia.rustem@actuaries.org.uk to put forward
    selling scandals?                                compensation, and the risk of                    your thoughts on this issue.



    Averting complaints                              panel is held in private. If that panel             The 1994 Court of Appeal case of
    1. Clients complain not only if they             decides that a sanction is appropriate,          Bolton v Law Society was an important
    feel that they are getting poor service,         think whether you really want to refuse to       judgement for regulatory bodies. In that
    but also if they feel that they may be           accept it. If you do refuse (and, of course,     judgement it was said that the most
    getting a satisfactory service, but are          it is your prerogative), the next step is the    fundamental purpose was “to maintain the
    not being kept in the loop. If telephone         disciplinary panel, which is held in public.     reputation of the (Defendant’s) profession
    calls are not taken or not returned, if              Although a spokesman for                     as one in which every member, of whatever
    letters are not acknowledged and acted           The Investors’ Association was quoted as         standing, may be trusted to the ends of the
    upon within a reasonable period of time,         saying, “actuaries have a deeply ingrained       earth… the reputation of the profession
    don’t be surprised if a complaint to your        culture, which is cynical, self-serving and      is more important than the fortunes of
    professional body follows, a complaint           indifferent to public interest”, from my         any individual member. Membership of a
    which could have been avoided if proper          own experience, nothing could be further         profession brings many benefits, but that
    communication skills had been employed.          from the truth. The members of your              is part of the price”. Accepting effective
    No-one likes being ignored.                      profession with whom I sit are thoughtful,       regulation is part of that price.
    2. Co-operate with the investigation team.       incisive and, most particularly, willing
    Not only is this a requirement under             to listen to, and accept if substantiated,
    Rule 1.18 of the Disciplinary Scheme, but        unpalatable views from a lay member
    not to do so may attract a further allegation    for or against members of the actuarial
    of misconduct in itself under Rule 1.22 of       profession. I feel that this takes a certain
    the Disciplinary Scheme. Although it may         sort of courage.
    be understandable that you would not                 There is no formal precedent system
    wish to help those who you may feel are          employed and therefore the profession
    attacking you, but consider how that would       does not follow the courts in that respect,
    appear to a disciplinary panel. Letters from     but its decisions must be consistent.
    investigators that are ignored by the person     The standard, which is objective, is
    accused are not helpful. Courtesy (even          considered on a case by case basis.
    with jaws tightly clenched) doesn’t hurt.        Transparency and consistency are very
    3. Stand back. Can you really say that you       important, particularly because the standard
    are blameless or, deep down, is there a          expected is broad, covering as it does any
    kernel of truth? If so, put your hands up.       conduct carried out in the UK or elsewhere.
    Give full and frank reasons for what, why            I have heard an actuary refer to those
    and how you arrived in this sorry position.      members of the profession who have
    4. Be careful what you write — both to           been brought before their regulatory
    clients and to your profession. Write every      body as “victims”. That is both unfair
    letter as if it is going to be produced at a     and unjust. If any profession is brought
    tribunal — one day it might be.                  before their regulatory body, there is a           Judith Goulden is lay member of the
    5. Don’t forget that the adjudication            reason, a concern.                                 Disciplinary Pool


www.the-actuary.org.uk                                                                                                                    April 2011    15
 News analysis                  Industry




     Insurers bid farewell to the gender rating factor
     ECJ ruling aims to remove gender discrimination from insurance pricing by end of 2012
     Insurers will no longer be able to differentiate   Motor Insurance                                  Life cover
     premiums by gender as a result of a judgment       Female drivers under the age of 25 are on        Life cover rates for women are forecast
     of the European Court of Justice (ECJ).            average much safer drivers than men of           to rise whereas rates for men would fall.
     The change will take effect from                   the same age. In this age group, premiums        This is because women have longer average
     21 December 2012. Gender is currently              for women will increase. Men may drive           life expectancy.
     one of the rating factors used to price risks      more powerful cars as their insurance                Insurers have considered using proxies
     covered by many different types of                 premiums fall.                                   such as body mass index for pricing.
     insurance policies. In some products it is                                                          Others have considered changing the
     the second-most important factor after age.        Pensions                                         product design to variable rates or shorter-
     Current UK gender legislation (and the EU          Currently, men receive a better single life      term products.
     Gender Directive) allows the use of gender         pension income than women, due to their
     as a rating factor when based on actuarial         shorter average life expectancy. Women are       Private medical insurance (PMI)
     and statistical data on gender-related risk        expected to gain from the changes as their       The majority of private medical insurers in
     differences but the ECJ has ruled that this        pension income increases whereas men find         the market do not currently price by gender.
     does not comply with the EU Treaty.                their pension income falls.                      For those providers who do price by gender,
        An Association of British Insurers (ABI)           It is compulsory to take some defined          the largest expected differences are in the
     research paper looked at the impact of this        contribution pension pots as an annuity,         35 to 50 age group, where premiums are
     legislation on policyholders, insurers and         therefore this prevents men from                 currently higher for women than for men.
     the insurance market. One possibility is that      dropping out of the market. In other areas       The opposite effect is observed in women
     insurers may change their marketing strategy       such as personal pensions there may be           above 60, where their premiums are cheaper
     to target the gender with the lower risk cost,     greater reluctance by men to annuitise           than for men.
     thus paying more attention to the mix of           when offered the choice of income                   Removing gender from pricing models
     business. Consumers in the most affected           drawdown instead. However, the charges           could lead to a fall in the model’s accuracy.
     group may change their actions by opting for       on income drawdown policies may                  However, PMI policies are annually
     lower forms of cover. The suggested impact on      militate against this option for those with      reviewable and the possible changes to
     policyholders is as follows, split by product:     smaller funds.                                   premium lower this risk.



     £140 a week state                                  Public sector unhappy                             EIOPA releases QIS5 report
     pension for all from 2016                          with recommended                                  On 14 March the European Insurance and
                                                                                                          Occupational Pensions Authority (EIOPA)
     The UK government is believed to be                pension changes                                   announced its results on the fifth Quantitative
     considering a basic state pension paying a         Trade union leaders have warned about             Impact Study (QIS5). In summary, the
     flat rate of £140 a week for everyone who           strikes following recommended changes             following was observed in the QIS5 exercise:
     retires after 2016. This is higher than the        to UK pensions for state employees.               n Participation increased since QIS4 from
     basic state pensions currently received:           Lord Hutton, the former Labour cabinet            33% of companies to 70%
     a single person’s pension of £96.65 a week,        minister, has called for an increase to the       n Financial position of European insurance
     or up to £132.60 with means-testing                pension age by five years (or more for those       and reinsurance sector as a whole is sound
     (which would not be necessary with a               with state pension ages higher than 65) and       when assessed under Solvency II
     higher state pension).                             a switch from final salary pension schemes         n Insurance and reinsurance groups saw
        The question has been raised about what         to ones based on average lifetime earnings.       a reduction in surplus capital available —
     will happen to those people who can expect         George Osborne, the chancellor, will              overall, €86 billion lower than in Solvency I,
     a higher state pension than £140 a week            confirm the exact details of the decisions the     a fall of 44%. QIS5 showed that this effect
     as a result of additional contributions they       government takes.                                 would be largely absorbed if internal models
     choose to make.                                       On the one hand, there will be losers in       were built
        The Liberal Democrat MP on the House of         the public sector suffering from the later        n Calibrations were generally appropriate,
     Commons Work and Pensions Committee,               retirement age, and higher flyers in the           however, EIOPA is doing more work in the
     Stephen Lloyd, defended the idea by saying         NHS and councils (with large increases in         non-life and CAT module calibrations
     that “provided that is the floor, most people       salaries later in life) may get lower pensions    n QIS5 did not directly test the areas of
     will build on top of that and what they get        following this change. However, things could      governance, risk management and reporting
     on top of that will precisely reflect what          have been a lot worse for the public sector       requirements. However, it did reveal that
     they’ve earned and what they’ve put in”.           when considering the collapse of final salary      these are important areas that the industry
                                                        pensions schemes in the private sector.           must prepare for Solvency II
         INDUSTRY NEWS                                     Lord Hutton did reject the idea of a cap on    n EIOPA highlighted that companies need
                                                        pensionable earnings, pointing out that the       to manage their transitional measures from
      Please send newsworthy articles to                higher paid also paid higher contributions on     Solvency I to Solvency II; sufficient work must
      Terren Friend at news@the-actuary.org.uk          those higher earnings.                            be carried out but not an excessive amount.


16     April 2011                                                                                                                       www.the-actuary.org.uk
                                                                                                                 Industry                         News



                                                                                                               FOR MORE GENERAL
    From the world of general insurance                                                                        INSURANCE NEWS
    AIG                                               Grange drew a parallel with the savings and           More news on the following items can be
    AIG has completed the sale of its Japanese        loans debacle of the 1980s and stressed that          found on the website:
    life subsidiaries AIG Star and AIG Edison         regulatory actions were more difficult for             ■ AIG and fall-out from the global
    to Prudential Financial (the US Pru) for          insurers than class actions.                          financial crisis
    US$4.8bn, of which US$4.2bn is in cash               The rating agency Moody’s predicted in             ■ Asbestos and pollution development
    and US$0.6bn is the assumption of third-          late February that European insurers will             ■ Gender discrimination
    party debt. The two companies will operate        not be significantly affected by defaults              ■ More regulatory and legal
    as subsidiaries of one of the purchaser’s         on sovereign and bank fixed-income debt.               developments
    Japanese companies, Gibraltar Life Insurance      It emphasised that the industry had limited           ■ Lloyd’s
    Company. AIG has stated that it intends           exposure to the most affected countries               ■ UK adverse weather — December 2010
    to retain and expand its other Japanese           such as Greece and Ireland, and only                  ■ UK bodily injury compensation
    businesses. The sale also assisted AIG in         Greece had fallen below an investment-                ■ Potholes in UK
    being able to report a net profit of US$7.8bn      grade rating. However, Moody’s added that             ■ Australian natural disasters
    for 2010, although its Chartis subsidiary         the situation might change if countries such          ■ Climate change
    did incur a reserve-strengthening charge of       as Spain and Italy showed deterioration in            ■ More large losses
    US$4.2bn, nearly a third of it in respect of      their sovereign creditworthiness.
    its asbestos and pollution liabilities.                                                                 Visit www.the-actuary.org.uk/875472
        Jeff Grange, senior vice-president and        Regulatory and legal developments
    chief underwriting officer at Torus, has           The European Court of Human Rights               a breach of confidence decision. The ECHR
    suggested that US regulatory actions related      (ECHR) handed down a judgement in                said that in coming to its decision, it had
    to the financial crisis are now beginning, and     late January that conditional fee arrangement    noted Lord Justice Jackson’s conclusion that
    that these are likely to impact significantly on   (CFA) success fees are contrary to the           the CFA success fee regime was “the most
    directors and officers policies. In particular,    fundamental right of the media to freedom        bizarre and expensive system it is possible
    he highlighted the failure of hundreds of         of expression. This arose out of the House of    to devise”. It is believed that this decision
    community banks in the US, and the fact that      Lords judgement in the case between              (which is binding on the UK government,
    the Federal Deposit Insurance Corporation         Naomi Campbell and the Daily Mirror, in          but not the courts) will increase pressure on
    has announced that it intends to pursue the       which the newspaper publisher was ordered        UK legislators to abolish the right of recovery
    directors and officers of these institutions.      to pay substantial success fees in relation to   of CFA success fees in civil courts.



    Large losses                                      Total insured losses are expected to exceed      Pacific Ocean. The event caused significant
    Earthquake, Christchurch, New Zealand —           the NZ$5.5-6bn estimate of September’s           structural damage throughout Japan’s
    22 February                                       costs, and early estimates put the loss          Honshu Island, with fires, landslides
    This quake, of magnitude 6.3, was the             in the range NZ$8-12bn. Reinsurers in            and flooding. Both the electrical and
    sixth significant aftershock from last            Bermuda are understood to be particularly        transportation infrastructures have also
    September’s quake and had its epicentre           affected, as they were in September.             been heavily affected and more than
    three miles below the port of Lyttelton,                                                           four million homes were without
    only six miles from the centre of                 Earthquake and tsunami, northern Japan —         electricity in and around Tokyo (although the
    Christchurch — the original quake and each        11 March                                         capital was nearly 400 kilometres away).
    of the major aftershocks is being treated as      The seventh strongest quake ever                 There was significant damage to a major
    a separate insured event. It happened             reported, with magnitude 8.9, had its            nuclear power plant at Fukushima and,
    in the middle of the day, at a shallower          epicentre 130 kilometres east of the             although this was automatically shut down
    depth and much nearer the city centre,            coastal town of Sendai, at a depth of            immediately after the damage, there was
    resulting in a much higher death toll than        15.2 miles. The earthquake triggered a           a serious problem caused by breakdown of
    the original magnitude 7.1 quake. The death       tsunami that had waves up to 10 metres           the cooling system, resulting in explosions
    toll is at least 163 and is expected to more      high, which hit the coast within minutes         at two of the seven reactors (so far) —
    than double, with over 200 remaining              of the quake, destroying almost everything       this has resulted in a limited escape of
    missing in the rubble. The property               in its path, wiping out a number of              radioactive material, but experts claim t
    damage, especially to commercial property,        significant coastal communities and              hat a nuclear disaster is unlikely to arise.
    is extremely significant and may be               penetrating up to 10 kilometres inland.          The death toll is expected to run into ‘tens
    affected by the extent to which buildings         The tremors of the quake lasted for              of thousands’ and the economic loss has
    were weakened by last year’s quakes.              nearly two minutes and there have                been reported at US$170bn, with possibly
    As in September, the older buildings              been a number of aftershocks of the              US$15-35bn of this insured — apparently
    were worst affected, being subject to less        order of magnitude 6. Immediately                most homes are not covered against
    stringent building codes. Land damage,            following the initial earthquake, the Japan      earthquake damage because of the cost
    which has been a significant contributor          Meteorological Agency and the Pacific            involved. All figures should be treated with
    to the increase in estimates of the earlier       Tsunami Warning Center both issued               considerable suspicion at the present time
    quake, is also very severe, and several           tsunami watches and warnings for the             as there has been very limited opportunity
    water and sewage systems have collapsed.          majority of areas bordering along the            to assess them at the time of writing.


www.the-actuary.org.uk                                                                                                                     April 2011    17
 News                           People/Society                                                               For people moves, see page 44




     Professor steers SAAX Group in better direction
     Thought leader talks of moral DNA and the three ethics of reason, care and obedience
     Around 70 Southern African actuaries                external driving forces in our lives, such       how to be more morally aware and thereby
     gathered at the Gherkin on 8 February for           as nationality, gender and occupation,           more mature in our actions.
     the Southern African Actuarial ConneXion            that have an effect on our intrinsic beliefs.       Professor Steare is an eloquent speaker and
     (SAAX) Group’s first event of 2011, where            Through unique programmes and his ability        grabbed the audience’s attention right from
     corporate philosopher Professor Roger Steare        to communicate his views, he encourages          the start. He ended his talk by encouraging
     was the main speaker.                               companies and government bodies to               us to not only live with optimism and yearn
         Professor Steare’s insightful talk was          understand human ethical behaviour.              for a better day but, more importantly, to do
     based on survey data that demonstrates the             The talk covered a bit of everything,         what is right in order to achieve it.
     nature of our ‘moral DNA’. This was broadly         including life, the universe and humans as          SAAX is a not-for-profit, actuarial member
     split between the three ethics of reason, care      individuals — how we behave and think and        interest group whose aim is to bring together
     and obedience.                                      how this is influenced by our environment.        people with a common actuarial connection
         To begin, Professor Steare showed a video       Addressing the southern Africans, he             and sharing an affiliation with southern
     clip where the current world population             compared how we behave in comparison to          Africa. The event was kindly sponsored by
     was considered to comprise 100 people.              other nationalities and, interestingly, how we   Swiss Re.
     Some surprising statistics followed —               can hold a mirror up to ourselves and learn      By Kelvin Chamunorwa
     14 people have malnutrition, 12 cannot read
     and only eight have access to the internet.
     If someone has food in their fridge, clothes
     in their wardrobe and a bed to sleep in,
     they are richer than 75% of the entire
     world population.
         Professor Steare is a well-respected thought
     leader. He has done extensive research
     on human character and judgment and
     found the ethics of reason, obedience and
     care as powerful tools in understanding
     fundamental human behaviour. He explores



     Worshipful Company of Actuaries’ annual golf                                                         Charity campaign
     competition to tee off at Effingham Golf Club                                                        Back in September 2010 the Worshipful
     The Worshipful Company of Actuaries’               The master, Graham Clay, is very keen             Company of Actuaries and The Actuary
     annual golf competition, for Liverymen             to welcome other actuaries and their              launched a joint initiative, calling on
     and the Other Half Club, will take place           partners as participants.                         members of the profession to consider
     at the Effingham Golf Club on 8 June.                The competition will be an 18-hole              charitable fundraising activities.
                                                        individual Stapleford competition, playing        Many actuaries have since been involved in
                                                        for the Worshipful Company of Actuaries           fundraising for various charities by riding,
                                                        Golf Cup (for liverymen) and other prizes.        climbing and skiing in a bid to reach the
                                                        Effingham is one of the finest courses in         £1 million fundraising target. We would like
                                                        Surrey, and has been an Open qualifier            to encourage more members of the profession
                                                        course for the last five years.                   to participate in charity events, particularly
                                                          Tee-off will be from 2:30pm, and there          as the weather is expected to become more
                                                        will be a supper and prize-giving at              friendly over the coming months.
                                                        7.30pm at which non-playing partners                  As you participate in various activities,
                                                        will be most welcome. The cost will be            please let us know how much you raise so
                                                        £65 each for those playing golf and £25           that we can keep a running total and provide
                                                        each for those only attending the supper.         support where possible. You can do this by
                                                        The company is seeking to raise money             emailing Kelvin Chamunorwa
                                                        this year for its Charitable Trust, and           social@the-actuary.org.uk and Charles Cowling,
                                                        would be grateful if players felt able to         chair of fundraising for the Worshipful
                                                        make an additional contribution of £20.           Company charles_cowling@jltgroup.com
                                                          For further information please                      The Worshipful Company has pledged
                                                        contact court assistant Bill Smith on             to support, where possible, any member of
                                                        billsmith100uk@yahoo.co.uk or by phone            the profession who wants to embark on a
                                                        on 07776 223 850.                                 fundraising venture, whether or not they are
                                                        By Brian Ridsdale                                 a member of the Company.



18      April 2011                                                                                                                       www.the-actuary.org.uk
          Follow @TheActuaryMag on Twitter                                Join The Actuary’s LinkedIn group




    A Mauritian with lofty ambitions                                                               Worshipful Company
    Mauritian actuary Jaysen Arumugum is           to raise awareness and to improve the           welcomes
    climbing Mount Everest to raise money for
    Breast Cancer Care. He aspires to be the
                                                   chances of Mauritian women surviving
                                                   this terrible illness.
                                                                                                   Donald Brydon to
    first from his nation to climb the highest         Life has been pretty busy since February     annual banquet
    peak on each continent. Having already         when the dates for the climb were set.
    succeeded in climbing five of the peaks         “Organising the climb and the intense           The Worshipful Company is pleased to
    (including Kilimanjaro, Elbrus, Kosciusko,     training combined with a full-time job has      have secured a date at Mansion House
    Aconcagua and Denali), Jaysen has now          kept me busy for the last few months,”          for its 2011 annual banquet, as not
    set his sights on the biggest of them all —    says Jaysen.                                    all livery companies who wish to dine
    Mount Everest, standing at 8,800 metres.          “On 2 April I will leave on my quest         at Mansion House are successful in
       Breast Cancer Care is just a phone call     to become the first Mauritian to climb           their applications. The event will be
    or mouse click away for anyone living          Everest. The whole expedition will take         on the evening of 19 April and is one
    with breast cancer. Its free helpline          69 days and will be one of the toughest         of the highlights of the livery year
    and information-packed website offers          challenges I have ever undertaken.”             and is usually a memorable experience
    a friendly ear and expert guidance to          He will provide more details of the             for guests.
    people dealing with the turmoil of this        actual climb on his website                       The principal guest will be
    life-threatening illness. Across the UK it     www.jaysenarumugum.com                          Donald Brydon, CBE, chairman of
    also offers professional support through a        This is a brief summary of Jaysen’s          Royal Mail and Smiths Group plc,
    range of confidential, face-to-face services,   training schedule over the last few             who will speak on the topic ‘Post in
    helping people every step of the way.          months:                                         an electronic age as the Postal Services
       So what motivates Jaysen to take on         n 200km cycling per week to work (on a          Bill proceeds through Parliament’.
    such mammoth challenges? He explains:          fixed-wheel bike)                                Donald spent the earlier years of his
    “My cousin Selina, who was actually more       n One to two half-marathons                     career as chairman and chief executive
    like a sister to me, was diagnosed with        n A few 50 to 100-mile bike rides               of BZW Investment Management and
    breast cancer a few years ago. She needed      n Weight training and weighted squats           then Axa Investment Management.
    major, complex operations as a result.         twice a week                                    More recently, he has been a director
    This made me realise how fragile the           n 5 to 12-hour weekend hikes with a             and chairman of a number of companies
    everyday lives we lead can be. She has also    weighted pack and ankle weights                 and organisations.
    shown me how strong the human spirit is        n Winter climbing weekend in Scotland             The Lord Mayor will be on an official
    and taught me that anything is possible.”      in February                                     visit to China at the time of the banquet.
       Breast cancer affects one in eight          n 150 floors of stairs during lunchtime          He will, however, be represented by the
    women during their lives. Jaysen will be       three times a week.                             Lord Mayor, Locum Tenens, Alderman
    raising money to help women in both the           If you would like to contribute to this      Sir Peter Savory, who was Lord Mayor
    UK and Mauritius. He will also be working      good cause, please do so at                     in 2004/5. He will be accompanied by
    with the Ministry of Health in Mauritius       www.justgiving.com/jaysenarumugum               Sheriff Richard Sermon, MBE.

