Actuary Australia 09 2011

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Diary Dates 2011                                                  contents
6 Oct         London             Presidential Dinner
                                 – David Goodsall
                                                             5    Health Reform Unlimited
                                                                  RepoRT – Geoff Dunsford

10 Oct        Brisbane           CPD for Members
                                 and Roadshow
                                                             8    Blogging and Diversity Amongst Speakers
                                                                  pResiDenT’s ColUmn – Barry Rafe
                                 David C Miller with Barry
                                 Rafe and Melinda Howes      9    Actuary Unearthed
                                                                  exposé – Kaise Stephan
10 - 13 Oct   Kuala Lumpur       East Asian Actuarial
                                 Congress (EAAC)             10   The Actuarial Pulse
                                                                  sURveY – Daniel Cooper
11 Oct        Canberra           CPD for Members
                                 and Roadshow
                                 David C Miller with Barry
                                                             13   How Public Relations Benefits Actuaries
                                                                  CommenT – Anna Fenech
                                 Rafe and Melinda Howes

12 Oct        Melbourne          CPD for Members
                                                             14   Maximising Our Wealth From Mining
                                                                  CommenT – Naomi Edwards
                                 and Roadshow
                                 David C Miller with Barry
                                 Rafe and Melinda Howes
                                                             16   A Qualified Actuary
                                                                  RepoRT – Kwame Atsu / Michelle Shek /
                                                                  Angus Halim / David Middleton
13 Oct        Sydney             CPD for Members
                                 and Roadshow
                                 David C Miller with Barry   17   Congratulations to our New Actuaries
                                 Rafe and Melinda Howes           RepoRT

                                                             18   Accident Compensation Seminar
17 Oct        Mercer, Adelaide   CPD Event and                    evenT noTiCe – Registration Now Open
                                 Presidential Dinner –
                                 Barry Rafe and
                                 Melinda Howes
                                                             20   ACTCALC
                                                                  RevieW – Dave Millar / Bill Szuch

18 Oct        PwC, Perth         CPD Event and
                                 Presidential Dinner –
                                                             22   In the Margin
                                                                  pUzzles – Genevieve Hayes
                                 Barry Rafe and
                                 Melinda Howes               23   Deadline Dramas
                                                                  moRe ThAn mAThs – Martin Mulcare
27 Oct        KPMG,              Super Policy Forum
              Melbourne                                      24   Ask Gae: Are We Happy Yet? / Kids + Job = ?
                                                                  ADviCe – Gae Robinson
3 Nov         Challis House,     Super Policy Forum
              Sydney                                         25   Volunteers Cocktail Parties
16 Nov        Deloitte,          YAP – Actuarial
              Melbourne          Job Market and              26   Exchange Trip 2011
                                 Remuneration                     sTUDenT ColUmn – Emma McCormack

20 - 22 Nov   Sofitel Brisbane   13th Accident               27   Letters to the Editor
                                 Compensation                     leTTeRs – Colin Westman / Bronwyn Loong /
                                 Seminar                          Brent Walker
                                 – Changing Times,
                                 Continuing Needs            29   Breaking Through the EQ Ceiling
                                                                  Ceo’s ColUmn – Melinda Howes

                                                                        A C T U A RY A U S T R A L I A ■ September 2011
4   editorial

        Actuaries in the 21st Century

                   o you or your business use social media? Facebook?                   this story it took a while to get past the case studies about Dell’s
                   Twitter? If not, it is probably time to get with the 21st            success in building revenue through social media.
                   century. How does the joke go (cleaned up for my
        editorial of course)… facebook = “this is what I was doing”; twitter            It is also all about globalisation. As an Institue or any service
        = “this is what I’m doing now”; YouTube = “watch me doing this”                 industry, we want to reach all our customers/members in forms of
        etc. It is a whole new world! Are we embracing it as actuaries or               media that appeal to them.
        is our natural reticence leading us to revile this narcissism?
                                                                                        So what can we expect next?
        You may be asking why is this relevant to me as an actuary? For
        a start, we all have customers and the ability to hear them in real             Just think we could have a blog ‘A day in the life of an actuary’ or
        time is a great asset. Not listening to them is a blind spot.                   a YouTube clip about being an actuary – actually that has already
                                                                                        been done, as a song I believe. The Institute is getting into it! Our
        In 2005 Jeff Jarvis blogged about his experience trying to get                  intrepid CEO is about to launch into Twitter and the President’s
        his Dell computer fixed. They took a long time, did not deliver                 Blog will update us about what Barry has been up to.
        on what they promised and ultimately gave him his money back.
        He blogged about his experience and had a huge following by                     Next phase these could be realtime on our web-based magazine!
        the end of it. The negative backlash for Dell was phenomenal.                   ▲

        Ultimately what happened was that Dell turned this into a                       James Collier
        success story. They got their technicians to reach out to             
        complaining bloggers. Dell also created their own blog for
        people to contact them directly and have their issues dealt with                Catherine Robertson-Hodder
        effectively. They were so successful that when I went to research     

     Actuary Australia
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      AA164 October 2011                                                                © The Institute of Actuaries of Australia ISSN 1035-6673
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      James Collier Editor:                            or email:
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                                                                                        Disclaimer Opinions expressed in this publication do not necessarily represent
      Katrina McFadyen Communications & Member Experience Manager
                                                                                        those of either The Institute of Actuaries of Australia (the ‘Institute’), its officers,
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    AC TUARY A U S T R A L I A ■ September 2011
                                                                                                                                     report         5

Introduction                                              Reform
● “....obesity .... drains
  the national budget each year
  by $58.2 billion”, (Sun Herald report,
  13 March 2011).
● “...smoking ... costs our society $31.5 billion
  each year”, (Nicola Roxon, media release,
  7 April 2011).
● “Depression-associated disability costs
  the Australian economy $14.9 billion
  annually”, (beyondblue website)

These are big numbers. Obesity costs $58.2
billion – that’s around twice the cost of Age
Pensions! And the numbers are all over
the place. Surely, if the other numbers are
correct, depression should cost more than
$14.9 billion?

This is the first of two articles commenting
upon the components of these numbers,
and considering the arguments for their validity in terms of justifying   Diabetes Australia. The costs given in this report relate only to those
regulatory action and how they are used in media reports.                 obese people who suffered from particular diseases: diabetes,

                                                                          osteoarthritis, cancer and cardiovascular conditions. This was a
             ealth Reform                                                 total of 1.339 million people out of an estimated obese population
             We all sympathise with those who have health                 of 3.71 million. A breakdown of these costs is:
             problems – indeed, sometimes we are ourselves
             afflicted! There is no doubt that disability and poor        Health System Costs (including carer costs) –
health impact employment effectiveness and cost society in general,       hospitals, nursing homes, pharmaceuticals, medical and
in terms of treatment and facilities. Hence, most people support          health services, research, health administration (excess
the provision of such treatment and facilities through taxation –         over community average costs per head):                        $3.9b
and anticipate advancements of science and society’s increasing
prosperity to improve them over time. However, a major issue is:          Other Financial Costs – productivity losses, tax
how much should the government spend? What proportion of                  revenue forgone, welfare payments, other government
the cost of a disability or medical condition is it reasonable for the    costs:                                                         $4.4b
government to justify use of taxpayers’ money on measures to
reduce its prevalence and prevention?                                     Non-Financial Costs – personal impact of loss of
                                                                          wellbeing/quality of life and premature death, expressed
Obesity                                                                   as the dollar value of the “burden of disease”:               $49.9b
The report costing obesity at $58.2 billion is “The growing cost
of obesity in 2008: three years on” by Access Economics for               Total Costs                                                   $58.2b

                                                                                             A C T U A RY A U S T R A L I A ■ September 2011
6   report
    What? $49.9 billion for ‘non-financial costs’? Now we are starting         Smoking
    to understand the numbers. How can the personal ‘burden of                 The report stating the $31.5 billion cost figure is The costs of
    disease’ cost so much? And how come this is included in a total            tobacco, alcohol and illicit drugs abuse to Australian society
    in an announcement which appears – at least superficially – to             2004/05 by David J Collins and Helen M Lapsley.
    represent real money costs?
                                                                               A breakdown of these costs is:
    Burden of Disease                                                          Health System costs                                       $1.0b
    Estimates of these costs were calculated by multiplying:                       Less savings from premature deaths                   ($0.7b)
                                                                               Net Health System costs                                   $0.3b
    ● the number of DALY’s (disability adjusted life years) suffered by        Other Financial costs (productivity losses, cost of
      obese people with the various diseases, where 0 represents a                 consumption of smoking products)                      $9.4b
      year of perfect health and 1 represents death,                           Non Financial costs (Unpaid labour costs less resources
                                                                                   saved through premature death)                        $2.2b
    ● by VSLY (Value of a statistical life year),                              Intangible costs (psychological costs of premature death
                                                                                   borne by the smoker and others, represented by
    and adjusting the result to avoid double counting of financial costs           the value of a loss of a year’s living)              $19.5b
    included.                                                                  Total Costs                                              $31.5b

    The DALY concept was developed by the World Health Organisation,           Again, the total is dominated by the large sum of non-financial and
    the World Bank, and Harvard University about 15 years ago. It has          intangible costs.
    been applied in Australia by the Australian Institute of Health and
    Welfare and other government organisations concerned with the              Methodology
    health and safety of the population. ‘Years of life lost’ through          For this report the following definition of costs was adopted:
    premature death and disability have been derived for the range
    of ailments. The proportions of years adopted for disability are             “The value of the net resources which in a given year are
    intended to represent the impairment effect of the disablement               unavailable to the community for consumption or investment
    including pain and suffering, relative to a healthy life state.              purposes as a result of the effects of past and present drug
                                                                                 abuse, plus the intangible costs imposed by this abuse.”
    A VSLY of $266,843 was adopted. This was based on the ‘value of
    a statistical life’ (VSL) at $6.35 million, and then discounting over      This is described as representing the ‘demographic’ approach to
    a working life of 40 years at 3% pa real. (The VSL was determined          the determination of costs. Under this approach, the focus is on
    from the results of international studies ranging from $3.7 million        the additional number of persons who would be alive today had
    to $8.1 million in 2006 dollars, and increased with inflation to           there been no smoking deaths over the past 40 years. An estimate
    2008). The concept of the ‘value of a statistical life’ is examined        of 369,161 was provided to the authors by John Pollard (he had no
    in the next article. Suffice to note at this stage the wide range          other involvement with the report).
    of estimates.
                                                                               A major item is the intangible cost of $19.5 billion. This is
    Remedies                                                                   determined as the reduction in the population multiplied by the
    The report refers to the usual remedies for prevention and mitigation      ‘value of the loss of a year’s living’. The ‘value of an individual life’
    of obesity ( ‘fat’ taxes, subsidies for healthy food, more regulation of   was taken to be $2 million in 1996 (at the low end of a range from
    ‘unhealthy’ food and constraints on its promotion, etc.) but provides      existing literature). This was indexed for inflation and divided by a
    no recommendations.                                                        population average expectation of life to arrive at the ‘value of the
                                                                               loss of a year’s living’ – $53,267. (The references to existing literature
    The elaborate details on labels of packaged food products in               make it clear that these expressions are equivalent to ‘value of a
    supermarkets are testimony to the current massive regulations              statistical life’ and ‘value of a statistical life year’.)
    supporting such details, but more are planned by Food Standards
    Australia NZ and the National Preventative Health Taskforce: claims        The intangible costs of the ‘psychological costs of premature death
    of health benefits will need to meet qualifying nutrition and nutrition    borne by the drug abuse victim and others’ were then assessed as
    effect criteria and other standards. It will then only be a short step     the reduction in the population (369,161), multiplied by the value
    to include take away food and restaurant meals. Already, in certain        of the loss of one year’s life ($53,267) to equal $19.7 billion. (c/f
    states of the US, it is a requirement for restaurants to display the       $19.5b in report, after adjustments)
    calorific value of their meals in the same size print – including
    on billboards!                                                             Problem with ‘Past’ drug abuse
                                                                               The problem with the above definition of costs is the way in which
    The cost of administering the regulations (to the government and           past drug abuse is incorporated into the costs for a given year.
    the food industry, all of which will ultimately be paid by consumers)
    will be mind boggling, but with a focus on the desire to reduce            The focus of most people on costs in a given year are those which
    the $58.2 billion cost of obesity, such actions can readily                impact the government budget, or represent reduction in GDP
    be justified.                                                              growth, or intangible loss, in that year.

    AC TUARY A U S T R A L I A ■ September 2011
                                                                                                                                          report         7

The concept of past activity impacting on such costs would be             Indeed, assuming the media release’s expected reduction in
limited to the effect on the abusers’ medical condition existing at the   adult smoking from the current 16% of the population to 10% is
start of the year. Certainly, prior deaths would not be considered as     achieved, the reader could be forgiven for estimating the ‘cost’ to
having any impact on the costs for the given year.                        fall by (16 – 10)/16 X 31.5 = $11.8 billion.

