2. Future Pathways
Fresh perspectives from actuaries of the future
Monsters vs Aliens: a comparison of
consulting and insurance actuaries
Peter Lane, Southern Cross
Abey George, Deloitte
3. Introductions
• Peter Lane
– Southern Cross - Insurance
– Institute of Actuaries of Australia
• Abey George
– Deloitte – Consulting
– Institute of Actuaries of Australia
4. Agenda
• Actuarial roles in NZ
• Company structure and interactions
• The work – what do we do?
• Work conditions
– Pay vs. Hours
– Travel requirements/opportunities
– Growth opportunities
– Study assistance
• What do we like about our roles?
5. Actuarial roles in NZ
• What companies hire actuaries?
– Direct insurance companies
– Reinsurance companies
– Consultancies
• Big Four
• Specialised actuarial consultancies
– Others
• Investment banks
• Government agencies
6. Actuarial roles in NZ
NZ Society of Actuaries membership 2012
100%
90%
80%
70% Other
Fund Managers
60%
General Insurers
50%
Life Offices
40% Consultancies
30%
20%
10%
0%
Fellows Students
http://www.conference.co.nz/files/docs/nzsa12/andrea%20and%20charmanine.pdf
7. Company structure and interactions
• Insurance
– Finance
– Underwriting
– Claims
– Product development
– Sales & marketing
– Senior management
– IT
– Other operational areas
8. Company structure and interactions
• Consulting
– Professional services firms
• Advisory (where actuarial team sit)
• Tax
• Assurance
• Private client services
• Infrastructure (IT, office services, finance)
– Specialist actuarial consultancies
– Individual consultants
9. The work – What do we do?
Insurance actuaries
Regular work – Valuation Actuaries
• Portfolio or claims monitoring &
reporting (Monthly or quarterly)
• Reserving/valuations, solvency
monitoring & reporting and dealing
with auditors (At least 6 monthly)
• Statutory reporting and tax (Annually)
10. The work – What do we do?
Insurance actuaries
Regular work – Pricing Actuaries
• Sales analysis
• Experience studies
• Premium rate reviews
• New product development
11. The work – What do we do?
Insurance actuaries
Other work
• Unit pricing work
• Construction or review of in-house
models (And associated
documentation)
• Financial condition reporting
• Ad hoc queries and analysis
• Operational issues
12. The work – What do we do?
Actuarial consultants
• Diverse
• Ad-hoc / one-off projects as well as ongoing
commitments
• Confidentiality considerations
14. The work – What do we do?
Actuarial consultants:
• Valuation (conventional & unconventional)
• Audit support
• Model reviews
• Secondments to clients
• Credit risk modelling
• Operational risk modelling
• Providing advice to clients (best practice)
15. The work – What do we do?
Actuarial consultants:
• Pricing
• Mergers and acquisitions
• Tax
• Data analytics
16. Working conditions – Pay vs. Hours
Insurance Consulting
Pay Possibly a little lower Possibly a little higher
than consulting (Unless average pay although likely a
you have a very senior higher variable/bonus
position). component
Hours Generally 40 – 45 hrs a Longer hours on average.
week. Not often over 60 Non-Busy periods – 40 -50
hrs even at busy times. hrs average. Busy periods or
projects – 50-100 hrs
Study leave Usually able to take Study leave sometimes
study leave as planned compromised
18. Working conditions - Travel
Industry Consulting
Fairly limited opportunities to travel Secondment to clients
unless,
You work for a large multi-national, Within city and nationally
and
You are quite senior International travel to work on large
projects
International travel – Secondment
opportunities
International travel – Mostly for
Professional services firms – and
available at all levels.
19. Work conditions
• Growth opportunities
– Insurers
Senior Senior
Analyst Actuary Chief actuary
analyst actuary
– Consultants
Senior Associate
Analyst Manager Director Partner
analyst director
21. What do we like about our roles?
Insurance Consulting
Stable work environment Variety
End to end involvement Travel opportunities
Ability to influence Seen as industry experts
direction in some of NZ’s
largest companies
We’ll talk the most about our own experiences, but we encourage the audience to chip in as well if they think that they’re organisation is significantly different.
First job for most of the audience. The presentation is to give an insight into working on the other side
110 licensed insurers in NZ (RBNZ website)The NZSA has around 300 members (277 at end of 2009 with 149 fellows). According to the Australian Institute website 25% of actuaries (In Australia) work in Life, 20% in Super & others in GI, Investment services and other. 1/3rd work for consultancies (Not clear if this is distinct from the practice area categories or not).Other employers of actuaries? RBNZ and banks.
