MAY 2020

theactuary.com

The magazine of the Institute and Faculty of Actuaries

Interview
Dr Emily
Shuckburgh
Facing down climate
change through
mathematics

IMPACTING THE LIVES

OF EVERYONE
ON THE PLANET
Health
An investigation
into the coronavirus
co-morbidity claims: is
there any truth to them?

Is the North Atlantic seeing increased

hurricane clustering?

Life
The COVID-19
effect: issues
for actuaries
and beyond

1 cover_The Actuary MAY 2020_The Actuary 1 27/04/2020 14:38

p02_ACT.May20.indd 2 27/04/2020 17:01
 Contents
May 2020

Features
12 Interview: Dr Emily Shuckburgh
The director of Cambridge Zero talks
about modelling climate change

16 Life: The co-morbidity question

Matthew Edwards and Stuart
24
McDonald on COVID-19 victims

20 Health: Modelling minds At The Back

12 How do different personalities cope

with risk? Geoff Trickey explains

22 Life: A new world order

Alistair Chamberlain looks at long-
term COVID-19 implications
36 Pass it on
Brian Ridsdale explains the work of
the IAA’s Mortality Working Group

38 The art of being an actuary

Working with maths can still involve
creativity, says Richard Lewis
Up Front 24 Modelling: A fine scale
4 Editorial Elena Kulinskaya, Ilyas 40 Puzzles
Dan Georgescu discusses Bakbergenuly and Lisanne Gitsels
staying socially connected and discuss dynamic statistical analysis 42 School of thought
mentally active during the Refilwe Modise discusses pensions
coronavirus lockdown 28 Investment: Turning the tables versus property as investments
A walk through the history of
5 President and CEO’s comment compound interest, by Chris Lewin 43 People/society news
The IFoA is doings its best to The latest news, updates and events
support members during this 30 Investment: Sustainable
unprecendented period, say investment’s new frontiers 44 On the record
John Taylor and Stephen Mann Gareth Sutcliffe and Holger Schalk Trishla Doshi on mystery novels
on approaches to ESG investing and motivation
6 IFoA news
The latest IFoA news and events 32 Risk: Clarity on climate
Actuaries can cut through the climate
Web exclusive
11 Letters data noise, says Russ Bowdrey Investment: Long term
product guarantees
35 Recruitment: Embracing change Why they still have a role
COVID-19 and the hiring process bit.ly/2Y0x80j

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This month we have a mix of articles about the pandemic and other
Subscriptions from outside the actuarial profession: UK: £100 per annum. actuarial work. Matthew Edwards and Stuart McDonald feature again
Europe: £130 per annum, rest of the world: £160 per annum. (p16), this time critically examining claims that the majority of
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T +44 (0)20 7632 2100 E kate.pearce@actuaries.org.uk.
I would recommend you read Russ Bowdrey’s article (p32) on cutting
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4 editorial_The Actuary MAY 2020_The Actuary 4 27/04/2020 14:40

 J O H N TAY LO R STEPHEN MANN

Carrying on amid uncertainty

arely six months ago, pandemics were the preserve have been conflicted about what this means for exams – some assert

B of a small group of experts. Now, COVID-19 and

its consequences are all too pervasive. We see
the distressing effects on the afflicted and those
working hard to save them. Beyond that frontline,
so many aspects of our world have profoundly changed, from
they should be cancelled entirely, others are determined they should
continue. We have pivoted to offer many of our events via virtual
platform, rather than face-to-face – a change that we may have made
eventually, but that COVID-19 has accelerated. As we continue to
learn and adapt to new ways of working and providing member value,
the way we interact with those closest to us to the outlook for we are grateful for your patience and support.
the global economy. In the absence of full information, our leadership (both elected
As we adapt to this dramatic change, the work of the actuarial and Executive) has been presented with many difficult choices, and
profession remains as important as ever. Indeed, our work over we won’t begin to assume that we’ve got them all right. What we are
many years in asset-liability matching, scenario modelling and sure of is that our principles which guide those choices – support for
risk management has meant our members, care for our people, a desire to keep learning and
our employers and clients “The IFoA’s growing, a promising future for both the IFoA and the profession –
have faced this crisis with a priority has been have not wavered.
degree of resilience. Despite the uncharted territory we have entered, we look ahead
Some actuaries, to support our with optimism. The IFoA has a rich history and, we believe, a
particularly those involved in members, as we promising future. We have been heartened by countless stories of
pandemic risk, are now at the people showing one another kindness and support. We have been
forefront of understanding
ourselves have inspired by how our members have risen to challenges, adapted to
COVID-19. Many more are rapidly been new ways of attending events or sitting exams, and shared their
involved in supporting clients
and employers dealing with
adapting to new feedback on how the IFoA can continue to improve these services.
As we make choices, we continue to place
the varied implications. ways of working” priority and emphasis on how we stay in
Balance sheets of insurer and touch with you, how we ensure a sense of JOHN TAYLOR
pensions schemes are being revisited; mortality and morbidity community and support during this period is the president of
assumptions are being revised; operations risk plans are being of change, and how we focus the IFoA and the Institute and
implemented and adapted – and many of us are leading organisations its work for the benefit of all our people. Faculty of Actuaries
and guiding colleagues through these difficult times. We will continue to make the very best
Throughout all of this, the IFoA’s priority has been to support our decisions we can for you – our members, STEPHEN MANN
is the chief
members, as we ourselves have rapidly been adapting to new ways of our stakeholders and our people – and hope
executive of the
working. Since mid-March, our 170 employees around the world have those choices will lead us into a bright Institute and
been working full-time from home, many with caring responsibilities future. Thank you, as ever, for your support Faculty of
and with little notice to prepare for this arrangement. Our members of, and trust in, the IFoA. Actuaries

www.theactuary.com AUTUMN 2017 | THE ACTUARY | 5

MAY 2020

5 CEO_The Actuary MAY 2020_The Actuary 5 27/04/2020 14:40

 Upfront
News

IN BRIEF...
Consultation update
Earlier this month the IFoA
submitted its response to the
Bank of England consultation on
proposals for stress testing the
financial stability implications of
climate change (bit.ly/2xj8sFu).
IFoA recognises climate change
as a material financial risk and
welcomes the Bank’s plans to
carry out the 2021 Biennial
Exploratory Scenario exercise –
the first exercise of its kind. IFoA’s
response identified that, while
the Bank has defined a number of
prescribed scenarios, the current
proposal requires participants
to interpret and assume a
significant amount. Rather than
RISK
require firms to make numerous

COVID-19 and our work assumptions, which could result

in large discrepancies in analysis,
the IFoA recommended the Bank
As the response to COVID-19 gathers pace, we are seeing individuals and institutions struggle to move to a strongly defined
cope with the many financial risks they face at this difficult time: whether it’s the impact of framework. This will allow firms
insecure work, problems with insurance, or not being able to meet care needs while frontline participating in the exercise to
services are otherwise engaged. Our 2020 campaign, The Great Risk Transfer, looks at how risks better understand and respond
that used to be shouldered by governments, financial services providers and employers are being to their exposure to climate-
transferred to individuals. Our latest blog looks at how these risks will be exacerbated as a result of related risk.
the current crisis – find it at bit.ly/2K5lrgI
Events
Due to the global COVID-19
situation, the IFoA is reviewing its
1 events programme. Our primary
goal is to ensure the wellbeing of
Online learning resources our members and employees
while minimising the disruption
Video and audio to our service.
Although this means that
many events will be cancelled
Find a diverse range of valuable content relevant to your area of expertise: or postponed, many are being
reformatted as webinars or other
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đƫ .+"!//%+*(ƫ/'%((/ đƫ ! !./$%,ƫ%*/%#$0/ event is disrupted, we will let
you know by email as soon
đƫ %"!(+*#ƫ(!.*%*# đƫ +*"!.!*!ƫ,.!/!*00%+*/ƫ* ƫ)/0!.(//!/ as possible.
đƫ !//%+*(ƫ.!/!.$ We’re asking all members and
stakeholders to check our event
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programme web pages for the

Visit: www.actuaries.org.uk/online_learning_resources latest information.
actuaries.org.uk/events

6 | THE ACTUARY | MAY 2020

6-9 news_The Actuary MAY 2020_The Actuary 6 27/04/2020 14:41

 Upfront
News

ACTUARIAL DIRECTORY
DISCIPLINARY TRIBUNAL PANEL

Make the most Hearing of Mr Cheng Gang Zhu

of the IFoA network On 20 February 2020 the
Disciplinary Tribunal Panel
of Rule 4.2 of the Disciplinary
and Capacity for Membership
Our online Actuarial Directory offers a way for members to considered a charge of Schemes of the Institute and
plug into the IFoA’s global network of 32,000 colleagues. Misconduct against Cheng Gang Faculty of Actuaries (effective
You can make contact with IFoA members around the world Zhu (‘the Respondent’), in the 1 February 2018).
and elect to have your contact details available exclusively to absence of the Respondent. The Panel found all elements of
IFoA members, opening yourself up to network building and The IFoA’s Charge was that he the Charge proved, determining
professional opportunities. If you prefer, you can choose to submitted an application form that the Respondent tendered
keep your contact details private. for student admission to documents to the IFoA knowing
You can update your Actuarial Directory preferences in Education Services at the IFoA they were false. The Panel was
the My Account section on the IFoA website. and an application form for satisfied this was misconduct.
Our online directories also provide listings of IFoA exemptions, including a falsified The Panel determined that
members for the general public, and a public listing of copy of his academic transcript the only appropriate and
companies providing actuarial services. and/or university degree proportionate sanction was
Our directory of actuarial firms receives more than certificate. These actions were to exclude the Respondent
15,000 page views each year – browsers discerning enough alleged to be dishonest and in for the maximum period of five
to conduct their search through the website of the UK’s breach of the Integrity principle years. A copy of the Panel’s full
actuarial regulator. We hope our members will support their of the Actuaries’ Code. It was also determination, including reasons,
professional body and draw this service to the attention of alleged that the charges can be found on the IFoA’s
their employer. constituted misconduct in terms website at bit.ly/3a9mPt0
Visit actuaries.org.uk/find-actuary

Book
now

Finance & Investment Conference 2020 webinar series

Delivering the same high quality event programmes to help you meet your CPD requirements online – beginning 5 May

Climate change and ESG specific practices

Climate Change Preparedness Deep dive into liquidity risk management–developing a robust framework
Speaker: Stefan Lundberg – Cardano Speakers: Sam Tufts and Ed Hawkins – EY
ESG and climate change readiness – Putting it into practice Asset specifics
Speaker: Ross Evans – Hymans
ESG forays into fixed income : Alpha factor and not sacrifice
Exclusions vs Engagement Speaker: Akshay Dua – Mercer
Speaker: Adam Ruddle – LV=
Implementing ESG principles within Real Asset Investment Decisions
Macro, scenarios and portfolio construction Speakers: Munawer Shafi and Stanley Kwong – Aviva Investors
Tackling climate change risk, one scenario at a time Sustainable private equity investment, an insurer’s free lunch?
Speaker: Jonathan Cross – Mercer Speakers: Punil Chaubal and Daniel Banks – River and Mercantile Solutions
Resilient portfolio construction: incorporating ESG and climate change Incorporating Climate Change in Analytical Tools
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 Get involved and help shape
the future of your profession

Develop personal and professional skills as part of your lifelong learning

Build and enjoy a strong and active network of peers
Raise your profile and the profile of a particular area of your expertise
Give something back and encourage actuaries of the future.