Indeed, if all smoking stopped, the methodology would still generate      As shown earlier, this reasoning does not apply. However, the
a large cost of smoking in the next year by virtue of the effect of       problem arises if the politicians and press not unreasonably believe
the past deaths.This is rather counter intuitive! Arguably it renders     it does. Spending of a few billion dollars to implement ‘plain
the methodology meaningless for the purpose of addressing cost            packaging’ might seem to be justified in view of the much higher
reduction initiatives, at least until it is explained.                    ‘expected’ reduction in costs. Such large expenditure may actually
                                                                          be required in practice if the tobacco companies win compensation
                                                                          for the loss of their ‘brands’.

                                                                          This sort of justification could not apply if the government pursued
                                                                          their much vaunted claim of their intention to be ‘transparent’ in their
                                                                          communications with the public, and revealed the budget impact
                                                                          numbers (provided in the report) in its announcement.
                    Smoking is
                    unhealthy...                                          Depression
                    but governments                                       The $14.9 billion of annual cost to society does not include a non-
                                                                          financial ‘burden of disease’ number. Does this reflect the often
                    make a profit                                         suggested lack of interest by the government in mental health
                    out of smokers!                                       problems? Not so. Burden of disease numbers are available which
                                                                          show DALYS due to depression are significant – particularly when
                                                                          associated causes of death, like suicide, are included. An amount
                                                                          of the order of $33 billion of non-financial costs could be added to
                                                                          the above annual cost number for the personal impact on the loss
                                                                          of wellbeing from the burden of depression.

                                                                          Intangible Cost – Burden of Disease –
Budgetary Impact                                                          Value of a Statistical Life
What taxpayers are likely to be most interested in is the impact          The impact of the calculation of this number for both obesity and
of smoking on the government budget(s) and how the cost may               smoking costs is enormous. It is notable that the methodology
be reduced.                                                               for incorporating the value in the determination of intangible costs
                                                                          differed between the investigations. In addition, the ‘value(s) of a
The problem is: we make a profit out of smokers!                          statistical life’ and the ‘value(s) of a statistical life year’ adopted were
                                                                          significantly different ($6.35m and $266,843 for obese people, and
The numbers are provided in the same report:                              $2m and $53,267 for smokers).
Health System costs                                             $0.3b
Other financial costs (taxes forgone)                           $2.9b     Each report mentioned that the numbers in ‘the literature’ varied
Total costs                                                     $3.2b     enormously but gave no reasons why the numbers they adopted
Taxes levied by state and federal governments on                          were relevant to their particular health problem.
   tobacco products                                             $6.7b
Tobacco taxes less smoking costs =                                        Can actuaries contribute to the debate?
Profit for governments                                          $3.5b     These issues are addressed in the next article to be published in the
                                                                          October edition of Actuary Australia. ▲
The level of profit shown is probably a little high as welfare costs
have not been included in the estimates. It is probable that smokers’     Geoff Dunsford
need for welfare support is higher than that of the population in
general. Against this is the saving in pensions in light of higher
smoker mortality.

Comment                                                                   Geoff Dunsford has never
Stating that the ‘plain packaging’ initiative was intended to reduce      been a smoker, nor obese,
the profit the government/taxpayers made out of smokers would             nor is he connected in
not have been helpful in the media release advocating the initiative.     any way to any of the
                                                                          organisations involved in
Giving the impression that the initiative would reduce the enormous       these issues. He is just a
$31.5 billion ‘costs to society’ had much greater impact!                 concerned taxpayer.

                                                                                              A C T U A RY A U S T R A L I A ■ September 2011
8   president’s column

       Blogging and diversity
       amongst speakers

              irstly, this is an old story. If you are not aware, there is now   top quality presenters, both actuaries and non-actuaries. There is
              a president’s blog that you can access via the web site.           also a careful vetting process for conferences.
              Up until now, the main communication vehicle for the
              president has been Actuary Australia. Whilst an excellent          Conference organising committees include a number of senior
    magazine, it is hard copy, not interactive and has a long lead-time.         actuaries and normally need to be endorsed by the relevant practice
    The objective of this new medium is to flag more immediate items             committee and the secretariat. Senior events staff members
    of interest to members and to hopefully, encourage more feedback             from the secretariat arrange and attend all organising committee
    from members. We also plan to have emails to all members on a                meetings. There is a long lead time required and a long list of
    quarterly basis highlighting current blog discussions.                       preferred speakers is organised. The initial approach to preferred
                                                                                 speakers is often made via a senior actuary, member of Council,
    There will be a degree of overlap between Actuary Australia articles         the Institute’s CEO or other centres of influence. Now clearly not
    and this blog. Generally, AA will pick up some of the key discussion         everyone will be happy with the speaker line up but there are plenty
    issues. New discussion and ideas will start on the blog.                     of checks and balances in the system to prevent inappropriate
                                                                                 speakers from presenting.
    My inspiration for this month’s discussion comes from an interesting
    and productive email exchange I had with a member of the Institute.          A similar but less rigorous process is also followed for concurrent
    The discussion started from the member’s concern about the choice            sessions where the organising committee requires outlines of
    of plenary speaker at one of our major conferences. In effect, the           proposed papers and peer review before giving the okay for
    member was arguing how we need to be careful whom we pick as                 the session.
    plenary speakers because there is an implied soft endorsement of
    their views by the pure act of us promoting the conference with their        The trickiest job for the organising committee is balancing
    name attached. This is a good point and I had not really thought             contributions from various firms where there may be sponsorship
    about it before. But I think we also need to be careful of only selecting    and other sensitivities. It has been argued that we should not accept
    speakers we agree with, because an important objective of our                sponsorship for conferences but my experience is that, if anything,
    conferences is to push the profession outside of its comfort zone.           sponsorship enhances the quality of the conference. Not only can
                                                                                 we make the conference more affordable and hence accessible to
    To realise this challenge we need speakers who can offer fundamentally       members, we also improve the speaker line up. Whilst sponsors
    different views from those which may be considered standard                  cannot ‘buy’ plenary slots, it is often the case that the sponsor
    actuarial views. But we obviously need to draw the line somewhere            makes available top quality speakers. Over the years the feedback
    and we do need to be comfortable associating the profession with the         from biennial conventions is that sponsor provided speakers are
    speaker. We need speakers who are seen generally in the community            generally the highest rated.
    as leaders with a legitimate opinion that is endorsed as valid. In this
    case, however, the member thought the speaker we invited was not             As a profession we have been well served by members who
    such a person.                                                               volunteer for conference organising committees. Members who
                                                                                 experience the conferences of other industry organisations and
    Now everyone is entitled to                                                  professions note that ours are amongst the best. A good indicator is
    their opinion. Having been on                                                that we usually only drop around 10% of attendees between the first
    the organising committee for                                                 and last session. I have been to major industry conferences where
    many biennial conferences                                                    there is a 60% drop off.
    I know how hard it is to get
    good speakers. The good                                                      So, back to where I started. I think diversity amongst plenary speakers
    news is that prominent                                                       is important and the onus is on the organising committees to make
    credible people do value                                                     the conferences relevant and provocative. ▲
    being asked to speak at our
    conferences. We have been                                                    Barry Rafe
    very successful in securing                                        

    AC TUARY A U S T R A L I A ■ September 2011
                                                                                                            actuary unearthed                  9

Kaise Stephan
Title…                                         Where I studied to become an actuary...        and communicating the practical
Appointed Actuary Non-Life                     Macquarie University                           consequences of technical findings to
                                                                                              non-technical audiences
Organisation…                                  Qualifications obtained...
Munich Re of Australasia                       B.Ec (Hons) FIAA FNZSA                         My most important decision…
                                                                                              To propose to my wife followed by
My favourite energetic pursuit…                My work history...                             decision to swim the English Channel a
Swimming and karate                            Worked in FAI Insurance as analyst             few years later
                                               reserving and pricing short tail personal
The sport I most like to watch...              lines, then moved into reinsurance at          I’m most passionate about…
Luge and Skeleton                                                                             My children
                                               GIO Re as actuary reserving all lines and
The last book I read (and when)...             later commutation deals and strategies
                                                                                              I’d like to be brave enough to…
The Bible (today) and The Girl Who             in run-off before joining Munich Re
                                                                                              Swim the Tigris and Euphrates rivers!
Kicked the Hornet’s Nest (still turning        Australasia
the pages!)                                                                                   In my life I’m planning to change…
                                               What’s most interesting about my role...
                                                                                              Spending more time with the family
My favourite artist/album...                   The variety of challenges in delivering a
No one favourite artist or album.              wide range of actuarial services to the        At least once in life, every actuary should...
I enjoy classical baroque such as Choral       business. Bracing myself every time            Apply their valuable skills in non-profit
and Sacred pieces by Handel, Bach              a major catastrophe occurs. Working            organisations
and other contemporaries, particularly         with the various perspectives of Board/
                                               Management, regulator, colleagues in           People say I look like…
pieces with coloratura sopranos!
                                               offices all around the world with their        Pete Sampras and my father
My favourite film...                           differing corporate perspectives and           My best advice for my children...
The film La vita è bella (Life Is Beautiful)   cultural skews                                 Strive in life to be the best they are, then
showed the ultimate humour and love
                                               My role’s greatest challenges...               let the rest unfold and stay close to God
from a dad (Roberto Benigni) who must
                                               Balancing the different perspectives.          while they are at it
use that same quality to protect his son
during the Holocaust and I cannot go           Being part of the organisation during          Four words that sum me up...
past Jack Nicholson’s performance in           this challenging period of high natural        Reliable, tenacious, diplomatic,
One Flew over the Cuckoo’s Nest                catastrophe activity and finding solutions     calmunderpressure ▲
                                               to key business issues
My interesting/quirky hobbies...                                                              Kaise Stephan
Getting into a body of water and feeling       Who has been the biggest influence on
the urge to swim to the other side!            my career (and why)...
                                               Many of the people I worked with
The person I’d most like to meet...            over the years in various capacities
Jesus Christ or in his absence one of          demonstrated courage, integrity and
his disciples                                  business acumen and passed on wisdom
What gets my goat…                             and experience
Unfairness, never getting to the point         My proudest career achievement to date…
and dishonesty                                 On the corporate side, working on an
What I wanted to be when I grew up...          especially large reinsurance deal as part
Many things including deep sea diver,          of a deal team. Receiving Actuary of
aeronautical engineer and environmental        the Year in 2009, an unexpected (and
engineer. Actuary was not on the list until    pleasant) surprise
the eleventh hour                              The most valuable characteristic an
Why I decided to become an actuary...          actuary can possess is…
My Aunt mentioned it and it seemed like        Thinking about opportunities that
a good idea                                    can arise from taking on a risk

                                                                                           A C T U A RY A U S T R A L I A ■ September 2011
10   survey

       The Actuarial

     Next Survey New questions will be available in October 2011.

     What would you like to know? If you have a question you would
                                                                                 The Actuarial Pulse is an anonymous, web-based survey of Institute
                                                                                 members, run on a monthly basis, giving members an opportunity to
                                                                                 express their opinions on a mixture of serious and not-so-serious issues.

                                                                                 – so I don’t want to be ruined... ● I get no thrill from it whatsoever and
                                                                                 see it as a pure waste of money.

     like to put to the membership, email it to
                                                                                 Q4: What proportion of your weekly salary would you be
     Results Report generated on 10 August 2011, 380 responses.                      prepared to gamble in one gambling session?