                                                                                                 Deaths
                                                                  Jaysen Arumugum reaches
                                                                                                 n Roger Gray, Hon FFA, died recently.
                                                                  his peak
                                                                                                 He became an honorary fellow in 2006.
                                                                                                 He lectured actuarial students for many
                                                                                                 years at Heriot-Watt University. He was
                                                                                                 course director for the Actuarial Science
                                                                                                 MsC from 2001 to 2006. An obituary will
                                                                                                 appear in a future issue of The Actuary.
                                                                                                 n Leon Rudolf Potgieter died on
                                                                                                 10 January 2011, aged 48. He became a
                                                                                                 fellow of the Institute in 1988.
                                                                                                 n Gordon Harold Richard Sharp died
                                                                                                 recently, aged 81. He became a fellow of
                                                                                                 the Institute in 1960.
                                                                                                 n Zeeshan Ali died recently, aged 31.
                                                                                                 He became a student of the Institute
                                                                                                 in 2006.


                                                                                                       PEOPLE/SOCIETY NEWS
                                                                                                    If you have any newsworthy items for
                                                                                                    these pages, email Kelvin Chamunorwa
                                                                                                    at social@the-actuary.org.uk


www.the-actuary.org.uk                                                                                                            April 2011    19
       Tuesday 17 May                        Programme event

     Practical challenges for GI           Do you find Solvency II requirements for internal       will talk on the GIRO working party’s continuing
                                           model approval unclear? How high is the hurdle          research into how firms are responding to specific,
     actuaries under Solvency II
                                           firms need to clear? How can you apply the              practical modelling challenges under the internal
     Staple Inn,                           requirements in a way that adds, rather than            model approval process. In particular, they will look
     High Holborn,                         detracts, value from the capital modelling process?     at model validation, use of third-party catastrophe
                                               Melinda Strudwick and Gabriela Chavez-Lopez         models and embedding models in the business.
     London
     5:30pm for 6pm start


       Thursday 19 May                       Social event

     Race night                            After the upcoming exams SIAS will be hosting its       spectacular victory on the big outsider?
                                           first ever race night. Will you be looking for steady      Full details to be confirmed but please watch
     TBC
                                           returns from backing the favourites or for that         the website and look out for further information.




                                             Fundraising

     Charity-matching                                                                              Did you know that SIAS has a charity-matching
                                                                                                   programme? Any SIAS member or team of SIAS
                                                                                                   members will be able to apply to SIAS for a
                                                                                                   donation to their charity fundraising efforts.
                                                                                                   The donation will be equivalent to 25% of
                                                                                                   sponsorship monies raised by the SIAS member,
                                                                                                   excluding any corporate sponsorship, with a
                                                                                                   maximum donation of £500. The donation will be
                                                                                                   increased to 50% of sponsorship monies raised for
                                                                                                   team applications where members of the team are
                                                                                                   from more than one employer.
                                                                                                      Other restrictions apply so please see the SIAS
                                                                                                   website for more details at www.sias.org.uk


             For details of events, visit www.sias.org.uk

20      April 2011                                                                                                                     www.the-actuary.org.uk
Now, let’s talk about the importance of financial modelling.




                                                                            MG-ALFA
                                                                                                 ®


     The world has changed. Rely on a proven financial modelling solution.
                                                                            uk.milliman.com/mgalfa
 Research                     Microinsurance




Walking a nomadic path
Kelly Rendek offers an insight into her year in Mongolia providing technical assistance to a
microinsurance development project

                                                     The primary industries are mining and          Tenger’s microinsurance project
                                                     manufacturing, while about 13% of the          The main objective of my fellowship was
                                                     population are nomadic herders. Winters are    to build the capacity of the microinsurance
                                                     harsh and severe livestock losses over the     team at Tenger and assist them with a
                                                     last several years have led many herders to    successful pilot. After revamping the project
                                                     abandon their traditional life and move to     plan, getting new members of the team in
                                                     the slums on the edge of the city.             place, and conducting some initial training,
                                                        Many of the challenges facing modern        we were ready to tackle the market research
                                                     Mongolia are a consequence of its history      and data collection phase.
                                                     and relative isolation. Seventy years as a        Market surveys and focus groups with
                            Kelly Rendek is a
                                                     communist satellite of the Soviet Union        the target market helped us identify
                            qualified actuary
                                                     have left their mark. With the transition to   demographic trends, income levels, and
                            with over 20 years
                                                     democracy in 1990, the government began a      risk management priorities. Data from the
                            of experience in
                                                     programme of modernisation which, while        National Statistics Office allowed us to
                            insurance and
                                                     creating economic opportunities, has also      calculate crude population mortality rates
                            reinsurance in both
                                                     resulted in increased poverty and decreased    and accidental death rates, split by gender
                            Canada and Ireland
                                                     funding for education and healthcare.          and age. Analysis of accident rates indicated
                                                        Private insurance is a relatively new       that male accidental mortality was three to
     The challenge                                   concept in Mongolia as prior to 1990           four times higher than for females; results
     In 2009, Tenger Insurance, a non-life           insurance was entirely state-controlled.       from Russia and Ukraine showed a similar
     company in Mongolia, received a grant from      Key challenges for the insurance industry      pattern. Validation against external sources
     the International Labour Organization’s         are consumer education and reaching a          was important as the experience data from
     (ILO) Microinsurance Innovation Facility to     scattered rural population.                    Mongolia isn’t sufficient to be fully credible.
     pilot a new microinsurance product.                There are currently 16 non-life                We obtained summary data on
     Its proposal was to develop an accident         insurers and one life insurer in Mongolia:     hospitalisation frequency and length of
     and health insurance product for the            all but the top five are relatively small.      stay from the Ministry of Health, and
     low-income market in Mongolia. They also        Insurance companies are regulated by           detailed hospitalisation data from two
     applied for a fellow through the Facility’s     the Financial Regulatory Commission            major hospitals. Hospitalisation frequency
     Technical Assistance programme, specifically     established in 2006 to supervise all           rates were much higher than expected,
     requesting an actuary to assist with product    non-banking financial institutions.             between 15-50% depending on age group
     development and pricing. I knew little          Regulations prohibit foreign insurance         and gender, and the average length of
     about microinsurance when I applied             companies from operating in the country,       stay was 8-15 days. Investigation revealed
     for this position, and even less about          although much of the domestic market is
     Mongolia, but I was intrigued: it offered an    reinsured globally.                              The Actuarial Profession
                                                                                                      in Mongolia
     opportunity to use my actuarial skills in a
     non-traditional way and to experience a         » Private insurance is a                         Formed in 2008, the Society of Actuaries
     unique part of the world.                       relatively new concept in                        of Mongolia currently has nine members.
        When I arrived in Mongolia in
     January 2010, the project had not
                                                     Mongolia as prior to 1990                        The Financial Regulatory Commission
                                                                                                      licenses actuaries in Mongolia and is
     progressed much beyond the planning stage,      insurance was entirely                           responsible for setting professional
     and was competing for internal resources.
     Battling jet lag, sub-zero temperatures and a
                                                     state-controlled          «                      standards. The Society introduced exams
                                                                                                      from the UK actuarial syllabus in 2010
     foreign language, I set out to understand my       Mongolia has a government social              and licensed actuaries will be required
     new environment: this was not going to be       insurance scheme that covers pensions,           to pass CT1-4 and meet work experience
     an ordinary actuarial assignment.               social welfare, health, workers’                 requirements. However, with no fully
                                                     compensation and unemployment                    qualified actuaries currently practicing in
     Mongolia                                        insurance. Participation is mandatory for        Mongolia, there is little guidance available
     Mongolia is a vast country, with an             permanent employees, and voluntary for           on practical applications of the study
     extreme climate and topography.                 the self-employed. In practice, only about       material, nor any official standards of
     Approximately 40% of the population             20% of the total population is currently         practice to ensure actuarial work is done
     of 2.7 million lives in the capital city of     enrolled and the scheme is under review          consistently. This is an area where members
     Ulaanbaatar, with the rest scattered widely     with the intent to make coverage mandatory       of the global actuarial profession could
     over remote and often inaccessible areas.       for all citizens.                                provide significant mentoring and leadership.


22      April 2011                                                                                                                 www.the-actuary.org.uk
    that Mongolians had developed a practice        now needs to focus on administration and           Developing insurance and actuarial
    of regular hospital visits out of a sense of    claims procedures, monitoring experience,       capacity in a developing country required
    entitlement during the former communist         and eventually expanding to additional          a lot of patience and careful listening.
    regime. Hospitals are compensated by the        branches. Sales data will be used to evaluate   It was important to always keep in mind
    government for all in-patient days, which       which benefit options are most accepted          that my goal was to transfer knowledge
    encourages longer stays. We also found          and emerging claims experience will be          and to help create tools so that the project
    that, while the government scheme does          analysed closely to determine if the pricing    could continue in a sustainable way after
    give everyone access to hospital care,          assumptions need to be revised.                 I had left. I was fortunate to work with a
    hospitals frequently charge additional                                                          wonderful project team who were eager to
    fees for items such as food, diagnostic tests   The benefits of fellowship                      learn as much as possible. I was extremely
    or surgical supplies.                           My fellowship year has just ended and, in       honoured to mentor our actuarial student,
                                                    spite of ongoing challenges and frustrations,   who became the first person sitting exams
    Mongolia’s first actuarial                      it was a very rewarding experience.             in Mongolia to pass CT1. I also learned to be
    pricing model                                   Microinsurance requires a different             more flexible, to be innovative, to look for
    A further objective of my fellowship was        application of actuarial skills — less focus    different solutions in the face of obstacles
    to develop actuarial capacity and I worked      on complicated models and more on good          — not skills you are likely to learn while
    closely with our assigned actuarial student     product design that meets the needs of          sitting actuarial exams, but necessary ones
    and the project’s Mongolian consultant          the low income market. It requires a bit of     for working in the microinsurance field.
    to cover basic actuarial concepts, models       risk-taking to design and price a product in       Of course this is only part of the story,
    and standards of practice. This sub-team        a completely new market, without as much        as I had many adventures living and
    created a simple pricing model in Excel,        data as you’d like, and building a process      travelling in Mongolia, which I’ll never
    using Palisade @RISK software, to model         for ongoing experience monitoring               forget. It was an opportunity of a lifetime,
    the aggregate claims distributions based on     becomes crucial.                                and I’m glad I took it.                      ■
    input assumptions for product features and
    benefit amounts. By developing a dynamic
    model we were able to educate our team,
    partners and the insurance regulator on the
    trade-off between benefits and premiums,
    and agree on the combination that would
    best meet the needs of our target clients.
    The result was a pretty simple model: all of
    the project members are able to use it and
    understand what data is needed to update
    the assumptions.
       The final product was designed to
    complement the existing health system by
    providing a simple, flexible hospital cash
    benefit. The payout is a fixed amount per
    hospital day, after a one or two-day waiting
    period has been met, with a maximum
    number of covered days. The benefit is
    paid directly to the policyholder and can
    be used to cover not only medical expenses
    but indirect costs, such as transportation
    or childcare. The product is bundled with
    accidental death coverage.
       With the distribution partner, Xac Bank, a
    sister microfinance organisation, we selected
    two pilot branches to launch the product,
    making it mandatory for new microloan
    clients. The product was formally launched
    in December 2010, and so far, the response
    has been very positive. The project team



www.the-actuary.org.uk                                                                                                                 April 2011    23
 Insurance                   Motor insurance




Running on empty
George Maher, Andy Staudt and Ryan Warren analyse developments in the motor insurance
industry and why insurers are making less profits




                            (clockwise, from top
                            left) George Maher,
                            Andy Staudt and
                            Ryan Warren all work
                            at Towers Watson




     T
              he UK motor insurance market is      controlling market entry by only funnelling     1% of insurance had been placed online;
              now in a situation similar to the    business to these larger firms and ignoring      but in the subsequent year that
              airline industry where competition   new entrants.                                   number had risen to almost 10%.
              is making profitability elusive.         However, in 1991 everything changed          Currently, upwards of 40% of motor
     The situation is unlikely to improve until    with Direct Line. Rather than relying on        insurance is placed online, with the
     some consolidation occurs or someone          brokers for business, Direct Line skipped the   majority of that business coming from
     comes up with a new business model.           middle man and went directly to the people.     aggregator sites. However, in the next five
        Figure 1 plots the Herfindahl Index (HI),   This allowed them to rapidly grow over the      years that number will be closer to 75%.
     a common measure of the competitive           next decade, expanding from a market share          But the aggregators have cost the
     structure of an industry, for the UK          of almost 1% in 1990 to a share of 10% in       insurance industry enormously in terms of
     motor market over the period 1985 through     2000 and now stands at almost 16%.              the unnecessary competitiveness. Figure 2
     to 2009. To put this into context,               The spike from 1997 to 1998 is the           illustrates to what extent. Here, we have
     comparison points are shown for several       merger of Commercial Union and                  overlaid the combined ratio for the UK
     other industries.
        Equivalently, the inverse of the index
                                                   General Accident.
                                                   The sharp increase in  » Aggregators cost the                           motor market over the
                                                                                                                           same time period.
     gives a rough estimate of the number          competition in the     industry £1 billion last                            Focusing on the
     of effective competitors in the market.       subsequent period      year in unnecessary                              period 2002 and
     For example, the HI of 13% for 1985           is attributable to UK                                                   subsequent years,
     through to 1990 implies that there were       insurance and Esure    price competition,                               the conclusion is
     eight main firms vying for market share        entering the market    while generating only                            obvious and rather
     back then; and the HI index of 6% in          and Churchill,
                                                                          £50 million in profits for                       damning – the

                                                                                                              «
     2009 implies that there are now 16 main       Groupama and                                                            aggregators have
     firms vying for market share. In effect,       Zurich expanding       a select few insurers                            encouraged greater
     competition has doubled over the last         their writings, while Aviva’s shrunk.           price competition while not showing
     two decades.                                     All of which brings us to 2002 and the       much profitability themselves, channelling
        Like the rings on a tree, this graph       first aggregator.                                revenue to advertisers in the process.
     tells the history of the UK motor market.                                                     Aggregators cost the industry £1 billion
     Prior to 1991, the majority of motor          The rise of aggregators and the fall            last year in unnecessary price competition,
     business was placed through brokers.          of profitability                                while generating only £50 million in profits
     There were only a handful of firms in the      The first insurance aggregator was               for a select few insurers. Further, advertisers
     marketplace with the brokers effectively      launched in 2002. Previously, only about        have more than doubled their revenue with



24      April 2011                                                                                                                 www.the-actuary.org.uk
                                                                    Figure 1 — Plot of the Herfindahl Index showing the competitive
                                                                    structure of the UK motor insurance market
                                                      0.14
                                                                                                                                                                                                                                                                         Phone (0.135)
                                                      0.12
                                                                                                                                                                                                                                 Aggregators
                                                      0.10

                                                     0.08                     Broker                                                                      CU + GA = CGU
                                                                            dominated
                                                                                                                                                                                                                                                                         Auto (0.065)
                                                     0.06                                                    Direct Line
                                                                                                            and the direct                                                                                                                                               Oil (0.045)
                                                     0.04                                                     revolution
                                                     0.02
                                                                                                                                                                                                                                                                         Airline (0.015)
                                                     0.00
                                                             1985
                                                                    1986
                                                                           1987

                                                                                    1988
                                                                                           1989

                                                                                                    1990

                                                                                                            1991
                                                                                                                   1992

                                                                                                                          1993
                                                                                                                                  1994

                                                                                                                                           1995

                                                                                                                                                  1996
                                                                                                                                                           1997

                                                                                                                                                                   1998
                                                                                                                                                                          1999

                                                                                                                                                                                 2000

                                                                                                                                                                                         2001
                                                                                                                                                                                                  2002

                                                                                                                                                                                                         2003

                                                                                                                                                                                                                  2004
                                                                                                                                                                                                                          2005

                                                                                                                                                                                                                                  2006
                                                                                                                                                                                                                                         2007

                                                                                                                                                                                                                                                 2008

                                                                                                                                                                                                                                                          2009
                                                                                                                                                                                                                                                                  2010
                                                                    Figure 2 — The relationship between competitiveness and
                                                                    profitability in the UK motor market




    £100+ million due to advert spends for price
    comparison sites. Effectively, aggregators                                                                                                                                          Profitability              7% 6%
                                                                                                                                                                                         (2002-09)                       3%
    have commoditised the motor market.                                                                                                                                                                                                     -1% -4%
       Where there was at best a tenuous                            Combined ratio                                                                                                                                                                               -8% -10%
                                                                    Profitability                                                                                                                                                                                       -15%
    relationship between the market structure
    and profitability prior to 2002, after 2002
    as competition increased, profitability
                                                     1985
                                                             1986
                                                                    1987

                                                                             1988
                                                                                       1989
                                                                                                  1990

                                                                                                           1991
                                                                                                                   1992

                                                                                                                           1993
                                                                                                                                    1994

                                                                                                                                              1995

                                                                                                                                                         1996
                                                                                                                                                                  1997
                                                                                                                                                                          1998
                                                                                                                                                                                  1999

                                                                                                                                                                                           2000

                                                                                                                                                                                                     2001
                                                                                                                                                                                                                2002
                                                                                                                                                                                                                         2003
                                                                                                                                                                                                                                  2004
                                                                                                                                                                                                                                          2005

                                                                                                                                                                                                                                                   2006
                                                                                                                                                                                                                                                             2007
                                                                                                                                                                                                                                                                         2008

                                                                                                                                                                                                                                                                                2009
                                                                                                                                                                                                                                                                                       2010
    decreased with a correlation of almost -96%.
    This is only natural as insurers are no longer
    competing on brand, marketing, service or
    other intangibles to the same extent;            their capital reserves, the industry has been                                                                    looks bleak. Mergers would certainly help
    rather, they are competing almost solely         taking larger and larger P&L hits.                                                                               things, as would consolidation of single
    on price and their position on the                  As Ted Kelly, CEO of Liberty Mutual,                                                                          insurer brands into a single marketable
    aggregators’ screens.                            recently noted, “we’ve had no inflation for                                                                       product. On the other hand, breaking
       In situations like this, classic economics    10 to 12 years, any idiot can make money                                                                         up the various insurance arms of larger
    is very clear: each new entrant creates          in personal motor”. Where this might                                                                             multinationals is likely to do much more
    additional supply, driving down industry         have been true for the US motor market,                                                                          harm than good.
    profits. Although, in theory, this occurs         where aggregators have been completely                                                                              In the absence of any change in the
    until no excess profits exist, in fact the        unsuccessful (and it is better for everyone                                                                      market structure, the question is really:
    current situation is much worse. What we         that they stay that way),the opposite is true                                                                    what is the next big innovation?
    are seeing is insurers cutting prices below      for the UK motor market.                                                                                         Pay-as-you-drive insurance is certainly a
    the actuarially fair rate in order to maintain      With many economists forecasting several                                                                      contender as it has been rapidly adopted by
    volume and, as a by-product of their             years of high inflation much akin to that of                                                                      several large US insurers and piggy-backs
    participation in these aggregators, writing      the ‘80s, these ultra-thin/too-thin margins                                                                      on the green movement.
    business that they previously would not          that the aggregators have forced on the                                                                             As the structure of the industry is
    have actively pursued.                           industry are not sustainable.                                                                                    outside of any one insurer’s control, and
       What is most worrying though is that the                                                                                                                       fundamental changes in insurance don’t
    last 10 years should have been extremely         Future of the UK motor market                                                                                    happen all that often, the key is for insurers
    profitable with inflation steady at around         Without a fundamental shift in the structure                                                                     to retool their business plan with the intent
    2%. But rather than several years of             of the marketplace or the way business is                                                                        of carving out a niche market where the
    profitability allowing insurers to build up       done, the future of the UK motor market                                                                          aggregators have no influence.                ■



www.the-actuary.org.uk                                                                                                                                                                                                                                     April 2011                  25
 Insurance                   Market pricing information




Unfair trading?
The OFT’s proposal to restrict insurers’ access to market pricing information is flawed,
says Jan Iwanik

                                                    identifiable competition concern.                     But individual insurers’ interests are in
                                                       The OFT’s main economic concern is             conflict and it is difficult to maintain a
                                                    that access to market pricing information         cartel without a disciplining mechanism5.
                                                    allows a common understanding of pricing          I do not know of such a disciplining
                                                    positions by insurers. The OFT also believes      mechanism in the UK market and neither
                                                    that this common understanding will lead          does the OFT. Until such a mechanism
                                                    to “successive rounds of signalling and           develops, and there is no evidence that this
                                                    responses by multiple insurers and this           is happening, market information is not a
                                                    could create upward pricing pressure3”.           threat to competition.
                                                       But this is a misunderstanding of                 In fact, restricting market pricing
                            Jan Iwanik is a
                                                    the market process. Profit-maximising              information will make it harder to start
                            GI actuary with
                                                    companies do not increase their prices            new insurance companies and for existing
                            experience in the
                                                    just because they know how much others            companies to enter new market segments.
                            Polish, US and UK
                                                    charge. If they did, we would see constant        This is because new companies, unlike the
                            markets. Jan is
                                                    price rises in markets for all goods where        established ones, do not have historical
                            currently working
                                                    companies have this knowledge — that is,          claims data and therefore need to rely on
                            for RBS Insurance
                                                    in most markets.                                  market intelligence tools to set prices.
                            as a pricing
                            innovation manager.
                            This piece expresses
                                                    We would see,
                                                    for example, an         » Restricting market                                 Commitment
                                                                                                                              enforced by OFT

                            Jan Iwanik’s private
                                                    upward spiral in the    pricing information will                          or any other such

                            views, and not
                                                    price of eggs, bottled
                                                    water, newspapers
                                                                            make it harder for existing                       restriction of market
                                                                                                                              pricing information
                            the views of his
                                                    and houses.             companies to enter new                            will not address
                            employer
                                                       Insurance pricing
                                                    is a reverse auction
                                                                            market segments                   «               an identifiable
                                                                                                                              competition concern.
                                                    where insurers bid and the buyer, if he/she is    Instead, to the extent to which it will be
                                                    price-sensitive, chooses the cheapest quote.      enforced, it will reduce effectiveness of
                                                    Restricting market pricing information            the market, increase insurance risk, reduce