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 Upfront
News

I F O A O P E R AT I O N S

Up for the challenge

CEO of the IFoA Stephen Mann shares how the organisation
is adapting to the COVID-19 pandemic
When I joined the IFoA in January this year, Exams Events
I knew it would be important to get up to Within a week of finding that it was no Many of our events – both large-scale and
speed quickly: to meet and understand our longer safe or feasible to offer our exams niche – have been moved online. While the
members, forge trusting relationships with in exam centres worldwide, we were able ways we deliver this kind of content may
our volunteers, and work with Council to to offer the majority of our April exam continue to evolve, what remains unchanged
develop and communicate a compelling diet online. We had some basic capability is our commitment to providing valuable
vision for the future that would inspire my in place already, but we scaled it up very thought leadership and a meaningful
colleagues to meet the needs of both groups. quickly and I was very proud to see how participant experience.
What seemed, in theory, to be quite volunteer and employee teams alike
straightforward and obvious at the outset pulled together to ensure we could offer Action
has turned out to be a little different in this to our members so quickly. Doing this Speaking of content, you will no doubt have
practice. I was pleased to get my feet ‘under has also helped us to protect exam capacity seen mention of the IFoA COVID-19 Action
the desk’ for the first two months or so, but for our September diet. We look forward to Taskforce (ICAT), chaired by incoming
little could I have imagined that the tail end learning and refining our approach to online president-elect Dr Louise Pryor. Working in
of the first 90 days or so of my tenure would exam administration in the future, close partnership with president-elect Tan
unfold as they have. The effects of COVID-19 particularly as it has been important to Suee Chieh, we are ensuring that the unique
have been devastating, and at the time of stress to students that taking exams in contributions that actuarial professionals
writing it is difficult to grasp how wide- April this year is voluntary. can give in this unprecedented time are
ranging they may eventually be. While it may offered up for the benefit of others.
not have been the catalyst we wanted, the
pandemic has also accelerated, out of Engagement
necessity, some of the things that had It was evident to me, even before joining the
already been in other people’s minds, as well IFoA, that our understanding and
as my own early plans, and I am grateful for engagement with employers of actuaries was
the opportunity to highlight some of these. limited and yet presented both a huge risk
and opportunity for us. Many of employers
Remote working have also expressed the challenges they and
Our colleagues in Asia have been working their organisations are facing at this time,
remotely since January; in mid-March, and understandably so. We recently
colleagues across our three UK offices launched a virtual ‘employer roadshow’,
joined them, so that all 170 employees of the where we are spending significant time
IFoA are now conducting our daily business understanding what our major employers
from their homes. Add to this the many need and how the IFoA can prove a valuable
colleagues who have caring responsibilities, partner in navigating a way forward for
and we are viewing workplace flexibility the actuarial profession.
in an entirely new way. While the These are just a few of the
nearly-overnight adjustment to these ways our volunteers,
new arrangements has not been members and employees are
without occasional hiccups (we are coming together in a time of
especially grateful we tested our extraordinary challenge. But
setup and systems with a business this challenge presents
continuity exercise earlier in opportunity, too – and I thank
March), it has shone a light on you all for the opportunity to
how we can best support our be part of this important work
members in the future – as we go forward together. My
whether or not that job is to support you in helping to
involves our staff being ensure that the IFoA is best placed
located in a traditional for whatever world we find ourselves
office space. in once this moment has passed.

www.theactuary.com MAY 2020 | THE ACTUARY | 9

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 Upfront
Have News

your More comments are posted

online about news stories published

LETTER OF THE MONTH say

y on www.theactuary.com

Taking re
research seriously
Jon
on Spain’s letter (April) refers
refer to my sessional higher estimated rate of return doesn’t really
paper
per on monitoring DB pensionpensi funding. This reduce the liabilities, which depend on salary,
concerned
concererned a valuation that ‘takes
‘tak stock’ of the service, mortality etc.
financial al position of a scheme (rather than I would expect trustees to take stock of scheme
budgeting ng and investment strategy).
stra I support finances with a valuation using a ‘risk-free’
liabilities based
b on placing a value
va on cashflows discount rate. That is consistent with several
independent
independeent of whether they are a assets or papers in the British Actuarial Journal. But it is
liabilities (I( recognise there arear issues, eg credit missing from The Pension Regulator’s (TPR)
risk and illiquidity,
illliquidity, so there isn’t
isn a ‘pure’ answer). new proposal that the sponsor covenant is
Using a (deemed)
(ddeemed) risk-free disdiscount rate relevant for technical provisions, which surely
produces compare reasonably with
es liabilities that comp cannot then be regarded as scheme liabilities, a
the insurance
insuurance buy-out cost (there
(th are reasons for point I would expect the Pensions Board to make
differences).
rences). Financial economics
ere econom covers a wider to TPR. Pensions actuaries’ practice has ignored
range
nge of issues; that is a different
ere debate. actuarial research for too long already; it must
A major problem is that, contrary
con to financial change if we are to be regarded as a profession
economics, many pensions actuariesact regard that is serious about research.
liabilities as regulatory-defined ne technical
provisions, meaning that their value depends on CHRIS O’BRIEN
investment strategy. But a new asset mix with a 15 APRIL 2020

Different approaches to pen

pension scheme funding
I write in response to Jon Spain’s letter of is: what is the purpose of the advance seems apparent that for many years the
16 March, where he states that he does not funding of DB pension schemes? This methods of UK pension actuaries, perhaps at
think it is possible that ‘evidence can be question has been debated by actuaries for the behest of their clients, have tended to be
produced supporting the applicability of as long as DB pension schemes have existed driven by the first of these two answers. The
financial economics to long-term entities (and, indeed, long before the key theories of second answer would appear to have more
such as DB pension schemes’. financial economics were developed). To my direct relevance to the financial security of
Financial economics, or at least the part mind, there are two basic answers to this pension fund members’ benefits. If the
of it that I think Jon is mostly referring to, is question: to generate future asset proceeds second answer had been adopted more
a group of abstract theories that can provide that can fund liability cashflows as they fall readily by our profession and the DB pension
conceptual insights that are useful in some due; or to ensure sufficient assets are entities that we have advised, I think a
forms of financial analysis. The degree of currently available to fund the transfer reasonable case may be made, albeit with the
usefulness of these insights will ultimately of accrued liabilities to a third party in the benefit of hindsight, that UK DB pension
be a matter of judgment for the expert event that the sponsor is no longer willing schemes would, in aggregate, be likely to be
practitioner who has sufficient knowledge or able to provide further funding for the in a healthier financial position than they
of both the theory and the potential domain cost of those liabilities. These two answers find themselves in today. Of course, the
of application for the insights it offers. But imply radically different approaches to the funding adequacy of DB pension funds is not
I would argue that the fundamental actuarial assessment of funding adequacy and the a UK-specific issue, and I suspect a similar
questions that arise in the financial setting of pension scheme investment point could also apply to the DB pension
management of DB pension schemes do not strategy. These implications are neither fund positions that may be found in a
ILLUSTRATION: ISTOCK

require particularly advanced or complex hard to identify nor reliant on advanced number of other countries.
economic theory. economic theory.
The fundamental question that must drive I am not a DB pension practitioner, and CRAIG TURNBULL
the financial analysis of DB pension schemes this may be an over-simplification, but it 11 APRIL 2020

www.theactuary.com MAY 2020 | THE ACTUARY | 11

11 letters_The Actuary MAY 2020_The Actuary 11 27/04/2020 14:41

 Features
Interview

Climate scientist and

mathematician Dr Emily
Shuckburgh talks to Chris
Seekings and Sharad Bajla
PHOTOS: SARAH COLLIN

about modelling the future

impacts of climate change,
and how actuaries can help
12 | THE ACTUARY | MAY 2020

12-15 interview_The Actuary MAY 2020_The Actuary 12 27/04/2020 14:42

 Features
Interview

T
he overwhelming majority of scientists agree that The volume of water in the ocean expands when heated, and ice
man-made climate change is real and threatens to that was once on land finds its way to the ocean due to melting; in this
radically change both the environment and society. way, sea levels have risen by around 25cm since the 1900s. Perhaps
Rising sea levels, frequent extreme weather and the most impactful change scientists have observed, though, is the
vanishing ice sheets are just some of the impacts frequency and intensity of extreme weather events such as
predicted under a business-as-usual scenario. heatwaves, flooding and wildfires. “Whenever there is an extreme
Dr Emily Shuckburgh, mathematician, climate scientist and weather event, the scientific community systematically asks:
director of Cambridge Zero, explains how these forecasts are ‘Has climate change increased the risk of these events occurring?’”
made, the challenges behind designing accurate models, and Dr Shuckburgh says. “In the last couple of years, we’ve been able to
the role actuaries can play in helping predict future outcomes. say that that risk has increased, and in many instances, increased
manifold – that’s been the current impact of climate change.”
First, the facts
Cambridge Zero brings together all the engineers, scientists, Making models
lawyers and social scientists responding to climate change at She explains that, to forecast future impacts, scientists first have to
the University of Cambridge, with Dr Shuckburgh responsible appreciate the physics of the climate system. “Both the atmosphere
for coordinating this effort. Although many unknown and the oceans are fluids sitting on a rotating sphere that
variables go into forecasting the scale and urgency of the is subject to gravity,” she says. “Those are the key inputs
issue, she first outlines various “observational facts”. if you want to build a model of how the atmosphere or
“We know from the ice core records that over the last oceans evolve. Just writing down the physical equations
almost million years, carbon dioxide levels have ranged describing that is at the heart of every weather forecast
between 180 and 280 parts per million in the or climate model.”
atmosphere,” she explains. “It’s observational fact that There are, however, other key inputs when predicting
carbon dioxide levels are now well above 410 parts per the climate, such as the equation for how energy from
million, grossly exceeding historic levels.” Sea levels the sun moves through the atmosphere. “We need to
Scientists say temperatures are rising thanks to have risen understand how energy from the sun, which is shortwave
the greenhouse effect, with gases trapping heat radiation, moves through the atmosphere compared to
in the atmosphere and preventing it from escaping
by around the longwave radiation that is reflected back from earth,”
into space. “It’s also observational fact that the average 25cm since she explains. “The difference between that is the
temperature is now about 1.1°C warmer than it was 150
years ago, before the Industrial Revolution was really
the 1900s greenhouse effect.”
There are also limitations to how much detailed data
starting to ramp up. We know that we’ve changed the scientists can put into the model. Processes behind the evolution
atmosphere in terms of its chemical composition and that has of sea ice and formation of clouds cannot all be directly included
had an impact in terms of temperature.” in computer models. “We have to use statistical representations of

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Interview

them instead and look at the patterns of change,” Dr Shuckburgh Climate scientists look for trends, rather than isolated changes,
says. “It’s a bit like the resolution of a digital photograph. The higher and another potential known unknown involves the international
the resolution that we have, the more information we have, the pledges made by countries to cut emissions. Even when these
greater fidelity of the model, but there’s a limit because we have commitments are incorporated into models, the world appears to
limited computer power.” be on course to exceed 3°C of warming by the end of the century,
warns Dr Shuckburgh. “That’s the state of play, and then we need to
Looking back understand what the implications of those temperature rises are.”
Actuaries use a process of backtesting when modelling life This area could be of particular interest to insurers who might be
expectancy and other future outcomes, comparing previous looking to devise flood or fire policies. “We’re seeing an increase in
predictions with what has actually happened. Climate scientists flood risk because a warmer atmosphere is able hold more water
use a similar process. “We will develop our models and then vapour, which means the air is wetter and more prone to heavy
run them over the last century and compare them to actual rainfall events,” she says. “Damage caused by tropical cyclones tends
temperature changes. We will then also test models completely to be through storm surges, and with rising sea levels, storm surges
out-of-sample, and look to see they have been able to replicate are able to penetrate much further inland. We’re very much seeing
very different climates.” an increase in the frequency of heat waves in some few parts of the
Climate scientists test models in so many ways, and there are world, too, and that could be a contributing factor to wildfires.”
so many aspects to the climate system, that improving
these models is “often very, very complicated”. “It Machine learning
might be that there’s a systematic difference in the One way that scientists have been trying to quantify
temperature profile in the South Atlantic in the known unknowns is through artificial intelligence
models compared to the real world,” Dr Shuckburgh (AI) and using machine learning algorithms with
explains. “That might be because clouds have been strong mathematical underpinnings, including to
misrepresented in the region, which is having a automatically interpret satellite data. This can help not
knock-on impact on oceans. Trying to trace back only with climate forecasts, but also with predictions
how you can improve one aspect of the climate model about the world generally. “It might be being able to
involves looking at how the model is represented The average count the number of a particular species of whale from
through the physics.”
Data from satellites is now available to scientists
temperature space and to see how those numbers are evolving
in the context of climate change, or the evolution
on a daily, or even hourly, basis, and modelling is now of unplanned settlements around growing cities in
centres around the world each have marginally about 1.1°C developing countries.”
different ways of representing the physics. “They’re Air quality sensors and wearable technology can
all slightly different and come up with slightly different warmer also be used to inform AI about indoor and outdoor
projections that then give a further range in terms than it was air pollution as people move around in their everyday
of our predictions,” she says. “Of course, the other lives. “We are integrating climate-related datasets with
key thing that is uncertain is what our future emissions
150 years very different epidemiological datasets to understand
of greenhouse gases will be.” ago. The the relationship between different weather conditions

Known unknowns
world is on and health outcomes,” Dr Shuckburgh continues.
“We can then use those two together to try and predict
Scientists don’t have one single prediction for the course to how climate change might alter our health outcomes.”
climate. There are a range of different scenarios, exceed 3°C We speak to Dr Shuckburgh as many countries go
and it is difficult to incorporate what Dr Shuckburgh into lockdown amid the COVID-19 crisis. “Trying to
describes as the “known unknowns”. These could
of warming understand the ways in which climate change might
include the collapse of vast ice sheets covering by the end of impact how different diseases transmit between
Greenland and West Antarctica, the rapid dieback
of the Amazon rainforest, or the melting Arctic
the century humans, animals and plants and so forth is a key
area of research that many people are involved in.”
releasing vast quantities of methane, a powerful greenhouse gas, into She says that coronavirus could provide some relief for the
the atmosphere. “There are a set of high-impact but low-probability environment in the short term as restrictions on air travel and
aspects of the climate system that we know might occur, but it’s falling oil demand bring down global emissions. “It is a very direct
difficult to incorporate those formulae within predictions – West and immediate impact just in terms of this year’s CO2 emissions –
Antarctica has three meters of sea-level rise equivalent within it.” I suspect this year they will be low because there’s lockdown,” she
Dr Shuckburgh explains. “Then, of course, there’s a whole set of continues. “How that plays out in the longer-term is very uncertain.
unknown unknowns that we have no possibility of being able to If this crisis can be used as an opportunity for restarting the global
include. As our scientific understanding evolves, then more and economy on a cleaner trajectory, then that might be at least one
more things get moved from the unknown unknowns into the fruitful outcome from what is currently very much looking like a
known unknowns and so forth, helping quantitative understanding.” hugely concerning global crisis.”