     T       his month’s Actuarial Pulse investigated respondent’s attitudes
             and actions in the fields of gambling and philanthropy.
                                                                                 Less than 5%
     Q1 & 2: Demographics                                                        6% – 10%                                                17        4.7%
                                                                                 11% – 25%                                               10        2.8%
                           Males: 73%                       Females: 27%         More than 25%                                           10        2.8%

     Age                                                                  %      In keeping with the high proportion of respondents gambling only
     20 – 29yrs                                                           31     infrequently it was not surprising to see almost 90% of respondents
     30 – 39yrs                                                           26     indicate that they were not comfortable spending more than 5% of
     40 – 49yrs                                                           24     their weekly net pay on any one session.
     50 – 59yrs                                                           13          One respondent provided a different mentality to the traditional
     60 – 69yrs                                                            5     gambling outing: “Base the amount on the approximate cost of 1
                                                                                 night of entertainment. Poker games are with family, so sometimes
     There was a high proportion of male survey respondents under the age        considered a ‘contribution’ to the in-laws’ retirement.”
     of 40, possibly related to the nature of the questions or the profession!
                                                                                 Q5: What forms of gambling do you use?
     Q3: On average, how frequently do you gamble?
                                                                                 Response                                             Count           %
     Response                                            Count            %      Poker Machines                                          47       19.1%
     Daily                                                   4         1.1%      Casino table games (eg. Blackjack, Baccarat)            81       32.9%
     Once per week                                          26         7.2%      Poker                                                   71       28.9%
     Once per month                                         45        12.5%      Sports betting                                         105       42.7%
     Once every six months                                  61        16.9%      Any other forms of gambling                             81       32.9%
     Less frequently than once every six months            139        38.6%
     Never                                                  85        23.6%      Of the actuaries who gamble, sports betting was the most popular
                                                                                 form. Men were more likely than women to bet on sports, go to the
     Weekly                                             Monthly                  casino or play poker. Interestingly, females were just as likely to use
     Daily                                                                       poker machines as men. Sports betters gamble the most frequently,
                                                                  Every 6 mths
                                                                                 with 62% gambling once per week. Those who play casino table
     Never                                                                       games are more likely to be casual gamblers, with 68% gambling once
                                                                                 every 6 months or less. Respondents pointed out that some popular
                                                                                 gambling types (like scratchies and lotteries), had not been included in
                                                                                 the question options, which was why the ‘any other forms of gambling’
                                                                  Less than      was so high. Furthermore, there was some uncertainty as to whether
                                                                  every 6 mths   lotto, the Melbourne Cup sweeps and non-financial poker games
                                                                                 were considered ‘gambling’. Some took a wider view of what the term
                                                                                 gambling might mean: ● “You take a risk getting up in the morning”.
                                                                                 The gamble of a cyclist: ● “I commute to the office by bicycle” was
     As many as 60% of respondents indicated that they gamble less often         contrasted with that of the pedestrian: ● “Whenever I cross the bike
     than once every six months perhaps confirming the profession’s risk         lane on Kent street I gamble with my life”. And the ultimate gamble...
     averse reputation! Some comments made to this effect included:              ● “Marriage is a gamble. (With 4 visits to the table I have lost 3 times,
     ● First lesson to learn in an actuarial course – ‘Gamblers Ruin Theory’     but this time I seem to be on a winning streak.)”

     AC TUARY A U S T R A L I A ■ September 2011
                                                                                                                                           survey          11

Q6: What proportion of your gambling is done online?                         this question from those broadly supportive: ● It makes sense to
                                                                             encourage responsible gambling. The cost may put some small pubs
Response                                             Count           %       out of business, in which case a bit of government support may
All                                                     17        5.2%       be needed. But the big picture is about achieving a ‘social good’
More than half                                          21        6.4%       which has far deeper implications than just the direct costs ● Think
About half                                               9        2.8%       something should be done - but do not know enough to be sure
Less than half                                          26        8.0%       the proposed solution is the right answer. Should reduce number of
None                                                   254       77.7%       poker machines. ● I wouldn’t say it is ‘necessary’, but it’s definitely a
                                                                             good idea. I have always set myself a limit in this fashion anyway, but
Perhaps biased by the high proportion of low frequency gamblers,             I understand that many people may have less self control.
almost 80% of respondents indicated that none of their gambling                   Whilst those who were sceptical that it will actually help suggested:
was done online.                                                             ● Will this really have an effect? Has it been tested? Isn’t it likely that
      Of those who indicated that they do gamble, 25% gamble online.         it will just result in people moving on to other forms of gambling? ● I
Not surprisingly, online gambling was more popular amongst under             am not sure it will really make a difference – you could always change
50s (27% of under 50s do some online gambling but only 18% of                machines... it will only impact a small number of problem gamblers
over 50s gamble online). Surprisingly, the 40-49 year old age group               And then there were those who felt it missed the mark altogether
was the most likely to gamble online – 31% of respondents indicated          who indicated: ● This measure will not address the problems with
that they use online gambling. Perhaps their parental responsibilities       gambling. There are more significant social issues that need to be
hamper their ability to get to the casino?                                   addressed. ● The only thing that can address problem gambling is to
      Despite the advances in online betting options in recent years         have adequate support systems in place to help people inflicted with
(including the ability to buy lotto tickets online) it was interesting to    it, and from my personal point of view, these systems are in place and
see relatively low take up rates. A number of theories were advanced:        they are adequate. ● It’s an inappropriate use of government powers
● Part of the fun is trying to read people isn’t it? (although it becomes    – in time you will need to be licensed to smoke, to eat fast foods, to
difficult when they start wearing visors) ● Gambling is used to kill time.   east chocolate... the list goes on... ● I want the Government to stop
There are better ways to kill time when one has access to the internet       interfering in the details of our lives. ● People should be responsible
● I don’t trust online gambling.                                             for their actions – Australia is too much of a nanny state and politicians
                                                                             are certainly not best placed to make such righteous decisions.
Q7: Driven by the Independent member for Dennison                            ● It will be ineffective and impossible to enforce.
    Andrew Wilkie, the Federal Government is planning to
    implement a system of mandatory pre-commitment on                        Q8: Would you work for (either directly or consult to) a
    all poker machines in Australia by 2014. What is your                        company that facilitates or promotes gambling (eg a
    opinion on the concept of mandatory pre-commitment                           casino or online betting agency)?
    (whereby each gambler nominates their maximum
    losses before they start gambling)?                                      Response                                              Count           %
                                                                             Yes                                                     210       59.7%
Response                                         Count      %                No                                                      142       40.3%
It is fair and necessary and should be implemented  179 50.3%
It will impinge upon my rights and should not                                Whilst the majority (60%) of respondents indicated that they would
be implemented                                        33 9.3%                work in this context, there was still a significant number (over 100
This does not go far enough to address                                       respondents) who indicated that they would not.
problem gambling                                            76 21.3%             As might be expected, a wide range of passionate points of view
Other                                                       68 19.1%         were put forward in the comments section: ● Legal product that if
                                                                             used responsibly can provide entertainment. Subject to abuse same
With this issue receiving a lot of publicity recently, this question         as alcohol, food etc but this does not mean it should be banned or
attempted to understand the high level views of survey respondents.          that I would refuse to work in such industry. ● A big big yes, because I
At least half of all respondents indicated that the proposed legislation     think it is the right thing to do. Gambling has enormous social benefits.
is in their view fair and necessary. A further 20% also indicated that       The most important point that most people in the debate ignore is that
the measures would not go far enough. As might be expected a                 with gambling comes a community. People feel closer to each other,
wide variety of views were expressed under the ‘other’ answer to             and they feel that they are part of a group. Why do you think two-up

                                                                                                 A C T U A RY A U S T R A L I A ■ September 2011
12       survey

     was so popular among the Anzacs? Because, with gambling comes           Regular monetary donations were the clearly dominant response
     comradeship. With comradeship comes a community, and a culture          with only 31 people indicating that they use their actuarial skills in a
     and tradition is born and celebrated.                                   philanthropic endeavour. The ‘other’ section indicated that ad hoc or
          Comments expressing the opposite viewpoint focused more on         one-off-event donations should also have been included in the survey.
     personal feelings towards the gambling industry: ● Probably not work        Comments provided indicated a range of philanthropic
     for. Maybe consult if they also recognised the problem. ● I see it as   approaches: ● Our firm does lots of pro bono work for various
     unethical and predatory.                                                charities, analysing data to support additional fund raising activities.
                                                                             Our staff like that we do it and the charities are hugely appreciative.
     Q9: Over an entire year what proportion of your annual net              ● 2.5% of my net wealth every year is donated to people of net
         salary would you expect to donate to charity?                       wealth less than 3 ounces of gold (approx $4800). One should learn
                                                                             to give so that they can receive, plus it cleanses your money.
     Response                                         Count           %          On a lighter note, a common joke running through this section of
     Nil                                                 16        4.5%      the survey was the analogy between charity and taxes... ● I already
     Less than 5%                                       269       76.0%      donate via my taxes. ● I am forced to donate 46.5% of my salary to
     6% - 10%                                            54       15.3%      an inefficient charity already.
     11% - 25%                                           12        3.4%
     More than 25%                                        3        0.8%      Q11: Do you think that the actuarial profession invests
                                                                                  enough time and resources into philanthropy?
     Responses to this question were strongly contained within the ‘Less
     than 5%’ option indicating that more granular options may have                  Yes: 42.6%                            No: 57.4%
     been useful. The following chart breaks down the responses to this
     question by broad age range.                                            The final question of this month’s pulse survey drew a wide ranging
                                                                             response with three recurrent themes emerging:
                                                                             1. Responses ranging from “I don’t know” to “How would I know”
                                                                                  and “I do not have any data” indicating that many respondents
                                                                                  felt they could not answer this question given their current level
                                                                                  of knowledge.
                                                                             2. A number of people expressed the view that “philanthropy is not
                                                                                  a professional matter, but for individual members to contribute
                                                                                  time, talents and treasure to the profession or to the community,
                                                                                  as they see fit”.
                                                                             3. And thirdly a number of respondents provided examples of
     Our older survey respondents (presumably the ones with larger                how the professional body could, in their opinion, be more
     incomes) indicated that they were more likely to donate a greater            philanthropic: ● In addition to monetary support to charities,
     proportion of their salary to charity.                                       which can always be increased both by the individual and the
         Only 12% of survey respondents under 40 donate more than                 profession, the actuarial profession could use its skills and
     5% of their net salary. This percentage increased to 46% when                knowledge to educate the vast majority of the population that
     considering respondents over 60.                                             are unaware of the risks they face – longevity risks, loss of super,
                                                                                  lack of insurance cover, etc. ● Giving to charity is a personal
     Q10: How do you contribute to philanthropic endeavours                       choice, but the profession could be more involved in development
          (excluding institute volunteering)?                                     of alternative funding models for the non-profit sector (eg.
                                                                                  social impact bonds, social enterprise). ● I don’t advocate the
     Response                                         Count           %           profession attempting to get members to give without proper
     Regular monetary donations                         250       77.6%           evidence. If the profession was to be involved then it should
     Pro bono work (where your actuarial skills                                   apply its skills / techniques to understand (and influence policy) in
     are used)                                            31        9.6%          the root issues driving the need for charity e.g. population growth
     Volunteering work (where your actuarial skills                               / distribution, government, social expectations... there are big
     are not used)                                       153      47.5%           questions that need an independent perspective.
     Other                                                44      13.7%      One final respondent had a different, tongue in cheek view and
                                                                             indicated that maybe we should not expect too much from
     Relative proportions                              Pro bono work         ourselves... ● No, but we shouldn’t be blamed. We are naturally an
     of donation type                                                        introverted bunch who try to avoid human contact.
                                                                                  It’s certainly been an interesting set of Pulse results this month
                                                           Volunteering      that hopefully have drawn out some of the thoughts and feelings that
                                                           (non actuarial)
                                                                             respondents have towards the areas of gambling and philanthropy.
                                                                             Thank you to all who contributed. ▲

                                                                             Daniel Cooper

     AC TUARY A U S T R A L I A ■ September 2011
                                                                                                                                   comment              13

how public
                                                                                important contribution to a well-functioning economy and society,
                                                                                for example, accurate pricing of insurance premiums; assessing
                                                                                and managing longevity risk; the role of ERM in natural disaster

relations                                                                       recovery planning.

benefits                                                                    3. To differentiate actuaries from other professions, including
                                                                               emphasising the much higher professional qualifications and

                                                                               standards for actuaries.

                                                                            4. To achieve a higher profile for the actuarial profession and
                                                                               attract more graduates into it.

                                                                            5. If necessary and appropriate, to defend actuarial positions
                                                                               being publicly attacked.