     U
                K motor insurance companies         changes the auction from a simple English         competition and increase compliance
                have been using detailed market     auction to a less transparent one where           cost and consulting fees. It will also mean
                pricing information to help set     at each step the bidders know if they are         that the seven big insurers, with the OFT’s
                insurance rates for many years.     winning or not                                    assistance, will collude to limit
     Insurers have been able to check how much      and if they are not winning they do not           competition from smaller insurers and
     their competitors have been quoting for        know who is and what the winning bid is.          potential start-ups.                          ■
     different types of vehicles and different      The Revenue Equivalence Theorem4 suggests
     groups of drivers. Available information has   that both auctions will result in the same        1 Office of Fair Trading, Notice of intention to accept
     been very precise and has allowed predicting   price to the customer. The latter one will just   binding commitments to modify a data exchange tool
     prices for individual quotes and up to one     converge slower, will be more volatile and        used by Motor Insurers, www.oft.gov.uk/shared_oft/
     month ahead.                                   hence will make the market less efficient.         consultations/OFT1301.pdf
        The Office of Fair Trading (OFT)                It is also hard to think of an intuitive
     is claiming that using such market             reason why better access to competitors’          2 Office of Fair Trading, www.oft.gov.uk/OFTwork/
     information limits competition and it is       prices makes a market less competitive.           consultations/current/private-motor/qandas
     threatening the largest UK insurers with       Telling a class of students what everybody’s
     a continued investigation to make them         grades were in last week’s test makes top         3 Office of Fair Trading, Notice of intention to accept
     commit to restricting the use of market        students more, not less, competitive.             binding commitments to modify a data exchange tool
     pricing information1. This commitment will        The OFT is also concerned that market          used by Motor Insurers, www.oft.gov.uk/shared_oft/
     be applicable to all UK insurers, including    pricing information could allow a                 consultations/OFT1301.pdf
     smaller ones who are not signatories2.         hypothetical cartel to monitor the market
        There is no valid economic case for         and hence to detect deviation from a              4 McAfee R. and McMillan, J. Auctions and Bidding,
     restricting access to market pricing           hypothetically co-ordinated strategy. If a        Journal of Economic Literature, 1987
     information. As a consequence the              cartel existed then I suppose it would use
     commitments offered, or any other              market information this way. It could also        5 Maniw G. Principles of Microeconomics, Chapter 16,
     regulatory action, will not be addressing an   use other means to co-ordinate rates.             Harcourt College Publishers



28      April 2011                                                                                                                            www.the-actuary.org.uk
                                                                                               Float-based valuations                        Insurance




Cheap at half the price?
Andrew Maclaren looks at the float-based valuations of some insurance companies


                                                      Float-based methods provide a quick way of       be around twice their respective market
                                                      measuring value.                                 capitalisation and more than twice their
                                                          The float concept is lucidly explained in     respective net tangible assets.
                                                      the annual reports of Berkshire Hathaway.            Amlin and Hiscox have grown their
                                                      The net insurance liabilities in the accounts,   balance sheets and enjoyed a negative cost
                                                      known as the float, are similar to a loan         of float on average over the last five years.
                                                      that has a cost related to underwriting          So a valuation based on underwriting break-
                                                      losses. Consider a simplified insurer, with       even and no growth might be conservative,
                                                      a balance sheet comprising an investment         making the shares look at least 50%
                                                      portfolio of £3 billion balanced by net          undervalued. On the other hand, market
                            xxxx
                            Andrew Maclaren is
                                                      insurance liabilities of £2 billion (its float)   conditions or competitive advantages could
                            a private investor,
                                                      and shareholders’ equity of £1 billion. It       deteriorate, resulting in future underwriting
                            self-employed
                                                      breaks even on pure underwriting each year       losses or float shrinkage or both.
                            actuary and a trustee
                                                      and is not growing. Returns to shareholders      Furthermore, a significant discount could

                                                                              » Float-based methods
                            of the AQA pension
                                                      will therefore be                                                         be applied to the
                            scheme
                                                      the returns on the                                                        investment portfolios
                                                      investment portfolio.   can help to focus the                             to allow for potential

    What is an insurer’s float?
                                                      If the investment       valuation appraisal                               return shortfalls, future
                                                      return is the market                                                      taxation and lack
    For a general insurer the major components        return then the shares  on the longer-term                                of investor access to
    of its float are reserves for unpaid losses,       will be worth three     prospects for underwriting                        capital. So it might be
    unearned premiums and other liabilities to
    policyholders less premiums and reinsurance
                                                      times the asset value.
                                                      The multiple should
                                                                              and investment              «                     far-fetched to say the
                                                                                                                                shares are half-price
    receivable and deferred acquisition costs.        be even bigger if this insurer can increase      fair value. No investment recommendation
       Usually, it is possible to work out the        its float, make an underwriting profit or          is being made here. However, float-based
    float from balance sheet information but           achieve a superior investment return. If it      methods can help to focus the valuation
    sometimes estimates are necessary.                can do all three for a long time then the sky    appraisal on the longer-term prospects for
                                                      is the limit for valuation, a fact familiar to   underwriting and investment.
    Float-based valuations of some                    long-term Berkshire Hathaway shareholders.           A few insurance companies do achieve
    insurance companies                                   There are two ways to do a quick and         market capitalisations close to equity plus
    General insurance companies often trade           dirty float-based valuation of an insurer         float. The well-regarded US automobile
    at share prices around net asset value.           that is expected roughly to break even on        insurer, The Progressive Corporation, is
    Given the competitive nature of the industry,     underwriting. We can add back the float           growing and aims for a 96% combined ratio.
    this is not surprising. High returns on capital   to shareholders’ equity. Alternatively, we       It currently trades at over twice asset value
    are rare because barriers to entry are low and    can deduct return-bearing liabilities            and at roughly equity plus float.
    competition is often based on price.              (such as corporate debt) from investment             Perhaps more intriguing is the huge
       Nevertheless, a few insurers do have           assets and cash. The raw valuation can then      discount to equity plus float of Munich Re.
    reasonable prospects of superior returns.         be adjusted to allow for other factors.          Adding back the roughly €40 billion float
    Their higher profitability should justify              Table 1 shows some rough calculations        in its general insurance and reinsurance
    valuation at a premium to asset value.            for two insurers at the end of 2010.             operations to its equity (including equity in
    How high should this premium be?                  Their float-based valuations turn out to          its large life and health businesses, which
                                                                                                       is conservatively calculated) gives a total of
         Table 1 — Float-based valuation of two insurers                                               over €60 billion. This is about three times
                                                                Amlin (£m)             Hiscox (£m)     its market capitalisation of €22 billion.
                                                                                                       Taxation of investment returns and a
 Market cap (March 2011)                                            1960                      1430     deteriorating reinsurance market no
                                                                                                       doubt account for much of the gap.
 Equity (excluding intangibles)                                     1544                      1202     However, it is conceivable that the
                                                                                                       shares might be undervalued.
 Investments + cash – debt – pension liability                      4049                      2775     Berkshire’s significant shareholding in
                                                                                                       Munich Re, the high dividend yield and
 Approximate float (row 3 – row 2)                                  2505                       1573    the company’s continual repurchasing of its
                                                                                                       own shares might support that view.              ■
 Source: Preliminary reports for year-end December 2010


www.the-actuary.org.uk                                                                                                                       April 2011     29
 Q&A                          Baroness Greengross




An age-old problem
Marjorie Ngwenya talks to Baroness Sally Greengross about the issue of ageing and her links
with the actuarial profession

                                                  What are the main objectives of the               job at Age Concern. I did not have special
                                                  ILC-UK?                                           knowledge — in fact, on the contrary, I had
                                                  The International Longevity Centre — UK           only worked with young people, mostly
                                                  is one of 12 organisations across the world       marginalised and in trouble, particularly
                                                  making up the ILC Global Alliance. We are         those involved in the Criminal Justice System.
                                                  dedicated to addressing issues of                 So it was a huge change for me to work with
                                                  longevity, ageing and population change.          older adults. I was lucky to be there and to
                                                  Therefore, we are primarily looking at ageing     have had that opportunity.
                                                  across society and across the generations to
                                                  see how we can plan for the future, taking        You have been an independent
                                                  these vast demographic changes into account.      crossbench member of the House of
                                                     The impact of ageing does, and should,         Lords since 2000 and you chair four
                                                  influence policy, whether it is through            All-Party Parliamentary Groups. One of
                                                  social care, economic performance, health         them is on Intergenerational Futures:
                                                  or well-being. One can only measure the           Old & Young Together. Tell us more
                                                  impact through policy changes and hope            about that.
                                                  that the work we have done helps to change        The challenges that the group addresses go
                                                  policies and practice to meet the huge            back to the main issues that the ILC-UK
     Baroness Sally Greengross has been           challenges we face.                               addresses, such as planning for the future
     a crossbench (independent) member                                                              in the light of demographic change.
     of the House of Lords since 2000 and         What has been your greatest                       We would like older and younger people to
     chairs four All-Party Parliamentary          professional challenge to date?                   be closer, to do more together and not to
     Groups: Dementia, Corporate Social           My current challenge is a long-term one in        lose touch as is sadly so often the case.
     Responsibility, Intergenerational Futures    the field of ageing. It is an issue that matters   Society tends to separate the generations and
     and Continence Care. She is the vice-chair   little to many, but one that I care about         there are hidden dangers in some of policies
     of the All-Party Parliamentary Group on      deeply. The Society campaigns constantly          we adopt, for example abolishing the
     Ageing and Older People, and is treasurer    to get rid of the stigma and discrimination       Default Retirement Age, which was necessary
     of the All-Party Parliamentary Group         associated with old age. Many organisations       and long overdue. However, many young
     on Equalities. Baroness Greengross is        campaign nationally and internationally           people are now unemployed leading to
     also chief executive of the International    for the UN bodies to produce a declaration,       worries that intergenerational conflicts
     Longevity Centre — UK, co-president of       eventually leading to a Convention on             could easily emerge. We try to ensure that
     the ILC Global Alliance and, in              the Human Rights of Older Persons. I am           the dangers do not materialise by adjusting
     December 2006, was announced as              pleased to be associated with this campaign.      policies and practices. We look for examples
     a commissioner for the Equality and          However, by singling older people out we run      in the areas of employment, healthcare, care
     Human Rights Commission.                     the risk of marginalising or infantilising them   funding, the built environment and design,
       She was director-general of                as being different from other adults to whom      which should reflect the mix of age groups
     Age Concern England from 1987 until          the current Human Rights Convention               and cultures in society.
     2000. Up until 2000, she was joint           applies. Older adults should primarily be seen       Looking to the future we need to
     chair of the Age Concern Institute of        as adults and age should ultimately become        change attitudes, which tend to lag behind
     Gerontology at King’s College London,        irrelevant. This is a dilemma we always face      legislation. For example, technology has
     and secretary general of Eurolink Age.       in our work.                                      totally revolutionised education, so someone
       Baroness Greengross is also chair                                                            could be living in a remote village somewhere
     of the Advisory Groups for the English       Many of the roles or posts that you               and watch a lecture by a world-renowned
     Longitudinal Study on Ageing (ELSA) and      have held in the past share a common              academic. We could question why we need
     the New Dynamics of Ageing (NDA).            theme of ageing. How did you come to              to separate the generations in all learning
     She is president of the Pensions Policy      specialise in this area?                          situations, as younger and older people could
     Institute and honorary vice-president of     I was lecturing and doing research at the         often learn together.
     the Royal Society for the Promotion of       London School of Economics and Political             Much could also be done, such as
     Health and a global ambassador to            Science. I decided being a long-term              mentoring two ways, using skills that
     Help Age International. She holds            researcher and academic wasn’t for me.            benefit both younger and older people.
     honorary doctorates from seven UK            Prior to that I had worked in both academia       We are trying to find new ways to improve
     universities and is an honorary fellow of    and industry. I was attracted by the idea of      relationships and to alert policymakers to
     the Institute and Faculty of Actuaries.      the voluntary sector when I applied for a         changes that are needed. Good examples



30      April 2011                                                                                                                 www.the-actuary.org.uk
    of this in practice are intergenerational                           The actuarial profession has a role to         How do you measure your success?
    centres where people come together to relax.                        play in many of the fields in which you        My own success is only measurable in terms
    Music and theatre activities, such as arts                          are involved. What more could                  of being reassured that some things I have
    and cultural activities, are particularly good                      actuaries do to add value?                     been doing are influential in achieving a
    ways of bringing old and young together,                            I am delighted with the work that the          better life for those on whose behalf we are
    to enhance each other’s performance. Some                           ILC-UK has done with the Profession.           working. I am also a commissioner on the
    of the mixed-age recreation centres that                            Actuaries have the expertise which we need     Equality and Human Rights Commission,
    already exist are quite inspiring.                                  in much of our work. We bring a more           working to protect disadvantaged or
       I will always remember visiting                                  ‘social science’ approach, partly through      vulnerable people and uphold their rights.
    one of Age Concern’s day centres                                    economics/health and social care expertise     The success of our work will be measured
    when I first worked for the organisation.                            and the blend of our skills strengthens,       through triennial reports, measuring fairness
    The organisation was small, with few                                I believe, both bodies. We know that           across the country.                          ■
    resources, so it was hosted in a volunteer                          collaborative working has a great potential.
    centre. Walking around, one would see a                                I am proud to have been an                     ILC-UK and the Actuarial Profession in
    mix of able-bodied and disabled people                              honorary fellow of the Institute and              partnership with ESRC Joint Debate:
    there, also some ex-offenders and                                   Faculty of Actuaries for a number of years        Measuring Quality of Life
    volunteers of all ages as well as staff. I had                      now and, more recently, an actuary,               10 May 2011, 16:00 for 16.30
    no idea who was who and from where.                                 Colin Redman, has become a trustee of             For more information, visit
    It was splendid and I learned a great deal                          the ILC-UK. This can only pave the way to         www.ilcuk.org.uk/
    from being there.                                                   increase collaboration.                           record.jsp?type=event&ID=78




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www.the-actuary.org.uk                                                                                                                                    April 2011    31
 Modelling/Life                         Swine flu




H1N1 — The swine who?
Dan Knipe explores what information can be found on the impact of swine flu on deaths in
the UK population

                                                                          deaths in 2009 as 227, of which 149 were        early 40s. Higher actual to expected deaths
                                                                          from avian or swine flu. To put that into        at these ages are not exclusive to 2009 but
                                                                          perspective, the combined influenza death        are also present in 2008 suggesting that they
                                                                          count in the three years prior to 2009 was      should not be wholly attributable to the
                                                                          just 87. In 2009 not only did the total         presence of the swine flu. In fact, the ONS
                                                                          number of influenza deaths dramatically rise     population estimates that the middle ages
                                                                          but also the percentage of influenza deaths      are more heavily influenced by net migration
                                                                          that came from the working age population       estimates than other age groups so it could
                                                                          soared. In 2009 around half of influenza         be that the increase in deaths is a result of
                                                                          deaths were in the working age population       an understated population rather than an
                                     Dan Knipe is the life
                                                                          with infants and seniors accounting for just    increase in mortality rates.
                                     portfolio manager at
                                                                          over one-third. In the three years prior to        To estimate net migration in any year
                                     Leadenhall Capital
                                                                          2009 over 80% of reported influenza deaths       the ONS uses a stratified sample survey
                                     Partners
                                                                          were in seniors and infants, with the working   conducted at UK points of entry and exit.
                                                                          population making up just over 5%.              A publication from November 2010 shows




     I
           n January 2010 the Health Protection                              Yet this published data on deaths by         that estimated immigration to the UK within
           Agency published in its weekly update                          cause may not reveal the whole picture.         the 25-44 age group during 2008 and 2009
           that the number of deaths related to                           In a pandemic year we could expect the          was broadly flat compared to significant
           swine flu in England had reached 251.                           deaths directly attributed to the pandemic      annual increases over the prior decade.
     It took care to point out though that the                            to be under-reported, with there being          Estimated emigration from the UK for the
     number “does not represent the number                                additional deaths for which influenza            same age group during the same two-year
     of deaths that can be attributed to swine                            was not the primary cause but where its         period was significantly increased compared
     flu” but rather “the number of deaths in                              presence is likely to have been a significant    to prior years. An underestimation of those
     individuals with swine flu”. As aggregated                            contributing factor in the death. One way to    entering the country and an overestimation
     national mortality statistics for 2009 become                        assess the impact of the influenza on death      of those leaving would make population
     available, it is possible to get a clearer picture                   rates is to make a comparison of deaths         estimates lower than the actual population
     of the impact of the 2009 H1N1 swine flu.                             observed in the pandemic year to those          from which deaths occur. It is plausible that
         Late last year the UK Office for National                         observed in recent years.                       the compounded effect of any errors in net
     Statistics (ONS) released publication DR_09,                            Figure 1 uses 2006 and 2007 data as a        migration estimates since the last
     which sets out statistics of the deaths                              base expectation from which to perform an       population count at the 2001 census could
     recorded in England and Wales during the                             actual to expected analysis of the male         lead to a fairly sizeable mis-estimation of the
     calendar year 2009. The ONS is among the                             deaths in 2008 and 2009. The red lines          true population.
     quickest of the national statistical agencies                        indicate a 95% confidence interval for              There is also a statistically significant
     around the world to report population                                the actual to expected ratio after allowing     decrease in the deaths during 2009 at
     mortality statistics and its data allows the                         for general mortality improvements.             senior ages. A level of immunity to the
     additional deaths in the population caused                           There is no statistically significant increase   H1N1 strain from the last time it was in
     by the 2009 swine flu outbreak to be assessed.                        in the number of deaths in 2009 with the        circulation could partially explain this
         The publication counts total influenza                            exception of people in their late 30s and       decrease in deaths. In particular, the H1N1
                                                                                                                          strain may have crowded out the seasonal
             Figure 1 — Male deaths in England and Wales 2008-9                                                           flu strains and caused their presence as a
             (base years 2006/7)                                                                                          secondary cause of death to be lower than
                     130%                                                                                                 in a normal year. However, accelerating
                                                                                    2009 actual to expected               improvements to old age mortality could
                     120%
                                                                                    2008 actual to expected               equally explain such a movement.
                     110%                                                                                                    The analysis of the data supports the
                     100%                                                                                                 assertion that swine flu was responsible for
                                                                                                                          surprisingly few deaths as either a primary
                     90%                                                                                                  or secondary cause despite its rapid spread
                     80%                                                                                                  through the population. However, the swine
                                                                                                                          flu pandemic serves to remind all of us in
                     70%
                                                                                                                          the life insurance industry that a global viral
                            39 to 41
                            42 to 44
                            45 to 47

                             51 to 53




                            87 to 89
                               0 to 2
                               3 to 5
                               6 to 8
                              9 to 11
                             12 to 14
                             15 to 17
                            18 to 20
                            21 to 23
                            24 to 26
                            27 to 29
                            30 to 32
                            33 to 35
                            36 to 38




                            48 to 50

                            54 to 56
                            57 to 59
                            60 to 62
                            63 to 65
                            66 to 68
                            69 to 71
                            72 to 74
                            75 to 77
                            78 to 80
                            81 to 83
                            84 to 86




                                                                                                                          outbreak is a very plausible threat to capital
                                                                                                                          and solvency.                                  ■
                            Source: ONS and Leadenhall Capital Partners
                                                                          Age



32      April 2011                                                                                                                                        www.the-actuary.org.uk
                                                                                                             Apostrophes                   Elegant English




Apostrophe catastrophe
In her latest article on language and grammar, Sonal Shah puts the apostrophe in its
rightful place

                                                      an apostrophe to only the second noun.            would not say “a month’s pregnant”.
                                                      For example, a project involving Ann and Bob          Another function of apostrophes is
                                                      is “Ann and Bob’s project” rather than “Ann’s     replacing omitted letters or numbers. This can
                                                      and Bob’s project” as the latter is usually       be in forming contractions such as doesn’t,
                                                      taken to mean separate projects. More than        let’s, won’t; or for years, such as expressing
                                                      one project involving both Ann and Bob are        the 1980s as ‘80s; or some abbreviations,
                                                      “Ann and Bob’s projects.” However, if Ann         such as government reduced to gov’t.
                                                      and Bob work on separate projects then their          Perhaps the greatest apostrophe-based
                                                      projects are “Ann’s and Bob’s projects”.          confusion occurs in the battle of “it’s versus
                                                          Sometimes certain phrases that have           its.” The former is a contraction meaning
                            Sonal Shah is a
                                                      become commonplace do away with                   “it is” or “it has.” The latter is the possessive
                            general insurance
                                                      apostrophes, so it is the writer’s discretion     form of “it” and belongs to this set of
                            actuary working in the
                                                      as to whether to use apostrophes, or indeed       possessives of pronouns, none of which
                            Prudential Insurance
                                                      the plural form. Deterioration of reserves        contain apostrophes: my, mine, your, yours,
                            Risk Department at
                                                      could be denoted as “reserves’ deterioration”     his, her, hers, its, our, ours, their, theirs.
                            the Financial Services
                                                      but we usually see this described as                  To help with determining which of
                            Authority
                                                      “reserve deterioration”. Similar examples are     “it’s versus its” it ought to be, try saying
                                                      scheme members and claims handling.               “it is” (or, if relevant, “it has”) in full

                                                      » The position of an                              whenever you write “it’s”, and if the
                                                                                                        sentence makes sense, then you are using
    The most popular requests I have had for          apostrophe is important                           the correct form with the apostrophe;
    this column have centred on apostrophes,
    therefore we take a look at these in the third
                                                      in differentiating                                otherwise the possessive form “its” is
                                                                                                        required. For example, “it’s a catastrophic
    instalment of the Elegant English column.         whether the reference                             event; it’s caused substantial damage;
        One of the main functions of apostrophes
                                                      is to one entity or a                             its insured loss runs into billions of pounds;”
    is to indicate possession or association, and
    the position of an apostrophe is important in     number of entities               «                where the two “it’s” are contractions of “it is”
                                                                                                        and “it has” respectively, and the “its” is the
    differentiating whether the reference is to one      Apostrophes should not be used to              possessive form referring to the insured loss of
    entity or a number of entities.                   form plurals, except when making a                the catastrophe.
    For example:                                      single letter plural, such as in “mind your           Similar errors occur with these
    n Policyholder’s claim = one claim pertaining     p’s and q’s” where the omission of the            combinations of words:
    to one policyholder                               apostrophes would obscure the meaning.            n you’re versus your
    n Policyholder’s claims = two or more claims      Apostrophes used incorrectly in forming           n who’s versus whose
    pertaining to one policyholder                    plurals are called greengrocers’ apostrophes      n there’s versus theirs
    n Policyholders’ claim = one (joint) claim        (humorously written as greengrocers               n they’re versus there or their.
    pertaining to two or more policyholders           apostrophe’s). Just as more than one banana           Using the technique of saying words
    n Policyholders’ claims = two or more claims      is written as bananas, more than one CRO          with apostrophes in full will help establish
    pertaining to two or more policyholders.          should be written as CROs and not CRO’s.          whether the words should indeed be
        If a word in its plural form does not end        Apostrophes are employed in references         contractions or not.
    with the letter “s”, then the only time to add    to time and money; for example, an hour’s             Remember the story of ‘The Apostrophe
    “s” would be when it follows a possessive         break, three months’ sabbatical and five           Man of Royal Tunbridge Wells’ who took
    apostrophe, for example, children’s accounts.     pounds’ worth. Sometimes there is confusion       it upon himself to insert apostrophes on
        It is discretionary as to whether to insert   over the use of apostrophes for plurals,          missing road signs, prompting some local
    the letter “s” when describing the possessive     such as two weeks’ notice versus two weeks        authorities to issue grammar guidelines?
    of a proper noun ending in “s”, thus both         notice; here, ask yourself how you would          His cause was not in vain, so grammar
    Chris’s report and Chris’ report are correct.     write the singular form, ie. one week’s notice,   aficionados need not be afraid to put the
    You could ask yourself whether you would          and given that this requires an apostrophe,       apostrophe in its rightful place.                 ■
    pronounce the extra “s” to determine              then so does the plural (after the “s”).
    whether you would choose to insert it,            Exceptions to this are when the time period       The views expressed herein are the author’s own and
    though in such cases it is usually down to        refers to an adjective rather than a noun, an     not necessarily those of her employer. Please note
    personal preference.                              example being someone can be three months         that this column is not intended to be prescriptive;
        When an item pertains to two or               pregnant but not three months’ pregnant.          its purpose is to provide suggestions to help make
    more nouns, the general rule is to add            Again, compare with the singular where you        communication clearer.