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Actuarial opportunities
As director of Cambridge Zero, Dr Shuckburgh understands
the importance of drawing on expertise from various different
disciplines, and always wanted to use her mathematical background
for causes outside academia. “Mathematics is very beautiful in its
own right, but I was very keen to use maths for useful real-world
purposes,” she explains. “I started being involved in climate-related
research right at the start of it becoming an international political
topic, and it’s been a convergence of different interests.”
The subject is of increasing interest to actuaries, too, as it becomes
clearer how climate risks threaten to impact health, weather and
the global economy. Dr Shuckburgh believes there are “huge
opportunities” for actuaries who wish to apply their skills in
this area. “Something which is very relevant to people with a
mathematical background is understanding how machine learning
and data science methods can be applied,” she continues. “There
are a lot of exciting opportunities there. My work is involved with
quantifying risk in different dimensions, and I think a huge number
of opportunities are at the interface of climate and actuarial studies.”

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Life

THE CO-MORBIDITY
QUESTION Would the majority of COVID-19 victims have died this year
anyway, as some have suggested? Matthew Edwards
and Stuart McDonald investigate

T
here has been comment given COVID-19’ (ie the case fatality rate, For instance, in Italy, 84% of male deaths
and speculation in the [CFR]), along with equivalent probabilities have been in those above the age of 70
media about the actual of deaths from other causes. If the CFR is (ISS statistics as of 26 March 2020), while,
and likely future life very low compared with the ‘other causes’ at the time of writing, 93% of deaths in the
expectancy of probability of death for an individual, it UK have been in those older than 65. At
COVID-19 victims – follows (via Bayes) that their death in any these ages, many people will have some
often with an implied year can be attributed largely to natural form of ‘existing condition’. For instance,
downplaying of the causes, not COVID-19. the 2018 Health Survey for England
impact of the virus, as The other argument for this case (bit.ly/2x3oByr) shows that among those
‘they were about to die arises simply from observing that many aged 65 and over, 29% have hypertension,
anyway’. This became a of the deaths reported from COVID-19 16% have diabetes, and 30% are obese.
perceived official view have been deaths of people with existing While the differences between countries
when Professor Neil Ferguson said in a medical conditions. For instance, 17% of reduce comparability, it is clear that
session with the UK Parliament’s Science Italian COVID-19 patients in intensive the prevalence of existing conditions at
and Technology Committee (25 March) care had a history of diabetes, and 49% had high ages is not massively out of line with
that “the latest research suggested as hypertension (bit.ly/2KhdrsP). (We will the proportions being seen among those
many as half to two-thirds of deaths from take a look at some equivalent UK intensive dying from COVID-19.
coronavirus might have happened this year care [ICU] figures later.)
anyway, because most fatalities were among Typical life expectancies of
people at the end of their lives or with other “There is a big difference between impaired lives
health conditions”. COVID-19 causing death, and COVID-19 When considering the life expectancy
being found in someone who died of of people with conditions such as those
“Two thirds of coronavirus victims other causes… It might appear far more above, a useful approach is – do they
may have died this year anyway, of a killer than flu, simply because of have just months to live, or many years?
government adviser says.” the way deaths are recorded.” For this, we have made use of a
The Daily Telegraph Dr John Lee, professor of pathology and NHS proprietary underwriting engine that
consultant pathologist (retired), The Spectator calculates life expectancies for people
How this view has arisen according to age, gender, disease history,
The strongest case we have seen for the The reporting of such aspects, along lifestyle (body mass index, smoking habits)
‘they would die soon anyway’ position with other risk factors such as obesity or and various other factors. The engine was
is based on use of Bayes’ theorem. Most smoking, has so far (with data emerging calibrated to a rich data set, has been used
readers will realise how this will apply only recently) been ‘crude’ in the sense by, or on behalf of, most of the UK’s annuity
here: we can calculate ‘probability of that it has not been adjusted for age. writers, including impaired life writers,
COVID-19 causation given death’ from However, deaths from COVID-19 have and has been validated extensively against
an assumption about ‘probability of death generally been occurring at high ages. market data.

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Using this underwriting engine, a life FIGURE 2: Expected distribution of deaths for 60-year-old obese diabetic male smokers during the next 30 years. Fewer
than 3% are expected to die within one year.
expectancy below a couple of years can be
found only by assuming acute cancers, or
5%
other serious but less critical conditions at
ages above 90, or such conditions conjoined

Percentage of deaths
with adverse risk factors (eg smoking) from 4%

the mid-80s.
For anything else, life expectancy is 3%
typically five years or more. For instance,
Figure 1 shows the life expectancy for
2%
obese male smokers of different ages, with
additional various disease combinations.
Chronic obstructive pulmonary disease 1%

(COPD) is of particular interest in the

context of a virus that kills via a pneumonia- 0%
like mechanism causing respiratory failure. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

FIGURE 1: Life expectancy bands for obese male Years

smokers. Life expectancies are shown in broad bands for
simplicity. None are below one year.
FIGURE 3: Age and sex profile of UK ICU COVID-19 patients.
AGE TYPE II COPD HEART
DIABETES DISEASE
25%
50 > 15 > 15 > 15
60 10-15 > 15 > 15
70 5-10 10-15 10-15 20%
80 3-5 5-10 5-10
90 1-3 1-3 5-10
Percentage

15%

By looking at men rather than women

(men having a lower life expectancy), 10%
considering the ‘obese smoker’ subset of
these impaired lives, and assuming no future
5%
mortality improvements, this table shows a
worst-case scenario. Even with this extreme
selection, we do not see life expectancies 0%

below one year, and it takes a lot of ‘forcing’ 16-30 30-39 40-49 50-59 60-69 70-79 80+

the factors in the engine to find life KEY: Male Female Age
expectancy as low as two or three years.
Of course, life expectancy is an average,
and some of these cases would still die summarises the age and sex profile of severe comorbidities. In the next
during the course of a year in the absence of these patients. section, we consider whether that statistic
of COVID-19. In most instances, though, the Most patients (72%) are male and, is representative.
number is not high. For instance, Figure 2 on average, 60 years old; 38% are obese
shows the distribution of deaths for a cohort (BMI > 30), compared to 30% in the Are ICU patients representative?
of 60-year-old obese diabetic male smokers general population. Just 7% have very ICU patients are obviously not
as per the above table – fewer than 3% are severe comorbidities and 7% needed representative of the general population –
expected to die in the next twelve months. some assistance with daily activities prior it would be worrying if they were – but, other
to contracting COVID-19. (ICNARC also than the severity of the disease, are they
UK intensive care experience provides corresponding numbers for broadly representative of all those known to
ICU supports failing organs while a normal viral pneumonia cases during the have COVID-19? In other words, is the triage
patient’s underlying illness is treated, past two years, where we see 24% of patients process applied to COVID-19 sufferers likely
and is usually only helpful when the patient with very severe comorbidities, and 26% to have removed, for instance, those deemed
has a potentially reversible condition. needing assistance with daily activities). incurable or too frail, given that the
The Intensive Care National Audit It seems clear from this high ratio that the numbers of potential ICU patients may
and Research Centre’s (ICNARC) report majority of deaths can be regarded as being exceed the number of spaces?
of 17 April 2020 (bit.ly/3bzWGoI) on due to COVID-19, not to other conditions. We can consider the impact of triage by
COVID-19 critical care patients and their For reference, of the actual deaths examining the COVID-19 Decision Support
outcomes presents a useful profile of detailed in the report, only 9% were Tool, believed to be in use by the NHS at the
the 5,578 patients recorded. Figure 3 recorded as occurring in the presence time of writing. This sets out a points-based

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system to help clinicians prioritise patients While it is very likely that other allow a meaningful comparison is only
who are most likely to benefit from intensive conditions or unhealthy lifestyles weaken just beginning to emerge.
care. Core to the assessment is a Clinical the immune system and increase the So far, we can say that more deaths were
Frailty Score, ranging from ‘1 – Very Fit’, chance of death from COVID-19, that is recorded in the week ending 3 April than in
through ‘4 – Vulnerable’ up to ‘9 – quite different from attributing the deaths any other week during the past 20 years.
Terminally Ill’. Most people without life to those other conditions. Death rates were 59% percent higher than
limiting conditions would score 1-3. Points the equivalent week in 2019. By early May
are added to this score based on age/sex and “This is a horrible, relentless, nasty there should be a reasonable body of
certain comorbidities as indicated in the disease in its severe form… They are evidence, and EuroMOMO data will provide
tables below (the full co-morbidity list is not NOT dying from comorbidities. They equivalent Europe-wide comparisons.
shown for simplicity). are dying from COVID-19.” However, even with such data, it is likely
Sanjum S Sethi MD, MPH that some may say, ‘many of these deaths
FIGURE 4: Points table for age/sex from COVID-19
Decision Support Tool.
are because of, not from, COVID-19’ in the
AGE POINTS POINTS
Another perspective sense that healthcare resources have been
(MALES) (FEMALES) Another valuable perspective on the issue deployed from, for instance, cancer care to
<50 0 -1 can be had by using the expected first-year COVID-19 care. Others will say, ‘their deaths
50-60 1 0 mortality rates from the underwriting tool are just accelerated from next year’.
61-65 2 1 mentioned previously, applying these to Recapping the main arguments,
66-70 3 2 a model point representing the ICU COVID-19 does seem to disproportionately
71-75 4 3 population described above, and working affect people with chronic health problems.
76-80 5 4 out how many would be likely to die this On the other hand, while it affects the old
>80 6 5
year purely because of their existing more than the young, and a large proportion
FIGURE 5: Points table for medical history from
condition or risk factors. of the elderly will have chronic health
COVID-19 Decision Support Tool. For this we have taken a 60-year-old (the problems, only a tiny fraction of impaired
CO-MORBIDITY POINTS approximate mean age of the ICU group), lives have life expectancies of the order of
Cardiac arrest in last three years 2 but assumed an obese male diabetic smoker one year. Therefore we feel it is unfounded
Chronic condition leading to three or more 2 in order to have an ‘extra unhealthy’ to claim that a large proportion of those who
hospital admissions in last year individual (as we did for Figures 1 and 2). have died from
Hypertension 1 Assuming 10 months (ie 1 March through COVID-19 in 2020
Diabetes mellitus requiring medication 1 MATTHEW
to end of 2020) of mortality exposure would have died in
Various other conditions 1 EDWARDS
applied to 5,578 lives gives: any case this year. is a director at Willis
Individuals whose score exceeds 8 would • Expected deaths: 111 This claim, in Towers Watson,
not typically be recommended for ICU- • Actual deaths: 1,445 addition to being where he leads the
based care, though of course clinical false, is also life demographic risk
discretion overrides. While it is clear that Note that the expected result is likely to dangerous from a group. He is chair of
there will be some selection effect, the be an overestimate, because of the fairly public health the CMI
majority of patients below age 75 and a extreme model point used, while the actual perspective: it
significant proportion of older people will deaths will be an underestimate, as a understates the risk
be recommended for ICU-based care where majority of the patients are still in critical from the disease,
necessary. We can cautiously conclude that care. Thus, the real Actual:Expected ratio is endangering
the current ICU population is not highly likely to be greater than the 1,445:111 ratio adherence to
selective and therefore the disease is making (ie a ratio of 13:1 of COVID-19 deaths to government policy
significant numbers of individuals who were co-morbidity-related deaths) shown. on social distancing. STUART
otherwise fairly healthy (and certainly not We can see from this that few of the ICU It also seems very MCDONALD
‘at death’s door’) seriously unwell. intake would be expected to die because callous, encouraging is head of
Demographic
This conclusion is consistent with our of their other conditions, and that this a ‘why should I care?’
Assumptions and
discussions with two critical care expectation is backed up by the ICU data attitude to the Methodology at
consultants, who have confirmed that currently available. people in question Lloyds Banking
COVID-19 ICU patients are broadly – in our view, people Group, and sits on
representative of general hospital patients Unfounded claims who would (in the the CMI’s Executive
(albeit with the most and least healthy tails As with much of the work on COVID-19, the great majority of Committee as CRO
of the distribution removed) and that question cannot be answered fully and cases) be alive now
“COVID-19 patients admitted to our ICU precisely at the moment. The issue will be in the absence of the
are generally healthier than our normal better resolved once we are able to compare coronavirus, and
patient population, but despite this, have total deaths during a reasonable period would probably still
a high mortality. People are dying in middle against total deaths during the same period be alive in several
age, with many years ahead of them.” in previous years. For the UK, data that will years’ time.

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FIGURE 1: The two orthogonal axes represent the

two neurological systems that contribute to decision-
making: emotion and cognition.

INTENSE PRUDENT

Em
ot
io
n n
tio
g ni
Co
CAREFREE COMPOSED

FIGURE 2: The interaction between emotion and

cognition generates eight risk types.
WARY

INTENSE PRUDENT

EXCITABLE DELIBERATE

In a follow-up feature on risk management and

personality, Geoff Trickey looks at the
significance of risk types in personality in CAREFREE COMPOSED

the response to COVID-19 ADVENTUROUS

FIGURE 3: Emotion influences sensitivity to danger,

insecurity or loss; cognition is about ‘wanting to
know’ and sensitivity about incoherence, ambiguity,

T
he events of recent unwrapping established ideas in the hope of dysfunction or chaos. Scores on these underlying
weeks are discovering new and exciting opportunities. scales position each individual within the compass.
unprecedented, and The Risk Type Compass is a psychometric
WA RY
the disruption to our personality assessment that models the PR
SE U
routines is profound. ways we cope with risk. It is a continuously N
TE

D
EN
People experience risk, incremented 360° spectrum of risk
IN

T
react to it and make dispositions, segmented into eight types.