                                                                            The Institute aims to act as a non-partisan thought leader and trusted

                                                                            adviser rather than as a lobby group. Sometimes, there’s pressure
                edia engagement and coverage, backed by a savvy             from policymakers, the media and others for the Institute to take a
                public relations strategy, provides multiple benefits       particular stance (or any stance) on an issue. Sometimes the Institute
                for Institute members, including raising the profile and    takes the view that members benefit most when it provides an
                reputation of the profession. This is achieved through      actuarial perspective and proposes options rather than seeks to take
showcasing actuarial expertise in traditional areas of practice, such       sides in ideological (left/right political) debates. Of course, the media
as insurance and superannuation and in new or high profile areas,           are always looking for a story, and strong views make better stories.
such as enterprise risk management – against the backdrop of the            From a PR perspective and for maximum media coverage, it is better
Global Financial Crisis; natural disasters – against the backdrop of        to take a position than not. The Institute’s recent National Disaster
the Queensland floods; and health financing – against the backdrop          Insurance Review submission attracted strong coverage precisely
of the proposed National Disability Insurance Scheme. By raising the        because it contained strong views and recommendations, including
profile, participation and standing of actuaries, it is hoped that the      the need for long-term risk mitigation measures, under-pinned by a
profession will be increasingly called on to contribute to public policy    temporary insurance pool.
debates which impact our wider society, that more job opportunities
for actuaries will be created and that more young women and men             Institute media coverage this year has been greatly increased by
will want to be actuaries.                                                  promotion of submissions to government inquiries. Media pieces
                                                                            have included press releases, a series of opinion editorials published
Sometimes achieving these ends may be as easy as profiling interesting      in the Australian Financial Review and The Australian, and a member
people (who happen to be actuaries) as role models. For example,            survey, drafted by Honner Media, in consultation with Institute
last year, Honner Media successfully pitched Institute CEO Melinda          spokespeople, and published in national newspapers. Topics have
Howes and President Bozenna Hinton to the Australian Financial              included the Federal Budget and the Institute’s view on retirement
Review’s BOSS magazine, with the resultant article (including pictures)     income policy; the Garnaut Review; as well as Queensland and
reporting how they worked together to advance Institute and actuarial       Federal Government inquiries on the Queensland floods. There have
profession interests, while balancing family responsibilities. A more       been many more radio interviews than is usually the case for the
recent example was actuary John Walsh’s appointment as a Member             Institute, almost all linked to flood issues.
of the Order of Australia. John received the award for services to the
health and disability sector. A press release led to follow-up interviews   The reputation of the actuarial profession does require careful
for him on radio, in the trade press and in BRW. Another example has        management. This is best handled by putting forward senior,
been solid media coverage of high profile actuary John Trowbridge’s         experienced people who have had media training, and who are
role as the chairman of the Federal Government’s Natural Disasters          equipped with clear, easy to understand Institute messages. Ideally,
Insurance Review. This coverage was aided by the Institute providing        Institute spokespeople receive media training to highlight what the
him with a platform for discussion of key flood insurance issues            media is looking for and how to handle interviews.
through events such as the Biennial Convention, Flood Resilience
Seminar and NDIR Seminar, together with PR activity designed                PR activity and resultant media coverage
to maximise media attendance and interviews. There are many                 has been greatly assisted by Honner
reasons why it is good for the Institute and its members to be in the       Media’s access to policy advisers Rebecca
media including:                                                            Johnstone and Rick Shaw, by the support of
                                                                            Institute CEO Melinda Howes and President
1. To make a valuable contribution to and to achieve professional           Barry Rafe; and by liaison with the relevant
   recognition for contributions to significant public policy debates.      Institute committees. ▲

2. To increase awareness of the contribution of a profession,               Anna Fenech
   a business-to-business niche brand, whose input makes an       

                                                                                                A C T U A RY A U S T R A L I A ■ September 2011
14   comment
                                                                                ●    What percentage of mining is foreign owned?

                                                                                ●    What implications does this have for Australia?
                                                                                ●    How much money will be made each year by foreign owners of
                                                                                     mines and how much will leave the country?

       our wealth                                                               The second question, regarding the implications for Australia, is a
                                                                                very actuarial one. Mining is highly profitable at the moment and likely

       from mining
                                                                                to remain so. Minerals are a non-renewable resource. Demand is
                                                                                growing rapidly. So, for a country that is extremely wealthy in mineral
                                                                                resources, what is the value maximising approach?

                                                                                Economic orthodoxy tells us that the value maximising approach is to
                                                                                extract the minerals as fast as you can, by whatever means possible.
                                                                                In Australia’s case, that means allowing foreign investment to drive the
                                                                                rate of extraction. Australia is simply too small to finance the levels of
                                                                                new mining investment we are currently experiencing.

                                                                                 Figure 1: The economic orthodoxy

                                                                                        Wealth to foreigners              Wealth to Australia

                                                                                         Profits to foreign owners          Jobs, opex, capex

                                                                                         Value adding to minerals      Royalties, MRRT, company tax

                                                                                                                        Profits to Australian owners

         was about to feed the sheep when the phone rang. “I’m from             The economic orthodoxy is certainly true when viewed over a very
         The Age,” said the journalist. “Would you like to comment on the       short time period (and assuming you ignore environmental costs;
         material the Liberals have been distributing to the media about        economic distortions, such as rising interest rates; crowding out
         your personal life?”                                                   of other industries; and opportunity costs, such as use of land for
                                                                                agriculture), but is it true over the longer term?
     This got my attention. Had Tony Abbott been eavesdropping when
     I cheated at Monopoly aged eight? Had Malcolm Turnbull been at             It seemed to me that the wealth maximisation function might be
     that party in my twenties when I’d had a puff (hated it, never inhaled).   reversed (i.e. NPV(wealth) might be optimised with a slower rate of
     I told the journalist I had no idea what he was talking about. “Oh,        extraction) under the following circumstances:
     you’re being smeared,” he replied cheerily. “The Libs are distributing
     photos of you dressed in a mini-skirt and wearing a blonde wig. Ring       i.   If profits are unusually high, meaning that a much higher
     any bells?”                                                                     proportion of the total pie is going to owners (mostly foreign)
                                                                                     rather than Australia; and if
     And thus began the most famous week of my life. Much of it                 ii. commodity prices are rising much faster than the RDR, meaning
     centred around my appearances as a comedienne at various venues                 that profits in future years have a higher NPV than profits this
     (including actuarial conferences). The Murdoch Press went to town,              year; and if
     calling me xenophobic, communist and economically illiterate (seven        iii. value adding opportunities do not currently exist in Australia but
     times in one article). The Minerals Council of Australia called me              could exist in the future; and if
     dangerous, racist and said my analysis was as rubbery as calamari.         iv. slower extraction means that a higher future proportion of
     The Financial Review, taking a calmer approach, said my analysis                investment and ownership can be by Australian companies.
     held onto its integrity and should have formed a foundation for a
     reasonable debate.                                                         That is a lot of ‘ifs,’ but these are the exact circumstances that we
                                                                                are experiencing at the moment. The Resource Super Profits Tax (the
     And what was the cause of the uproar?                                      RSPT) was an attempt by Treasury to deal with the first two points.
                                                                                Resource rental taxes are a fascinating area for actuaries to study.
     I had written a paper for The Greens addressing the issue of the level     Interestingly, Ross Garnaut, known by many actuaries for his climate
     of foreign ownership of mining in Australia. The questions The Greens      change work, is the father of resource rental tax systems in Australia,
     asked me to answer were:                                                   having written many books on the topic.

     AC TUARY A U S T R A L I A ■ September 2011
                                                                                                                                 comment             15

The key concerns of a resource rental tax are the establishment of           There are few resources as profitable as those already identified.
an appropriate risk discount rate (called the Allowance for Corporate        At current extraction rates, identified economic resources will
Capital or ACC in resource rental systems) and measurement of                be depleted by 2036 for iron ore, and by 2026 for gold. More
a break-even point at which taxing commences. I had previously               reserves will be found, but not forever.
completed a research paper for The Greens which calculated the
revenue lost from shifting from the RSPT to the Minerals Resource        The thing that had originally sparked the Greens’ interest in the
Rent Tax (about $100 billion over ten years) and commenting on           flow of mining profits to foreign owners was a table from the last
the RSPT (the ACC seemed too low by about 5% but otherwise               Budget showing a Treasury forecast of the net income balance,
it seemed like a reasonable tax). I knew that mining profits were        reproduced below.
high and getting higher, but it wasn’t until I studied iron ore profit
margins that I realised quite how profitable. Out of every dollar of     Figure 3 Net income balance forecast to 2013
iron ore revenue, 52 cents was accruing to mine owners and only
48 cents to workers, contractors, suppliers or governments. The
EBIT margin was running at over 60 cents in the dollar, a very high
number for a commodity product.

Figure 2 Breakdown of iron ore output – typical dollar

                                                                         Over the last few years, as a result of the high levels of foreign
                                                                         ownership in the mining sector, the net income deficit has broken
                                                                         below its long term floor of 3% and is forecast to reach 6% by 2013.
                                                                         This creates a significant drag on the current account balance. This
                                                                         used to be something that kept Paul Keating up at night but now it
                                                                         seems to be keeping Bob Brown up.

                                                                         The part of the research that was of least actuarial interest (the
                                                                         absolute level of foreign ownership of mining) was the part that
                                                                         generated the intense public controversy described in the opening
                                                                         paragraphs of this article. It seemed that to even ask the question, or
On the question of whether commodity prices would continue               to try to quantify it, meant you were a racist. My bottom up analysis
to jump, the evidence seemed overwhelmingly ‘yes’. ABARES                gave a figure of about 83% foreign ownership, which was close to the
forecasts had prices continuing to grow until 2016, the end of the       figure I knew that Treasury were using of about 80%. The percentage
forecasting period. To get a feel for the rate of increase, ABARES       is changing by the day as M&A and new investment are happening
forecast iron ore revenues for the period 2010-11 jumped from $35        continuously. The Minerals Council of Australia, using older ABS
billion in the March 2010 forecast to $53 billion in the September       statistics, said that the figure was 71%, and therefore, my entire report
2010 forecast – only six months later. Imagine trying to set actuarial   was wrong. After receiving extensive feedback from many sources on
liabilities (or government policy) when your underlying experience       my calculations, I now believe that the level of foreign ownership is
is jumping by 51% over a six month period. It is little wonder that      probably about 78% to 80%, but changing by the day.
government policy was rushed and playing catch-up.
                                                                         The issue of what to do with our mineral wealth, and how to maximise
Over the much longer term, which was what my paper focused on,           it for both our and future generations’ benefits, is an interesting
it seemed likely commodity prices would continue to grow at a rate       actuarial question. My full paper
faster than the RDR:                                                     can be found at http://bob-brown.
●   Commodities are a non-renewable resource. Demand is                  release/australia%E2%80%99s-
    growing, not slowing.                                                foreign-owned-mining-industry-
                                                                         ship-50b-dividends-offshore. ▲
●   While further mineral resources can always be generated
    over the medium term, they are becoming more costly, less            Naomi Edwards
    productive and more environmentally damaging to extract.   

                                                                                             A C T U A RY A U S T R A L I A ■ September 2011
16   report

                                                                                           en years out of high school and I have finally reached
                                                                                           the milestone of becoming an Actuary. Needless to
                                                                                           say, the road has been long and difficult and the
                                                                                           traumas experienced and sacrifices made along the
                                                                                way will not be unfamiliar to most that have chosen the challenging
                                                                                actuarial career.

                                                                                At 17, I first came across the term ‘Actuary’ in the Job Guide.

        A qualified                                                             I quickly established that I would not fare well as an Abattoir worker,
                                                                                an Accountant or an Actor. I settled on the fourth occupation in the
                                                                                guide – the Actuary, on the basis that it required good mathematical

                                                                                and communication skills. Five years of studies late into the night
                                                                                followed that decision.

                                                                                After graduating from Honours, I commenced as a graduate in
                                                                                the Financial Risk Management division of KPMG. One definite
                                                                                advantage of consulting is that the work covers a broad range of
                                                                                activities and there is always something new to learn. In the last five
     Four recently qualified Actuaries from the July 2011                       years I have been involved in credit risk management, securitisation
     Professionalism Course, talk about their current roles                     analysis, treasury risk management, unit pricing, and Basel II
     and their journey to achieving the Actuary designation.

                                                                                There have been some significant challenges juggling family life
                   ualifying as an Actuary has been an “All stations            with study demands over the years (especially during pregnancy
                   to Liverpool” experience. Being over 30 at the               and early motherhood!). However, the rewards
                   time of starting the core technical UK subjects by           are well worth the effort. Equipped with the
                   correspondence, raising a family and holding a full-         right problem solving skills and logical thinking
     time job all at the same time, was long and hard. I think the ‘core        capabilities, Actuaries are capable of pursuing
     technicals’ are best done full-time through university, staying with       practically any career in financial services.
     mum, dad and Markov (!!!). With hindsight this experience was a
     lesson in discipline, perseverance and rewards.                            Michelle Shek
     Other than three years at general insurers, doing actuarial reporting
     and product research work, I’ve spent over 15 years working with

     Workers Compensation and CTP scheme regulators, doing mainly
     statistical reporting and increasingly more actuarial analyses. Other         started my journey in qualifying as an Actuary at Curtin
     actuarial opportunities include – collaborative work with actuaries at        University where I spent two and a half years completing a
     PwC, peer reviews from Taylor Fry actuaries and training from The             Bachelor of Actuarial Science. Having to focus on actuarial
     Quantium Group.                                                               exams as well as holding down three part-time jobs was very
                                                                                challenging. Fortunately with motivation and persistency I was
     On a part-time basis, I have secured my employer’s approval to work in     acknowledged as being one of the top achievers of Curtin University
     micro insurance consulting with the International Labour Organisation.     and was accepted as a member of the Golden Key International
     Australian actuaries are already involved in this area which has a large   Honour Society.
     development focus in poor and developing countries. This type of
     work begins as joint missions with more experienced actuaries from         After graduating, I accepted a role as a Treasury Consultant where
     all over the world, until one becomes experienced enough to be             I travelled across the Asia Pacific Region. This role provided me
     registered as a micro insurance consultant. Working with actuaries         with many valuable experiences through my responsibilities and
     from different countries makes an international qualification more         interaction with various lines of businesses such as Treasury, Market
     relevant, noting that actuaries in Europe have qualifications more in      Risk, Accounting, IT and Operations. While working and travelling,
     line with our Actuary designation.                                         I completed the Actuarial Control Cycle course by correspondence
                                                                                through Macquarie University.
     Having an atypical actuarial career path, I see
     Fellows like specialist doctors and Actuaries                              I am currently employed as a Senior Credit Risk Analyst by Bankwest.
     like GPs. Actuaries are usually gifted individuals,                        I am involved in the development and implementation of credit risk
     but one needs to remember that “To whom                                    measurement. This also requires reporting for the Retail Division
     much is given, much is required”.                                          loan portfolios, ensuring alignment with Group internal and external
                                                                                requirements. Responsibilities include weekly and monthly reporting
     Kwame Atsu                                                                 and forecasting of delinquencies, new business, score profiles,                                                       vintage analysis and other risk measures. I am also responsible for

     AC TUARY A U S T R A L I A ■ September 2011
                                                                                                                    report       17

obtaining, analysing and integrating data and reports from other
internal and external sources that enhance the understanding of the
performance of the Retail Division loan portfolio.