www.the-actuary.org.uk                                                                                                                              April 2011   33
 Stat Attack                    Cricket




Hit for six
Test purists grumble about the rise of limited-overs cricket, but could actuarial life tables
do with a similar makeover, asks Greg Becker

                                                                                                            scored so far and some measure of the ‘par
                                                                                                            score’ for the conditions of the day (reflecting
                                                                                                            things like the pitch and ground size).
                                                                                                               A variety of simple adjustments were
                                                                                                            initially made (for example, revising a target
                                                                                                            based on run-rate ratios, or by comparing
                                                                                                            scores at a similar point in an innings),
                                                                                                            and continually developed but flaws were
                                                                                                            identified. After a fateful semi-final in the
                                                                                                            1992 World Cup2, when a counterintuitive
                              Greg Becker is a
                                                                                                            adjustment was made using the ‘best scoring
                              product development
                                                                                                            overs’ method, it was decided to draft in
                              actuary at RGA
                                                                                                            the statisticians to improve the system.
                                                                                                            The D/L method was born from the efforts
                                                                                                            of two statisticians, Frank Duckworth and
                                                                                                            Tony Lewis, and the first version was used in
                                                                                                            19973. It has since been revised, most notably
                                                                                                            in 2004.
                                                                                                               The system takes into account the first
                                                                                                            team’s score and overs faced, the length
                                                                                                            of the delay, which is used to estimate the
                                                                                                            revised total and overs to be faced for the
                                                                                                            second team. The Standard Edition can be




     C
              ricket is a rare sport. A five-day         match as being to ‘score the most runs’,            applied using a set of tables and a calculator,
              match, interrupted by tea breaks,         while in limited-overs cricket, one could           while the Professional Edition requires a
              can end in a draw because time ran        argue that it is to ‘score the most runs using      computer4. The target score to be calculated
              out. It is truly a spectator-orientated   the overs available’. In an ODI, each team          using the Standard Edition is based on the
     sport — for spectators with plenty of time         starts with 50 overs (300 balls) from which         ‘resources’ that the second team has at its
     and opinions. While purists believe that Test      they try to score as many runs. In the case         disposal, which is a nonlinear combination
     cricket is the only sort of cricket there should   of an interruption — most likely due to a           of a number of wickets (0-9) in hand and
     be, money and television dragged cricket into      rain delay — the number of balls available          the number of overs remaining (0 to 50 —
     a shorter format with a guaranteed result.         to both teams needs to be adjusted as there         see Figure 1). Once one has ascertained
     Controversy was guaranteed with the                may not be enough time for each team to             the amount of ‘resources remaining’, an
     introduction of limited-overs cricket in the       face 300 balls, and for the two teams to face       estimate of their target score can be made.
     1970s, and the traditionalists have had a          a different number without an adjustment            The Professional Edition is more complex
     tough time with the increasing popularity of       would be unfair. While purists still carp on        and beyond the scope of this article.
     one-day internationals (ODIs, which have           about ODIs, every cricket supporter has a              Many would agree that the complexities
     50 overs in each innings), the introduction of     memory of a victory that was ‘stolen by a           of the game of cricket cannot be captured
     night cricket (which is played under lights in     rain interruption’, and the Duckworth-Lewis         into a tractable list of variables that could
     colourful uniforms with a ball that’s not red)     method (D/L method)1 — the system used              adequately reflect the ‘nuances of the
     and Twenty20 (T20, which has 20 overs in           today to adjust for interruptions — currently       situation’ — are the batsmen in, have the
     each innings).                                     gets much, often undeserved, criticism.             weaker bowlers been used, are the best
        Cricket, played in the open is,                    When there is an interruption, it is very        batsmen still to come, has the Powerplay5
     unfortunately, weather-dependent.                  easy to work out how many overs are to be           been taken, should all interruptions be
     While Test cricketers just headed for the          lost: just divide the length of the delay by the    treated the same irrespective of when they
     pavilion when the rain came down,                  time it takes to bowl an over. The complexity       happen, should multiple interruptions be
     knowing there was either another day or            lies in adjusting the target score to reflect that   treated differently? Not only is a
     that a draw is an acceptable result, one-day       a different number of overs will be faced by        particular match hard to translate into
     cricketers need to deliver a result that day.      each team. There are plenty of factors to be        parameters, but ODI cricket has been
     Thus, a solution was needed to take an             taken into account, with the most influential        changing: teams are scoring more and faster
     interruption into account.                         being the number of overs remaining,                — certainly boosted by T20, specialist players
        A gross simplification of cricket could          the number of overs lost, the number of             and the introduction of batting Powerplays.
     be to summarise the goal of winning a Test         wickets remaining, the number of runs               Does this mean that the D/L method needs



34      April 2011                                                                                                                          www.the-actuary.org.uk
                                                                   Figure 1 — The Standard Edition of the Duckworth-Lewis Method —
    to be revised annually to take into account
                                                                   Resources remaining by wickets remaining
                                                                                                100%
    the latest rules and trends?
                                                                                                90%                                                                         0
        There is an interesting parallel with life
                                                                                                80%                                                                         1
    tables: Over time, changes in mortality




                                                                        wickets and overs (%)
                                                                         Combined resources
                                                                                                70%
    — largely due to environmental factors,                                                                                                                                 2
    lifestyle and medical developments — have                                                   60%
                                                                                                                                                                            3
    led to ‘revised’ expectations of life, which is                                             50%
                                                                                                40%                                                                         4
    illustrated in the progression of the English
    Life Table (ELT) series7. Developments have                                                 30%                                                                         5
    been substantial, so much so that a new                                                     20%                                                                         6
    version has been produced every decade.                                                     10%
                                                                                                                                                                            7
        It should be noted that the current set                                                  0%
                                                                                                                                                                            8
    of tables — ELT 16 — does use the latest                                                           50   45    40     35      30       25    20    15    10    5   0
    graduation techniques in their development                                                                                                                              9
                                                                                                                               Overs remaining
    and that it produces regional tables (for
    instance in Scotland). The concept of
                                                                   Figure 2 — Run-rate per over in ODIs (by year) — 1980-2010 for
    ‘mortality improvement factors’ to help keep
                                                                   seven leading cricketing countries6
    tables current are commonly used, notably
                                                           6
    in pensions. With that said, ELT 16 is still
    best described as ‘out of date’ if used today        5.5
    without adjustment.                                                                                                                                                          Australia
                                                           5
        Is it time for the Duckworth-Lewis                                                                                                                                       England
    system to become more nimble, and                    4.5                                                                                                                     India
    able to reflect regional differences, recent                                                                                                                                  Pakistan
                                                           4
    developments, rule changes and trends?                                                                                                                                       South Africa
    Do we think that the team that loses an              3.5                                                                                                                     Sri Lanka
    interrupted World Cup final by a run would                                                                                                                                    West Indies
                                                           3
    think of this as spurious accuracy?
                                                                   0




                                                                   6


                                                                   9
                                                                   8
                                                                   4
                                                                   5
                                                                   2
                                                                   3




                                                                   7
                                                                   0




                                                                   9
                                                                   6
                                                                   0




                                                                   6

                                                                   8




                                                                   8


                                                                   1
                                                                   9




                                                                   0
                                                                   4




                                                                   4
                                                                   5
                                                                   2




                                                                   7
                                                                   2
                                                                   5




                                                                   3
                                                                   3




                                                                   7




                                                                   1
                                                                   1




                                                               200
                                                               200
                                                               200
                                                               200

                                                               200
                                                               200

                                                               200

                                                               200
                                                               200
                                                               200
                                                               199
                                                               199
                                                               199
                                                               199
                                                               199
                                                               199
                                                               199
                                                               199
                                                               199
                                                               199
                                                               198
                                                               198

                                                               198
                                                               198

                                                               198
                                                               198
                                                               198

                                                               198
                                                               198
                                                               198




                                                               201
        While cricket supporters berate the
    D/L method and arguments over suggestions
    for improvements proliferate, changes are                      Figure 3 — English Life Tables 1-16: Female (Red) and Male (Blue)
    made: the Professional Edition is no longer                                                                                            90
                                                          90                                                     (in descending order)                                    (in descending order)
    a table but a statistical model with a                                                                                 2000-02                                                  2000-02
                                                          80                                                                               80
    computer that takes into account many                                                                                 1990-92                                                   1990-92
                                                                                                                          1980-82                                                   1980-82
    factors. Are we as critical of life tables: should    70                                                                               70
                                                                                                                          1970-72                                                   1970-72
    they be a shortcut like the D/L ‘Standard                                                                             1960-62          60                                       1960-62
                                                          60
    Edition’, but also a thing of the past for the                                                                        1950-52                                                   1950-52
                                                          50                                                              1930-32          50                                       1930-32
    ‘professional’ user? Are we correctly applying
                                                                                                                          1920-22                                                   1920-22
    actuarial judgment when using them,                   40                                                              1910-12
                                                                                                                                           40                                       1910-12
    remembering to interrogate them before                                                                                1901-1910                                                 1901-1910
                                                          30                                                                               30                                       1891-1900
    using them? Could medical advancements                                                                                1891-1900
                                                                                                                          1881-90                                                   1881-90
    have the same effect as T20s are having on            20                                                                               20
                                                                                                                          1871-80                                                   1871-80
    ODIs? Actuaries are meant to be prudent:              10                                                              1838-54          10                                       1838-54
    are we looking out for the batting Powerplays                                                                         1838-44                                                   1838-44
                                                           0                                                              1841              0                                       1841
    of longevity? Are migration, urbanisation and
                                                                 0
                                                                 6
                                                                12
                                                                18
                                                                24
                                                                30
                                                                36
                                                                42
                                                                48
                                                                54
                                                                60
                                                                66
                                                                72
                                                                78
                                                                84
                                                                90
                                                                96
                                                               102
                                                               108




                                                                                                                                                  0
                                                                                                                                                  6
                                                                                                                                                 12
                                                                                                                                                 18
                                                                                                                                                 24
                                                                                                                                                 30
                                                                                                                                                 36
                                                                                                                                                 42
                                                                                                                                                 48
                                                                                                                                                 54
                                                                                                                                                 60
                                                                                                                                                 66
                                                                                                                                                 72
                                                                                                                                                 78
                                                                                                                                                 84
                                                                                                                                                 90
                                                                                                                                                 96
                                                                                                                                                102
                                                                                                                                                108




    catastrophe risks more or less of a problem
    than ball-tampering? Are we making different         References                                                                      4 http://bit.ly/ePvlGw
    adjustments for prudence when using them
    for mortality or longevity business?                 1 http://bit.ly/3j4StG                                                          5 http://es.pn/ih9qip
    For all these questions and more, it is
    recommended that an actuary finds a Test              2 http://es.pn/ehS2Y0                                                           6 http://bit.ly/gENV8Z
    match, and some colleagues, to explore the
    problem — and preferably before lunch… ■             3 http://es.pn/hne8Iw                                                           7 http://bit.ly/gDqMP8



www.the-actuary.org.uk                                                                                                                                                     April 2011           35
 International                 Kenya




Out of Africa
                      Fresh from a recent visit, Marjorie Ngwenya reports on the opportunities and
                      challenges facing actuaries in Kenya



     T
              he Actuarial Society of Kenya (TASK)     adopting the new South African education          occupational schemes. Legislation has focused
              was launched in 2005. It brings          strategy and obtaining accreditation for the      on enhancing protection of members’ benefits
              together qualified and trainee            local university actuarial science programmes.    and improving governance of schemes.
              actuaries in professional, educational      Some of the local qualified actuaries teach     Public service schemes are being re-engineered.
     and research organisations with an aim of         at the universities and participate in course        There is a trend towards DC schemes
     promoting the actuarial profession in Kenya       reviews and examination marking.                  and there are particular concerns regarding
     and East Africa. Sundeep Raichura is the             Actuarial members are predominantly            contribution rates, distribution and equity
     founding and immediate past chairman.             employed by life insurers and consulting          of allocation of returns to member accounts,
         TASK performs its role through its            firms. Some are employed by banks,                 conservative investment strategies and
     governing council and committees and              investment companies and healthcare               member communication.
     works to a three-year strategic plan.             organisations. The few consulting firms in the
     Its vision statement is “to position the          country mainly practise in the pensions field.     Challenges
     actuarial profession in Kenya and the region                                                        While there are many services that actuaries
     as the leading profession in the areas of         Statutory roles in pensions and insurance can offer, most life insurance companies will
     modelling and management of financial risks        Insurance                                         only call upon actuaries to undertake yearly
     and contingent events”.                           An actuary is currently defined as FIA or FFA      actuarial valuations and certify rates for new
         The society fulfilled its ambition to          or other as approved by the Regulator.            life products. There is a perceived high cost of
     become a full member of the International         n Actuarial certification of long-term             actuarial services
     Actuarial Association at the International        insurance premium rates                               The trend towards DC schemes limits the
     Congress of Actuaries in Cape Town in 2010.       n Annual statutory actuarial valuations of life   traditional defined benefit actuarial role.
         With Kenya there are less than ten            funds                                             The capacity of the market to absorb
     qualified actuaries, including associates of       n Independent actuary report on mergers           actuarial science graduates in traditional
     both the Institute and Faculty of Actuaries       and acquisitions.                                 fields has led to frustration and
     and the Society of Actuaries. There are over         There is no statutory actuarial role for       disillusionment of actuarial graduates.
     300 students registered with the Institute and    non-life or healthcare currently.                 Wider fields are not penetrated and they are
     Faculty of Actuaries, although not all of them    Pensions                                          a hard sell, although some individuals have
     are in actuarial practice. There are further      An actuary is defined as fellow member of          done well in banks, investment houses and
     students who have graduated from local            recognised international actuarial body.          information technology.
     universities with actuarial science degrees       n Triennial actuarial valuations of defined        Other challenges faced are:
     and more actuaries of Kenyan origin working       benefit schemes                                    n Effective implementation of actuarial
     abroad.                                           n Minimum funding actuarial valuations (no        recommendations
         Many students have given up on actuarial      prescribed basis) and statutory remedial plans    n Actuarial education, resource and capacity
     examinations and have taken up other              n Actuarial certifications of amendments           constraints and lack of accreditation
     qualifications such as the CFA charter.            affecting financial health                         n Competition from other courses or
     A lack of actuarial employment opportunities      n Actuarial evaluation on winding up              qualifications
     and the difficulty and length of the actuarial     n Actuarial certifications of transfer values      n Mentoring and training of students.
     qualification process are cited as reasons.        and commutation terms                                 TASK organises an annual actuarial
         The local universities have actuarial         n Initial statutory requirement for actuarial     convention in Nairobi and is promoting
     programmes that enrol hundreds of students.       reviews of defined contribution (DC) schemes       research by university students and actuaries.
     Among them, the University of Nairobi’s           dropped in 2004                                   TASK worked closely with Actuaries Without
     programme is the most established, which          n Regulations on scheme conversions               Frontiers to organise a two-week forum on
     started in 2000. Jomo Kenyatta University         being prepared.                                   enterprise risk management in Nairobi in
     of Agriculture and Technology (2002),                There are some provisions in income tax        late 2009. TASK is also working with the
     Maseno University (2006) and                      rules on treatment of actuarial surpluses         regulators and insurance companies to come
     Strathmore University (2010) also have            and deficits.                                      up with a formalised internship programme
     programmes. TASK is also liaising with the           TASK is seeking recognition under the          so that actuarial trainees benefit from relevant
     Actuarial Society of South Africa to look at      insurance and pensions legislation.               experience during their holiday attachments. ■

                                                       Industry players                                  With thanks to Sundeep Raichura for the
          KENYA STATS AND FACTS
                                                       Most companies transact life insurance and        overview of the Kenyan actuarial profession
     Land mass 580,367 square kilometres               are composite insurers.                           and industry information. Sundeep, a qualified
     Population 40,046,566 ( July 2010)                   The pension sector comprises unfunded          actuary, is managing director for Alexander
     GDP £20.054bn                                     pay-as-you-go Public Service Superannuation,      Forbes Financial Services (E.A) Ltd and was
     Source: CIA                                       National Social Security Fund (DC) and            instrumental in the formation of TASK



36       April 2011                                                                                                                      www.the-actuary.org.uk
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Apply yourself to work
There’s a huge selection of apps available for modern phones and tablet computers.
Anthony Dhanendran picks some of the most suitable and interesting for actuaries
     LinkedIn Free                                    Dragon Dictation Free                             10 more worth browsing
     LinkedIn is a useful                             The iPhone and iPad have
     business tool for                                microphones, so why not put them to               Spotfire Free — text and
     making contacts                                  some use? The Dragon app does just that,          graphical analysis tool
     and connections,                                 recording and dictating what you type in          from Tibco.
     but now you can                                  for emails, memos or anything else.               Works with: iPad only
     take it with you,                                A separate Blackberry Dragon For E-mail
     with the free                                    app is also available.                            iSpreadsheet £1.79 —
     LinkedIn apps                                    Works with: iPhone/iPad                           take your spreadsheets
     that allow you to                                                                                  with you using Google Docs
     access your connections and their profiles and    Evernote Free                                     Works with: iPhone/iPad
     updates. You can also use it to join             Clip any website, article or document you
     The Actuary’s LinkedIn group.                    find online for later reading and reference.       Graphing Calculator £1.19 — powerful
     Works with: iPhone/iPad/Blackberry/Palm          Either save notes directly or email them to       graphical calculator with handwriting
                                                      your personal Evernote email address, and         recognition
     Bloomberg Free                                   mark them up with photos and audio.               Works with: iPhone/iPad
     Get business and world news on the move          Works with: iPhone/iPad/Android/Blackberry/
     using the company’s collection of apps. There    Windows Mobile                                    Remember the Milk Free — simple but
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     translations in some of those, though a          kinds of full-on test.                            UK Tax Calculator 59p — simple but effective
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     GoToMyPC Free                                    ZagatToGo £varies (iPhone £5.99)                  Sky Sports News Free
     This desktop programme is great for accessing    Zagat guides aren’t well-known in the UK,         — get live sports news
     a work computer from home (or vice versa).       but in America they’re revered. The apps,         (separate Sky football
     The mobile version brings that experience        available for nearly all smartphone models,       and cricket apps are
     to your iPad. Android and iPhone users can       cover all the restaurants from 45 of Zagat’s      also available)
     make use of the similar Teamviewer app.          paper guide books.                                Works with:
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38      April 2011                                                                                                                   www.the-actuary.org.uk
arts@the-actuary.org.uk                                                                                   Richard Elliott                               Arts




Short stories
Richard Elliott argues that small really is beautiful




    W
                   hen was the last time you         cosmopolitan future. In the summer of 2010,      slipping into didacticism. This cleverness
                   picked up a book only to set      The New Yorker published a list of the 20        allows her to pull off the grotesque symbolic
                   it down again with a gasp         ‘best’ fiction writers under the age of 40,       imagery of the second half of the story.
                   once you saw the number in        all of whom have written short stories, and
    excess of 600 on the last page? I recently       currently living in North America. The list      Signs and Symbols —
    had this experience with Hilary Mantel’s         included writers from Nigeria (Adichie), Peru    Vladimir Nabokov (from Nabokov’s Dozen)
    Wolf Hall, which clocks in at a daunting         (Alarcón), Latvia (Bezmozgis), China (Li),       This moving story about a mentally disturbed
    672 pages. Where do people find the time          Ethiopia (Mengestu), Yugoslavia (Obreht)         young man and his elderly parents sees the
    to get through such hefty tomes? On a lazy       and Russia (Shteyngart).                         author of Lolita rein in his more mischievous
    holiday you might well polish it off within         In contrast to a 600-page novel, a short      impulses. Nabokov famously posited ‘beauty
    three or four days but, vacations aside, many    story that doesn’t quite live up to an overly    plus pity’ as a definition of art; here, the two
    people (myself included) would require a         fervent recommendation will rob you of a         combine to memorable effect.
    good few weeks in which to spread the            mere hour (or thereabouts) of your time.
    20-plus hours’ reading time. And I suspect       With this in mind, I look forward to             Good Country People —
    I’m not alone in finding the latter approach      hearing what you thought about one or            Flannery O’Connor (from A Good Man is
    to novel-reading much less satisfying than       more of the following five marvellous tales.      Hard to Find)
    the former.                                      No excuses accepted.                             When the haughty and atheistic protagonist
       The solution? Allow me to introduce                                                            of this story encounters a simple travelling
    an undervalued old friend: the short story.      Araby — James Joyce (from Dubliners)             Bible salesman, the possibility of romance
    Short stories have been around in various        The young narrator is besotted with              seems remote. If the preceding sentence
    shapes and forms for just about as long as       his friend’s older sister, intending to          suggests a rather sentimental offering,
    anyone can remember. The development             purchase for her a gift from a bazaar.           nothing could be further from the truth.
    of the modern short story, however,              Joyce popularised the term ‘epiphany’            In many short stories, the title will appear
    owes much to a 19th century Russian —            in a secular context and each of the stories     just once, if at all. In Good Country People,
    Anton Chekhov.                                   in his collection Dubliners feature              the title appears half a dozen times, as
       More than any writer before him,              characters who arrive at a moment of             O’Connor builds to an astonishing climax.
    Chekhov dealt with both the mundaneness          revelation. In Araby, this moment comes
    and mysteriousness of life. He eschewed          in the lyrical last sentence.                    A Silver Dish — Saul Bellow
    facile conclusions, avoided judging his                                                           (from Him With His Foot in His Mouth)
    characters and focused on internal emotion       You’re Ugly, Too — Lorrie Moore                  The longest story here, A Silver Dish is still
    rather than external event. In 1987, when        (from Like Life)                                 easily consumed in a single sitting and never
    25 eminent authors were asked to name            Zoë Hendricks is an eccentric history lecturer   outstays its welcome. Bellow was one of the
    the most crucial influences on their work,        fighting against pressure from family and         greatest prose writers of the last century and
    Chekhov received double the nominations          lovers to conform. At one point in the story     his warm humour is wonderfully displayed
    of any other writer.                             she concludes that “all men, deep down,          in this tale about father and son.
       In the first half of the 20th century,         wanted Heidi”. Moore deals with feminist
    American publications such as                    concerns with no little wit and without ever     Aforementioned books available from all good retailers
    The Atlantic Monthly and Saturday Evening
    Post paid healthy sums for stories, attracting
    such luminaries as Faulkner and Fitzgerald.
    Post-war America boasted many of the
    short format’s most enthusiastic and skilled
    practitioners, including Eudora Welty,
    Flannery O’Connor and John Updike.
       The 1960s and ‘70s saw writers such as
    Borges, Barthelme and Gass attempt to shake
    up what they saw as conservatism in the
    short story’s form. However, Raymond Carver,
    arguably the most influential figure in the
    ‘80s, harked back to Chekhov with his widely
    admired minimalist style.
       Although one country — America —
    will most likely continue its dominant role,
    the short story looks set to have an exciting



www.the-actuary.org.uk                                                                                                                         April 2011      39
 Puzzles                        Coffee break




        April prize puzzle                        April fuel
        For a chance to win a £50 Amazon voucher, please send your answer to puzzles@the-actuary.org.uk by 15 April.