D E L I B E R AT E
decisions in different How will each of these types be facing up to
E XC I TA B L E

ways, and risk the pandemic, and how will they be coping? AXIS
dispositions vary from Starting from the top of the compass, each
person to person. risk type merges with the next.
COVID-19 manifests
CA

D
SE

with different degrees of severity, but the THE ‘WARY’ RISK TYPE
RE

FR
1
O

EE P
M
risk is something we must all deal with. These people are risk averse in two CO
A DV
As outlined in a previous feature, different ways: they will be fearful about ENTUROUS

bit.ly/3bOSQbb, individual risk infection, but also extremely troubled about

FIGURE 4: The prevalence of the eight risk types is
dispositions reflect an interaction between being unable to make sense of what is going remarkably even.
our emotions and the way we make sense of on. This makes them astute and critical WARY
our world. Both are fundamental to followers of official pronouncements, media E PR
NS UD
decision-making and behaviour. In terms of opinion and social media trends. They know TE
EN
IN

emotionality, we range from those who their stuff and argue their case with passion.
LE

experience the world as treacherous and

E XC I TA B

D E L I B E R AT E

threatening, to those that are emotionally Highly sensitive risk antennae,

unresponsive and see danger as just another combined with their passion for
problem to be dealt with. In terms of maintaining order, will ensure that they are
CAR

cognition, people vary from one extreme potent advocates for their viewpoint
EF

– those who need to resolve uncertainties They may be driven to the point of
RE

about their world for things to add up – to exhaustion by worry and their efforts
E

D
AD SE
the other extreme, those who revel in to make an impact on immovable forces to VE PO
NTU
RO U S CO M
uncertainty and ambiguity, probing and get things done

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PRUDENT RISK TYPE Their unemotional focus on in projects that are important, notorious or
2 Not especially emotional, their main
concerns are about being organised and
practicalities may make them
seem insensitive
worthy in some way.

knowing what is going on; uncertainty will Their aims are often unconventional,
be a troubling discomfort. The daily drip, ADVENTUROUS RISK TYPE: but also aspirational and creative
drip of information will be a source of acute
discomfort and frustration. They will be
5 They want to be in command of their
own destiny and will feel hugely frustrated
Their creative ideas may prove too
eccentric or impractical
checking the figures and keeping up to date by the imposed restrictions. They believe
with developments and statistics across the that with an element of good fortune, things INTENSE RISK TYPE
globe. As things become more predictable,
they will experience considerable relief.
generally turn out well. Their lack of
deference to consensus or convention frees
8 The strongest examples of this risk type
feel things in deeply emotional and complex
They will be a pandemic information them up to pursue imaginative solutions. ways. Persistent worriers, their risk
resource for their friends and family. They are intrepid big-picture people who antennae will have been giving them little
have an eye on the disruption of business rest; they react strongly to things others find
Their ability to seek out and discern and the needs and opportunities that might unexceptional and are difficult to placate or
solutions means they will always be arise in the aftermath. reassure. They are likely to be struggling
reliably well informed more than others with the threat posed to
Having researched and decided, They will always focus more on the them and their loved ones. They find it
their viewpoint will become opportunities than the dangers difficult to trust others and are vulnerable to
totally inflexible Their unconventionality and the sensationalised interpretations of the
enthusiasm will be unnerving media. During this pandemic they will have
DELIBERATE RISK TYPE for some been severely stressed.
3 They hate being unprepared and will be
profoundly unsettled by all the uncertainty, CAREFREE RISK TYPE Their anxiety and vigilance will
but this risk type is also unemotional and
shows little anxiety. They view problems
6 Relishing change and new
opportunities, they see life as an ever-
serve well in protecting themselves
and others
calmly and logically – something to solve changing panorama. Finding routine and Their views may be unrealistic and
rather than to fear. In a situation that is continuity monotonous, they will always exaggerated by their anxieties
largely out of their hands, they will be trying look for ways to avoid repetitive tasks. Their
to anticipate immediate consequences, ideal roles give them freedom and variety, THE AXIAL GROUP
trends and outcomes. During lockdown, the and commitment may be transient. In this These people score close to the mean on
expression of these thwarted instincts may crisis, they will feel concern and both the emotion and cognition scales. Risk
be displaced into obsessive attention to compassion, and bring refreshing and novel dispositions will be varied and defined at the
domestic organising. ideas to the table. They may also experience sub-theme level of analysis. Within a team
a heightened awareness and excitement. setting, the central positioning of this group
Their search for coherence and provides a perspective on the balance and
order will help to ensure that The energy and excitement they dynamics of that combination of Risk Types.
policies are enacted bring into any operation will be This independence qualifies them uniquely
In extreme and prolonged a morale booster as arbiters and conciliators – key roles in
circumstances, they may Routines and procedures group decision-making.
become obsessional associated with their role are
likely to be challenged This group are best placed to
COMPOSED RISK TYPE objectively appreciate team balance
4 Nothing fazes them. A calm
imperturbability is their defining feature. 7 EXCITABLE RISK TYPE
They are never sure whether to listen to
and dynamics
They may
They seem always on an even keel, without their head or their heart. Emotionally they find
the usual peaks and troughs. Situations are are anxious and apprehensive, so risk averse themselves caught GEOFF TRICKEY
considered unemotionally, practically and from this point of view. But cognitively they in the crossfire is managing director
logically, but their risk radar is weak. In any positively embrace uncertainty and are between extremes of Psychological
crisis they will often be the last to react, and excited by chaos and the opportunities that Consultancy
their responses may seem low key. In the might arise. From this point of view they are Risk Type descriptions
case of possible contagion, their optimistic risk takers. These are the ambivalent are generalised
fearlessness may put them at risk. tensions of a stereotypic ‘artistic interpretations based
temperament’: high emotional sensitivity on research and are
Their imperturbability will be a and precarious lifestyle. They seem to seek used here solely for
calming and reassuring influence meaning in their lives through involvement illustrative purposes.

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C
oronavirus is one of the greatest challenges serve. The impact to our respective businesses and wider society
the modern world has faced. From its macroeconomic comes from multiple and varied sources.
consequences to the human mortality impact and mental
health challenges of self-isolation, it has the potential to Business disruption impact
impact the lives of nearly everyone on the planet. As white-collar workers, the go-to business interruption solution is
Huge pressure is being put on healthcare services, and working from home. As we settle into the new ‘normal’, specific
governments are having to act pragmatically, changing home-working challenges for actuaries include mobile computing
policies daily. For business, the watchword is ‘agility’, adapting to new power (some companies allowing actuaries to take desktop and
ways of operating to protect the health of the workforce while trying other equipment home, as well as laptops) and new communication
to maintain continuity for clients, customers and business partners. challenges, including with those teammates and colleagues we
As we digest the news and the impact it is having on us, our families would normally communicate with on a real-time, face-to-face basis.
and communities, actuaries must also discharge the responsibilities Thankfully, this crisis has reached us in the broadband age, and in most
and professional duty we have to the companies and societies we cases the communication solutions are excellent. While conference
call facilities and servers are challenged by the volume of traffic, and

A NEW
family interruptions on work video calls are now commonplace,
those businesses that stress tested their business continuity and
contingency plans will be grateful. When this pandemic is over,
the largest work from home exercise of all time is likely to change the
way we work forever. Overall, the business disruption impact seems
manageable and rather minor in the context of the unfolding crisis.

WORLD ORDER
Alistair Chamberlain,
examines the impact
that COVID-19 is having
on business, the actuarial
profession and the way
we work

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Business volumes impact change people’s willingness to pay for stronger cover, or if
In Q1 2020, consumer behaviour changed in a way we couldn’t have governments will accept that they effectively underwrite unexpected
imagined in January. Sorting out one’s personal finances, often seen universal loss events such as COVID-19. Either way, it will provide a
as a ‘job for tomorrow’, is even further down the priority list in the test for insurance industry bodies, insurers, reinsurers and
immediate term. A long face-to-face meeting with a complete stranger intermediaries, determining how far they are willing to go to define
– a standard element of financial planning in many places – is currently what they are prepared to protect individuals and businesses from
unimaginable. Actuaries need to distinguish between short-term during an ‘unexpected, unforeseen event’ for a customer.
disruption and long-term paradigm shifts, bearing in mind that the While mortality cases make vivid images and headlines, as an
long-term change in trend is likely insurance mortality claims event,
to be facilitated by our now- the experience has so far not been
intimate familiarity with remote “The long-term implications extreme; even medical insurance
connectivity. Financial planning of the crisis seem likely to be claims are limited, with treatment
via video conference is likely to be in most countries restricted to
rapidly accepted and normalised. profound – maybe more so in government-controlled facilities.
Consumer appetite for insurance the West, where this is the first The mortality impact is focused on
is also likely to change, with some of the most vulnerable
awareness of and sensitivity to
major pandemic for 100 years” groups of society, who are either
potential life events at an all-time aged, and therefore largely not in
high, and an increasing demand for new types of cover. People may the insured population, or who may have struggled to get insurance in
start to think about their policy, and the cover provided, in more detail the past due to inherent health conditions. The latter group especially
– a number of customers have had travel insurance claims rejected as a may be one where we have questions to answer about access to
result of government advice regarding travel, even though customers insurance cover.
reasonably changed their plans. In Asia, insurance companies saw
strong demand immediately after the SARS crisis. In some markets, Longer-term implications
we are already seeing a large increase in uptake of protection products The long-term implications of the current crisis seem likely to be
that consumers have, in the past, struggled to engage with. profound on many levels – maybe more so in Western society, where
this is the first major pandemic for 100 years. Impact is likely to range
Market impact from the relatively minor (maybe more appetite for remote working)
The initial phase of the crisis, when cases appeared to be limited to to major questions about how we organise as a society on a local,
Asia, was largely shrugged off by the financial markets. The current national and global basis. For insurers, the impact will be felt for some
phase, in which the impact is hitting home in Europe and North time across life and general insurance, covering both immediate-term
America, has sent markets spiralling, calling the valuation of long- balance sheet implications and also some longer-term questions about
term assets into question. This, in turn, quickly generates questions how we serve society and how our products and services responded in
about capital measures, what the numbers mean and what actions the hour of need. Questions will be raised about policy limits, wording,
companies should take. As actuaries take this in, they need to bear exclusions and coverage levels – how will insurers, corporates and
in mind the limitations inherent in the bases and models, which are individuals react if another ‘unforeseen’ event hits? We will need to
now being operated with previously unseen and unforeseen find new solutions to these societal challenges.
parameters. As well as understanding and relaying all this, actuaries
need to consider the macro context and the underlying, sometimes What can actuaries do?
implicit, limitations. Helping companies make sense of the numbers First of all, we must keep going through these tough and strange
in fast-moving and uncharted territory is a moment when all of our days – which include extended working from home while managing
skills, knowledge and judgment are put to the test. our personal lives and supporting family near
and far. These things should not be trivialised,
Claims impact and it will test our perseverance and impact
ALISTAIR
So far, the insurance claims impact has largely been felt on general aspects of our mental and physical health.
CHAMBERLAIN
insurance product lines, with a massive incurrence of travel Secondly, we must do what actuaries are is the group head
cancellation claims and business disruption cover potentially required to do in our professional capacity – of product and
triggered. Indeed, swathes of suppliers in the UK responded to the manage the immediate and also take the long actuarial, global
crisis by completely withdrawing travel insurance products from view, exploring and optimising a range of insurance, at
the market before the government imposed travel restrictions. plausible outcomes. Our businesses and HSBC Life
In some markets, policy clauses will often exclude governmental societies are being asked tough questions,
action (eg forcible closure of businesses, even when they are not and so are we. While we won’t have all the
ILLUSTRATION: ISTOCK

directly impacted) or can limit exposure with respect to new viruses. answers, our training to understand a new
Insurance that doesn’t deliver at the moment of truth, while being range of implications and scenarios and
actuarially logical, will raise major questions about the effectiveness enabling rapid, level-headed and sound
of the industry when it is most needed. It remains to be seen if this will decision-making is fully needed now.