Due to limited opportunities for a traditional
actuarial role in WA, my experience so far has
been in non-traditional areas. Since qualifying                                Professionalism Course – July 2011
as an Actuary, I hope this will increase
opportunities for me to explore traditional
                                                                               Congratulations to our New Fellows
actuarial roles.

Agus Halim                                                                     David King Him Chan                                                        Chris Leonardi Chan
                                                                               Chongling Chen
                                                                               Min Chen

                                                                               Nikola Genevieve Coristine
                 y role as Business Service Manager at Russell
                                                                               Vivian Vu Dang
                 Investments may be best described as a combination
                                                                               Ashley Bruce Evans
                 of varied tasks requiring technical expertise, industry
                 knowledge, and most importantly coordination,                 Peter Yi Dong Fang
negotiation and project management skills. To better explain my                Debbie Louise Hansen
role, let me first describe my professional journey.                           Jonathan Jian Hui Ng
                                                                               Jonathan Paul Nicholls
After my Science degree at Monash University (Melbourne), I decided            Pravesh Ponna
to embark on a career in the actuarial field with Towers Perrin in 1997,       Wynne Yin Tan
and I also commenced my actuarial studies.
                                                                               Anthony Adam Tockar
                                                                               Bonnie Lai Tung Tong
The early years of my career focused on traditional actuarial consulting
within superannuation working on large, mainly defined benefit clients
                                                                               Jessica Eileen Twigg
of varying types. I was extremely lucky to work closely with the               Ben Wang
senior actuaries within the organisation and was directly exposed to           Zeming Yu
client relationship management early in my career. This gave me the            Fang Yuan
opportunity to develop the skills needed to work with client issues,
not only in relation to actuarial matters, but also in relation to the other
services that were offered (e.g. administration, communication, legal          Congratulations to our New Actuaries
& investment consulting). My actuarial background was an essential
ingredient to understanding and dealing with the diverse and complex
                                                                               Kwame Eric Atsu
issues being faced on a daily basis.
                                                                               Louise Anne Cahill-Mulvogue
I really enjoyed this aspect of the role and it expanded my horizons           Yew Wei Chai
away from the traditional actuarial consulting area. I ultimately took up      Tehn Foure Chin
a role as a client relationship manager for administration services. It was    Belinda Joy Creagh
also around this time that I qualified as an Associate of the Institute.       Matthew John Dunger
                                                                               Agus Kurniawan Halim
In 2005, Russell Investments purchased Towers Perrin and this
                                                                               Yung Lee
presented a new range of opportunities. I moved into an operational
                                                                               Tania Leong
role as Business Services Manager.
                                                                               Derek Kai Choy Luk
My role requires a close link in with nearly all of the lines of business      David Matthew Middleton
and this definitely presents a great opportunity to interact and learn         Mark Pinto
from people from a diverse range of backgrounds. It is not hard to see         Emma Elizabeth Robertson
how many of the above functions can benefit                                    Simon Judah Rosin
substantially from actuarial experience and it                                 Michelle Hoi San Shek
is no coincidence that some of my colleagues                                   Xueyuan Wu
working in my team also have an actuarial
                                                                               Yan Yan Xi
background. ▲
                                                                               Amanda Xie
David Middleton                                                                Yolanda Chin Li Yapp                                                         YenHong Yu

                                                                               A C T U A RY A U S T R A L I A ■ September 2011
                              20 – 22 November 2011 • Sofitel briSbaNe

Register NOW for this important industry event at:
TOPIC SNAPSHOT                         – Subject to change

Scheme Updates
● Workers Compensation Scheme Updates
● CTP Scheme Updates

● The Long, Long Tail
● Implementation Considerations Related to the National Injury Insurance Scheme
● Costs Risks in the Proposed National Injury Insurance Scheme (NIIS)
● Treat Disability Related to Injury the Same as Other Disabilities: Abolishing Fault
   Based Compensation

Claim Trends and Emerging Issues
● Fair Work Australia – Implications for Accident Compensation Schemes
● UK Experience with Motor Bodily Injury Claims
● Emerging Themes in Accident Compensation Schemes
● Repeat Workers’ Compensation Claims: Risk Factors, Costs and Work Disability
● An Examination of Accident Compensation Claims During Natural Hazard Events
● Study on Long Term Continuance Rate

Claims Management Strategies
● Evaluation of the TAC Recovery and Independence Claims Management Initiatives
● TAC Claims Management Transformation
● Never Entirely Outsource Your Brain
● What is Working in Managing High Cost Claims: A Strategic Approach, Results,
   Data Design, Decision Guides and Individual Claims Estimates
● ACC – The Winds of Change

Scheme Governance and Monitoring
● Superimposed Inflation – An Elusive Concept
● Scheme Governance and Financial Management
● Dynamic Risk Modelling – A Case Study
● Retrospective Reinsurance - Unlocking Value in the Balance Sheet

Scheme Design Factors
● How System Design Impacts the Funding Mix for People Injured in Accidents
● New Zealand Accident Compensation – What’s Happening?
● Moral Hazard and Workers’ Compensation: Time for a Rethink?
● Does Compensation Lead to Worse Health or Does Worse Health Lead to
   Compensation? Why Both Possibilities Should Be Considered
● The Role of Incentive Mechanisms in Accident Compensation Schemes
● Empirical Evidence of Ex Post Moral Hazard in the Australian Market for
   Comprehensive Automobile Insurance
● The Potential to Use Insurance and Other Markets to Reduce Road Trauma

Outcome Measurement and Injury Management
● What Does Return To Work Really Mean:- Looking Through A New Lens
● Effective Injury Management
● Information-based Interventions for Injury Recovery: A Review
● Four Outcome Measures of Return to Work After Compensation for Work-Related
   Injury or Disease: Insights from WorkSafe Victoria Claims Record
● Burden of Injury in Australia: Identification of Sources of Injury Outcomes Data
20   review


         t has been a while since many of us were actuarial students           However, if we dig a little deeper, and take into account our entire
         – some more than others – and the education process of                membership base, it is clear for all to see that there is still a most
         the Institute has changed significantly since then. Gone are          definite need for this grounding in commutation functions. The
         the days of distance-education only, where members were               continued expansion of our membership base throughout the
     handed the course notes and a slip of paper with the exam time.           South-East Asian region, and the increased opportunities for our
     These days the students of the Institute are provided with lectures       members to apply their trade within other regulatory frameworks,
     and tutorials all the way through their Part I and II courses, and in     requires an understanding of complex commutation functions.
     many cases, some of the Part III courses as well.
                                                                               Looking at the recent figures provided by the Institute regarding the
     However, whilst course content and delivery has been modified             composition of the students completing the Part III courses, the
     over the years, one thing hasn’t appeared to have changed - the           number of international students continues to increase. This will only
     relevance of the material to current business practice. University        magnify the importance of the place for commutation functions in
     students are now learning about the use of copulas within the general     our university teachings of the Part I courses.
     insurance industry (allowing the representation of dependence in
     multivariate distributions) as well as stochastic modelling of asset      Looking at Indonesia as an example, the reserving basis is prescribed
     performances, to determine appropriate allocations for supporting         by the Finance Minister in one of their decrees. The discount rates
     liabilities and derive investment strategies.                             used are subject to a maximum, which for new policies denominated
                                                                               in the local currency is 9%, and many policies use a Zillmer Net
     At first glance, however, the teaching of life insurance within our       Premium method, with a 3% loading, as the prescribed reserving
     universities appears to have remained static. On the surface,             basis. To calculate these, the premium and reserving commutation
     the decision to persist with teaching commutation functions and           functions are a necessity.
     complicated reserving functions, without reference to solvency
     and capital adequacy standards, appears to be less relevant than          The Actuarial Life Table Calculator (ACTCALC), developed by Brian
     the general insurance and investments content. The value of the           Bambrough, is a great tool for actuarial students, and professionals,
     treasured ‘Yellow Book’ (‘Formulae and Tables for Examinations of         allowing them to explore a range of basic actuarial life table functions
     the Faculty of Actuaries and the Institute of Actuaries’) within the      and also develop their own formulae as part of their studies. For
     workplace appears to be limited. Whereas, the value of the Part III       those who are more technically savvy, the software was written in
     notes as reference material for life actuaries recently graduating from   J and APL for some of his clients in the insurance industry and has
     university cannot be understated.                                         two main purposes:

     Many would argue that the university material provides a solid            1) To calculate values for annuities, insurances, compound interest
     grounding in the technicalities of product pricing, reserving and            functions, commutation functions, etc.
     valuation. They are probably right. However, in the Australian            2) To act as an example to aid other actuaries interested in learning
     business world, it simply seems that no-one uses these anymore.              J, and code their own systems and calculations in J.
     Our environment is no longer conducive to these relatively
     inflexible methods.                                                       The language J, itself, was created by Dr. Kenneth E. Iverson. Prior
                                                                               to this, Dr. Iverson had created the APL language and J software
     The processing power of computers has increased significantly             can be thought of as a highly enhanced APL that no longer requires
     since commutation functions were used widely throughout the               special symbols. This software is a modern high-performance
     industry. Actuaries are now able to comprehensively model all             general-purpose programming language that is ideal for complex
     types of claim, expense and commission payments, without relying          analytics and data manipulation. J provides an outstanding platform
     on generalised model points. They use Margin on Services (MoS)            for actuarial software development. The concise syntax and
     projections, with various profit carriers, and calculate Embedded         interactive environment make it easy to experiment with ad hoc
     Value (EV) and Market Consistent Embedded Value (MCEV) in order           models and data analyses, permitting very short development and
     to determine the financial impact of decisions.                           debugging times.

     AC TUARY A U S T R A L I A ■ September 2011
                                                                                                                                       review          21

The core language is based on a small set of simple and                 ●   Clicking on the big Button Help button allows you to find out
consistent mathematical rules with powerful facilities for creating         how to view help messages for controls.
new definitions. In most cases, actuarial formulae and expressions      ●   Clicking on the View menu item allows you to see the system’s
map directly into J equivalents, making it the ideal language for the       code, which is great for increasing your understanding of the
ACTCALC program.                                                            way these functions are built up.
                                                                        ●   Clicking on the Programmer menu item for information about
Now retired, Bambrough has made the ACTCALC software freely                 how this system was coded.
available for anyone to use, modify and distribute. The ACTCALC         ●   Clicking on the Help menu item About for information on who
software has subsequently been modified to run under the latest             coded this system and the J language
version of J as well as the more widely used Windows operating
systems. In addition to this, the Australian Life Tables have been      The main calculator screen looks like the screenshot below (bottom),
included within the software, making it much more applicable for        showing the versatility of the program, the ease of parameter inputs
Australian mortality investigations.                                    and the choice of mortality tables.

As can be seen within the screenshots below, there are a vast           To run the ACTCALC you will first need to download and install on
amount of functions that can be explored through this program.          your computer the most recent version of J for your operating system.
Basic survivor-type functions and interest related functions can be     This is a relatively simple task as a fully operational version of J is free
used independently, or combined to create the annuity, variable         and can be downloaded from
annuity, reserving and general commutation functions. For those
that feel a bit daunted by all of these different functions, help is    This free version has no restrictions and will allow the ACTCALC
available everywhere on the system, for example:                        program to run on your computer. Again, for those more technically
                                                                                   savvy, at the time of preparing this note the stable versions
                                                                                   of J were J602 for 32 bit systems and J64-602 for 64
                                                                                   bit systems.

                                                                                    Once the J software is installed, you are able to contact
                                                                                    Bill Szuch on
                                                                                    au or phone +61 (0)3 9397 0489 to
                                                                                    obtain the free ACTCALC software.
                                                                                    In addition to this, he has also offered
                                                                                    to provide any assistance that may be
                                                                                    required to run the calculator. ▲

                                                                                    Dave Millar

                                                                                    Bill Szuch

                                                                                            A C T U A RY A U S T R A L I A ■ September 2011
22   puzzles
     “I have discovered a truly marvellous proof of this, which this margin is too narrow to contain” – Fermat
     In the Margin with Genevieve Hayes
     “I have discovered a truly marvelous proof of this, which this margin is too narrow to contain” – Fermat.