        Arthur, Bernie and Colin are having a cycle race on a circuitous              Any of the cyclists reaching the van are immediately
        route between Edinburgh and Fife. All three set out at 10am at                seduced by its sugar-dusted fried produce and lose a
        different speeds from Edinburgh — Arthur is 5km/h faster than                 constant 20km/h in speed due to the combined effects of
        Bernie and 10km/h faster than Colin.                                          having a bag full of doughnuts to carry on the handlebars
          Most of the time all our protagonists maintain a constant                   and acute indigestion.
        speed over the course. However, also travelling the same route                  The van leaves Edinburgh at 9am and arrives in Fife at 3pm;
        at a constant speed is a mobile catering van selling doughnuts.               the race itself is a three-way tie. When does it finish?

        Terms and conditions
        The prize will be awarded for a correct answer received before the closing date picked at random by the puzzles editor. 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. Your details will not be passed to any third party in connection with this draw.


     Puzzle 470                               Gilty pleasure                                    1      2       3        4        5       6        7


     Across:                                                                               8                            9


     8. Received without common era, strangely, to deduce (6)                         10                                                                   11

     9. Double count, perhaps (8)
                                                                                 12                    13                                14
     12. To not have one for retirement leaves one short (4)
     13. Also known as rich funny place in Pakistan (7)
     14. Disentangle locks (6)                                                   15                            16       17                        18


     15. Leave one’s shores in a semi-grateful state (8)
     17. Where approximations lie (9)
                                                                                 19                                     20
     19. Reserving tree inside bite (8)
     20. Trial in weird date? Proven! (8)                                                                                                                  21


     22. Buffing tool found inside flank (6)                                     22                            23                24      25


     23. Currency exchange of one rand (5)
     25. Counterfeiting note with family before German capital (6)
                                                                                           26          27      28                29
     26. The way someone who is testate goes? (8)
     29. Protect loud substitute (8)                                                  30


     31. The way those without crosswords live! (10)                             31                                     32       33

     33. About half a buck the monarch has when reprimanding (8)
     34. Exposed side that blows from below (6)
                                                                                 34             35             36                37               38
     36. & 11. Down. The worth of a gift? (7,5)
     37. The result of many ticks OR go through when dad boards ship (4)
     38. Odd pulse and one that’s in force (8)                                             39                                    40


     39. One who wants to lose (6)

                                                                               Down:
                                                                               1. Where killer and victim are one among adolescents (7,7)
                                                                               2. Underwriting arising from relative position after gamble (4,5)
                                                                               3. Bring forth a pessimistic outlook (4)
                                                                               4. Attempt, we hear, to find a baby’s bed with knitting fabric (6)
                                                                               5. & 7. Down. Fatal for twentysomethings! (8,4)
                                                                               6. They cover in more certain direction (8)
                                                                               7. See 5 Down
                                                                               10. Ancient common with stock, funnily enough, that’s one of 6 Down (3,6)
                                                                               11. See 36 Across
                                                                               16. Urged, for example, by an earthsea wizard (5)
                                                                               18. It’s very dangerous for vertebrates! (9,5)
                                                                               20. Pester any small number inside (5)
                                                                               21. Least uniform jumble of venue sent (9)
                                                                               24. Fresher for each after Rhode Island (5)
                                                                               25. What one does after being patient, hopefully (4,6)
               MORE PUZZLES ONLINE                                             27. & 30. Down. Revealing garments? (8,5)
                                                                               28. Final piece of mail for the sounding of the bugle (4,4)
       To access the puzzles archive or to play daily interactive              30. See 27 Down
       Sudoku, visit www.the-actuary.org.uk/puzzles.                           32. Youth leader with funny slide gives rates of interest (6)
       The puzzles editor is pleased to receive ideas for new                  35. Reserve that’s initially interesting, but not really (4)
       puzzles from readers at puzzles@the-actuary.org.uk                      37. They meet when there is enough money going around (4)

40      April 2011                                                                                                                              www.the-actuary.org.uk
      Bridge challenge 14                         Double conundrum               www.ebu.co.uk/education/learning/default.htm. Please send any
      A useful beginners’ guide to playing bridge can be found at                comments you have to Tom Bratcher at puzzles@the-actuary.org.uk

       You are sitting in the West seat and the (natural) bidding goes as follows:
       The bidding:
       S         W          N        E
       1♥        Pass       2♦       Pass
       3♥        Pass       6♥       Pass
       Pass

       ♠832                  N       1. You pick up this almost pointless hand and can
       ♥J10975                       hardly believe your ears as the opposition sail
                         W       E
       ♦108                          into 6♥. They cannot make their contract, so why
                             S
       ♣532                          shouldn’t you double?

                                                                    ♠K75
                                                                    ♥Q8
       2. North’s hand is as follows. What should he have           ♦AKQ75
       bid over 3♥?                                                 ♣A84

    Solutions for March 2011
                                                                                Bridge challenge 13 solution
       March prize winner                                                       Defending the defensible
       Congratulations to this month’s winner, Lynne Davis                               The bidding:
                                                                                         S        W          N         E
                                                                                         1♠       Pass       2♣        Pass
    March prize puzzle                          Strange                                  2♦       Pass       3♠        Pass
    1) Hamper / hamster / hamstring      bedfellows                                      4♠
    2) Pinhole / pinion / pink
    3) Unclassified / uncle / unclean                                           You will need partner to take a couple of tricks to set the contract.
    4) Peremptory / perennial / perestroika                                     From the bidding, spades and diamonds are unlikely prospects and,
    5) Loganberry / logarithm / logbook                                         after your ace, Dummy has the top hearts. The best chance lies in
    6) Bale / baleen / baleful                                                  clubs — and if Declarer has enough club losers to allow you three
    7) Ordeal / order / orderly                                                 winners, then it’s likely that K♥ is a singleton and he is planning to
    8) Legendary / legerdemain / legging                                        discard his losing clubs on QJ♥.
    9) Juxtapose / ka / kabaddi                                                   Therefore you must win with A♥ immediately and then lead out
    10) Hobo / hock / hockey                                                    A♣ and another club — and hope you are rewarded when partner
    11) Julienne / jumble / jumbo                                               turns up with KJ♣.
    12) Perceptive /perch / perchance                                             The full hands look like this:      ♠K98
    13) Rack / racket / racketeer                                                                                     ♥QJ2
    14) Skinny / skint /skip                                                                                          ♦J109
    15) Verve / vervet / very                                                                                         ♣Q1072
    16) Nicety / niche / nick                                                                           ♠752                       ♠64
    17) Filibuster / filigree / filing                                                                  ♥A1098           N         ♥76543
    18) Ibex / ibis / ibuprofen                                                                         ♦632          W     E      ♦Q54
    19) Wail / wain / wainscot                                                                          ♣A64             S         ♣KJ9
    20) Loa / loach / load
                                                                                                                    ♠AQJ103
                                                                                                                    ♥K
    Puzzle 468 solution                         20 questions                                                        ♦AK87
    A priori the probability of a student with a score of 12 having                                                 ♣853
    revised is slightly less than a half, but because we know that
    exactly three of the six students revised, the probability that Pete          Without a club switch, Declarer can discard clubs and make an
    revised is (slightly) influenced by knowledge of Sharon’s score.            overtrick with the help of the diamond finesse.
      Given the information in the question we can express the
    probability that Pete revised as
      ( P (ps) + P (ps’) ) / ( P (ps) + P (ps’) + P (p’s) + P (p’s’) )          Puzzle 469 solution                   Circular argument
      where, for example, P (ps’) is the probability that Pete revised          He is near the South Pole — points off if you thought he was at the
    and scored 12 but Sharon didn’t and scored 11. Working through              North Pole, which can be walked to when frozen, but is pack ice
    to calculate the individual probabilities is a straightforward              rather than land and so cannot support permanent buildings.
    combinatorial exercise in Excel; the probability that Pete revised is          The building could be on any one of a set of concentric circles
    approximately 52.7%.                                                        slightly more than three miles away from the South Pole.

www.the-actuary.org.uk                                                                                                                     April 2011    41
 Student page                    Stephen Paines                                                       Follow @TheActuaryMag                               Join The Actuary’s
                                                                                                      on Twitter                                          LinkedIn group




     This month Stephen Paines applies a familiar subject — to another
     familiar subject



     Subject to scrutiny
     The exams we take furnish us with the                HA1. CT4 is harder than the other seven.                           in my results. So is this study scientifically
     tools to tackle statistical problems. So why         The same is true of CT8, simply substituting                       sound? An interesting point: if someone else
     not return the favour, and apply them to             CT8 results into the formula above                                 had made the hypothesis before looking at
     actuarial exams? A rather twisted take on            appropriately: it is harder than the other seven.                  the data and came to the same conclusion,
     revenge, perhaps.                                        In fact, because the sample sizes are                          would the result then have been trustworthy?
         I have a feeling that the following may          so large here, it’s almost trivially the case                          As ever, statistics need to be interpreted
     be true:                                             from looking at the averages. A quick bit of                       with care. The graph shows that CT8 and CT4
     A. That one of the CTs is more difficult than         analysis suggested that, unless the pass rates                     are not always harder to pass than other CTs.
     the others. (Let pA1 be the pass proportion          were within about 2% of one another, they                              When doing these tests, doing the
     for an individual CT, and let pA2 be the pass        would be significantly different.                                   statistics is not really that difficult. Selecting
     proportion for the others. Then HA0: pA1 =               On closer inspection, the data suggests that                   the correct test is time-consuming, but not
     pA2. HA1: pA1 < pA2.)                                maybe CT4 and CT8 are as difficult as one                           difficult in itself. Once the test is selected,
     B. That September CT pass rates are higher           another. The present test mixes the two up.                        testing for significance is straightforward,
     than April CT pass rates. (Let pB1 be the pass       So if we separate them out, guess what? —                          once the data has been collected.
     proportion for September CT exams, and               there is no significant difference in difficulty                         The difficulty is in trying to conduct the
     let pB2 be the pass proportion for April CTs.        (as measured by the above statistical test).                       test in the correct, logical manner, and to
     Then HB0: pB1 = pB2. HA1: pB1 > pB2.)                    Perhaps testing hypothesis B, that                             do things objectively. Another fair point
         I will interrogate both with a simple            September pass rates are higher than April                         is to ask whether what I’ve done has any
     statistical test. Please note — I make no            ones, will be more controversial.                                  predictive power?
     claims that this is for anything other than a            Performing the same statistical test again,                        So next time you come across an exam
     bit of fun, of sorts.                                this time over CT results from the last six                        question involving statistics, it may be worth
         Visual inspection of the data (Figure 1)         sittings, reveals that HB0 is false. There is, in                  asking yourself whether you know how you
     suggests that CT4 and CT8 are more difficult          fact, statistical significance to suggest that                      would get to the point where the question
     than the others. I’ll start by considering those     April exams have a higher pass rate than                           was asked? But I dare say that will be the last
     two subjects in particular.                          September exams (although the results are                          thing on your mind if you’re sitting exams
         I shall use a formula, but I hope the old        much less significant than for hypothesis A).                       this month.
     publishing maxim that one can halve the              So we can’t accept HB1 as it stands — the
     number of readers for each formula published         inequality needs to be turned around.                              Any mistakes are the fault of the author alone.
     does not apply to the actuarially adept reader.          But you might rightly point out that I                         The data was collected by the author from the
     It may even double the number.                       decided to do these tests after collecting my                      Profession’s website. Grateful thanks go to Greg Becker
         I’ll use the test to compare the ‘success        data, so I am guilty of finding my hypothesis                       and Anton Brink for their comments and suggestions.
     proportions’ of two binomially distributed
     random variables. I took the proportion                        Figure 1 — CT pass rates, last six sittings
     of successes in CT4 in the Institute and
                                                                                     90%                                                                                       CT1
     Faculty for the past six exam sittings (pA1 the
     proportion, nA1 the number of sittings), and                                    80%                                                                                       CT2
     compared this to the proportion of successes                                                                                                                              CT3
     in CTs 1, 2, 3, 5, 6, 7 and 8 in the Institute                                  70%
                                                                 Proportion passed




                                                                                                                                                                               CT4
     and Faculty for the past six exam sittings
                                                                                     60%                                                                                       CT5
     (pA2 the proportion, nA2 the number of
     sittings). Then, using the test statistic:                                      50%                                                                                       CT6

                        pA1 – pA2              ~ N(0,1)
                                                                                                                                                                               CT7
                                                                                     40%
           pA1 (1 – pA1)       pA2 (1 – pA2)
      √              nA1
                           +
                                    nA2                                              30%
                                                                                                                                                                               CT8



       The outcome is HA0 is false; so we accept                                     20%
                                                                                           Apr ‘08   Sep ‘08   Apr ‘09   Sep‘09    Apr ‘10    Sep‘10     Total


42      April 2011                                                                                                                                                www.the-actuary.org.uk
                                                                                                       AOTF/Book review           People/Comment




     Actuary of the future                           Book review
     Priya Mistry
                                                     Andrew Smith reviews
                                                     The Immortalization Commission
       Employer and
       area of work                                  by John Gray
       Towers Watson,                                The desire for immortality is as old as            Moura Budberg,
       pensions.                                     humanity itself. Gray’s book explores              half-sister to
                                                     two attempts to escape the finiteness of our        Nick Clegg’s
                                                                                                                                 The Immortalization
       How would your                                life on earth.                                     great-grandmother,
                                                                                                                                 Commission is
       best friend describe you?                         The immortalisation commission was             twice married and
                                                                                                                                 published by
       The coolest kid on the block.                 established after Lenin’s death, to preserve       also enjoying affairs
                                                                                                                                 Allen Lane. RRP £18.99
                                                     his body. The Bolsheviks had faith that one        with Bruce Lockhart,
       What motivates you?                           day science would be able to restore life to       HG Wells and Maxim Gorky.
       Bran Flakes in the morning.                   sufficiently well-preserved corpses so all that         Stylistically, the book is tedious.
                                                     was required for Lenin’s immortality was           A long string of anecdotes are individually
       What would be your personal                   that his corpse be preserved until that day.       entertaining but mostly peripheral to the
       motto?                                        In the meantime, the comrade’s mausoleum           main thrust of the book. An account of
       Do unto others as you would have them         is open to curious Moscow tourists.                failed movements is not to be expected
       do unto you.                                      A central concept of Bolshevik socialism       to end in a triumphant finale, but this
                                                     is that society progresses over long periods       book disappointingly fizzles out leaving
       Who do you admire most and why?               of time in a way that transcends the life          many loose ends. It is a book easy to put
       My parents for raising me so well. Well, I    of any individual. Mortality affects us            down and took real effort of the will to
       think I turned out alright.                   individually, while the society we build           get through to the end in order to write
                                                     is immortal. This provides context for             this review. Read the book because it will
       What is your most ‘actuarial’ habit?          Stalin’s terrors, in which the acceleration of     improve you, not for the enjoyment.
       I can’t think of anything and am now          society’s progress entailed a corresponding            Has Gray’s writing any actuarial
       worried that I don’t have any…                acceleration of mortality for individuals          relevance? Life insurers are unlikely to avoid
                                                     who stood in the way.                              claims on the basis that the policyholder
       How do you relax away from the                    In contrast to large-scale Soviet rejection    still lives beyond the grave. Instead, it
       office?                                       of religion, the book portrays Bolshevism          provides an insight of how odd scientific
       Meet up with friends, watch films,             as religion by another name. Gray digresses        endeavour can look with the passage of
       visit interesting new places. I generally     from his main theme to provide a graphic           time, when the motivations have changed.
       try to make the most of free time.            and detailed account of these terrors. I read          The late nineteenth century saw a
       Being a recent graduate, it has been          the book on a long train journey from Lviv         philosophical crisis. The concepts of
       hard adjusting to working life!               to Mukachevo in Ukraine, so I found his            self-interest and ethical behaviour
                                                     account of Stalin’s forced collectivisation        towards others were seen as reconcilable
       Tell us something unusual about               and subsequent Ukrainian famine                    only by a belief in an afterlife involving
       yourself                                      particularly poignant.                             retribution for unethical behaviour.
       My height — I’m four foot nine!                   The other half of Gray’s book documents        Darwinism appeared to imply that humans
                                                     efforts to contact the dead within the             shared the same ephemeral nature as other
       What’s your most treasured                    spiritualism movement. Nowadays, we                animals. The philosophical edifice could
       possession?                                   might be inclined to dismiss the spiritualist      stand only if, contrary to Darwinism, some
       My three-year old iPod — it is so large       church as a fringe religion, undeserving           proof of life after death could be found.
       compared to the ones that are out now,        of serious scientific attention. The reverse,       Science’s entanglement with spiritualism
       that I have been asked whether I am           however, was the case in late nineteenth           was the result of this quest. While that
       in construction.                              century England. So-called ‘automatic              particular quest was in vain, the temptation
                                                     writing’, received during spiritualist séances,    to write the conclusions and then back-fill
       If you ruled the world, what would            was interpreted as messages from beyond            the research remains with us. Much of what
       you change first?                             the grave. Leading scientists and writers          we now consider as actuarial science may
       I would make sure that all people have        of the day devised elaborate experiments           look as odd to our successors as automatic
       heard of the word ‘actuary’ and can           involving sealed documents left by the             writing does to us.
       define it. That would allow me to outlaw       dying, and statistical analysis applied to
       the question ‘what is an actuary?’            volumes recorded automatic writing.                        CONSIDER YOURSELF A
                                                         A small cadre of intellectuals, influential
                                                                                                                BUDDING BOOKWORM?
             WHO WOULD YOU LIKE TO                   in both London and Moscow, form an                      We welcome readers’ suggestions of
             SEE FEATURED HERE?                      intricate chain that joins the two halves               relevant books for our contributors to
           If you would like to nominate someone     of the book. Gray gives a particularly                  review or, alternatively, if you would like
           for Actuary of the Future, please email   entertaining account of the pivotal                     to submit your own reviews, then please
           AOTF@the-actuary.org.uk                   Russian siren and KGB agent                             email sharon.maguire@incisivemedia.com


www.the-actuary.org.uk                                                                                                                        April 2011   43
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                                                   Robert Heathcoat        Chris Hoffman                   transactions

                                                   Bradshaw Dixon          Protection Fund.
                                                   Moore, the actuarial    All join as assistant    managing director        with some of JLT’s
                                                   and administrative      vice-presidents.         in the securities        larger clients.
                                                   professional services   Mr Furniss has           division focusing on
                                                   firm, has announced      joined the Client        ALM and solvency         OAC has announced
                                                   the appointment         Solutions Group          solutions for            the appointment of
 City University London has announced the
                                                   of John Riley as an     where he will be         insurance                David Lechmere
 appointment of Professor Richard Verrall
                                                   actuarial consultant    helping clients          firms in Europe.          to the newly
 to the new post of pro-vice-chancellor
                                                   to the firm.             to manage their          Prior to that he         created position of
 (Strategy & Planning). Professor Verrall
                                                   Mr Riley spent nearly   pension risk and         spent over twenty        head of insurance
 will join City’s executive team from its
                                                   30 years at Sun Life    evaluate                 years at Watson          consulting.
 Cass Business School where he was associate
                                                   Assurance Society,      de-risking options.      Wyatt, where he was      This new position
 dean (Research, Knowledge Transfer &
                                                   principally in          Mr Heathcoat and         a main partner and       reflects the growth
 International). In 1999 Professor Verrall was
                                                   marketing, product      Mr Hoffman join          leader of the UK life    of OAC’s insurance
 made an honorary fellow of the Institute for
                                                   development and         the Professional         practice, specialising   consulting business
 services to the actuarial profession.
                                                   corporate and           Services team,           in providing             and recognises
     RSA plc has             from Towers Watson,   business planning,      where they will          advice to insurers       Mr Lechmere’s many
     announced the           where he advised      and oversaw the         be responsible           on risk and value        years of experience
     appointment             companies on          development of          for onboarding           measurement and          in the life assurance
     of Sankar               employee              all the group’s         assets for new           management.              field at a senior level.
     Mahalingham             benefit issues.        international           clients adopting                                  Mr Lechmere’s new
     as head of                                    activities, directly    PensionsFirst’s          JLT has appointed        role encompasses
     Group Pensions.         Beazley plc has       managing its            web-based risk           Malcolm Paul as          the responsibility
     Mr Mahalingham          announced that        overseas operations.    management               chairman of JLT          for actuarial
     will be responsible     Andrew Pryde has      Since leaving           platform.                Employee Benefits         standards within
     for driving pension     been appointed        Sun Life in 1997,                                Scotland, a new role     OAC. Mr Lechmere
     strategy globally       chief risk officer     he has developed        Aviva plc recently       underpinning JLT’s       joined OAC in 2000
     across the group,       and has joined the    his own actuarial       announced the            commitment to the        and holds a number
     and aligning the        management team.      consultancy             appointment of           Scottish market.         of Approved Person
     strategy with rewards   Mr Pryde joined       business.               Martin Muir as           Mr Paul’s previous       roles within the
     as a whole. He joins    Beazley in 2005 as                            its group asset          role within JLT was      Friendly Society
                             group actuary.        PensionsFirst has       and liability            as executive director    sector and Life
                             Beazley also          recently announced      management               in the Trustee           Insurance business,
                             announced that        three new senior        director.                Solutions business.      and he has been
                             Colm Hensman          hires —                 Mr Muir will have        Throughout his           approved by the
                             has been appointed    Matthew Furniss         responsibility for       career, he has           FSA to act as an
                             as group actuary.     and                     the optimisation         maintained a             independent expert
                             He joined Beazley     Robert Heathcoat,       and strategic asset      portfolio of             in connection
                             in 2005 and has       who join from           allocation of the        scheme actuary           with Transfers of
                             been leading the      Punter Southall, and    Aviva investment         and consulting           Business under Part
                             development of        Chris Hoffman who       portfolio. He joins      client appointments,     VII of the Financial
                             pricing tools for     previously worked       from Goldman             and leads the            Services and Markets
     Sankar Mahalingham      the group.            for the Pension         Sachs where he was       relationships            Act 2000.