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 The ARC is the IFoA’s global network of actuarial researchers. The ARC delivers industry-relevant, cutting edge
research programmes that address significant challenges in actuarial science by working collaboratively with
academics, practitioners, industry and other actuarial bodies. For more info visit actuaries.org.uk/arc

A FINE SCALE

Elena Kulinskaya, Ilyas Bakbergenuly

and Lisanne Gitsels revisit longevity modelling
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 In-depth
Modelling

L
ife expectancy (LE) and stratification and more personalised type of regression model typically
its changes are crucial to service. Traditional statistical used in survival analysis in medicine
the pensions and methods use the baseline data for is the Cox proportional hazards
insurance industry, long-term outcome predictions regression. The Cox model factorises
society and government. (often beyond the study’s range). For the hazard or force of mortality μi(x)
Longevity-trend instance, a person’s characteristics at for a subject i with risk factors Zi at
projections are used to retirement age are used to infer their age x into an age-varying baseline
manage longevity risk in hypothetical longevity. Dynamic hazard μ0(x) and a constant
pricing and reserving for analysis allows for changing personal subject-specific risk score.
insurance and annuity products, as circumstances and age-dependent The risk score is a log-linear
well as for costing public and private changing risks, and incorporates regression term which includes
pensions. Changes in mortality them into more precise modelling. relevant risk factors, so that
projections directly affect annuities The age-varying survival benefits μi(x, β, Zi) = μ0(x)eZiβ
costs, especially in the decreasing or harms of various predictors Taking a ratio of the hazard
interest rates environment. obtained from dynamic statistical functions for two subjects, the
LE is also a consideration for modelling of big health data can be hazard ratio
μ (x, β, Zi)
individuals planning their financial used to obtain finely differentiated μ(x, β, Z) = i = eβ(Z -Z ) i j

goals and retirement strategies. projections of life expectancy for μj(x, β, Zj)
Previously, a vast majority of people numerous subpopulations. We is constant over time and does
would buy a lifetime annuity with provide a case study on statins. not depend on the baseline hazard.
their pension pot. However, the This proportional hazards
introduction of pension freedoms in Cox regression assumption, if true, allows to
2015 resulted in the emergence of a and landmark analysis easily estimate hazard ratios for
variety of flexible retirement options, Survival analysis, or time-to-event various combinations of risk factors,
from drawdown to fixed-term analysis, investigates the effects of regardless of the parametric form
annuities. This has necessitated various risk factors on mortality. The of the baseline hazards.
dynamic decision-making both by
individuals and companies. FIGURE 1: Hazard ratio of all-cause mortality associated with statin prescription compared to no
prescription, for two birth cohorts of 1930-35 and 1936-40, from the landmark analysis with 30-year
Many financial tasks, from window. Results were adjusted for cardiac risk at three levels, sex, birth cohort, Townsend deprivation
underwriting to retirement planning, quintile, chronic kidney disease, diabetes, treated hypertension, hypercholesterolemia, aspirin, BMI,
alcohol use, smoking status and general practice.
need to account for a large number of
important and time-varying
1.5 KEY:
determinants of health and longevity, Unadjusted landmark model
such as socio-economic factors Adjusted model in patients born 1930-35
1.4 Adjusted model in patients born 1936-40
(income or residence), health status
(new conditions and/or 1.3
prescriptions) and lifestyle factors
(smoking, obesity, alcohol usage), as 1.2

well as their interactions. In addition,

1.1
they must take into account the
Hazard ratio

medical advances and public health

1.0
interventions that are aimed at
increasing the health of populations. 0.9
Our research, funded by the
Actuarial Research Centre, 0.8
concentrates on dynamic statistical
modelling of population-based 0.7

individual-level data, collected over

0.6
the long term and recorded in
IMAGE: IKONIMAGES

electronic health records (EHRs).

0.5
Dynamic statistical analysis allows us
to make more accurate predictions, 60 65 70 75 80 85
based on real-time data, dynamic risk Age

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 In-depth
Modelling

However, the main assumption of FIGURE 2: Log-hazards between ages 60-80 years from the ONS period life table centred at 2010 (circles) and fitted regressions
the Cox model – that the risk score by Townsend score quintiles (Q1 least to Q5 most deprived area) and sex (lines).

does not change over the age span – Males Females

is rightly distrusted by actuaries.
Landmark analyses is a recent -2.0 Townsend Q1 -2.0 Townsend Q1
Townsend Q2 Townsend Q2
statistical method used to Townsend Q3 Townsend Q3
-2.5 -2.5
dynamically predict the survival Townsend Q4 Townsend Q4
Townsend Q5 Townsend Q5
effects associated with changing risk -3.0 -3.0
factors. This method builds a series
Log hazard ratio

Log hazard ratio

of L Cox models, each in a sliding -3.5 -3.5
window of width w from the
landmark age xLM = sl to sl+w, for
-4.0 -4.0

l = 1,…, L, and then smoothes the -4.5 -4.5

obtained trajectories. This means
that the latest medical history at the -5.0 -5.0
landmark age xLM is used to predict
-5.5 -5.5
survival conditional on survival to
the landmark, thereby allowing for 60 65 70 75 80 85 90 60 65 70 75 80 85 90
time-dependent covariates and Age Age
time-dependent survival effects
(Van Houwelingen and Putter, 2011).
FIGURE 3: Screenshot from Step 1 of the mylongevity.org/v2 life expectancy calculator.
Landmark analysis of statins
We have recently completed a
landmark analysis on the survival
benefits of statins, a medication used
to lower the lipid levels in the blood.
We followed up a cohort of 110,000
healthy people who hit 60 between
1990 and 2000 for the next 25 years,
updating their health status and
statins use every six months (51 time
points) (Gitsels et al, 2020). The
time-varying hazards of all-cause
mortality for two birth cohorts
(1930-1935 and 1936-1940) are
depicted in Figure 1.
The results show that statin
therapy is associated with increasing
survival benefits in older ages: age 65
hazard ratio HR = 0.86 (95%
confidence interval of 0.78-0.94), age
75 HR = 0.81 (0.74-0.89), age 80 HR =
0.72 (0.62-0.84) and age 85 HR = 0.57
(0.35-0.91). The survival benefit of
statin therapy differed by birth
cohort, but not by sex or cardiac risk.
The 1936-40 cohort showed larger
survival benefits than the 1930-1935
cohort, probably due to more
efficient drugs or higher dosages.
For statins, the results of analyses
based on a window width of five, 10

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 In-depth
Modelling

FIGURE 4: Life expectancy at age 65 by Townsend score quintiles landmark analysis are translated into
(Q1 least to Q5 most deprived area) and sex.
LEs for 648 different risk profiles at
different ages within each sex and
TOWNSEND HEALTHY DIABETES SMOKER
SCORE QUINTILE / STATIN STATIN STATIN deprivation quintile. The list of risk
SEX factors we use include hypertension,
N Y N Y N Y
diabetes, hypercholesterolemia, BMI
Q1/F 87.8 89.5 84.6 86.2 81.9 83.5
category, QRISK2 (the risk of a
Q1/M 86.4 88.1 83.1 84.8 80.4 82.0 PROFESSOR
cardiac event within 10 years), ELENA
Q5/F 87.1 89.1 83.3 85.2 80.4 82.1 smoking status and statin use. KULINSKAYA
Q5/M 84.8 86.9 81.0 82.9 78.1 79.8 As an example (Figure 4), for a holds the Aviva
healthy 65-year-old female who is Chair in Statistics
resident in the least deprived at the School of
and 30 years are very similar. This is analysis with the Gompertz baseline postcode, our calculator provides a Computing
also true, say, for diabetes, but not for hazards, we obtain cumulative hazard LE of 87.8 vs 89.5 years with or Sciences,
smoking, where the hazards are functions, and hence life expectancy. without statins; for a male, those University of East
Anglia
significantly higher for a five-year The overall life expectancy is a numbers are 86.4 vs 88.1 years.
window than for a 30-year window, at weighted average of LEs of people Diabetes decreases LE by more than
2.95 (2.77, 3.15) vs 2.34 (2.26, 2.42) at with different socio-economic and three years; among diabetics, statins
age 65. This is because in the health profiles. Our methodology increase the LE from 84.6 to 86.2
landmark analysis, only the risk (Kulinskaya et al., 2020) allows to years for females and from 83.1 to
profile at the start of a window is subdivide it into component LEs for 84.8 years for males. Smoking
used, and while a chronic condition people with particular risk profiles. decreases LE by approximately six
such as diabetes will not go away, The weights, based on the counts of years; among smokers, statins DR ILYAS
people may change their lifestyle people with the specific covariate increase the LE from 81.9 to 83.5 years BAKBERGENULY
choices (eg give up smoking) in the values, are also estimated from the for females and from 80.4 to 82.0 is a senior research
longer term. EHR data. years for males. In comparison, the fellow in actuarial
As an application of our ONS online LE calculator just statistics at the
Calculating life expectancy methodology, we are developing a life reports, for a 65-year-old, an average School of
To estimate life expectancy, we expectancy calculator, available at LE of 87 years for females and 85 Computing
need to make an assumption about mylongevity.org (web developer years for males. Deprivation Sciences,
University of East
the baseline hazards. We use the George Oastler). Results of our decreases LE by one to 1.5 years for
Anglia
Gompertz baseline hazards, healthy people, but by two to 2.5
μ0(x) = ea+bx which describe well the years for people with diabetes or for
mortality between ages 50 and 95 and “Dynamic smokers.
increase log-linearly between these
ages (Brenner et al., 1993;
statistical These life expectancies do not take
future health and lifestyle choices
Spiegelhalter, 2016). Under the analysis allows into account. If we assume the same
Gompertz law, the increase in the us to make health and lifestyle continuing to age
annual hazard of mortality associated 85, life expectancies for healthy and
with ageing one year is approximately
more accurate prosperous people on statins
DR LISANNE
GITSELS
constant. However, it is well known predictions, increase to 91.9 for females and is a senior
that the force of mortality differs by
gender and by deprivation.
based on real- 90.1 for males.
LE calculation at such a fine scale
research fellow
in biostatistics at
To measure area deprivation, we time data, will not only be useful for individuals the UCL Great
Ormond Street
use the Townsend score, obtained dynamic risk and their physicians for improving
Institute of Child
from the UK Census 2001 and life expectancy via healthy lifestyle
available from the UK Data Service. stratification changes, but also for individuals,
Health

Gompertz log-hazards for different and more independent financial advisors and
deprivation levels measured by the the insurance industry for financial
Townsend score quintiles are
personalised planning and reserving of actuary
depicted in Figure 2. service” products. Our R software, which will
Combining age-varying hazard enable bulk calculation of LE, is due
ratios obtained from landmark to be released later in the year.

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 TURNING
THE TABLES Chris Lewin
examines the
emergence of
compound
interest over the
course of history

Richard borrowed from nine different period the abbey still could not afford to
people for periods ranging from two months repay the debt, and it was converted into
ompound interest, one to three years, with 15 loans running for a a loan of £440.
of the foundation stones year or less. The rates of interest were all The science of compound interest was
of actuarial science, has expressed as “per pound per week” and were studied by mathematicians such as
a long history. One four pence in nine cases, three pence in eight Fibonacci who, by calculating what a sum
writer has suggested it cases, and two pence in three cases lent would become after 18 years at 25% per
may have originated (corresponding to about 86%, 65% and 43% annum, showed in 1202 that compounding
from people lending a per annum). One small emergency loan was could cause loans to become enormous.
herd to a neighbour for charged at the equivalent of 4.5 pence. By looking separately at the sum required
several years and finding it had become The lenders reduced their interest rates to secure each payment, he also worked out
more numerous when returned. once Richard had repaid the first loan and how much must be invested to secure an
Compounding for loans lasting more then needed another – one lender charged annuity payable for five years and 70 days.
than a year was known in ancient Rome; three pence on the first five occasions and In Europe, annuities were often granted by
Cicero wrote to a friend in 50BCE, “I had two pence on the last three. This suggests one person to another as part of a property
succeeded in arranging that they should that part of the highest interest rates was transaction, and towns needing to raise
pay with interest for six years at the rate of regarded as a risk premium. money to finance wars or expansion would
12%, and added yearly to the capital sum.” grant perpetual or life annuities.
In medieval times, much borrowing Mounting debts Social concern grew, as long-term
was for months rather than years, so When loans extended for several years, borrowers often became desperate.
compounding usually did not arise. they could mount up rapidly, as illustrated In 1233, a new law in England prohibited
Richard of Anstey, for example, was a by the transactions that occurred at Bury St moneylenders from compounding interest,
plaintiff in a legal case starting in 1158, Edmunds Abbey from 1172 onwards. For and in 1275 the law went further and banned
IMAGES: © IFOA LIBRARY / IKON IMAGES

which necessitated him making several example, an abbey official secretly borrowed them from charging any interest at all. A way
journeys round the south of England; he £27 to repair the monks’ room. After some round the ban was found when, in 1276,
needed 21 loans to cover his expenses. The years, the debt had accumulated at Henry of Berkeley received a payment of
largest loan was £20, but many amounted to compound interest to reach £100, and it £120 from a moneylender and granted him
£5 or less. These loans had to be obtained was agreed that the debt should be rolled an annuity of £40 per annum for 10 years, so
from Jews, because religious restrictions over into a new loan of £200 repayable in that he received a return equivalent to about
prevented Christians from moneylending. four years’ time. However, at the end of this 31% per annum compound interest. Another