110 licensed insurers in NZ (RBNZ website)The NZSA has around 300 members (277 at end of 2009 with 149 fellows). According to the Australian Institute website 25% of actuaries (In Australia) work in Life, 20% in Super & others in GI, Investment services and other. 1/3rd work for consultancies (Not clear if this is distinct from the practice area categories or not).Other employers of actuaries? RBNZ and banks.
Often the Actuarial team is part of the Finance department. Some insurers have a separate Actuarial or Risk Management department. Most insurers in NZ have fairly small (<10) actuarial teams if they employ actuaries at all. Sovereign seems to have one of the larger actuarial teams.How clearly defined the actuarial roles are depends on the insurer and the size of the team. Generally speaking the larger and more complicated (More products) the insurer the larger the actuarial team is. As the size of the team increases the more clearly defined the roles are. E.g. one person pricing these products, another pricing those. Or one person reserving for these products and another taking care of others.In a smaller actuarial you may work on new product pricing, experience analyses and reserving.
Professional services firms (in NZ)DeloittePwCSpecialist actuarial consultanciesMJWTaylor FryFinityIndividual consultantsPeter DaviesCharlie CahnMurray HilderProfessional Services – Interaction with audit, tax, corporate finance and consulting. Can call upon international expertise on a projectClient or Project – Depending on project, interaction with actuarial, marketing, IT, finance and investments department
The frequency of some tasks (e.g. reserving) can vary by insurer but all are required to do this at least every 6 months.Similarly the frequency of premium rates reviews can very quite a bit depending on the class of business (speed of changes).
Examples of ad-hoc queries/analysis: - What proportion of members make a claim of type x? (Could be asked by Marketing or Claims department) - Others?Operational issues might involve discussions about changes to business rules, proposed marketing campaigns, changes to IT systems etc.
Examples of ad-hoc queries/analysis: - What proportion of members make a claim of type x? (Could be asked by Marketing or Claims department) - Others?Operational issues might involve discussions about changes to business rules, proposed marketing campaigns, changes to IT systems etc.
EveryoneBusy around financial year end (June & July) and when big projects kick-off and end.Insights from working in one company or industry can be applied to another.Diverse work with good knowledge of the insurance industryActuarial skills can be used in other industries
EveryoneFor each topic give a brief description of what it is you do with an example.
Everyone
Peter & AbeyThere’s a common perception that actuarial consultants are remunerated a bit better than actuaries in insurers.It’s difficult to know the extent of this without a comprehensive survey.More money for longer hours – study time might be compromised!At PwC we can purchase leave (don’t know if that occurs elsewhere), direct insurers may get better benefits, consultants probably eligible for greater bonuses)Peter: I’ve heard ACC are quite generous with leave
EveryoneTimesheets for consultants - @PwC in six minute increments!
Peter & AbeyConsultants – Jenn probably travels to Auckland at least 4 times a year (if not more)In large firms (Deloitte, KPMG) travel opportunities overseas are probably greaterJenn worked in Ireland and Thailand. Others at PwC – UK, Australia, Singapore and Canada
Jenn & NelliePromotion pathTalk about the number of years to get to each stepConsultants:Analyst – 3 yearsSenior analyst – 2-3 yearsManager 2-3 years Associate Director 2-3 yearsDirector 5 years???Partner3. Transferability (in out of direct/consulting, specialty track, overseas etc)Peter: It seems like most insurers offer some opportunity to take on more responsibility and different roles as you progress. That being said, you can also get stuck doing the same thing for a while sometimes.
Jenn & NellieStudy days and flexibilityFee reimbursementPassing pay rise or bonusLikely to be employer specific@PwC up to 5 people sitting exams, so lump sum leave not possible. At Deloitte only 1-3 people sitting them, so can take lump sum.Peter: My impression is that students in Life insurance tend to make more use of their studies on a day to day basis (at least for the earlier papers). Not sure how much you apply your studies in consultant roles?
JennAdvantages of working for Direct Insurance and ConsultancyDirectConsultancyWhat do in house actuary think of actuarial consultants and vice versa???Often actuaries command a unique view within insurers in that we have access to a wide range of data and (in general) understand a fair bit of the detail of the business operations as well as the high level figures. This makes our point of view quite valuable and tends to mean we get listened to.