44      April 2011                                                                                                                  www.the-actuary.org.uk
                                                                     Appointments
                                                                                                   www.theactuaryjobs.org.uk
                                                                           To advertise your vacancies in the magazine and online please contact:
                                                             Aisling Durrant, Tel: +44 (0)20 7316 9493, E-mail: Aisling.Durrant@incisivemedia.com




                  High Finance Group
                  Specialist Recruiters                                                www.highfinancegroup.co.uk
      Lead Actuary - UK                                            General        Head of Reserving                                          General
      Salary: £120k - £140k + Bonus + Benefits                                    Salary: £110k - £135k + Bonus + Benefits
      Location: London                                                            Location: London
      This leading Lloyd’s syndicate is looking for a Deputy Chief Actuary.       A world renowned Insurer is seeking a qualified Actuary to head up its
      The role will cover pricing, reserving and capital modelling working        reserving division. The team is continuing to grow and you will be
      closely with the Underwriters and the senior executives. The right          responsible for the appointment of a number of Actuaries within the
      person should have a managerial background with a commercial                team. To be considered you should have a strong reserving
      nature to provide strategic insight for the direction of the business.      background, be a qualified Actuary plus experience of Solvency II
      WG1274                                                                      would be an advantage. WG1275

      Newly Qualified Actuary                                      General        Solvency II Actuarial Analyst                              General
      Salary: £75k - £95k + Bonus + Benefits                                      Salary: £35k - £65k + Bonus + Benefits
      Location: London                                                            Location: London
      After an aggressive restructure this Global Insurer is looking for a        This large international London Market Insurer is seeking to expand
      newly qualified Actuary to join its team. The role will work across         its Actuarial function as a product of increased business and the
      pricing and capital modelling with some reserving projects. This is a       demands of Solvency II. This role will work across the pricing,
      great opportunity to expand your experience and learn new skills. Any       reserving and capital modelling areas of business giving the
      background and skill set considered. WG1276                                 successful candidate great exposure to a mix of work whilst they are
                                                                                  still working towards their Actuarial qualification. JK1027

       Portfolio Risk Actuary                                      General        Actuarial Manager                                          General
       Salary: £40k - £75k + Bonus + Benefits                                     Salary: €100k+ +Bonus + Benefits
       Location: London                                                           Location: Amsterdam, The Netherlands
        Well known Lloyd’s insurer looking to appoint an Actuary to assist in      Join a leading Lloyd’s Syndicate in the Netherlands with a major focus
        the implementation of their internal model. The role works closely         upon the Marine and Property & Casualty markets. The client is
        with the model building team in ensuring the output fits the needs of      looking to hire a Manager to lead its Actuarial team which is
        the business as well as presenting business decisions and strategy         comprised of two Actuaries and three Business Analysts. You will be
        to senior management. A good understanding of capital modelling            responsible for all Actuarial work as well as the development of the
        and confidence in communicating with different parts of the                team. DB6442
        business is necessary. JK1025

       Risk Management                                           Pensions         Contract Roles                                             General
       Salary: £35k - £75k + Bonus + Benefits                                     Salary: £400 - £2,000 per day
       Location: London                                                           Location: UK Wide
        Join this Global consultancy, working on cutting edge risk solutions       In a rapidly changing market, our clients are looking for contractors
        to manage client Pension liabilities. You will be exposed to a wide        with a strong Pricing or Capital Modelling background to assist with
        range of projects including Corporate advisory, M&A and Audit              their Solvency II requirements. Modelling experience especially with
        Support. There may be the opportunity to be involved in investment         Igloo or ReMetrica is in demand as well as commercial and/or
        related work. You will be commercially minded and thrive working in        personal lines experience. Opportunities for part qualified to
        a challenging and dynamic environment. MW5827                              qualified actuaries are available. RP234

        General                                                                  Pensions                              Executive Search
        William Gallimore: 020 7337 8826        william@highfinancegroup.co.uk   Miranda Wilkinson: 020 7337 8815      Mark Dainty: 020 7337 8816
        James Kitt: 020 7337 1202               james@highfinancegroup.co.uk     miranda@highfinancegroup.co.uk        mark@highfinancegroup.co.uk

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

         020 7337 8800                       actuarial@highfinancegroup.co.uk                              www.highfinancegroup.co.uk


www.jobs.the-actuary.org.uk                                                                                                                  April 2011     45
A refreshingly different service for contractors


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 Mo.net ® 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.



 Solvency II Actuarial Analyst                                                         GI Risk

 Experience: Qualified Actuary.                                                         Experience: Nearly Qualified Actuary.
 Location: South East (UK).                                                            Location: Manchester (UK).
 Daily rate: £900.                                                                     Daily rate: Excellent, dependent on experience.
 Duration: Initial contract is for 6 months.                                           Duration: Initial contract is for 3 months.
 Description: Internal model development role.                                         Description: Role available in GI pricing and / or capital
                                                                                       reserving. Knowledge of Igloo is preferred. Must have strong
                                                                                       Excel skills. Would ideally suit a mid-level to senior student.
 Unit Linked Product Pricing Actuary
                                                                                       GI experience is essential.
 Experience: Qualified Actuary.
 Location: South (UK).
                                                                                       Solvency II Analyst
 Daily rate: £900.
 Duration: 3 months.                                                                   Experience: Nearly / Newly Qualified Actuary.
 Description: Knowledge of Prophet and investment and savings                          Location: South East (UK).
 products.                                                                             Daily rate: Excellent, dependent on experience.
                                                                                       Duration: Initial contract is for 3 months.
                                                                                       Description: Urgently required. To develop actuarial structures,
 Group Risk Pricing Actuary
                                                                                       processes and systems required for Solvency II.
 Experience: Newly Qualified Actuary / Qualified Actuary.
 Location: London.
                                                                                       Opportunities in WP and NP Reporting, Modelling,
 Daily rate: £800.
                                                                                       Actuarial Systems Development and Actuarial Data
 Description: To join their pricing team.
                                                                                       Experience: Newly Qualified Actuary / Qualified Actuary.
                                                                                       Location: Midlands (UK).
 Investment Team Manager
                                                                                       Daily rate: Market rate.
 Experience: Near Qualified Actuary / Qualified Actuary.                                 Duration: Initial contract is for 3 months.
 Location: Basingstoke (UK).                                                           Description: Preferably with 1-5 years’ post-qualification
 Daily rate: Excellent, dependent on experience.                                       experience and with-profits experience.
 Description: To manage an investment administration team.


 Financial Reporting                                                                                                     For more information
                                                                                                                                 Colette Lurshay
 Experience: Nearly / Newly Qualified Actuary.
 Location: London, Bristol, Edinburgh and Dublin.                                                                          +44 (0)20 7278 9500
 Daily rate: Excellent, dependent on experience.                                                                  interimresourcing@oacplc.com
 Duration: Initial contract is for 3 months.                                                                       oacplc.com/interimresourcing
 Description: Requires financial reporting experience eg ICA, or
 Regulatory Reporting, or IFRS, or Solvency II.




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.
                             www.ipsactuarial.co.uk
ACTUARIAL




Solvency II Contracts Various                                                    Specialty Line Actuary
Up to £1200 a day                                                – Various       RMB500,000-800,000/annum                                             – Shanghai

Qualified and part qualified life Actuaries are need for a number of roles       One of the leading Lloyd’s syndicates is looking for an excellent Specialty
working on Solvency II. Experience in one of the following areas is              line modeler to assist the syndicate underwriters to quantify risk profiles for
preferred – With profits modelling, RBS work, reviewing ICA submissions,         their portfolio. You should be from a statistical background with both
assisting in Risk assessments, reviewing reserves and advising on regulatory     training and experience in building economic and statistical models.
decisions. Contracts are for a minimum of 3 months with immediate starts         Dynamic Financial Analysis experience in insurance and reinsurance would
and good daily rates. If you are a permanent employee and wish to discuss        be useful. Both fluent Chinese Mandarin and English are essential.
moving to becoming a contractor please get in touch.                             Contact: Jimmy.Ping@ipsgroupasia.com - Shanghai Office         Ref: JP470588
Contact: Guy.Bates@ipsactuarial.co.uk – London Office        Ref: GB466480




Motor Pricing Actuary/Student                                                    Head of Strategy (Investment)
RMB300,000-600,000/annum                        – Shanghai or Beijing            Top quartile salary + Bonus & Benefits Package – Hong Kong

Our client is a leading global actuarial consultancy . Due to their recent       This international firm wishes to appoint a Head of Strategy to make and review
expansion in China, they are looking to recruit experienced pricing              long-term investment assumptions for institutional clients in the Asia-Pacific region.
actuaries specialising in Motor products. You should have over 4 years           You will make recommendations on asset allocation and support with the delivery
experience in commercial fleet or domestic portfolio pricing and be familiar     of strategic advice. Candidates will be CFA/FIA/FSA qualified with a minimum
with the relevant software package knowledge. Candidates should speak            of 10 years investment experience. You will have wide knowledge of all areas
Chinese Mandarin fluently, have a confident personality and expect to travel     of investment consulting especially on strategy , capital markets analyses and
throughout Asia frequently.                                                      asset management. In addition, candidates will have good experience of asset
Contact: Jimmy.Ping@ipsgroupasia.com - Shanghai Office        Ref: JP472709      allocation, derivative products and MPT. Strong communication skills and high
                                                                                 levels of self motivation and professionalism are a prerequisite.
                                                                                 Contact: Anthony.Chitnis@ipsactuarial.co.uk – London Office            Ref:Z472657



General Insurance Actuaries                                                      Investment Analyst
£ on Experience                                                  – London        £30,000 - £45,000                                            – City of London

There are a number of opportunities currently available for part qualified       A large institutional investment consulting unit are looking to hire an analyst
and qualified actuaries ranging from a years experience through to nearly        into their London team. You will ideally have at least one years experience
qualified with general insurance experience. Roles exist in pricing,             within a similar role, however candidates with a pensions or insurance
reserving, capital modelling forecasting and business planning. All positions    background who possess transferable skills may also be considered. A
offer full study support and good career progression. A background in            sound academic record is required and you will have commenced the
general insurance is also not essential but experience of working in the UK      CFA/or actuarial exams.
is. A professional and pro-active approach to working in this environment is     Contact: Simon.Arthur@ipsactuarial.co.uk – Leeds Office        Ref: SA462965
essential for all positions.
Contact: Guy.Bates@ipsactuarial.co.uk – London Office        Ref: GB471525




Pensions Actuaries Required x 2 (3-8 Years PQE)                                  Life Pricing Contract
Competitive Packages                                  – Central London           £750-900 a day                                                          – London

Intrigued by the prospect of working for an expanding practice? I’m now          Qualified Actuary is required to provide high quality, effective actuarial
recruiting for two pensions actuaries to join this boutique firm. There is the   pricing in annuities; the role will be responsible for providing actuarial input
potential for one of these individuals to be based from a regional satellite     into pricing of large and complex risks; developing, reviewing and
office. Due to a restructure this is an exciting time for the business, so       maintaining pricing models. Their will also be a level of research required
whether you are working within a benefit house or an accountancy practice,       and database development of key pricing assumptions. The ideal candidate
this could represent a wise career move. Please call me for further details.     will have strong technical skills, and experience of pricing analysis in
Contact: Simon.Arthur@ipsactuarial.co.uk – Leeds Office        Ref: SA470236     annuities.
                                                                                 Contact: Guy.Bates@ipsactuarial.co.uk – London Office           Ref: GB467724




                              London Office: IPS Group, Lloyd’s Avenue House, 6 Lloyd’s Avenue, London, EC3N 3ES
                                 Tel: 020 7481 8686 Fax: 020 7481 8660 Email: actuarial@ipsgroup.co.uk

                                          Leeds Office: IPS Group, 8 St Paul’s Street, Leeds, LS1 2LE
                                 Tel: 0113 202 1577 Fax: 0113 202 1598 Email: actuarial@ipsgroup.co.uk
More jobs online at www.theactuaryjobs.org.uk



                                               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 recruitment@partnership.co.uk
     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.




     Do you have the skills and qualities
     to move into the consulting world?


                                                                                                  Join our team – Mazars Actuaries and Consultants
                                                                                                  Job profile
                                                                                                  • A unique opportunity to join a business-focussed and fast
                                                                                                      growing team.
                                                                                                  •     Working in both the general and life insurance areas, this role
                                                                                                        will approximately be split between external audit and reserving
                                                                                                        and a wide range of consultancy work.
                                                                                                  •     A truly exciting opportunity to make your mark and add value
                                                                                                        to a growing global business.
                                                                                                  Candidate specification
                                                                                                  • Part qualified, ideally completed the CT series to nearly/newly
                                                                                                     qualified.
                                                                                                  •     Will consider candidates who have decided not to further
                                                                                                        pursue the actuarial exams.
                                                                                                  •     Experience within life or general insurance, particularly audit
                                                                                                        and reserving.
                                                                                                  •     Lloyd’s experience is not essential but would be an advantage.

                                                                                                  To apply or for more information please contact Joanne Young
                                                                                                  E: joanne.young@mazars.co.uk
     ACTUARIES AND CONSULTANTS                                                                    T: +44 (0)20 7063 4162 M: +44 (0)7794 031 485


48      April 2011                                                                                                                                        www.jobs.the-actuary.org.uk
                              Latest jobs from The Actuary are now on Twitter http://twitter.com/TheActuaryJobs




            Continental European
              Pricing Actuary                                               Actuarial Opportunities in Scotland
       Salary: €150k + bonus + benefits. Location: Paris                    bagpipe appreciation not essential
       Background
       Our client is a leading global insurance/ reinsurance company
                                                                                                              Proudly independent, Hymans Robertson
       that now seeks an experienced Pricing Actuary to be based in                                           offers a unique proposition in a rapidly
       Paris. In this role you will work across all Continental European                                      changing industry.
       Property & Casualty business lines in embedding an actuarially
       based pricing approach in the business including the                                                   Our people and partnership culture lie at
       assessment of risk adjusted return targets.                                                            the heart of our business. The results are
       You’ll report to the Chief Actuary, but won’t have any direct                                          clear to see: strong continued growth,
       reports yourself. Hence you’ll be expected to work with                                                numerous industry awards and some of
       considerable autonomy and have contact with larger actuarial                                           the longest client relationships.
       and underwriting teams across Europe.                                                                  Our Edinburgh and Glasgow operations
       The role – In this role you’ll provide:                                                                offer challenging opportunities. We are
       • Pricing support to underwriters on binders, reinsurance deals                                        always looking for new talent – and are
         and large account pricing.                                                                           particularly interested in speaking to
       • Improve rigour of price monitoring processes including                                               experienced consultants interested in
         linking to rating tools.                                          Stephen Birch                      relocating or returning to Scotland.
       • Assist underwriters in segmenting portfolios.                     Head of Manager                    For an informal, confidential conversation
       • Co-ordinate the completion of reinsurance submissions for         Research and enthusiastic          – please contact:
         internal and external reinsurance.                                bagpipe player.
       Suitable candidates will have the ability to work confidently                                          Philippa Johnston on 0141 566 7947 or
       with underwriters and brokers and occasionally be prepared to                                          email recruitment@hymans.co.uk
       travel across Europe.


                       Parvinder Matharu
                    Contact
                    Newton Recruitment
                     t +44(0)1689 862937
                                                                                   Communications        Investment    Third Party       Best Companies
        e parvinder@newtonrecruitment.com                                         Provider of the Year   Consulting   Administration   One Star Accreditation
                                                                                         2010               2010          2010                 2011
            w www.newtonrecruitment.com




www.jobs.the-actuary.org.uk                                                                                                                         April 2011   49
More jobs online at www.theactuaryjobs.org.uk

                                          UK I Europe I Asia Pacific




     “...one of the best recruitment and
     search firms I have worked with...”
     HR Manager, Amlin
                 Rob Bulpitt,                            Dennis Ball,
                  Manager                             Senior Consultant
           Tel +44 (0)20 7092 3237                 Tel +44 (0)20 7092 3286
      rob.bulpitt@eamesconsulting.com         dennis.ball@eamesconsulting.com

                 Rupert Rickard,                        Mansi Koshy,
              Managing Consultant                    Senior Consultant
             Tel +44 (0)20 7092 3219               Tel +44 (0)20 7092 3283
     rupert.rickard@eamesconsulting.com      mansi.koshy@eamesconsulting.com

                Zoe Campbell,                              Alistair Allan,
             Senior Consultant                           Senior Consultant
           Tel +44 (0)20 7092 3208                   Tel +44 (0)20 7092 3262
     zoe.campbell@eamesconsulting.com         alistair.allan@eamesconsulting.com




     Join the market leader.
     New recruitment                                                                                           Faculty of Engineering & Physical Sciences
     opportunities with Prudential.                                                                            School of Mathematics
                                                                                                               Lecturer/Senior Lecturer in
     A career at Prudential means you will be working                                                          Mathematics/Actuarial Sciences
     at the forefront of one of the UK’s leading life &                                                        £36,862 - £55,758 p.a.                                   Ref: EPS/10866
     pensions companies.
                                                                                                               This is part of an ongoing programme to strengthen Actuarial
     Prudential has over seven million customers and a leading                                                 Sciences in the School of Mathematics. Applications can
                                                                                                               be from researchers in any area of Actuarial Sciences who
     range of products and services.                                                                           should be able to teach undergraduates and postgraduates
                                                                                                               in Actuarial Sciences.We would encourage applications which
     With over 160 years experience, it’s our people that ensure
                                                                                                               strengthen existing research in the group and create new
     we continue to perform. That’s why we’ve put in place a                                                   links within the School and between the School and other
     people development programme designed to reward high                                                      Schools, institutions or disciplines.
     performance and why we constantly seek out new and                                                        The appointee's primary duties will lie in teaching, research,
                                                                                                               and administration. In the case of the appointment of a senior
                                                                                   www.manchester.ac.uk/jobs




     exciting talent.
                                                                                                               lecturer, the appointee is expected to a) take on administrative
     We are currently recruiting the following vacancies;                                                      duties with respect to Actuarial Science and other School
                                                                                                               activities; b) take the leadership in developing the School's
     > Actuarial Technician               > Principal Auditor                                                  expertise in Actuarial Science; c) liaise with the professional
                                                                                                               bodies; and d) have several years of teaching/professional
        (Modelling Team)                  > Risk Assurance                                                     experience. For appointment as either a Lecturer/Senior
     > Senior Actuarial Trainee             Technical Lead                                                     Lecturer it is desirable that you should have professional
                                                                                                               qualifications (Institute and Faculty of Actuaries).
     > Senior Qualified Actuary
                                                                                                               Application forms and further particulars are available
     To find out more about the roles above and a career with                                                  from our website www.manchester.ac.uk/jobs

     Prudential visit www.pru.co.uk/careers and add your                                                       If you are unable to go online you can request a hard copy of
                                                                                                               the details from The Directorate of Human Resources, Faculty
     name to our growing list of achievers.                                                                    of Engineering and Physical Sciences on +44 (0) 161 275 8837 or
                                                                                                               email: eps-hr@manchester.ac.uk quoting the reference number.
                                                                                                               Closing date: 3 May 2011.
                                                                                                               The University of Manchester values a diverse workforce and
                                                                                                               welcomes applications from all sections of the community.