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28-29 Compound interest Lewin_The Actuary MAY 2020_The Actuary 28 27/04/2020 14:46
 Features
Investment

way of evading the ban was to avoid any de la Roche of Lyon devoted nine chapters extensive tables,
mention of interest in a loan contract but to compound and simple interest in his in present-value
CHRIS LEWIN
specify a repayment sum higher than the arithmetic book of 1520. He used somewhat form rather than is chair of the IFoA’s
sum lent. similar methods to those pioneered by Trenchant’s Infrastructure
Fibonacci three centuries earlier, but accumulation form. Working Party, and
The first compound interest tables delved into the subject in greater depth. Stevin wrote that has written
Francesco Balducci Pegolotti worked for the Using a trial and error method, he tackled such tables had numerous articles on
great banking house of Florence, known as the difficult question of finding the rate of previously been in actuarial history. His
interest in a compound interest transaction book Pensions and
the Bardi. He served it in various countries, use by some people
Insurance before
including England from 1317-21, and lasting two years and eight months. He also but had been kept 1800: A Social
produced a lengthy manuscript on developed a formula for finding the annuity hidden as a great History was
mercantile practice, of which a copy written payable for three, four, five or six years secret, and the published in 2003
in 1472 survives today. This manuscript is which could be bought for a given sum. method of
important because it contains the earliest composing them
known tables of compound interest. Banks Later developments was known to few
often made short-term loans to merchants The mathematical methods required people. In England,
and others, charging only simple interest. considerable laborious computation, which an excellent book
However, officials of these banks would have was very time-consuming and liable to error. written by London
been well aware that a sum they set aside for An important step forward was when Jean mathematical
a portfolio of short-term loans, with simple Trenchant, also of Lyon, published the first practitioner Richard Witt appeared in
interest reinvested, would have increased in compound interest tables to appear in print, 1613: this contained numerous tables of
value over a period of years at much the in 1558. He was followed by Simon Stevin of compound interest, in both accumulation
same rate as if the sum set aside had Bruges, who, in 1582, published more and present-value form, and a wealth of
benefited from interest compounded at practical examples showing their use in
least annually. Tables of compound interest “An important step property transactions. Witt clearly
would therefore have been useful.
From about 1500 onwards, the
forward was when understood the mathematical basis of
compound interest, and his book is a
publication of printed books started to give Jean Trenchant landmark in the subject.
wider audiences access to materials that had of Lyon published Various other tables of compound interest
only been known in manuscript to a few. were published during the 17th century and
There was an increasing focus on loans, the first compound were used quite extensively, though they
because changing attitudes in both Europe interest tables to sometimes contained annoying mistakes.
and England during the 16th century led to An example of such mistakes occurs in an
the gradual relaxation of legal and religious
appear in print, English manuscript table written between
restrictions on charging interest. Estienne in 1558” 1625 and 1651, now owned by the IFoA (see
Figure 1). Based on the 8% interest rate then
FIGURE 1: Manuscript compound interest tables written between 1625 and 1651, showing the present value of £1 and of prescribed by law, that table is in the same
£1 p.a., based on an interest rate of 8% p.a. There is an error in the third table at years 2 and 3, but the error is not carried
into the fourth table, where the figures are broadly correct. format as modern tables, showing the year
by year accumulations and present values of
a single payment and a series of payments
for up to 30 years. The table must have been
needed in practice, since someone took the
trouble to copy it out.
In 1671, Jan de Wit in the Netherlands
combined compound interest calculations
with age-dependent survival rates linked to
a mortality investigation; Edmond Halley
carried out a similar analysis in England in
1693. The compound interest techniques
developed over a period of 500 years thus
became a basis for the development of
actuarial science.

For more detail and full references, see: Lewin

CG, ‘The Emergence of Compound Interest’.
British Actuarial Journal (open online access),
December 2019.

MAY 2020 | THE ACTUARY | 29

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 Features
Investment

SUSTAINABLE INVESTMENT’S
NEW FRONTIERS
Gareth Sutcliffe and Holger Schalk look at the impact of ESG
regulation, and different approaches to implementation

I
nterpretations of sustainable investment differ, and investment because of the improved risk-adjusted outcomes.
investors behave along a spectrum of investment approaches. Divestment from polluting industries such as coal may be a factor,
While traditional investment often does not involve any real although a more important consideration is the full integration of
consideration for sustainability practices or societal impacts, sustainable investment principles throughout policies, processes
responsible investment is concerned with avoiding the and portfolios.
downside risks associated with sustainability factors. The industry is about to be hit by a raft of regulations, driven by
You then have the sub-asset class of sustainable investment, EU commitments made under the Paris Accord of 2015 and by the
which is about adapting progressive sustainability techniques European Commission’s 10-point action plan, which has aggressive
in your investment portfolio with a view to adding value and timelines for implementation. Two of these 10 points are
outperforming a traditional investment portfolio. particularly significant: the classification system for sustainable
Impact investing, on the other hand, aims to address investments, and the incorporation of sustainability into financial
specific societal challenges. Some of these types of investments advice and prudential requirements. This means insurers must
provide a risk-adjusted return that can compete with or beat understand the ESG preferences of their customers, and will need
traditional investments, but others offer a lesser return – you are a way to identify their beliefs and put them into an ESG category.
essentially making an investment for the greater good of society. More importantly, the Commission says that, in future, insurers
Whatever your precise definition of sustainable investing, three must offer customers products that fit their ESG preferences – and
core factors are likely to play a key part in investment decision- they will be subject to mis-selling risk if they fail to do so.
making – environmental, social and governance (ESG) (Figure 1). According to the European Insurance and Occupational Pensions
Authority, there are financial risks associated with sustainability.
What are insurers doing? Insurers should therefore already be managing these in their
Many insurers have stopped underwriting and investing in coal investment strategy through the Prudent Person Principle, and
companies. This is not without challenge, even for early adopters on the risk management side through their Own Risk and Solvency
that are passionate about sustainable investment. While some Assessment. The Prudential Regulation Authority has also stated
are taking these decisions because of convictions that supersede that it expects insurers to be modelling and managing physical,
purely financial considerations, most are engaged in sustainable transitional and liability risks.

ENVIRONMENTAL FACTORS SOCIAL FACTORS GOVERNANCE FACTORS

contribute to environmental objectives: contribute to social objectives: contribute to good governance practices,
for example companies with:
Climate change mitigation and / or adaption Tackling inequality
Sustainable use/ protection of water Fostering social cohesion, social integration and Sound management structures
and marine resources labour relations Employee relations
ILLUSTRATION: IKON IMAGES

Transition to a circular economy Or an investment in human capital or economically Remuneration of relevant staff
Waste prevention and recycling or socially disadvantaged communities Tax compliance
Pollution prevention and control
Protection of healthy ecosystems

SUSTAINABLE INVESTMENT
FIGURE 1: A common taxonomy for sustainable investment?

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 Features
Investment

Physical risks may concern exposure to climate change events assets, such as munitions, cluster bombs and landmines. These are
or natural disasters, and the subsequent risk of damage or loss to sometimes excluded on moral grounds and, from an investment
an insurer’s assets. point of view, are so insignificant in size that investment
Transitional risk is when an asset suffers a loss of value, possibly performance is unaffected. While there is significant evidence to
caused either by regulatory change or disruptive technological suggest that excluding stocks will detract from value in the long run,
advancement. For example, a global ban on the use of coal at some this is increasingly being challenged, and the issue is unresolved.
point in the future could result in the value of mining company Tobacco stocks, for example, have tended to outperform indices
shares suddenly falling to zero and becoming a stranded asset. in the past, but this has become less clear in recent times and there
Liability risks will arise from parties seeking compensation is no indication that they will continue to do so. In industries that
for losses incurred due to the physical and transition risks may qualify for exclusion from an ESG-focused portfolio, some
associated with climate change. Legal liability for losses and companies have started to invest in alternative products and
damages associated with these risks could be transferred to services. This complicates the issue of exclusion and raises the
the insurer through some types of policies. question of whether it is more productive to engage with these
firms and their move towards more sustainable business models.
Sustainable investing, sustainable profits? Oil companies, for example, are some of the biggest investors in
With sustainable investing being a relatively recent phenomenon, renewables. Engaging with them would enable an insurer to use their
the historical data available for analysing its performance is far ownership to push for change within the company. Exclusion, on the
more limited compared with that for other investment themes. other hand, should perhaps be left as a last resort when engagement
On balance, the evidence does suggest either a neutral impact from fails to deliver the necessary results.
having a sustainable investment-tilted portfolio, or a moderate A tilt signifies ‘leaning’ towards good ESG risk management
risk-adjusted long-term benefit. through portfolio construction. Individual names or shares need
More compelling evidence can be found by differentiating not be excluded but can be underweighted, either due to a current
between individual ESG components. The strongest evidence is for ESG score or a trend in the score.
the impact of governance on investment performance. Most asset
managers have shown a commitment to embedding the governance Adapting portfolios to climate risk
principle into their policies, as a company with good governance, A recent study from Smurfit Business School showed that only
a long-term horizon and good corporate social responsibility is 43 companies worldwide reported 100% of their greenhouse gas
likely to be better managed and add more value over time. emissions. Another 23 companies reported at least 95% of the
As the focus on ESG factors is a recent trend, the link between same emissions, while the remaining companies reported less.
environment and social factors and investment performance is less Consequently, the ability to monitor the investment portfolio
clear cut. That being said, environmental scientists, regulators and with regard to environmental impact remains
politicians are increasingly pointing to the real risks associated with an issue.
climate change, suggesting a tipping point may have been reached in In the past, a lack of interest and scrutiny
which companies that do manage this risk are more likely to achieve has made it possible for ESG risks to remain GARETH
a better outcome. hidden. Today, the steady growth of ESG SUTCLIFFE
investing has brought sector risks to the is head of insurance
Exclude, engage or tilt surface and impacted asset prices. The big investment at Willis
There are three options for implementing challenge for governments, industries and Towers Watson
a sustainable investment portfolio: individual companies will be to successfully
exclude, engage or tilt. Exclusion adapt to a new environment that favours
means not investing in certain smarter, cleaner and healthier products
and services by rebuilding and reshaping
the economy in a more sustainable way.
Whole sectors will inevitably be affected,
from greenhouse gas-intensive industries HOLGER SCHALK
to the automotive sector. is a director of
Regardless of a company’s belief in insurance consulting
sustainable investment, few question and investments at
the escalating threat presented by climate Willis Towers
risk. At the very least, insurers will need Watson
to incorporate climate change effects
into their investment and underwriting
strategies. Insurers will also need to be
prepared for changing customer demand,
as this may happen quickly and shift the
landscape dramatically.

MAY 2020 | THE ACTUARY | 31

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 Features
Risk

H
ave you heard? Actuaries can save
the world! Well, sort of. If we set
aside our love of fine detail and
getting super-nerdy over the
models, we can draw on a key part
of our skillset in acting as ‘master
translator’ for decision-makers
– helping them to slice through
the fuzz of uncertainty and take
decisive action. The key is to not
fixate on the numbers, but instead
to consider the trends that will
lead to the right outcomes.
The critical first step is,
sensibly, measurement. But how do you make sure you
take it seriously? In short: disclosure. The point of
committing to disclose is to give the business the insight
it needs to understand this ‘new’ risk. Take a look at Travis
Elsum’s excellent article from the February issue of
The Actuary (bit.ly/TravisETheActuary), showing what
leaders in this field are doing. It is worth bearing in mind
that taking climate disclosures seriously will not be
optional for much longer, and that those viewed as leaders
are not that far down the road. This is not to detract from
their achievements – they have certainly expended a lot of
time and effort – clearing a new path always takes a lot of
work. However, with a focused project, appropriately
guided by those with domain knowledge, it is very possible

CLARITY
ON CLIMATE
ILLUSTRATION: IKONIMAGES

There is considerable uncertainty in the output of climate change

risk and exposure data – how should decision-makers cut through
all this? Russ Bowdrey explains.
32 | THE ACTUARY | MAY 2020 www.theactuary.com

32-34 Climate risk Bowdrey_The Actuary MAY 2020_The Actuary 32 27/04/2020 14:49
 Features
Risk

How useful is this for making tangible, profit-moving,

risk-reducing business decisions? In my experience, using
the figures in absolute terms, not very useful at all. There
is simply too much going on: what does it even mean to
align a portfolio to a temperature? And if you believe you
can, is 2.4˚C better than 2.5˚C or is it materially the same?
What is Climate-VaR? Is the one you’re looking at even a
value-at-risk? This simply breeds confusion and paralysis.
Then there is the uncertainty embedded in the analysis,
something that we as a profession should be comfortable
dealing with. Until we’re actually faced with it.
Just think about the components required to assess
the portfolio warming potential alignment of a portfolio –
I need to:
Work out the trend of emissions that might lead to
‘Paris-aligned’ temperature rises in 2100. Then do the
same for other temperature rises. There are multiple
paths for each, none of which are certain to result in
Paris alignment (or better) – leading to uncertainty #1.
Work out what emissions we attach to different
activities (hundreds, if not thousands if we’re doing this
properly). We can reasonably estimate this in the near
term, but such is the pace of technological change that
beyond 10 years, this is guesswork – which gives rise to
uncertainty #2.
Attribute the activities of each company to those
described above. Even doing this for today is hard, as
few firms disclose revenues in enough granularity.
to catch up. Committing to disclose and applying a short Moreover, no company publishes (or even creates)
concerted effort will yield a rich dataset for internal use business plans beyond three to five years, but we really
– even if disclosing it all may be unwise until the market need 80 years – so are left with more guesswork, and
has learnt how to digest such information. uncertainty #3.
Let’s call these data ‘climate change metrics’.
They include, for example: For each uncertainty we need a model, with
Carbon footprint assumptions about how the world works. These are
Emissions intensity
Portfolio warming potential FIGURE 1: This modified risk management control cycle provides a great
framework for approaching a relatively unfamiliar set of risks, such as
Exposure metrics climate change.
Climate scenario losses.

Model risks Measure

It’s rapidly becoming clear that climate change data will
become as crucial to disclosures and risk management as
market data. This is why the leading vendors of climate
change risk data have been snapped up by big names in
market data and ratings in the last year. But here is the Describe the
system Interpret
rub: despite the Herculean effort of those involved in
Risk
producing climate change metrics, if you scratch the management
surface of any climate-related metric you find a lot of cycle
the features we dread in model output:
Spurious precision
Parameter uncertainty
Model uncertainty
Misleading parameter/output naming Wider Manage
context
Conflict of interest in assumption setting
Bias/anchoring triggering units.

www.theactuary.com MAY 2020 | THE ACTUARY | 33

32-34 Climate risk Bowdrey_The Actuary MAY 2020_The Actuary 33 27/04/2020 16:16
 Features
Risk

choices that are often driven by expert judgment. This FIGURE 2: The Z-score shows the number of standard deviations from the mean climate
exposure dollar losses that a particular stock has. We see that 15% of the holdings account for
drives a lot of variability between different providers. all the downside risk.
Even individual providers change their models from time Climate exposure Z-score
to time, with material differences in output. If you use a -6 -4 -2 0 2 4 6
consistent model over time (or can accurately say what
changes in a model do to its outputs), then you can start to

% of portfolio holdings
extract meaningful relative measurements.