                                                                                   with Genevieve Hayes

                                                                                                    i n t h e m a rg i n @ a c t u a r i e s . a s n . a u

      The Maze of Doom              (AA161 Solution)                                “I think we’re supposed to enter letters into the remaining
      The safe path through the Maze of Doom is as follows:                     squares of the grid, but I have no idea which ones. We could guess,
                                                                                but the odds of getting the right code in the next year, let alone the
      A →> B →> H →> I →> J →> K →> E →> F →> L →> R →> Q →> W →> #             next five minutes, are astronomical.”
      →> $ →> ) →> ( →> * →> @ →> ! →> U →> T →> N →> M →> S →> Y →> %.

      The solutions to the questions in each of the rooms are:
      A: 5 (Groucho, Chico, Harpo, Zeppo and Gummo); B: 1778;
      C: 20; D:15; E: 23561; F: 22; G: 13; H: 17; I: 1 (This answer
                                                                                                W                                      I
      requires that the host, the host’s brother and the host’s sister
      all married first cousins); J: 33; K: 16; L: 6 (McGoohan’s
      number in the TV series The Prisoner); M: 2; N: 1547; O: 3; P:
      15; Q: 10; R: 147 (= 342 – 173 in base 8); S: 18 (Nancy Drew
      Mystery Story #18); T: 3760; U: 451; V: 12; W: 42; X: 12; Y: 10
      ((0, 65), (16, 63), (25, 60), (33, 56), (39, 52), (52, 39), (56, 33),
      (60, 25), (63, 16), (65, 0)); Z: 9; !: 8; @: 527; #: 29 (listed in the

                                                                                                 A                                   O
      song Joseph’s Coat from the Andrew Lloyd Webber musical
      Joseph and His Amazing Technicolour Dream Coat); $: 2; %:
      1955; ^: 14; &: 19; *: 108; (: 3; ): 27.

                                                                                    “What about that?” said Allan. “That could be some sort of a clue.
     Two correct answers were submitted. The winner of this month’s                 On the wall next to the keypad was a list of words:
     prize, selected randomly from among the correct entries, was
     Jeffrey Azzato, who will receive a $50 book voucher.                                   •   ASSIGNS                    •   EASIER
                                                                                            •   GIN                        •   GLOVE
     Mind Boggle                                                                            •   INSANE                     •   IRIS
     “Ha ha! Mr Quatermain! So we meet again, but this time I will get                      •   LONG                       •   NINE
     the better of you!” The man looked down at Allan and Katherine                         •   NOVENA                     •   SEWING
     from a vantage point above the pit they were trapped in.                               •   SIGN                       •   SWING
           “Who is he and what’s he talking about?” whispered Katherine                     •   WIRE
     Gainsborough to Allan Quatermain.
           “Harry Rider, first rate writer, second rate adventurer. Two years       “I don’t know, it looks pretty meaningless to me,” said Katherine.
     ago we were both searching for the Star of Africa. I found it first and    She stared at the wall for a moment. “You know what it reminds me
     Rider’s a very sore loser. This is his revenge.”                           of? Boggle! You know, the game. I used to play it all the time as
           “Silence!” screamed Rider. “You may have noticed that the pit        a kid.”
     you are in is not as spacious as it once was. That is because the              “You might be on to something there,” said Allan. “Rider’s a
     walls are slowly closing in on you. In five minutes time, you and your     huge fan of Boggle.”
     little friend will be as flat as a pancake. However, I am a fair man, Mr       Katherine shook her head. “I still can’t figure it out.”
     Quatermain. There is a key pad on the far wall. Enter in the correct           “Well keep thinking, because from the looks of it, we’ve only got
     code and you are free to go. Hopefully, it won’t boggle your mind.”        two more minutes at best.”
     Rider laughed again and then left.
           “Boggle, boggle,” muttered Quatermain under his breath as
     Katherine walked over to the key pad to take a better look at it.
           The key pad was made up of an ordinary QWERTY keyboard               For your chance to win a $50 book voucher, fill in the
     with a screen above it. On the screen was a four by four grid with         missing letters in the grid and email your solution to:
     the four corner squares already filled in.                        ▲

     AC TUARY A U S T R A L I A ■ September 2011
                                                                                                                      more than maths                      23

   Deadline Dramas

               challenging part of every actuary’s working life is            ●   Think carefully about who goes first in the negotiation. In some
               managing timeframes. One of the interesting dimensions             circumstances you may wish to propose a date and in other
               of that challenge is how deadlines are negotiated and              circumstances it may be beneficial to hear their request first.
               agreed. You see, I think that some of the stress that              Choose wisely…
many people experience when they are working towards tight
timeframes could have been avoided if they had put more thought               ●   If the other party seems to have demanded an unrealistic
into the deadlines adopted at the start of the task or project. Here              deadline, rather than be defensive, be curious and politely enquire
are some thoughts on negotiating timeframes that may help reduce                  as to their rationale or needs. That insight may be useful in the
your stress levels.                                                               subsequent negotiation.

There is an important assumption that I need to table right at the start. I   ●   Be conscious of, and clarify with the other party, any important
am assuming that you believe that you have some power to negotiate.               dependencies. There may be a third party involved, for example,
In other words, I am assuming that you will have some say in                      or a reliance on receiving additional information.
determining the deadline. This may be obvious but, sadly, I hear many
people feeling helpless in this regard. “I have to deliver when the boss      ●   Remember not to constrain your bargaining to a single dimension
says.” “I am stuck with what our client demands.” “We’ve got to meet              (ie time). Think about other options to include in your negotiating.
our service standards”. If you hear yourself saying words like these –            For example, you may offer a draft or an executive summary in
and denying yourself a say in the timeframe – I would recommend that              order to meet their deadline. It may be that even a verbal report
you test them. It may be true. Then again, it may not be true and you             can satisfy their urgency addiction.
may be simply consigning yourself to victim status rather than taking
responsibility for your plans. (You might review the Pulse Survey results     ●   Be careful not to be a slave to your perfectionist streak. You will
in the June 2010 AA if you are interested in this aspect.)                        never have enough time to get it exactly, perfectly, 100% correct.
                                                                                  You may need to be ‘commercial’.
If you do have some power to negotiate then we can move on to
three principles:                                                             It is also worth remembering that if you encounter a problem that
                                                                              threatens the achievement of the agreed timeframe then it will be
1. The timeframe must be realistic. It sounds simple but in my                important to inform your client as soon as possible. (See my column
   experience human beings have a strong bias towards optimism.               on ‘Delivering Bad News’, October 2009 AA).
   I would strongly recommend some buffer time.
                                                                              What are the benefits of agreeing sound timeframes with your clients?
2. Where possible, under promise and over deliver. Let’s                      I think that you will have greater confidence in the quality of your work
   say it’s Monday and you think you can deliver on Wednesday                 if it is produced in a sensible timeframe. I think that your stress levels
   morning. Now imagine that you actually deliver on Wednesday.               will be reduced if you avoid unnecessary dependence on adrenalin to
   Now consider these two scenarios: in the first case you                    get your work completed. Perhaps more importantly, I think there is
   promised to deliver on Tuesday and in the second case you                  great potential for improved relationships with your clients if you can
   promised to deliver on Thursday. In which case are both                    get this right. They will feel respected and appreciated if you give them
   parties happy?                                                             a say and can conduct a mature conversation on delivery times. They
                                                                              will, in turn, be appreciative if you keep them informed.
3. The timeframe should be clearly understood by both
   parties. Confirmation of the understanding would be valuable,              It takes more than maths to negotiate and agree
   either in an engagement letter (if it is with a client) or via email (if   sensible timeframes – to enhance the enjoyment of
   it is with someone in your team).                                          your business life. ▲

When it comes to actually negotiating the timeframe here are                  Martin Mulcare
some tips:                                                          

                                                                                                  A C T U A RY A U S T R A L I A ■ September 2011
24   advice
        Gae answers your serious and not-so-serious questions about life in the office, career, study and coping as an actuary in the real world

                                                                                              with Gae Robinson
                                       Are we happy yet? • Kids + Job = ?

     Are we happy yet?                                                         Kids + Job = ?
     There’s a really funny hyperactive old guy in the office. I now           Is it possible for a girl to keep working if she wants to have
     realise age is no issue when it comes to happiness. I wonder              (at least) four kids?
     how he stays happy every day though – I get tired after being
     a little high. Do you have any secret wisdom for achieving                OK, first things first, has this reproductively ambitious girl had any
     constant happiness?                                                       children yet? My advice is to ease into it one kid at a time…

     ‘Constant happiness’? It does sound exhausting. I think I’ll settle
     for almost-continuous general contentment.

     You know, the pursuit of happiness is a recent phenomenon for
     us human beings. For most of our history, the focus has been on
     getting enough food, not getting chomped by diprotodons* or killed
     in wars, hoping that our offspring survive childhood, having a basic
     roof over our heads etc. Now (for those of us in the prosperous           But let’s all start with a big sigh. Because (and you know what I’m
     segments of the first world) it’s all about self-fulfilment, molecular    going to say) would this question be asked about a guy? Probably
     gastronomy, accumulating e-gadgets, and overseas holidays.                not. (SIGH)
     Spoilt – us?
                                                                               Of course it is possible to work and have multiple kids. What is NOT
     Many wise people (including Elvis Presley, according to Google)           possible is working five days a week and late nights and being there
     have said that the three keys to happiness are having: (1) Someone        for your children through every step of their lives. And there’s no
     to love, (2) Something to do, and (3) Something to look forward to.       rule that says you have to be there for everything (female or male).
     It’s hard to argue with these, and they’re so simply stated that they
     sound easy. But sometimes 1-3 can be hard to find.                        In my (possibly controversial) view, no one should feel guilty
                                                                               because their life doesn’t revolve totally around their kids. Here’s
     Some other random thoughts on achieving happiness:                        my logic. People often say “the most important thing in my life
     ● Being healthy helps (clearly not a priority for Elvis). Which means     is bringing up my kids”. So extrapolate from there – what’s so
        eating well, doing a bit of exercise, not taking harmful levels        important about your kids? Well, the most important thing in their
        of drugs                                                               life will be bringing up their kids, and then what will be important in
     ● Good genes are also useful – some people are predisposed to             the life of those kids? etc etc. It’s kind of proof by induction that no
        happiness, others aren’t. Personally, I am part of a long proud line   one’s important in the end, and the whole argument just doesn’t
        of anxiety-prone depressives but, hey, we all have our challenges!     work for me. At some stage, at least some of us have to focus on
     ● Find a job you love and do your best at it. If you’re in a job (or      doing some of the other important things. And not just the people
        profession) you don’t like, consider leaving it. And DON’T WORK        who don’t have children!
        TOO HARD – well, not all the time
     ● Getting older seems to increase contentment for most people –           So, work and have kids. Share the home duties with your partner
        up to a point, obviously. I’m not sure whether this is correlated      (you need the right partner for this!). Pay people to care for your
        with my empirical observation that everyone over 40 is mad             children if you need to; it won’t turn them into monsters. Find an
     ● Hang out with people you like and respect                               employer that is family-friendly – flexible working hours, occasional
     ● Be yourself, and don’t worry about whether what you’re doing is         absences at short notice, extra holidays etc. And, I repeat, don’t
        cool or not. Pursue those crazy passions                               feel guilty! ▲
     ● Reorganise your home/room every three months and throw out
        more stuff                                                             *Yes I know they were herbivorous, but I’m not sure I would be 100%
     ● And last, don’t discount the lasting joy that can be created by         comfortable standing right in front of one…a bit like an elephant.
        your team winning a grand final!                                       Remember to send me your questions! – the more controversial, the better.

     AC TUARY A U S T R A L I A ■ September 2011
                                                                                                                                                             event   25

                                                                                                       hlin, Gra
                                                                                         y, Ian                                Jim Rep
                                                                                    Rowle                                              anis, David
                                                                             Fred                                                                  McNeic

           he Institute hosted the annual Volunteers Cocktail                Our volunteers contribute their knowledge, time, experience and
           Parties in Sydney and Melbourne on the 16 and                     passion across many areas of the Institute including communications,
           23 August respectively. These events allow the Institute          education, governance and professional development with over
           an opportunity to thank its many volunteers for the time          100 committees, sub-committees, taskforces and working
and effort that they have contributed to the profession over the             groups. To date there are almost 600 volunteers worldwide. Thank
past year.                                                                   you everyone! ▲

 Sydney – 16 August                                                            Melbourne – 23 August

Paul Driessen, Barry Rafe                                                    David Goodsall, Melinda Howes, Bill Buttler

Bozenna Hinton, Bruce Thomson, David Goodsall, Mark Robinson                 Travis Elsum, Simon Anderson

David Underwood, Michael Stumbles, Heather Navid, Ian Grubb, Anthony Carey   Andrew Higgins, Rebecca Moore and Vivian Yu

                                                                                                          A C T U A RY A U S T R A L I A ■ September 2011
26   student column

         Trip 2011

               reezing cold and shivering, I remember wrapping my coat          when it sees me coming) to spend six months at another university?
               tighter to block out the wind. Despite the wintry weather        It may sound crazy to some but for me this experience is something
               all around me, I couldn’t wipe the smile off my face –           I will never regret. Basically there are three reasons I chose to go on
               I was in London.                                                 exchange, and I’ll list them for you.