50      April 2011                                                                                                                                                   www.jobs.the-actuary.org.uk
                              Latest jobs from The Actuary are now on Twitter http://twitter.com/TheActuaryJobs

                                                                                                          T:       020 8420 1818

                                 Actual Search
                                           SEEKING       THE     EXCEPTIONAL
                                                                                                          E:
                                                                                                          W:
                                                                                                                   jobs@actualsearch.co.uk
                                                                                                                   www.actualsearch.co.uk

     Move Out of Life’s Comfort Zone                                                    Pricing Promise
     London                                         up to £150K + exc bonuses           London, Surrey, S West                                 £40-75K + benefits
     Is your job repetitive & mundane? Same day after day? If you need a new            Whether you’re looking to price annuities, protection products, tools or
     challenge this award winning life consultancy needs qualified actuaries with       frameworks we have roles to suit. Our clients seek all levels of qualification
     career aspirations & can do attitudes. Duties vary from solvency to valuations     with life or health pricing experience. Immensely enjoyable work - vibrant
     to pricing to buyouts. Training if needed. Boring it isn’t!! Ref:1313              team culture – dynamic atmosphere – endless prospects! Ref:1316

     Reserving & Solvency                                                               P Qual Pensions – Corporate World
     London                                                      £50-95K + bonus        Birmingham, Manchester, Leeds                          £35-70K + benefits
     London market insurer & reinsurer wants a GI reserving analyst. Key                Flexible working & terrific commercial exposure will advance your knowledge
     technical role involving ICA parameterisation & solvency provisions as well as     in the cutting-edge world of corporate pensions. With a minimum of 12
     actuarial reserving. You’ll also advise the pricing team once figures are done.    months pensions experience you’ll have superb variety with a mix of projects,
     Ideal role for a reserving analyst seeking to broaden their exp. Ref:1314          excellent career development & flexible working arrangements. Ref:1317

     Varied Life Role                                                                   Pricing Manager - International
     Midlands                                               c£50-65K + exc bens         London / South West / Europe                               £65-90K + bens
     Award winning, niche life insurer offers varied role to aspiring, talented snr     Key executive management role with this leading insurer specialising in
     analyst / actuary. Duties incl valuation, modelling, product development &         investment, savings, corporate & protection products with business sold
     pricing. Brilliant chance to broaden your exp. Full training offered if needed.    abroad. Manage a growing & motivated pricing team. Ideal experience is
     P/q or qual life actuaries should apply. Relocation help if wanted. Ref:1315       3yrs+ post qualification in life pricing, financial reporting or consulting.
                                                                                        Ref:1318

             To apply for any of these vacancies please phone 020 8420 1818, and speak to Peter or Norma
                      or apply online at www.actualsearch.co.uk or email jobs@actualsearch.co.uk.

                  w w w. a c t u a l s e a r c h . c o . u k                                   jobs@actualsearch.co.uk


      Genworth Financial
      Genworth Financial, Inc. (NYSE: GNW) is a leading Fortune 500 global financial security company. Genworth has more than $100
      billion in assets and employs approximately 6,000 people with a presence in more than 25 countries. Its products and services help
      meet the investment, protection, retirement and lifestyle needs of more than 15 million customers. Genworth operates through
      three segments: Retirement and Protection, U.S. Mortgage Insurance and International. Its products and services are offered through
      financial intermediaries, advisors, independent distributors and sales specialists. Genworth Financial, which traces its roots back to
      1871, became a public company in 2004 and is headquartered in Richmond, Virginia.

      Pricing Actuary                                                                  Pricing Manager
      Location: Paris, France                                                          Location: Madrid, Spain
      Requisition INTL11274                                                            Requisition INTL12028

      The individual will manage the Pricing and Technical processes                   The individual will work closely with the Risk, Actuarial & Pricing Manager
      supporting the Western European Region (Benelux, France,                         and with the Country Managers of the Southern / Eastern European
      Germany, Ireland, United Kingdom, Switzerland) working closely                   Region of Lifestyle Protection on different pricing initiatives, namely
      with the Risk, Actuarial & Pricing Manager together with the Country             Spain, Portugal, Italy and Greece. The qualified Actuary will report directly
      Managers. We are looking for a qualified Actuary with strong pricing              into the Risk, Actuarial & Pricing Manager Southern Region.
      experience for Lifestyle Protection Life and Non-life products.

      Pricing Analyst                                                                  Actuarial Internship
      Location: Neu-Isenburg, Germany or Dublin, Ireland                               Location: Neu-Isenburg, Germany
      Requisition INTL11868                                                            Requisition INTL11984

      Ensure Pricing and Technical support for Western Region European                 Ensure Pricing and Technical support for Western Region European
      countries (Benelux, France, Germany, Ireland, United Kingdom,                    countries (Germany, Austria & Switzerland) we are looking for an
      Switzerland). We are looking for an experienced Pricing Analyst, may             Actuarial Analyst for a 6 month internship for Lifestyle Protection Life
      be part-qualified, for Lifestyle Protection Life and Non-life products.           and Non-life products.


      For more information on Genworth and all European Actuarial, Risk & Pricing opportunities,
      please visit: www.genworth.com

      Please forward applications to giuglia.gainsborough-waring@genworth.com or call Giuglia directly
      on 00 44 208 380 2160 or her mobile: 00 44 7887 708 251 for further information. Applications may
      also be made directly by clicking on the Genworth Careers Website and inputting the Requisition
      Number attached to the vacancy.

www.jobs.the-actuary.org.uk                                                                                                                             April 2011     51
More jobs online at www.theactuaryjobs.org.uk




     Nearly or Newly Qualified Pensions Actuary
     Your opportunity to become a key part of an independent, growing consultancy team

     Barnett Waddingham LLP is an independent firm of actuaries             day-to-day contact on a portfolio of clients, providing
     and consultants offering a full range of services to trustees,        support to the Scheme Actuary and helping to develop junior
     employers, insurance companies and individuals. The business          members of the team.
     is based on a culture which aims to provide all of our clients
     with a high-quality professional service through strong               You need to have top class technical skills, be sensitive to the
     personal relationships and tailored solutions. Our own values         needs of your clients and be able to work effectively with
     can be summarised as “doing it the right way”, to ensure we           senior and junior colleagues in a close-knit team. Excellent
     develop long-term relationships with our clients and our staff.       consultancy and communication skills are essential to succeed
                                                                           in these roles.
     We started with 16 people in 1989. We now number
     over 500 and our business plan means we are looking for               You will enjoy a friendly working environment in attractive
     ambitious nearly or newly qualified Pensions Actuaries to              offices with an independent management team, open to
     help us to continue to grow.                                          fresh ideas and challenges. A competitive package is on offer
                                                                           with an annual bonus and flexible benefits package.
     We have vacancies in our Amersham (north-west London),
     Cheltenham and Bromsgrove (Birmingham) offices. We are                 To apply please send your CV to:
     looking for enthusiastic applicants ready to apply sound              careers@barnett-waddingham.co.uk
     technical skills to an active, consulting role, being the lead
                                                                           www.barnett-waddingham.co.uk
     A M E R S H A M – B R O M S G R O V E – CH E LT E N H A M – G L A S G O W – L E E D S – L I V E R P O O L – L O N D O N




     WE’RE TRANSFORMING
                                                                                                         FIRST FOR ACTUARIES




     As a business, The Phoenix Group is the country’s
     largest closed life and pension fund consolidator          REVIEW ACTUARIES • WITH-PROFITS REPORTING
     and the umbrella organisation for an impressive
                                                                Superb Rural Location, S.W. Midlands (Just off Junction 3, M42)
     portfolio of life brands. A member of the FTSE 250
     Index, with a premium listing on the LSE, we’re fully      Currently we manage the assets of 11 With-Profits funds – so as a Review
     focused on being a ‘best in class’ financial and risk       Actuary within our ‘with-profits’ reporting team you’ll certainly have your
     management enterprise.                                     hands full, but at the same time benefit from a level of exposure you’d be
     As an organisation, we’re continually transforming         hard pressed to find anywhere else. Acting as the expert in the fund, your role
     ourselves through acquisitions and fund mergers, as        will focus on reviewing and agreeing the content, quality and delivery for all
     well as preparing for the arrival of Solvency II, whilst   reporting of results, as well as the assumptions and methodology used.
     embarking on one of the most ambitious technology          With openings at various levels, you’ll appreciate that for any qualified and/or
     transformation programmes ever attempted. In               experienced actuary this represents a superb opportunity to apply and develop
     short, it’s a packed and demanding agenda, offering
                                                                your technical expertise in a unique setting at the forefront of the reporting
     some of the most unique and exciting challenges
                                                                landscape. All we ask is that you’re accustomed to producing high level reports
     that our actuaries have ever had to face.
                                                                for sign off, have a good all round knowledge of the life business, products and
                                                                processes, as well as a solid grasp of regulatory and legislative changes.

                                                                To apply online, simply visit: www.phoenixgroupcareers.co.uk/actuarial
                                                                and click on search & apply (Ref: 0641)




52    April 2011                                                                                                                   www.jobs.the-actuary.org.uk
                                                  Latest jobs from The Actuary are now on Twitter http://twitter.com/TheActuaryJobs



                                                                               MOVING FORWARD
                                                                               Head of Group Capital Management
                                                                               £competitive | Bournemouth
                                                                               As the UK’s largest friendly society, with more than 2.5 million customers and
                                                                               a 4,500 strong team, we have ambitious plans for the future and we’re now
                                                                               looking for the sharpest of minds to help us build on our success.
                                                                               In this senior role, you’ll work alongside the Chief Actuary and Group Financial
                                                                               Director on Capital Management and enjoy excellent opportunities to
                                                                               consolidate your expertise and influence change. Leading a team of Actuaries,
                                                                               your particular focus will be to inform effective and efficient decision making
                                                                               regarding the management and optimisation of the Group’s capital. A Fellow of
                                                                               the UK Institute or Faculty of Actuaries, you’ll bring a thorough understanding
                                                                               of in force and prospective financial risks and a good understanding of relevant,
                                                                               leading-edge industry practice. A holder of or eligible to hold Life Practise
                                                                               Certificate (including With Profits), you’ll also bring the soft skills essential to
                                                                               drive change positively.
         Chris, HR Change Manager




                                                                               For your chance to be part of a flourishing organisation, please visit
                                                                               LV.com/careers searching under ref: FI000113.
                                                                               Closing date: 15 April 2011.
                                                                               Here at LV= we always love to hear from great people. So, don’t
                                                                               forget to follow LV= on Twitter and become a fan on Facebook.
                                                                               LV= is an equal opportunities employer.




                                                                               LV.com/careers
                                                                                INSURANCE        RETIREMENT     INVESTMENTS




     SENIOR MANAGER
     PENSIONS RISK MANAGEMENT
     To c£90,000 + bonus + benefits                                                                 City of London
     Our client is one of the largest UK based financial services groups providing a wide range of banking and financial services to personal
     and corporate customers.

     Our client is seeking to recruit an experienced individual to join their specialist pensions risk management team. They are responsible for
     analysing and managing the financial risks faced by the group arising out of its defined benefit pension schemes. The successful applicant
     will be given the opportunity to to lead initiatives to shape strategy and change the risk profile of the Group.

                                      The Role:-                                                            The Person:-
                               • Analysis of all financial aspects of the group’s pension                  • Should come from an actuarial or pensions risk background
                                 schemes and the impact of associated risks on the group                    and have strong analytical skills

                               • Development of funding and risk management strategies to                 • Should have an extensive knowledge of DB investment
                                 meet both sponsor and Trustee objectives.                                  products including derivatives

                                    • Engagement with both senior management, pension                     • Should possess excellent communication skills with the
                                      Trustees and their advisors to facilitate implementation              ability to explain complex information to non-specialists
                                      of strategies                                                         in an articulate manner


     This role offers an exciting opportunity to join a team of 7 focused on meeting the varied challenges faced by the changing market environment.

     Flint Hyde is retained by the client to carry out the recruitment of this role. In the first instance, candidates should contact Andrew Carrett on
     0113 220 6550 or email him at andrew@flinthyde.co.uk to express their interest in the position and to discuss their application in more detail.




www.jobs.the-actuary.org.uk                                                                                                                                         April 2011   53
Get ahead . . .




Actuaries wanted
Competitive salary and bonus scheme
Based at home (UK)


We have two exciting opportunities to join our consulting team. Our highly innovative business
and working environment offers the right candidate the rewards and work / life balance they
have always wanted.

Approved Person
We are looking for an experienced and dynamic actuary with:
  an AFH / WPA background or is ready to take on responsibility immediately;
  excellent communication skills at all levels; and
  a real interest to contribute to and be part of a growing business.

Qualified Actuary
We are also looking for a confident and enthusiastic actuary with:
  experience in the life industry;
  strong analytical and problem solving ability; and
  the ability to work as part of a team.

To get a taste of what it is like to work at OAC go to oacplc.com/careers. For further
information about these roles, or to submit your CV, email your details to careers@oacplc.com.




OAC Actuaries and Consultants
Portsoken House Minories London EC3N 1LJ | www.oacplc.com enquiries@oacplc.com | +44 (0)20 7278 9500
                              Latest jobs from The Actuary are now on Twitter http://twitter.com/TheActuaryJobs




                                              A name you can trust
                                              Contract                                                           Life
                                              UK-Wide Vacancies                                                  Head of Modelling Solutions
                                              Ref: 4540045                                                       Surrey to £100,000+
                                              Financial reporting, 3-month contract, Dublin, up to               Ref: 4518977
                                              £1,100 per day. Must be a nearly/newly qualified actuary.           A major UK provider requires a senior actuary to
                                              Solvency II, Life, 3-12 month contracts, Bristol, Edinburgh,       manage and oversee its modelling department.
                                              London & Surrey, to £1,100 per day. Those with reporting           The position does not require technical modelling skills,
                                              experience will also be considered.                                but rather the gravitas and industry experience to direct
                                              t: 020 7220 4774                                                   a complex actuarial operation.
                                              e: clare.roberts@reedglobal.com                                    t: 020 7220 4774
                                                                                                                 e: peter.baker@reedglobal.com
                                              Life
                                              Valuations Actuary, Reinsurance                                    General Insurance
                                              South East to £65,000                                              Actuary, International Provider
                                              Ref: 4533487                                                       Surrey £Negotiable
                                              Working for a reinsurer can be challenging and career-making.      Ref: 4469408
                                              This is a great opportunity to join the actuarial finance team      An international non-life group needs an actuary to
                                              within a global leader and widen your skill set. Ideally already   work alongside large commercial customers with
                                              using MoSes, you must be nearly/newly qualified with                reinsurance structures. You will deal across the full
                                              experience of UK annuity valuations.                               spectrum of functions, including pricing, reserving,
                                              t: 020 7220 4774                                                   capital management and Solvency II implementation.
                                              e: mark.keizner@reedglobal.com                                     t: 020 7220 4774
                                                                                                                 e: peter.baker@reedglobal.com

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



                                                                                                                                                         reedglobal.com




        Business Development Actuary, London (flexible)                                         Investment Banking - Analytics, Central London
        £70,000 - £100,000 + benefits                              Ref: JT47384                 £Six figures + competitive bonus                           Ref: MP47322
        A well established actuarial advisory practice is recruiting for a                     This Bank has three vacancies at different levels in its Analytics
        Pensions Actuary with business development experience. Following                       team. The team provides a full financial modelling and analysis
        significant investment and the appointment of a new Senior                              capability to support the origination and execution of transactions,
        Management Team, this is an opportunity to directly impact future                      so successful candidates will develop bespoke cashflow models
        growth and development. You will be a qualified actuary, ideally with                   to reflect the underlying businesses to which they relate. Ideal
        both corporate and trustee consulting experience and will manage                       candidates will be nearly / qualified actuaries with strong modelling
        existing relationships and develop new clients. The role is based in                   skills, including the ability to build models from scratch in VBA.
        London, but could potentially be based in the Midlands or the North.                   Banking experience is welcomed, but not essential.
        E: James.Turner@goodmanmasson.com T: +44 (0)20 7019 8861                               E: Mike.Painter@goodmanmasson.com T: +44 (0)20 7019 8842

        Head of Client Management, Central London                                              Manager / Senior Manager – Consulting, All UK Locations
        £Six figures + excellent bonus                             Ref: MJB47463                £60,000 - £120,000                                     Ref: MP45522
        Having completed an extremely successful launch this fiduciary                          This Big 4 company is expanding as a result of recent success, with
        manager is now looking to add the remaining member of the                              large client projects underway covering Solvency II, modelling,
        Senior Management Team. The key parts of the role will be to take                      financial reporting, audit, transactions and capital management.
        responsibility for managing the relationships with a number of UK                      Whatever your specialism, if you are a qualified (or nearly-qualified)
        clients as well as taking full responsibility for the development of                   life actuary with an appetite for innovative projects and varied
        the client management function in the UK. The successful candidate                     exposure, then this market leading company has an opportunity
        is likely to be a Qualified CFA or Actuary and will have worked                         for you. Being a consultancy, strong communication skills and
        in an institutional client-facing role in an investment manager                        the ability to apply your knowledge in practical and commercial
        or investment consultancy.                                                             situations are essential.
        E: Matt.Bullock@goodmanmasson.com T: +44 (0)20 7324 0505                               E: Mike.Painter@goodmanmasson.com T: +44 (0)20 7019 8842


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




www.jobs.the-actuary.org.uk                                                                                                                                           April 2011   55
                       The Actuary presents:
‘So, you want a career in life consulting?’
                A live and interactive careers webinar
                   Monday 9 May 2011, 19:00 BST

Life consultancy offers a dynamic, diverse and demanding
environment for actuaries, with the opportunity to
progress and develop quickly and gain invaluable
experience on challenging projects including capital
restructuring, mergers and acquisitions, finance
transformation, ERM and Solvency II.
Through strong relationships                         How to register
and an ability to solve clients’                     For further details and
most important issues,                               to register, visit
consultancy can offer a
varied and highly rewarding
                                                     www.the-actuary.org.uk/875482
career for actuaries at all
levels.

So what does it take to
work for a top consultancy?
What sort of work is
available? And how can
you make the most of the
opportunities?

The Actuary’s third live
careers webinar, produced
in association with Deloitte,
will explore the challenging
world of life actuarial
consulting. This is your
chance to find out more and
to put your questions to our
expert panel, chaired by
editor Marjorie Ngwenya.


The panel
Marjorie Ngwenya, Editor, The Actuary (chair)
Roger Simler – Partner, Deloitte
Andrew Smith – Partner, Deloitte
Naomi Burger – Senior Manager, Deloitte

In association with:
                                                      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.


 Regional (EU/Middle East) Actuary                         Life              Capital Management Actuary                              Life
 Salary: Up to £100k + Bonus + Profit Share                                  Salary: Up to £95k + Bonus + Benefits
 Location: London                                                            Location: London
 This Global Insurer is searching for a progressive FIA with Life Office     The Capital Management function at this Insurer has recently been
 experience to join their central team and become integral in shaping        invigorated following the Board level appointment of a Chief Capital
 strategic business decisions through the interpretation and delivery        Officer. They are looking for an Actuary with Economic Capital
 of their financial and Actuarial results for UK, Europe and the Middle      experience to manage the capital plan, assess risk appetite
 East. This is a high profile role ideally suited to a career minded         exposure, interpret MI and deliver to senior internal and external
 actuary with a financial reporting background and the skills to             stakeholders. There is also the chance to be involved in restructuring
 consult to their regional business. CB7591                                  and M&A deals from a Capital perspective. CB7565


 Strategic Pricing Analyst                               Life                Actuarial Investment Consultant                       Investment
 Salary: £40k - £65k + Bonus + Benefits                                      Salary: £40k - £80k + Bonus + Benefits
 Location: London                                                            Location: Edinburgh
 This is a unique opportunity to join a leading Life Reinsurer’s Pricing     A rare opportunity to join a growing Investment team with a leading
 division. Your role will be split between producing individual              consultancy and accelerate your career. Here you will apply your
 quotations and completing market sensitive research into the pricing        skills in projects outside traditional Actuarial consulting.
 basis which will aid future strategic decisions. You will be offered        Responsibilities will include; performance & risk monitoring, capital
 responsibility quickly, be expected to use your own initiative and          market and investment manager research, model development and
 work directly with senior management. A great opportunity to                risk modelling of assets and pension liabilities. Candidates from any
 diversify your skills and broaden your Actuarial knowledge. GB1681          background may be considered. GB1680


 Investment Management Analyst                           Life                Risk Based Capital Actuary                         Life
 Salary: £25k - £35k + Study Support                                         Salary: €70k - €100k + Bonus + Benefits
 Location: South West                                                        Location: Zurich, Switzerland
 An exciting opportunity for a student to join the Actuarial team of a       Join a Global Life Insurance company in their Zurich office where you
 FTSE 250 wealth management group. Gaining commercial exposure               will be responsible for leading the analysis of Risk Based Capital and
 across the business you will have enthusiasm to work with all levels        Economic Returns for the entire Group. You must come from a Life
 of seniority across this dynamic investment brand. The role provides        background. Your focus will be on improving the analysis process
 a mix of Actuarial experience giving you a good technical grounding         with particular focus on Life and ALM. Further to this you will work to
 while supporting your qualification. JE1001                                 implement new procedures including Solvency II/SST. DB6416

 Contract Roles                                           Life               Pensions Consultant                                Pensions
 Salary: £500 - £1500 per day                                                Salary: £40k - £70k + Bonus + Benefits
 Location: UK Wide                                                           Location: UK Wide
 Part qualified / qualified applicants required with Solvency II,            Looking for the opportunity to work on FTSE100 clients and enjoy
 Capital or Financial Reporting experience. You will be involved             accelerated career progression? This leading employee benefits
 directly in the interpretation and implementation of Solvency II to         consultancy is seeking career focused, newly qualified pensions
 European operations. You will work the internal model, develop the          consultants to join their growing team. You will be responsible for an
 economic capital methodology, manage the ORSA and work with the             individually tailored portfolio of trustee and corporate clients in
 global offices. Project management skills required. RP8001                  order to help you achieve your career aspirations. MW5821

 Switch to Life                                          Life                International Actuary                                   Life
 Salary: £35k - £60k + Bonus + Benefits                                      Salary: €60k - €100k + Bonus + Benefits
 Location: UK Wide                                                           Location: Europe
 Superb opportunities for part-qualified and experienced Actuaries to        Do you feel you need a change in your life? Do you want to gain
 join leading Life Insurers regardless of previous experience. Receive       exposure to different working cultures and environments? If you have
 industry training and experience of a variety of work across Life           a true taste for a challenge and are curious about international
 Insurance. You will be highly personable and demonstrate                    cultures, then contact High Finance Group where we can help you
 enthusiasm to retrain. MW6416                                               start your international career. DB6417

 Life                                                                      Europe                                  Contract
 Clare Bethell: 020 7337 8829    clare@highfinancegroup.co.uk              Damien Bernard : 020 7337 1206          Rupa Pithiya: 020 7337 1200
 Graeme Braidwood: 020 7337 8820 graeme@highfinancegroup.co.uk             damien@highfinancegroup.co.uk           rupa@highfinancegroup.co.uk
 Jack Eccles: 020 7337 1207      jack@highfinancegroup.co.uk

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

020 7337 8800                      actuarial@highfinancegroup.co.uk                                 www.highfinancegroup.co.uk
“...location, location, location.”


 EDINBURGH                      YORKSHIRE




 NORTH WEST                     BIRMINGHAM




 SOUTH WEST                     SOUTH EAST
LONDON        LONDON




NETHERLANDS   BELFAST




DUBLIN        RUSSIA




CANADA        ANYWHERE - JOIN US
“...energy, integrity and a long term perspective.”