Don’t let ‘perfect’ stand in the way of

‘good enough’
But – and it is a big ‘but’ – used on a relative basis, this data
is good enough to act upon. Especially given that we know
we have to take decisive action now. We can take actions
that are directionally right, without needing to know every
underlying detail with total precision.
What do these insights look like, and why can we be
happy with such a broad-brush approach? alignment of their funds to doing the right thing for
1 There is considerable concentration of climate change climate change. However, the inconsistency of these
risk in a few names/assets. measures makes comparison very hard. When
2 If we normalise the data, stripping out units that might considering your own funds and risk profile, be
anchor or distract users trying to interpret unfamiliar mindful of fixation on meaningless detail and challenge
data, and carefully controlling for model or parameter yourselves on cognitive biases.
drift, then we can infer trends. Yes, it’s simplistic. Yes, 2 Challenge conflict of interest positively
it’s not perfect. But these cut through the fuzz of For financial institutions, the most widely used source
uncertainty and get to the heart of what we need to of scenarios for projecting emissions pathways is
achieve: the transition of our portfolios towards produced by the International Energy Agency (IEA).
supporting a green economy and away from (soon-to- This intergovernmental body historically safeguarded
be) stranded assets and those imperilled by physical the supply of fossil fuels, and is partially funded and
climate change risk. staffed by that industry. So without agenda, one should
be wary of potential conflict of interest here. The
This approach will lead to decision-useful outcomes, criticisms of systematic bias in their projections are
particularly helping us to identify hotspots of risk and a well documented elsewhere. However, the IEA dataset
more streamlined list of assets on which to focus our should still be accepted as part of the set of plausible
attention. Using these, we can engage with our asset scenarios. Importantly, I would like to see the whole
managers and get them to apply their skillsets to financial sector come together to fund an independent,
validating what we’re seeing in the climate risk data. For unconflicted scenario set.
example, equity and credit analysts are well placed to 3 Challenge yourself and your firm to reflect on the
consider what could happen to a business’s revenues or true nature of this risk, how it affects you, and start
physical assets under plausible but extreme climate to take mitigating action
scenarios. Asset managers can use this to place a higher While there is currently no requirement to explicitly
priority on engaging with management on key climate reflect climate change under Solvency II Pillar 1,
change topics, such as adapting the business mix. most regulators expect it to be covered in Own Risk
Consequently, the CIO and CRO, informed by both the and Solvency Assessment and in raising supervisory
climate change metrics and insights from the asset expectations. In my mind there is a distinct
RUSS BOWDREY
managers, can make well-informed decisions about competitive advantage for early movers and
is a senior ALM
rebalancing long-term portfolios with climate change risk incentives to act: customers want it, shareholders manager at Aviva,
in mind. are demanding it and are holding boards and led the Climate
accountable. Change Physical Risk
A call to action Workstream for
Here is a call to action with regard to three aspects of Climate change, and the associated mitigation and Aviva’s TCFD report
assessing climate change risk, and using it to make adaptation required from our businesses and the wider
world-changing impacts via investments and engagement. world, is so far-reaching that there are few areas of
1 Be mindful of biases, anchoring and fixation on business actuaries are involved in that will not be
meaningless details touched. Helpfully, the profession has prepared
There is, rightly, a strong call from policymakers for practical guidelines (bit.ly/2V88wAP).
investment funds and investors to publish the Now, what are you waiting for?

34 | THE ACTUARY | MAY 2020 www.theactuary.com

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 Features
Recruitment

Embracing change
The insurance sector is currently facing
unprecedented challenges, one of which is
filling actuarial vacancies. A leading recruiter
advises on best practice

T
he reassuring news for businesses looking building that immediate rapport and trust with your new
to attract talent and for those seeking starter noticeably harder. Both of these are important
new opportunities during these unfamiliar cultural aspects and must not be overlooked.
times, is that most companies have shown Firms should be proactive and open to having
a resilient approach and are rising to the transparent and consistent communication earlier and
unique hiring challenges by continuing more frequently than usual. Now more than ever, people
to interview via video conference and will need reassurance – especially to limit the increased
onboard remotely. risk of counteroffers during notice periods. Many
A minority of companies in the permanent market companies are including new starters in virtual team
are implementing a two to three-month hiring pause. quizzes and Friday drinks before their start date to help
Where this is the case, they are doing so in order to embed them into the team culture, increase buy-in and
give themselves time to adapt to these extraordinary offer essential reassurance around job security.
circumstances. Similarly, companies looking for Meet-the-team virtual meetings have also been added
contractors tell us that any delays are temporary, as at the end of some interview processes, enabling the
they work through logistics and teething problems. candidate to meet their future colleagues and develop
Early feedback across the market indicates that a sense of the culture that they may have missed during
many insurers are reacting to the ‘new norm’ by taking a fully remote interview process.
time to reassess hiring needs, implement new interview
solutions and create remote onboarding processes Proactive engagement ROSS ANDERSON
before pushing ahead with business-critical hires. Once a new candidate has joined, it is important for is a principal at
While video interviewing and remote onboarding the employer to replicate day-to-day interaction by Oliver James
quickly becomes the norm for companies, there are introducing innovative virtual solutions for anything
still understandable fears among candidates that offers that is usually face-to-face – such as a video team lunch
may be withdrawn and opportunities could vanish. In on their first day. Some companies are also scheduling
our experience, firms that are still recruiting are doing daily morning and afternoon team meetings and coffee
so because they have completed unprecedented analysis breaks, in order to maintain the agile working
of their hiring needs and the remaining roles have been environment and give employees a sense of
marked as ‘business-critical’. accountability. Many people within the team may ROB GORMLEY
Candidates should concentrate on their own be cautious of technological adoption – particularly is a manager at
development as people are still moving, there is junior members, due to the immediate exposure it Oliver James
confidence in the market and, if anything, the gives them to their new colleagues – so managers
caution exercised by some prospective candidates should lead from the front by ensuring they are using
has created less competition for a number of excellent virtual communication wherever possible. The team
opportunities. Our advice is to remain positive, as many will soon follow suit.
companies are still hiring – but patience is essential, as It is no secret that many people will be worried about
interview progression may take a little longer than usual. job security; it is important to focus on supporting your
new starter and creating proactive engagement within LAURA SHARKEY
Building rapport the team. Both elements are imperative to achieve is a principal at
As companies begin to explore the unfamiliar territory a successful induction. Some firms have introduced Oliver James
of remote onboarding, there are two key factors to focus virtual yoga sessions, team cookery classes and
on: the all-encompassing engagement, and the emotive personal training sessions to help improve wellbeing
elements of onboarding. Of course, ensuring a clear and and team morale during this time. It is also vital to keep
IMAGE: ISTOCK

structured plan for the practicalities, such as having a employees up to date on the health and position of the
robust IT infrastructure in place, are paramount. company, so they have confidence that the business is
However, due to its nature, remote onboarding makes adapting well to market changes.

www.theactuary.com MAY 2020 | THE ACTUARY | 35

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 At the back
Mortality

PASS T
he International Actuarial Association’s (IAA) Mortality
Working Group (MWG) was formed in 2008 to address
the difficulty in tracking global mortality research, both
within countries and internationally. I was an inaugural
MWG member as the representative of the IFoA.
In our first meeting, we outlined our vision:
The Mortality Working Group will be the preeminent
international actuarial body to provide insights and

IT ON
knowledge with respect to mortality and trends in mortality (ie
encouraging research, but also making sure that people know
what is going on internationally).
Members shared information from their own countries, and
I was able to report on progress in the IFoA’s Mortality Research
Steering Committee and highlight the work done by the CMI and
the ONS. The IFoA had just finished a mortality research scoping
study in the UK, and was starting on a multidisciplinary approach
for future research which it was going to sponsor. What was
The IAA’s Mortality Working missing was the international dimension.

Group provides a valuable Opening up access

forum for sharing information From the start, the MWG aimed to publish all our papers,
presentations and discussions widely, putting them up for
on mortality research open access on the IAA website and publicising their existence.
around the world, says We started producing Country Reports to give an overview
of country demographics relating to mortality and longevity,
Brian Ridsdale products, research, and the governmental and actuarial
organisations involved. By agreement with the IAA, all our
materials were open access on www.actuaries.org/mortality
In response to interest in research and developments in the
UK, I produced the first of a series of UK Updates. If you are in
any doubt as to how many organisations there are involved in
high-quality mortality research in the UK, just have a look at
the most recent Update at bit.ly/3aN247Q.

Sharing practice
We were able to shine a light on the substantial longevity
improvements throughout most of the world during the first
decade of the 21st century – and then on the slackening of
improvements, again in large parts of the world, during the
second decade.
Early on it became apparent that while UK pensions
and annuity providers were taking account of the early
2000s’ improved longevity trend, many countries
were not. In some countries long-outdated life
tables were in use, and no attention was given to
projecting future improvements. Supported by
the IFoA, we sponsored research on international
longevity trends and reserving, and publicised
the results to IAA Member Associations through
our members.

Sharing information on developments

News is transitory: a paper published this month
becomes more difficult to find later. We felt there
was an unsatisfied need for easier access to research
and presentations, and in 2010 we decided to

36 | THE ACTUARY | MAY 2020 www.theactuary.com

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 At the back
Mortality

introduce a web-based Information Base on 13 topics, with a FIGURE 2: How the MWG operates.
Supporting the development of the actuarial profession worldwide. This diagram
selection of papers on each topic. The Information Base provides summarises the inputs (left) the outputs (right) and the benefits of membership of the
a title or brief introduction, and a hyperlink to the paper on its Working Group (centre).

original web page. Updating the Information Base has proved KNOWLEDGE RESOURCE
difficult, although I believe it still has value. Country reports LIBRARY
Research updates Open access on web to:
Of course, academic papers are not always the first place Sharing at meetings Minutes and papers
Conferences Country reports
practitioners turn to for new ideas and techniques. Conference Visiting speakers Information base
papers, reports and presentations from governmental and actuaries.org/mortalityinfo

non-governmental sources, consultancies and reassurers MWG

are useful, as are magazine articles. We aimed to make these
equally accessible through half-yearly Updates and our
Information Base.

Seminars RESEARCH DISSEMINATION

MWG research projects Updates in 13 languages
Our meetings were held half-yearly alongside IAA council and Own research FELLOWSHIP promoted to associations
Papers Joint projects Actuarial educators
committee meetings, which meant our members could participate Presentations Dinners IAA seminars with PIWG
in a variety of groups covering different areas of interest. It also International: HMDB Shared research In-country seminars
supranationals Worldwide contacts Supranational meetings
provided a briefing opportunity for actuaries in other areas to
catch up with progress in our field. We would invite a few local Ongoing relevance
mortality and longevity specialists to join us, and soon realised Looking back over the years since the MWG was founded, is the
there was scope for a seminar in the countries that we visited – concept still relevant? We’ve seen a further explosion in
for both local actuaries and our IAA group to be updated on mortality and longevity research: in the way actuaries contribute
progress in that country. In 2015 we ran our first country seminar to developments in the field, and in public awareness of this role. The
in Zurich, Switzerland. By our November 2019 meeting in Tokyo, IFoA’s Actuarial Research Centre, aimed at doing excellent research,
there was a fascinating seminar with nearly 100 attendees, run has come into being, as have the IFoA’s Longevity Bulletins and a
on a self-funding basis. continuation of international conferences, seminars and courses.
However, these still don’t reach a number of people – particularly in
Building the team countries outside the mainstream research centres – and there is a
From an initial attendance of nine members in Quebec, the MWG need for an online resource aimed at communicating new research
has grown under successive chairmen to involve 45 members and to Member Associations and practising actuaries, and at making
55 Interested Persons. The half-yearly MWG Mortality Updates existing research more accessible nationally and internationally.
now reach across the world, in 13 languages. I completed my term as chair of the MWG at the end of 2019. It was
a great experience and I made a lot of new friends. I am pleased that
FIGURE 1: The impact of the Mortality Working Group.
Dan Ryan, a member of the IFoA’s Mortality Research Steering
Committee, will take on the IFoA representative role, and also the
production of the half-yearly UK Mortality and Longevity Update.
His first meeting in May 2020 will be interesting as the IAA is
undergoing a thorough reorganisation, with three key objectives:
Influence supranational relationships
Assure the promotion of the profession
Advance the development of competence.
The IAA Mortality
Working Group The MWG is focused on the latter two, and
has 45 members I hope the work we have done during the past
and 55 Interested
Persons. few years, opening up international access to
research and development in mortality and BRIAN RIDSDALE
longevity, will continue to thrive and grow was Chair of the IAA
The MWG’s work, too, has grown to meet new needs. It aims in the new structure. Mortality Working
to recognise work being done in member countries, do its own Finally, I believe that opening up access Group from
2017–2019
research, maintain an Information Base of research and papers, and to important actuarial research and
to disseminate its output to Member Associations and through them developments is intrinsically valuable
ILLUSTRATION: IKONIMAGES

to practising actuaries worldwide. None of this could have been done for the profession and our customers.
without the small but enthusiastic and multitalented team in the IAA It deserves consideration in other fields,
Secretariat. One of the benefits to MWG members themselves has and I recommend this for discussion by
been the fellowship that has built up, and this has contributed to the actuarial professional bodies in the UK
effectiveness of the group. and internationally.