     I arrived in the United Kingdom on                                                                      It appears that employers love to
     Tuesday 4 January this year to begin                                                                    see that you have completed an
     my six month exchange program                                                                           international exchange program
     at the University of Southampton.                                                                        and they have a good reason.
     Arriving in London mid-winter from
     summery Perth was a shock but this                                                                       Exchange is an opportunity to
     was the choice I had made in arriving                                                                    develop critical skills which are vital in
     a month early. I wanted the chance                                                                       the workplace. Many new graduates
     to explore the rest of the country                                                                        can face difficulty in adapting to their
     before settling down to five months                                                                       new work environment, handling
     in Southampton, a port town in a                                                                          stressful situations and balancing
     southern county of England known as                                                  land
                                                                                                               their workload. But if a student has
                                                                       en pastures of Eng
     Hampshire. My first travels took me         Enjoying the wide gre                                         participated in an exchange it shows
     north from London right up to Scotland and back again, finally             that they are capable of accepting new challenges with an open
     arriving in Southampton to meet my new housemates.                         mind and that they have the experience, and have developed some
                                                                                of the skills, to succeed.
     When students go on exchange to the UK, they will often be
     offered accommodation at their host university’s halls of residence.       It broadens your academic knowledge.
     However in my case, I chose to swap accommodation with an
     English student who was going on exchange to Curtin at the                 The University of Southampton is one of the top rated in the UK
     same time.                                                                 when it comes to actuarial science and mathematics. I had some
                                                                                amazing lecturers who were very passionate about what they do.
     I moved in with four people who I had known less than a month              We are lucky to have many great lecturers at Curtin, but the more
     and never seen in person – and luckily for all of us this turned out       people you meet and learn from in your chosen field, the more you
     to be a wonderful situation! By the end of my trip we had become           will know about why you want to do it (and once you know why, you
     great friends and shared many happy memories, from street parties          can figure out how and what specifically you want to do).
     and pub crawls to rambles through the countryside and picnics
     on the common. Halls of residence are a great place to meet                Its fun and you get to try new things every day!
     new people but moving into a house so close to the university
                                                you find that most of           The University of Southampton has over 180 societies, with a group
                                                your neighbours are             for anything including unicycling, light opera and trampolining. I
                                                also students. In the           took archery lessons and saw my first match of indoor canoe polo
                                                UK, it is common for            in Southampton. In my travels I visited seven countries and met a
                                                students to move town           range of new friends that I am still in contact with. I arrived in the
                                                for university, so you are      UK knowing no-one but left after having
                                                not the only one in a           explored much of it, including five of my
                                                new environment.                friends’ home towns – which taught me
                                                                                a most valuable lesson… that the locals
     A stunning Swiss bac
                                                So why did I decide             always know the best places to hang out. ▲
                                                to pack my belongings
     into an oversized suitcase and travel halfway across the world?            Emma McCormack
     Then spend a great deal of money (my bank account still cringes  

     AC TUARY A U S T R A L I A ■ September 2011
                                                                                                                                letters        27

                                                                        described by Pauline Durant. As outlined above, there are other
                                                                        reasons in addition to simplification.

                               to the Editor                            Colin Westman

 Paying Super Death Benefits                                             Collaborate or die?

Dear Editor,                                                            Dear Editor,
I read with interest Tim Trahair’s article in the June 2011 Actuary     I wish to comment on the CEO’s Column ‘Collaborate or Die?’
Australia headed ‘Paying Superannuation Death Benefits’.                which appeared in the April edition of Actuary Australia. Although
                                                                        my PhD is not in actuarial science, I believe my comments have
From my working and personal experience, I have joined the group        some general relevance.
of commentators critical of the discretionary system. In my view that
system has served its time and needs to be replaced by a system         Firstly, I completely agree with the observations on the dichotomy
of automatic payment to the estate of the deceased.                     of business vs academia. I experienced these first hand when
                                                                        making the transition to academia after several years in a business
Points to support this view are:                                        environment. Certainly in my own research work, my result
1. The family circumstances of many members are now impossibly          orientated background made it frustratingly difficult to enjoy the
    complex. Some could not be imagined. While trustees do their        process of spending quality time to achieve a quality solution.
    best, too often their decisions are overturned by the SCT who       That said, I do now appreciate the time and freedom to think and
    form a different but sometimes not better view.                     am very grateful I have 5+ years to finish this PhD. Within one
2. Even in straightforward situations payments are not made             academic department you will also find a variety of characters.
    quickly. Routinely non dependent children are asked if they wish    Yes, there are academics who will push for some theoretical result
    to ‘stake a claim’.                                                 which they themselves admit is of no practical use (but just an
3. Many members have significant assets outside superannuation          elegant display of mathematics).
    (such as a house). These are not considered by trustees, yet can
    be relevant to any fair determination.                              That said, I have been fortunate my group of advisors are
4. The philosophy behind the whole system has moved from                interested in using statistics to solve real problems which, along
    needs based to individual rights and control – witness the          the way, may require some new theoretical development. I think
    move to accumulation funds, non discriminatory benefits,            the differences between academia and business will always exist
    payments to non dependants, and taxation favouring lump sum         by the nature of each group’s primary objectives. However, we can
    superannuation investments to name a few.                           always try to understand and be open to where the other side is
5. It is acknowledged that protection from creditors would be           coming from, without losing our own principles and training. This
    lost, but would that be a bad thing? Creditors should not be        just takes time as I have found in building my relationships with my
    easily dudded!                                                      advisors. I have been working on the same research question with
6. Unfortunately many members die intestate. However the rules          two different advisors. Yet, because each comes from a different
    of intestacy will often deliver a reasonable outcome in any         school of thought, solutions with one advisor may not make
    event. Further legislation exists which would enable a challenge    immediate sense with another advisor. I have spent a lot of time
    to be made to any distribution which results in unjust or           explaining and re-explaining but have gained from the diversity in
    unfair treatment of relations or dependants left without proper     opinion. Patience and persistence and a common objective!
    provision being made for them. Should the system be changed
    to automatic payment to the estate, then trustees should            Secondly, I am not surprised the collaborative nature may have
    persistently remind members to make a will.                         dwindled, especially if members prefer less technical content at
7. The death benefit may comprise much of the member’s own              conferences and other sessions. You will also find academics
    money. Often the insured portion will have been selected by         falling asleep during presentations from colleagues if things get
    the member. The days when the employer decided the amount           too technical! How to pique interest in actuarial science again in
    of insurance have mostly gone. Accordingly the member               business? This is a tough one, akin to revitalising a product after
    should have more control over this money than the trustees (or      its demand has dropped. Where did the curiosity go?
    the SCT).
8. It is recognised the automatic payment approach may increase         A motivation for me to consider a PhD was to gain time to think
    the number of expensive court cases. However court cases            deeply about problems and develop the tools and confidence to be
    often arise in respect of non superannuation assets. Better to      an independent thinker. The time (and funding) issue is a hard one
    have one fight than two!                                            to solve for sure, from both a business and personal perspective.
                                                                        Surely, many of us would rather be sunning ourselves on the beach
While the binding nominations system overcomes many of the              than mulling over complex formulae that appear to be written in an
above, it is time consuming and does not deal with all these points.    alien language. I think it is really hard to implement an immediate
                                                                        Institute-wide solution to this problem. The curiosity has to spark
In summary I support the direct payment to the estate approach          from the ground up! It doesn’t require everyone to obtain PhDs,

                                                                                          A C T U A RY A U S T R A L I A ■ September 2011
28       letters

     just a group of curious people asking questions and willing to           calamitous Sendai earthquake and tsunami). Both articles went
     seek solutions.                                                          through several rewrites and significant content cuts to ensure that
                                                                              they would fit the space allotted in the magazine and were in the
     Finally, on the question of warriors and warrior princesses, a PhD       style required by the editorial staff of the magazine. The articles
     is a BIG life investment, time wise, relationship wise, financially      have been read by many non-actuaries and I have received many
     and mentally. So I completely understand if we don’t have so             compliments from many academics in this area, with perhaps the
     called Gregs and Tims sprouting all over the place. That said, I         one criticism that I did not take this topic much further.
     found it a bit ironic the call for lady Gregs and Tims came in the
     same journal that featured two lady PhDs with FIAAs, myself and          I agree entirely with our CEO in her column in the July edition of
     Ramona Meyricke, winner of the A H Pollard PhD Scholarship.              Actuary Australia where she calls for more collaboration between
     And I am sure there are others out there working towards the             members. She would like to see more papers on new and old
     double qualification. We are around, just give us some time. Our         subjects and greater advancement of our science. I believe in
     PhDs may not be in the actuarial science area, but speaking              this philosophy, which is why I have written a number of actuarial
     for myself, I still value my actuarial training and the support the      papers on new subjects that I have hoped would interest my
     Institute has provided, and hope to remain part of and contribute        professional colleagues. I have recently promised our CEO that I
     to the profession. At the same time, I need to work in a supportive      will write a full paper on the subjects that I just have barely touched
     environment where I feel my PhD qualification is valued. To quote        upon in the March and April articles.
     from the President’s Column of the same Actuary Australia issue
     “...the more we expose ourselves to other professions the more           An important series of experiments being undertaken at CERN
     we will challenge the way we think of the world we work in and the       is also directly related to the science that I wrote about. The first
     better we will be able to communicate with others”.                      results of these experiments were published in Nature on 25
                                                                              August. This new paper of mine will look at the implications of
     Perhaps the academic versus business debate falls under this             this paper and a number of other scientific papers whose authors
     umbrella too?                                                            would be highly offended to be branded as pseudo-scientists.
                                                                              Another recent paper I will refer to shows how the outer planets
     Bronwyn Loong                                                            have a direct but very small effect on the rotational spin of Earth,                                                      and how these changes in Earth’s spin are related to changes in the
                                                                              Pacific Decadal Oscillation and the El Nino Southern Oscillation.

      Nature’s Risk Framework: watch this space                               “The solar cycle may be going into a hiatus,” Frank Hill, Associate
                                                                              Director of the National Solar Observatory’s Solar Synoptic Network,
     Dear Editor,                                                             said in a news briefing on 14 June. He was backed up by two
     It was pleasing to see that at least one actuary, Murray Glase,          other studies from different viewpoints that all pointed to similar
     (refer August edition of Actuary Australia) read the two articles ‘The   conclusions. The fact that in August there was zero observable
     falling apple’ and ‘Nature’s risk framework’ that were published         sunspot activity on the surface of the sun for 5 days in a row at this
     in Actuary Australia in the March and April editions. Versions of        time in the solar cycle is illustrative of what is happening.
     these were also published in the UK Actuary. Fortunately I wrote
     these articles in the 21st Century because had I been born 400           My first actuarial paper (Illth Insurance) was discussed at a
     years earlier then I would have by now been executed by being            sessional meeting in 1976. In one tiny section of it I advocated
     burnt at the stake. That was the fate of Giordano Bruno for having       that life and health insurers should use lifestyle factors in premium
     not too dissimilar views. Yet Bruno’s views of that time are now         rating. This caused a furore in the profession as then most
     mainstream science today.                                                actuaries smoked. One actuary even argued that smoker/non
                                                                              smoker rating would split the risk pool! Several eminent members
     My motive for writing these two articles was to alert actuaries as to    of the medical profession were at the Sydney meeting and they
     the likely changes in risk of natural events such as extreme weather,    also spoke against this outrageous suggestion – again because
     catastrophic earthquake and volcanic activity that occur through         most doctors smoked. It is fascinating how eventually smoker/
     combined gravitational forces of the outer gas giant planets of the      non smoker rating became mainstream actuarial rating science.
     sun. Murray asserts these forces are weak, but since they cause the      That little example should provide an important message to our
     sun to change the direction of its orbit quite dramatically at certain   profession about the value of new ideas.
     times they are far from weak. These forces also do have spin-off
     effects on earth and its climate and so affect us all.                   We will continue to be a great profession provided we collaborate.
                                                                              But to collaborate we have to get the ideas out there and not
     The articles were written in a journalistic style rather than in a       keep them selfishly to ourselves. So thank you Murray for getting
     style befitting of an actuarial paper with all the normal caveats,       your ideas out there in the July edition. In the meantime I would
     examples and references. The first was written and sent off for          be delighted if more actuaries would fire off more letters so as to
     peer review by a number of actuaries and a solar physicist before        further raise the interest of our great profession in this subject. ▲
     Christmas 2010, so before the floods of January and February. The
     second article was written in January and early February before the      Brent Walker
     second major earthquake in Christchurch (and so well before the

     AC TUARY A U S T R A L I A ■ September 2011
                                                                                                                          CEO’s Column                   29