Star Actuarial's Referral Bonus Scheme:



StarToStar                          BONUSES OF UP TO £2,500 PER CANDIDATE
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          MAKE A
          POSITIVE IMPACT
           Life Actuaries & Students, North of England                        Senior Corporate Actuary, London
           £40,000-£80,000 + benefits                                          £75,000-£95,000 + car allowance + benefits
           One of the market leaders within life insurance, currently         This leading insurer is seeking a senior life actuary with
           has various opportunities across the business including            MCEV experience to join its corporate actuarial team.
           financial reporting, financial management, product pricing           Reporting directly to the head of actuarial reporting, you
           and Solvency II. A solid life insurance, consultancy or            will be looking at all of the MCEV for the company globally
           re-assurance background and experience of working very             including the US, Asia, Europe and the UK. This position will
           closely with FSA regulations is desired. You will be working       provide invaluable insight into global reporting without the
           within its life actuarial department, so if you are qualified or    travel. Part of the role will be embedding Solvency II in the
           nearing qualification, they will be keen to speak with you.         reporting process. The key aspects of this role are reviewing,
           This is a great career opportunity which will allow exposure       challenging and communicating so you’ll need to be a
           to various departments. This will give you a variety of skills     qualified life actuary with PQE, strong communication skills,
           that will help drive the business and your career forward.         initiative, drive and determination to move issues to
           Ref: 1350405                                                       a resolution. Ref: 1305691
           kevin.smith@hays.com or call 020 7481 9984                         kevin.smith@hays.com or call 020 7481 9984

           Life Consultants, London                                           Basis Actuary, Surrey
           £45,000-£80,000                                                    £55,000-£70,000 + benefits
           A well-known consultancy is looking for experienced                Work for this well-known insurer and play a key role
           actuarial professionals to join its market-leading life team.      in determining the company’s reporting. You will be
           It prides itself on having a high level of technical capability,   responsible for robust investigations of the operating
           so actuaries interested in joining must be technically very        experience, apply judgement in determining the range
           strong and have a successful track record of exams. You will       of plausible future assumptions and present a case for
           have immediate exposure to real client assignments, which          the recommendations in papers to the various boards.
           will draw on your imagination and creativity as well as your       This position will be pivotal in bringing in-team the various
           ability to analyse data, summarise conclusions and present         stochastic assumptions currently set elsewhere in finance,
           results. These experiences will help build your technical          as the team expands to incorporate Solvency II assumptions.
           knowledge and overall industry expertise whilst benefiting          To be considered for this role, you’ll need to be qualified,
           from one of the industry’s most comprehensive actuarial            or nearing qualification, and have life office experience.
           training and development programmes. Ideally, you’ll be            Ref: 1370434
           successfully studying towards an FIA qualification or be            kevin.smith@hays.com or call 020 7481 9984
           recently qualified. Ref: 1348445
           kevin.smith@hays.com or call 020 7481 9984



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




           hays.co.uk


62   April 2011                                                                                                                       www.jobs.the-actuary.org.uk
                                                                                                               T:        020 8420 1818

                             Actual Search
                                         SEEKING THE             EXCEPTIONAL
                                                                                                               E:        jobs@actualsearch.co.uk
                                                                                                               W: www.actualsearch.co.uk



Pensions & Risk Management                                                             Analysts – Pricing / Research
London                                                          £45-85K + bens         London & Surrey                                     £32-45K + study support
New risk section of global firm needs p/q & qual actuaries for corporate advice        2 roles for life actuarial analysts making solid progress with their CTs. Chance to
incl. scheme cash requirements, risk control, liability management etc. Suit           work in either pricing or research. Join these successful insurers with 1–3 yrs exp.
pensions actuaries & analysts from trustee or corporate background who want            in life insurance & skills in any of: Excel, SQL, VBA, financial modelling,
to change direction within the pensions field. Strong Excel essential. Ref:1301        experience analysis, pricing or financial reporting. Ref:1307




An unusual role                                                                        Investment Consultants
London                                                    £40-85K+ exc bens            London, Berks                                           £45-85K + exc bonus
Stuck in a rut? Global business information provider seeks both p/q & qual life        PQ or qualified with investment exp? Want a new challenge? Compelling
reporting actuaries to join dynamic European insurance team. Strong Excel,             roles include ALM & LDI work, strategic planning, financial tool development,
good communication skills & exp of EV needed for this different reporting role.        and risk management. Innovative thinking encouraged. Opportunities for
You’ll analyse performance & provide crucial data to clients. Ref:1302                 personal development, strategy reviews, wide ranging projects. Ref:1308




Solvency II & Life                                                                     Financial modelling / ALM
London                                                    £65-150K + exc bens          Surrey/Berks                                             £35-75K + exc bens
A dedicated solvency II role will put you at the cutting edge of the life sector.      A client facing, exciting, challenging & rewarding role at this successful
This organisation seeks nearly, newly & senior qual actuaries with exp in any          international consultancy. Part qual or qual actuaries with skills in Prophet,
of: Solvency, ICA, valuation, or realistic balance sheet. High profile &               Moses, VIP or similar are sought. Conduct financial performance analysis, ALM
demanding. Flexi working arrangements. Terrific salary packages. Ref:1303              & stochastic modelling. Seek a change? This’ll really appeal. Ref:1309




Change Sector                                                                          IT / Systems Managers
London / Home counties (South)                                        up to £50K       London / Surrey                                                 £40-95K + bens
Chance to move out of pensions or life. Due to expansion this major GI insurer         If you have a mix of life actuarial & IT skills, then this could be for you! In this
needs pricing & reserving analysts with min 2 yrs UK actuarial exp. in any             management & analytical role, you’ll be responsible for systems & strategy to
sector. Duties are personal lines pricing & reserving for motor, travel & health.      meet financial plans, forecasts & MI for this leading life insurer. Lead a team,
Strong Excel + exam progress essentl. Full training offered. Ref:1304                  liaise with actuarial/finance to ensure consistent results & reports. Ref: 1310




Future of life as we know it                                                           Nearly Qual Pensions - Join Life Insurer
Surrey                                                 c£70K + bonus + bens            London                                                    c£40-55K + benefits
Award winning life financial risk products provider needs a profits & product          With a strong Defined Benefits background, you could join the new business
portfolio actuary to revamp the commercial offering. Nearly / newly or fully           team of this leading life insurer involved in the buy out market. Review & sign
qualified life actuaries with pricing skills should apply for this key & influential   off quotations, get involved in presentations & liaise with consultants. Work
role. Knowledge of protection products or risk management useful. Ref:1305             closely with product development & pricing. Career enhancing role. Ref: 1311




Move into the London Market                                                            Actuarial Analyst – Non Life
City of London                                                        £Excellent       Berks / Surrey                                             £35-55K + benefits
Commercial London / Lloyds market roles available for personal lines analysts          My client is keen to add to their growing team. This is a varied role where you’ll
& actuaries working for GI motor, travel, household or small business lines            help prepare analyses, undertake investigations, get involved in reserving, pricing,
insurers. If you have reserving or pricing exp we have 2 clients who want your         planning & work closely with Underwriting. Suit a part qualified GI actuary with a
CV. Outstanding salaries & bonuses. Relevant training offered. Ref:1306                strong statistical background & proven personal or commercial lines experience.
                                                                                       Ref:1312

         To apply for any of these vacancies please phone 020 8420 1818, and speak to Peter or Norma
                  or apply online at www.actualsearch.co.uk or email jobs@actualsearch.co.uk.

              w w w. a c t u a l s e a r c h . c o . u k                                     jobs@actualsearch.co.uk
The Actuarial Recruitment Company




 Qualified / Part Qualified                          Pensions to Life         Senior Actuarial Analyst                                    Life
 UK                                                      £Attractive          South                                       to £45K plus Benefits
 Excellent opportunities exist for part qualified and recently qualified      This major global financial services organisation is looking for part
 actuaries to make a move into life sector roles with leading insurers.       qualified actuaries to join their life team. You will gain exposure to a
 You will be given the opportunity to develop new skills across a broad       broad range of actuarial work including product development and
 range of work ranging from Solvency II related activity to product           pricing, and ideally you will have some experience already in the life
 development. Interested candidates must demonstrate strong                   and pensions sector. Good IT skills and exposure to actuarial modelling
 technical capability and a genuine desire to work in the life sector.        systems would be an advantage but not essential. Ref: ARC25302
 Ref: ARCLIFE




 Risk Actuary                                                   Life          Assistant Actuary                                             Life
 South                                                  £Competitive          Midlands                                              £Competitive
 This is an excellent opportunity for a senior actuary to lead the            This role is suitable for a nearly or recently qualified actuary with a
 development of risk, capital and business planning capability as part        life actuarial background, good technical knowledge of products and
 of the Solvency II related implementation programme. The successful          processes and strong communication skills. The successful candidate
 candidate will work at senior levels and be instrumental in shaping the      will help define the reporting processes and methods taking account
 risk management environment. Ideally candidates should have significant      of the Solvency II requirements. Excellent communication skills in
 life sector experience (or relevant experience in other sectors) with        addition to strong technical ability will be needed and an attractive
 strong interpersonal and influencing skills. Ref: ARC24940                   package is offered in return. Ref: ARC25303




 Contract                                                      Life           Manager                                                  Pensions
 Various                                   Significant £££ per day            London                                                £Competitive
 There are opportunities for part qualified and qualified actuaries with      This consultancy is looking for a qualified actuary with strong technical
 experience in any of financial reporting, capital assessment, financial      knowledge around pensions strategy and valuations to join their team.
 modelling and all aspects of product development and pricing                 The successful candidate will contribute to business development as
 methodology for life products. Initial 3 / 6 month contracts are available   well as taking the lead on chosen project assignments and will need
 and experience of actuarial modelling software may be an advantage.          strong client facing skills and ideally experience of corporate and
 Part qualified candidates who have stopped exams will be considered          trustee advisory work. Relevant pensions or consultancy experience
 and very competitive daily rates are offered. Ref: ARCCON                    is essential. Ref: ARC25304




 Consultant                                             Investment            Actuarial Analyst                      Life/Pensions to Non Life
 London                                          to £85K + Benefits           London                                               £Attractive
 A global consultancy seeks a well qualified individual to work within        We have an excellent opportunity for a part qualified actuary to make
 the investment consulting practice. You may be pursuing the FIA or           a move into the non life sector within the London Market in a role
 CFA qualification, or have already qualified, but you must also have         with a strong modelling focus. The successful candidate will need to
 some relevant investment consulting experience from a consultancy            be making good progress with the actuarial exams, have some solid
 or asset management environment. An excellent overall package is             actuarial modelling experience and also demonstrate a convincing
 offered to strong candidates with suitable experience and good client        desire to move into non life actuarial work. Ref: ARC25300
 facing experience. Ref: ARC25301




Call us anytime including evenings and weekends on 020 7717 9705 or
                     email enquiries@the-arc.co.uk
                                                                                     A fresh approach
                                                                                                                   www.the-arc.co.uk


Global opportunities and trusted advice from experienced actuaries


 Chief Pricing Actuary                            General Insurance            Consultant                                  General Insurance
 London                                              £Competitive              London                                £Depends on Experience
 With a team of qualified and part qualified actuaries reporting into           This very different consulting role would allow an academically strong,
 the role this leadership position will be responsible for developing           motivated and entrepreneurial individual the opportunity to work
 the pricing across all business lines for this London Market company.          across pricing, capital, reserving as well as other varied projects.
 The role will also have involvement in the reserving and business              Working with a small team of high calibre individuals this role would
 planning in cooperation with the corporate actuarial function. Clear           allow far closer involvement with clients and the prospect of providing
 communication style together with strong management and technical              a more value added service.Ref: ARC25201
 ability vital. Ref: ARC25280




 Head of Capital                                  General Insurance            Risk Actuary                                    General Insurance
 London                                               Circa £120K              London                                                    To £80K
 Working for a London Market and commercial insurer, this role will             Supporting the work of the CRO, this role will have involvement in
 require someone with strong leadership skills to provide direction             testing, validation and performance analysis of the internal capital
 for the capital management team. The client is looking for someone             model, assisting with capital planning and capital management,
 who can deliver best practice capital solutions, provide actuarial             development and implementation of the ORSA and development of
 input to Solvency II implementation and develop capital management             market risk measurement and reporting within the business. Previous
 solutions for evaluation of performance, strategic decision making and         capital and Solvency II involvement needed. Ref: ARC25281
 in pricing on a risk basis. Ref: ARC25262




                                                                                                                                                          The Actuarial Recruitment Company is an employment agency
 Pricing & Reserving Actuary      General Insurance                            Reserving Actuary                               General Insurance
 London                Circa £90K plus good benefits                           London                                             To circa £80K
 This established London Market business is looking for a qualified             This role for a nearly/newly qualified actuary will support the Chief
 actuary for pricing, reserving and business planning across various            Actuary in quarterly reporting, development of the reserving process
 classes of business. The client will be looking for an academically strong     including Solvency II implementation, provision of management
 candidate from a commercial general insurance background who                   information, reserving parameterisation of the capital model as well
 can provide a consultative approach in support of the underwriting             as support in other areas for the actuarial team. Previous reserving
 team. Ability in managing more junior members of staff will need to be         experience and knowledge of ResQ desirable. Ref: ARC25282
 demonstrated. Ref: ARC25261




 Risk Analyst                                General Insurance                 Contractors                                  General Insurance
 London                              To £60K plus good benefits                London                                   £500 - £1,200 per day
 This specialist P&C (re)insurer is looking for a self motivated student        New contract roles are coming through constantly and we currently
 with London Market or commercial lines experience to build, maintain,          have positions from 3mth to 12mths in all areas of capital, pricing and
 modify and document portfolio risk models. Also develop tools for              reserving. Ref: ARCContractors
 monitoring risk accumulations, modelling of outwards reinsurance
 programs and development of stress and scenario testing. Excellent
 communication skills and an innovative and pragmatic approach to
 problem solving required. Ref: ARC25260




GI                                                                Andy Clark BSc FIA                0781 333 7891             andy@the-arc.co.uk
Life, Pensions, Investment and Graduate                           Chris Cannon BA                   0771 122 8449             chris@the-arc.co.uk
All other enquiries                                               Roger Massey BSc MBA FIA          0781 398 9016            roger@the-arc.co.uk
                                                                     General Insurance

Head of Reserving                                         Rick Davis                Head of European Actuarial                         Emma Gilbert
London                                      £140,000 + Bonus + Bens                 Zürich, Switzerland                   CHF 200,000 + Bonus + Bens
London market insurer seeks a qualified actuary to bring the reserving              Exceptional opportunity to lead and develop an actuarial team, having
function into London, firstly to be Solvency II compliant but more interest-        responsibilities across Europe. This role at a Lloyd's market insurer offers
ingly to develop an advanced methodology which will include stochastic              genuine longevity in the Swiss market, overseeing both Reinsurance and
modelling. A brilliant role needing ingenuity and imagination.                      direct commercial lines teams. Additional language skills not needed.


Head of Risk Modelling                                Emma Gilbert                  Head of Capital                                        Paul Francis
Zürich, Switzerland                    CHF 200,000 + Bonus + Bens                   London                                    £130,000 + Bonus + Bens
A rare opportunity to work for such a business where actuaries are heavily          Unbelievable opportunity for an experienced Actuary to assume a senior
involved in all strategic decisions and are very well looked after. You should      management role. You will be reporting into the CRO and working closely
have more than 6 years' experience and have very strong Capital Modelling           with members of the exec committee. Good SII knowledge and man
experience. Commercial lines experience essential.                                  management / mentoring experience a prerequisite.


Pricing Expert                                    Jamie Howard                      Senior Pricing Actuary                                Paul Francis
London                                      £120,000 + Bonus + Bens                 London                                    £120,000 + Bonus + Bens
Pricing expert required for large multinational insurer. This is a group level      I have four vacancies in the Lloyd’s market for senior pricing candidates. The
position reporting to a board level executive – a unique and autonomous             roles vary between monoline and multiline with one supporting the Chief
role. Pricing responsibilities for all lines of business – personal lines through   Underwriting officer across all lines. A pricing role for everyone! London
to large commercial. Some pricing experience beneficial.                            market pricing and excellent communication skills required.


Senior Pricing Manager x 2                           Jamie Howard                   Capital Actuary                                          Rick Davis
London or North of England £110,000 + Bonus + Bens                                  London                                    £100,000 + Bonus + Bens
Superb Pricing Manager opportunities for experienced actuaries looking for          Top London Market business requires a technically strong capital actuary to
responsibility of a high GWP portfolio and manage a team of actuaries. Must         join their highly-rated in-house team. You will be responsible for the
be from a general insurance background and be a qualified actuary or                on-going development of the capital model while playing a lead role in
statistical specialist. Flexible location and great financial incentive.            numerous business planning projects. Also requires team leadership skills.


Syndicate Actuary                                        Paul Francis               Business Analytics Actuary                            Paul Francis
London                                        £90,000 + Bonus + Bens                London                                      £80,000 + Bonus + Bens
An excellent opportunity for a nearly / newly qualified actuary exists within       I am looking for an actuarial / statistical professional with hybrid,
my client. Excellent opportunity to develop technical and business skills and       non-traditional skills. The role will translate the system functionality and
extensive exposure to the senior management decision making process. You            software to make the capital model more efficient. You must have good
must have good reserving ability – other skills will be taught.                     modelling, software, interpersonal and business analysis knowledge.


Solvency II                                           Gary Rushton                  Igloo Modeller                                      Gary Rushton
London | 6 - 12 Months                                       £1000/day              London | 6 Months                                           £800/day

Solvency II Actuary                                   Rob Bentham                   Capital Actuary                                     Rob Bentham
London | 6 Months                                            £600/day               London | 6 Months                                           £600/day

Actuarial Consultant (6 Years + PQE)                        Ik Onyiah               Actuarial Analyst                                         Ik Onyiah
London | 6 Months                                            £Competitive           Newport | 6 Months                                             £500/day

                                 General                                                                       International
Paul Francis                                               0207 649 9469            Diane Lockley                                      +353 (0)1 685 2413
paul.francis@ojassociates.com                                                       diane.lockley@ojassociates.com
Rick Davis                                                 0207 649 9353            Emma Gilbert                                    +41 (0)43 508 0509
rick.davis@ojassociates.com                                                         emma.gilbert@ojassociates.com                            0207 310 8782
Jamie Howard                                               0207 310 8725            Phu Le-Ngoc                                      +49 (0)89 2206 1068
jamie.howard@ojassociates.com                                                       phu.le-ngoc@ojassociates.com                           0207 649 8643
                                                                                                                             www.ojassociates.com

                                                                                 Ireland          |    Continental Europe |                            UK



                                                       Life Insurance & Investments
Chief Actuary                                          Clare Nash                Head of Risk                                       Clare Nash
London                                    £180,000 + Bonus + Bens                London                                    £150,000 + Bonus + Bens
My client seeks an experienced actuary to develop an expanding team. This        A high profile role has arisen within a household name; my client seeks an
is a high profile role which will require technical excellence coupled with      accomplished actuarial professional to lead their growing team. You will
outstanding commercial awareness. A unique role within a niche player.           have a wealth of post qualified experience and enjoy leading high profile
Please call for a confidential discussion.                                       projects which will shape the company’s future.


Head of Pricing Development                            Harriet Hall              Risk Manager – Life Actuary                         Julien Fabius
London                                    £100,000 + Bonus + Bens                Brussels                                  €110,000 + Bonus + Bens
Are you looking to work in a fast-paced environment for a growing yet niche      Looking to recruit for my client, an undisputed leader for Individual Life and
player? My client is looking for an accomplished actuary with pricing and        Employee Benefits as well as a leading non-life player. In their head quarters
marketing experience to lead crucial projects and get involved in market         we are recruiting for an experienced actuary to join the Group’s Risk depart-
development. Excellent career opportunity.                                       ment to take on a key role in the global Solvency II project.

Life Actuaries                                  Patrick Flanagan                 Corporate Actuary                               Patrick Flanagan
South East                                  £90,000 + Bonus + Bens               London                                      £80,000 + Bonus + Bens
Are you interested in achieving a better work/life balance? I am working on      My client, a niche and specialist insurer, is looking for a nearly / newly
a number of exciting and interesting opportunities with large Life compa-        qualified to join their small entrepreneurial team. A broad, all encompassing
nies that cover all levels and areas of specialism. Dynamic and ambitious        position that will allow you close interaction with the CA, CRO, Investments
Pensions actuaries will be considered.                                           and CFO. A truly outstanding career enhancing opportunity.


Senior Systems Actuary                             Harriet Hall                  Reinsurance Actuary                                 Diane Lockley
London / Surrey                             £80,000 + Bonus + Bens               Dublin                                      €90,000 + Bonus + Bens
Are you a systems actuary who is looking for variety and diversity with          International reinsurer is seeking a commercially minded actuary to be
strong career development potential? My client is a market leader and            involved in a business developemnt focused role. You will ideally come from
looking to bolster its systems function. There is real scope to mould the role   a Life Pricing / Product development background and be looking for an
around the individual. They are open on type of systems package.                 autonomous opportunity in the reinsurance field. Great Opportunity.


Life Actuary                                         Phu Le-Ngoc                 Financial Reporting Actuary                         Diane Lockley
Cologne                                     €80,000 + Bonus + Bens               Dublin                                      €75,000 + Bonus + Bens
Very exciting opportunities for PQ or qualified actuaries in Cologne. My         Are you a nearly / newly qualified actuary looking for a new challenge? A
client, a renowned insurance company, offers various positions for life          European Life insurer are seeking an actuary with a passion for financial
actuaries. Good knowledge of at least one of the following is expected:          reporting. The role will be heavily involved in GAAP reports, Solvency report-
MCEV, ALM, Solvency II, IFRS, Prophet and QIS.                                   ing, Solvency II and risk management. Apply Now!


Peak 2 Actuary                                      Rob Bentham                  Pricing Actuary                                     Rob Bentham
South West | 6 Months                                     £1000/day              London | 6 Months                                         £1000/day

Annuities Reporting Actuary                         Gary Rushton                 ICA Actuary                                               Ik Onyiah
South East | 12 Months                                      £850/day             South West | 6 Months                                         £800/day

Prophet Developers                                  Gary Rushton                 Moses Developers / Testers                                Ik Onyiah
UK Wide | 12 Months                                         £700/day             Midlands | 3 Months                                           £550/day


                                  Life                                                                        Contracts
Clare Nash                                              0207 649 9350            Gary Rushton                                            0207 310 8793
clare.nash@ojassociates.com                                                      gary.rushton@ojassociates.com
Patrick Flanagan                                        0207 649 9355            Ik Onyiah                                               0207 310 8785
patrick.flanagan@ojassociates.com                                                ik.onyiah@ojassociates.com
Harriet Hall                                            0207 310 8783            Rob Bentham                                             0207 649 9351
harriet.hall@ojassociates.com                                                    rob.bentham@ojassociates.com
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