  Breaking through the
  eQ Ceiling

         any actuaries use the term ‘soft skills’ with derision. This         those organisations dealing with customers face-to-face are
         is the easy stuff that anyone can do. We are a cut above             generally more successful, if they train their staff to use these
         that. We’re the masters of ‘hard skills’ – the complex               skills. Screening or training for personal habits or traits such as
maths, statistics and analysis which only those with the highest              dependability and conscientiousness can yield significant return
IQ’s can master.                                                              on investment for an organisation2. For this reason, soft skills
                                                                              are increasingly sought out by employers in addition to standard
Perhaps the fact that our identity and pride is so tied up in our high        qualifications.
IQ’s and technical prowess, is the reason many of us remain blind to
the importance of EQ (Emotional Intelligence Quotient), or soft skills.       It has been suggested that in a number of professions soft skills
It may also be the reason that we don’t realise how bad many of us            may be more important over the long term than occupational
are at these skills.                                                          skills. The legal profession is one example where the ability to
                                                                              deal with people effectively and politely, more than their mere
I always thought I was good with people. I love to talk to people,            occupational skills, can determine the professional success of
love public speaking, and like nothing better than being the centre           a lawyer.3
of attention. However some business coaching in my early 30’s
identified that I was a poor listener. Part of the reason was that          Hmmm… “more important than… mere occupational skills” – that’s
I always knew the answer. So rather than listening to someone’s             enough to make an actuary aspiring to senior management sit up
issue and trying to understand their viewpoint, I would spring              and take notice.
straight into solution mode, start talking over them and telling them
what to do (sound familiar?) As I moved into people management              Core capabilities of an actuary
roles, this became a real issue and has been something I have had           Our Head of Education Philip Latham is leading a project to map out
to put a lot of work into overcoming.                                       the core capabilities an actuary will need in the future – no matter
                                                                            where they are working4. I have been pleasantly surprised by how
In the decade since then, I have come to realise that I am not really       strongly communication skills are coming through as a core capability.
that good at putting myself into another person’s shoes and asking          For example, the draft for the actuarial approach to problem solving
myself “how are they thinking / feeling?” Even in social conversation,      contains the sections:
I realised that I was not genuinely interested in the other person at all
but was only interested in myself (“So enough about me, what do you         1.4 Select appropriate communication strategies:
think about me?”).                                                              •	 Alternative	communication	strategies	are	identified
                                                                                •	 Seek	feedback	from	key	stakeholders	on	preferred	strategies
Seeing as this column has become a bit of a confessional booth of               •	 Strategies	best	suited	to	the	particular	situation	are	selected
late, I’d like to take this opportunity to apologise to my long-suffering   1.5 Communicate recommendations and results conclusions to
friends, family and colleagues, and let you know that I am conscious            all stakeholders:
of these shortcomings and I am working on them!                                 •	 Proposal	 and	 recommendations	 are	 clearly	 stated	 or	
                                                                                    communicated and amended as required
What are soft skills?                                                           •	 Clear	communication	of	issues	to	be	monitored	and	trigger	
I cannot define soft skills better than that highly reliable source of              events for further actions
information, Wikipedia:                                                         •	 Results	 and	 alternative	 strategies	 are	 discussed	 with	 the	
                                                                                    relevant parties to agree preferred option for solution
  Soft skills is a sociological term relating to a person’s EQ, the         1.6 Engage with and influence business partners and stakeholders:
  cluster of personality traits, social graces, communication,                  •	 Capacity	to	think	commercially	is	demonstrated
  language, personal habits, friendliness, and optimism that                    •	 Ideas	 are	 presented	 in	 language	 that	 stakeholders	 can	
  characterise relationships with other people1. Soft skills                        understand
  complement hard skills (part of a person’s IQ), which are the
  occupational requirements of a job and many other activities.             Training actuaries
                                                                            When the capabilities framework is finished towards the end of this
  A person’s soft skill EQ is an important part of their individual         year, it will give us a template for the skills all actuaries should have.
  contribution to the success of an organisation. Particularly              I suspect it will be dramatically different from the current outcomes

                                                                                                A C T U A RY A U S T R A L I A ■ September 2011
30       CEO’s Column

     of our educational program. When we implement it, it will mean a            you to build these skills. It is run by Incept Labs and is called ‘How
     fundamental change to the way in which we educate and train our             to Influence your Key Stakeholders’. The one-day course can be
     young actuaries.                                                            done at a particular workplace, and is also run with mixed groups1.

     At the moment actuaries are trained well in hard technical skills,          Our Leadership Committee is focused on assisting actuaries to build
     however we only gain soft skills if we are born with them, or learn         the skills they will need to undertake senior management roles8.
     them in the workplace (e.g. from managers or mentors) or through
     undertaking specific training.                                              In October we will be running some training sessions for members in
                                                                                 Brisbane, Canberra, Sydney and Melbourne with a US speaker called
     A very senior academic running an actuarial program told me that            David Miller. Dave started life as an actuary and is now a business
     the way we train actuaries is ‘archaic’ and our jam-packed Part             coach. He wrote a book called The Influential Actuary 9 which contains
     1 syllabus (we use the UK syllabus which is extensive and very              “tools and strategies that enable actuaries and other technical
     technically focused) leaves no room to train budding actuaries in           professionals to raise their game and add greater value to their
     business skills or soft skills. By comparison, this university now          organisations by being more influential in the way they communicate,
     trains their accountants with modern educational techniques and             influence and relate to others.”
     they integrate the use of soft skills (e.g. presentation skills) into the
     course assessment.                                                          Soft skills are hard, not easy. But we actuaries love a challenge! ▲

     In my March and April columns I talked about the recent
     survey of senior employers5, and the weaknesses
     they identified that actuaries are introverted, poor
     communicators and not commercial. (They also
     identified key strengths: we are highly technical,
     problem solvers and intelligent.)

     These senior executives identified soft skills as the
     number one development need for actuaries. A
     number of respondents pointed out that actuaries are
     rewarded for our technical skills and not our soft skills.
     It was suggested that managers should set goals for
     actuaries and reward them on soft skills as well.

     Many actuaries go through their studies and early career
     never having to display soft skills, and they are rewarded
     by their managers and/or promoted based on exam
     success (which is all about hard skills) and/or their technical prowess     Melinda Howes
     (again, hard skills).                                             

     I believe the other issue is the Part III exams. Most of us have had        1   Career Opportunities News, 2002
     our heads down and bottoms up studying until our mid to late                2   See George Paajanen, EI Reports, Technology Based Solutions/
     20’s, then when we finally come up for air we find that our non-                Personnel Decisions, Inc., 1992.
     actuarial colleagues are five years ahead of us in terms of learning        3   See Giuseppe Giusti, Soft Skills for Lawyers, Chelsea Publishing,
     about the broader business and how to influence and relate to                   2008.
     other people. We just haven’t had the bandwidth to focus on that            4   This work is being developed through focus groups with a range
     stuff. And perhaps we haven’t thought it was important.                         of thought leaders in the actuarial profession – from a variety of
                                                                                     backgrounds. The framework is being built by two Professors
     Breaking through the EQ Ceiling                                                 (Andrew Gonzci and Paul Hager) who are the leaders in the field
     So if you are an actuary wondering why your career has stalled                  of mapping capabilities. This work will finish later this year and
     at middle management, perhaps you have hit the EQ Ceiling. The                  the framework will be made available to all members.
     good news is that you can do something about it. Unlike the glass           5   “Understanding the Actuary Brand”, December 2010, Beaton
     ceiling, nothing as radical as a sex change is required6.                       Research & Consulting
                                                                                 6   As women are generally acknowledged as having stronger EQ
     Unlike IQ, you do not have to be born with EQ (although it helps!)              than men, perhaps female actuaries will be better than males at
     These are skills that can be learned and it is possible for anyone to           battering through this ceiling….this could be the equaliser!
     improve their EQ. This is why I avidly read Martin Mulcare’s ‘More          7   For more information:
     Than Maths’ column each month. He gives great tips and insights                 andProfessional/CPD/InfluencingStakeholders.aspx or contact
     into how to build and practise these skills.                                    Jennifer Burns at the Institute secretariat.
                                                                                 8   For more information contact Convenor Jenny Lyon.
     We have developed a course specifically for actuaries to assist             9   Refer

     AC TUARY A U S T R A L I A ■ September 2011
                                                     Strategically placing Actuaries
                                                           around the globe.
 Market Update                                                                  Asia –
                                                                                Re-insurance Broker
                                                                                                                                                 Hong Kong –
                                                                                                                                                 Life Insurance
 Asia is Booming!
 With the US experiencing economic uncertainty, the              As part of a major expansion programme, our client a              This role is responsible for asset liability management
 financial world is facing East, and many of our clients are     key international re-insurance broker seeks to expand             across the region for a major global insurer based in
 experiencing exhilarating growth and gearing themselves         their Hong Kong and Beijing offices. They are looking for         Hong Kong. It is a great role supporting the management
 up for expansion. For example, our Consulting clients           a number of people including an Analytics team leader,            of the insurance funds, for example seeking approval
 based in Asia are increasing the size of their teams,           experienced Actuaries, Actuarial students and junior cat          of investment proposals, implementation of investment
 reflecting the growing demand by primary insurers for           modellers. For all of these roles proficiency in the local        decisions, and reporting on investment performance
 advice on a variety of aspects from pricing and valuation       language is required. In addition to relevant General             of the insurance funds. You will actively participate
 to M&A and new market entry. Going hand in hand with            Insurance technical experience and preferably with a              in the Investment Committee and make strategic
 the growth of consulting practices following the lead           background in re-insurance, the other skills that our client      recommendations to the Board.
 of the direct insurers; we are also working closely with        is looking for include:                                           • Strong understanding of life insurance products
 a number of re-insurance brokers who are increasing             • Good at problem solving                                           and mechanics
 their teams to fulfil the needs of the market. It is not
 just mainland China, the follow on effect sees Hong             • Able to think broadly                                           • Excellent business and financial acumen
 Kong, Singapore and many other local markets in Asia            • Strong communication and listening skills                       • Bias for action and results focused
 also recruiting strongly. Given Australia’s close ties with     • Commerciality                                                   • At least six years post Fellowship experience
 Asia, the story is similar here, with consulting practices
                                                                 • Ability to liaise at senior level                               • Preference for Hong Kong experience
 creating new roles, smaller insurers recruiting their first
 Actuary, and teams expanding.                                   • Our client offers a great career opportunity and a              • People and management skills
                                                                    competitive salary                                             • Flexible, adaptable and communicative

 Contact Lesley Traverso for more information                    Contact Lesley Traverso for more information.                     Contact Lesley Traverso for more information.
 on global market trends.
              Sydney –                                                           Sydney –                                                       Sydney –
              Senior GI Pricing Actuary,                                         Nearly/Newly Qualified                                         Quantitative/Actuarial
              Reinsurance                                                        Consulting Actuaries                                           Analyst, General Insurance
 Rare Reinsurance opportunity for an Actuary with                 This niche consulting company is looking for strong              Due to continued growth, this leading Australian Insurer
 between 4 and 8 years of experience. Reporting directly          GI actuaries at the nearly/newly qualified level to join their   is looking for an actuarial analyst or quantitative analyst
 to the CA, who is based in Singapore, you will be                dynamic and friendly team. You will have experience in           to join their commercial lines actuarial team. You will
 responsible for the provision of pricing advice across           reserving and pricing and ideally some well-developed            have between 1 and 3 years of experience in a similar
 Australia and NZ including the development of tools,             consulting skills. This firm has an innovative approach          role with strong SAS and excel skills or you will come
 training, pricing and overseeing treaty pricing and              to work where everyone is given a chance to develop              from an analytical background with a desire to move
 conducting market studies. You will be either an AIAA            their full potential. Providing advice to clients for various    into General Insurance. With sound communication skills
 or FIAA and as well as excellent technical capabilities in       reserving and pricing projects you will also have                and the ability to communicate effectively with senior
 actuarial pricing you will also :                                the following:                                                   management you will be responsible for:
 • Provide high quality service to underwriters                   • Strong academic record                                         • Conducting portfolio analysis to promote better
 • Stay up-to-date with new actuarial pricing                     • GLM and SAS experience                                            management of the portfolios
    methodologies and underwriting related issues to give         • Developed business skills and the ability to                   • Providing pricing advice to the business
    the company a competitive advantage                             “think outside the box”                                        • Valuations and claims monitoring to identify trends
 • Have insurance and/or reinsurance experience and               • Opportunities for involvement in non-traditional               • Contributing to the budgeting and forecast process
    strong communication skills                                     actuarial projects
                                                                  • Desire to develop new services to clients

 Contact Claire Street for more information.                     Contact Claire Street for more information.                       Contact Tania Lee for more information.

      Lesley Traverso                                     James Lecoutre                                  Claire Street                                Tania Lee
      T: +61 2 9226 7459                                 T: +61 2 9226 7412                              T: +61 2 9226 7418                            T: +61 2 9226 7411
      M: +61 433 129 390                                 M: +61 404 397 503                              M: +61 401 606 171                             M: +61 412 445 612                               

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