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 At the back
Career development

Richard Lewis
reflects on the
unexpected creativity
that can be found
within the actuarial
profession

THE ART
OF BEING
AN ACTUARY
38 | THE ACTUARY | MAY 2020 www.theactuary.com

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 At the back
Career development

W
hen you think of artists, you
probably think of painters,
“Crafting your process is
poets and musicians… but completely down to you,
anyone can be an artist. All
you have to do is choose.
but it’s such a rewarding
Actuaries are used to thing to work on”
choosing – expert judgment is
our currency. However, we’re to start and find a way to finish. Once you have a plot for
also used to not choosing. Most your novel, any subplots have to fit. Very soon, you might
days we go to the same places, not like the box you’ve found yourself in.
see the same people and think Actuaries have a different kind of freedom. While
the same things. We understand risks for a living, but artists feel personal responsibility for their constraints,
how often do we take them? actuaries work to rules set by the profession – so we can
I was so afraid of making music that I became an focus our time and energy on creating solutions.
actuary, but it turns out actuaries make things as well. The knowledge barrier can get in the way of
Most people think we make numbers, but really, we communicating our work, but it gives us the freedom
turn numbers into decisions. We make stories. to play with models and assumptions, which is how
we create our best work.
Hiding behind technology Dealing with bad data is probably our most common
Technology only turns data into more data, so challenge. The only way forward is to be creative –
computers aren’t great at making stories. In our find other data, change the model or change the story
data-driven world we need technology to evolve – we’re telling.
but we need to evolve, too.
Sometimes it feels easier to let technology do the The process is the work
evolving for us. Computers put people on the moon and We’re often told that the result is the work. Goal-
food on our doorsteps, so we think we can automate our driven culture is great for proposals, decision-making
way out of anything. Yet we still have bookshops, we still and management, but does it really get you to do your
don’t have enough meeting rooms, and sometimes we best work?
still need the back of an envelope. Look back on work you’ve already done. Notice when
To evolve, we need to learn, and in return for relying you’ve been motivated and when you’ve been bored,
on automation we can learn from it. It’s no coincidence when you learned something and when you forgot
that the only way to make anything foolproof is to fool something. Instead of focusing on your results, focus
around with it, because the best way to learn is to play. on how you responded and how you changed.
Jazz pianist Bill Evans viewed learning to play the No one else can give you permission to do this work.
piano as an automation process. He obsessively focused Crafting your process is completely down to you, but
on each level of playing until it became automatic. This it’s such a rewarding thing to work on. I’m still afraid of
might seem too rational a way to make inspired music – becoming a full-time musician and all the uncertainty
but coupled with commitment, hard work and love, this that goes with it, but letting go of the stories other
strategy led him to make some of the most beautiful people have for me helps me see my creative process
music of the past hundred years. Think what happens as work and gets me moving.
when we hold on too tightly to our automations, when As actuaries we have so many opportunities to
we stop playing with them. Repeating the same thing build processes, leveraging
over and over may be how computers work, but it’s not technology and the trust we’ve
how we work. earned. Choosing to work this RICHARD LEWIS
way is not going to be easy, and is a senior
Beautiful constraints it’s not for everyone. If you’re consultant at RPC
Consulting
Being an actuary could be the most constrained job curious, you can start right now
in the world. Our work is heavily regulated, we have a and move towards your art – the
ILLUSTRATION: IKONIMAGES

reputation for relying on obscure technical knowledge, work that you love.
and we all know that garbage in equals garbage out. See what happens when you
Surely there must be no space left for creativity? Being play more with technology.
an artist, in contrast, could be the least constrained job. Those stories aren’t going to
Where could you possibly start? But that’s it – you have write themselves.

MAY 2020 | THE ACTUARY | 39

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 At the back
Puzzles

iQ www.mensa.org.uk

On the road
Mensa puzzle 783
A car is travelling slowly in heavy traffic. In the first hour it covers one eighth of its total
journey. The next hour it covers one third of what is left. The following hour it covers one
quarter of the remainder and in the fourth hour half of the remaining distance.
The car still has 15 miles of the journey remaining.
How many miles has the car covered?

Missing letter
Mensa puzzle 784
What letter should replace the question mark
in this sequence?

A C E ? F S H
40 | THE ACTUARY | MAY 2020 www.theactuary.com

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 At the back
Puzzles

Dare to square
Mensa puzzle 785
Which square should come next in the sequence?

Answers 783: 53.5714 784: O. The letters of the alphabet that contain only straight lines alternate with the letters that contain only curved lines. 785: A. One line moves 180 degrees each time, the
A B C

other moves 45 degrees anticlockwise each time. 786: Roulette 787: Cricket, skiing and polo.
Spell it out
Mensa puzzle 786
On each row, place two letters that can be
attached to the end of the word to the left to
give a longer word. When completed, the
eight added letters will give the name of a
game reading downwards. What is it?

BOLE _ _
Out of the kitchen
CONS _ _ Mensa puzzle 787

BALL _ _ Rearrange the letters of

‘PRICKLIEST COOKING’
ILLUSTRATIONS:

ROTA _ _ to give three sports.

What are they?

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 At the back
School of thought

Student
Refilwe Modise asks whether pensions or property
For those opting to invest in property
rather than a pension, what happens in the
late stages of life with regard to property
management? One of two things could
happen, either assistance from family or
using letting agencies to manage them,
although the latter comes at a cost.
makes the better investment choice Pensions secured in DB schemes are often
low-risk due to the backing of the central

Opportunity or loss? discontinuance fund in the UK. However,

if your employer goes bust before you retire
and you hold a defined benefit pension, you

T
he choice between where may lose up to 10% of your pension value.
to invest in the long run The likelihood of this is fairly low, though,
depends on the concept so pensions are a good option for the
of opportunity cost. low-risk and additional contributions that
You can’t have more of one come with it. DC schemes, on the other
thing without sacrificing the hand, allow the individual
other. As such, we could to tailor the contribution
pose the question, “What investment to align with
is the right choice in long- their own risk appetite.
term investment? Risk is also limited
Investment in pensions within a pension by the
or in property?” fact that you are only
A property purchase requires investing money you
a substantial initial expenditure. have – so you cannot lose
Pensions, however, allow you to save more than you invest.
for retirement through monthly By contrast, people
payments – which most people may be borrow to buy property, which
able to do. One commonly-used option will magnify their return on their
to combat the problem with property investment during good times, but
investment is to use mortgages. leave them in financial problems
In the UK, one is allowed a mortgage of up Timescales to sell during bad times.
to three to five times their salary. Taking a could differ due to Essentially, it all depends on your risk
mortgage means one can purchase property demand and supply issues – appetite, circumstances and expertise.
and sell it at a higher price for capital gains; and negotiations. Many landlords opt With regards to pensions versus property,
the average house price went from £58,000 to hold the property for some time and the key question is: how much risk do I want
in April 1990 to £225,000 in February 2018. buy-to-let. Rental yields can be used to to take? While the risk-averse may shield
The combination of rental yields and cover-off interest payments from the their funds using low-risk assets, real yields
capital growth means there is both mortgage over a few years. The house in the UK on government bonds have
immediate income and the potential for could then be sold for a profit and the been negative for a while now. Therefore
long-term profit. Nonetheless, according to revenue generated used to pay off the property, or, by proxy, property funds,
the ONS, “Average house prices in the UK initial mortgage. can be the necessary device to push up
increased by 0.7% in the year to July 2019, Repeating this process on a large scale can risk-adjusted returns without facing
down from 1.4% in June 2019. This is the lead to exceptionally high investment gains. stock market volatility head on.
lowest annual rate since September 2012, Yet such ventures also lead to advertising
when it was 0.4%. costs, as well as the renovation and
“During the past three years, there has management costs of renting out property.
ILLUSTRATION: SIMON SCARSBROOK

been a general slowdown in UK house Mortgages are also dependent on

price growth, driven mainly by a slowdown occupation type and income, which act
in the south and east of England.” as limiting factors on how much you can
This trend of downward increases in actually make from the ‘mortgage, buy REFILWE
house prices means one would have to and sell’ option. In recent years, regulation MODISE
hold property for longer in order to raise changes have meant that the tax on property is a guest student
a substantial profit. is more belligerent than on pension income. editor

42 | THE ACTUARY | MAY 2020 www.theactuary.com

42 student_The Actuary MAY 2020_The Actuary 42 27/04/2020 14:52

 At the back
Society news

WCA A recent message from Master

Fiona Morrison outlined what the
KEEPING Worshipful Company of Actuaries
(WCA) is doing to connect with

GOOD its members during the

lockdown period.

COMPANY “There has never been a time in the

Company’s 40 years when community
KEEP
was so important,” she said. “I usually
think of this in terms of meeting and doing things together, whether at dinners or
ON
less formal social events. But all that is off for the foreseeable future. We all know RUNNING
that we must adapt to survive, and that is just what we are doing.” She went on to
describe three ways to connect that are ‘COVID-19 compatible’. Fancy spending your ‘one time a day’ run
First, the WCA is providing ‘virtual socials’ using the Zoom app, where members or walk connecting with other actuaries
can meet on laptops, tablets and smartphones. The first took place on 26 March for and helping out your chosen charity?
an hour, and the WCA aims to make them a regular occurrence. “Pour yourself a cup SIAS is continuing it’s ‘run with SIAS’
of tea, or perhaps something a little stronger, and join me and other members on a programme for its members during
video link,” said Fiona. “Join in for as long or short as you like during the hour, with the lockdown:
your own drink and food…. In future we may do things like quizzes, or other themes.” 1 Take a photo or a selfie pre or post your
The new Whatsapp group has also been useful. “During this crisis, it has taken on run or walk (alone or with your pet) – it
a life of its own, enabling members to share thoughts, pictures and information,” doesn’t matter if your run is long or short,
Fiona said. “As well as the clerk posting practical information, some members have if you are an experienced runner or you
found amusing films and cartoons, bringing many smiles. Some members who are began during the lockdown
self isolating have said how the humorous posts are much appreciated.” 2 Post it on Twitter, Instagram, Facebook
Realising that Zoom and WhatsApp aren’t for everyone, the Master is keen that the or LinkedIn with the very important phrase
community be inclusive for all, and so the third way of connecting is more personal. #IrunwithSIAS
“If you would prefer to be put in touch with a member who would phone/email/text, 3 Tag them in your post and follow SIAS
or whatever you prefer, on a one-to-one basis, please let us know,” she said. “Do you (Twitter @siascommittee and/or
need help with your shopping or other things? If so, we will try to find a member near Instagram @siasevents)
you. We can’t promise, but we’ll certainly try to find a solution. This is clearly the 4 Send an email with your Twitter or
first time we’ve ever attempted anything like this, but I have confidence that we Instagram name, postal address and your
can deliver, so don’t be reticent in asking!” chosen charity to charity@sias.org.uk
The charity and community the WCA is famous for is certainly coming into its
own. If you are interested in joining, please visit www.actuariescompany.co.uk Previous participants are welcome
to complete another three runs.
For your first run or walk with SIAS,
a SIAS-branded water bottle will be sent
SIAS
out – albeit after the lockdown!

Poker faces For your second and third run or walk

with SIAS, a £10 donation will be made
BY KISHAN PATEL each time to your chosen charity. SIAS
Some 45 people took part in the annual SIAS would like to encourage you to support
Poker tournament on 11 March. It was a strange any local food banks or COVID-19 related
tournament this year, taking place as the charities – at these difficult times, we
government’s COVID-19 policy evolved but before should come together to support our local
social distancing was at the forefront of people’s community and our carers. However, you
minds. Nevertheless, most who purchased tickets can support any charity you wish to.
attended. It was fantastic to see some of our regulars, as You can fundraise a maximum of £20 with
well as some new faces. Plenty of food (and some drink) each run or walk for your chosen charity.
was provided to facilitate rational thinking.
The top 10 players all received cash prizes ranging from £35 to £370. The top three
were Rajinder Poonian in first place, Lewis Wilson in second, and Peter Jackson in Call for your news…
third. Congratulations to all the winners! We would be delighted to hear from you.
IMAGES: ISTOCK

SIAS would like to thank everyone for attending and supporting our socials. If you have any newsworthy items for
We are hoping to run more events in the future, but please check out our website, these pages, please contact us at:
sias.org.uk. Given the current circumstances, these may be virtual. social@theactuary.com

www.theactuary.com MAY 2020 | THE ACTUARY | 43

43 people_The Actuary MAY 2020_The Actuary 43 27/04/2020 14:52

 At the back
Actuary of the future

On the
record TRISHLA DOSHI
Student

Place of residence What’s your most ‘actuarial’

Mumbai, India. habit?
Adding the numbers on a number plate and
Hobbies & interests the happy feeling when the addition is an
Reading mystery novels, even number.
writing poems, drawing,
listening to music. Favourite Excel function?
Solver, it is so easy to use and has
Tell us an wide practical applications.ns.
interesting fact
about yourself If there was a
I don’t let go of things even if products might be insured 20 movie produced
they seem impossible to years from now. about your life,
achieve. Sometimes, it who would play
works in my What motivates you? you, and why?
favour. I imagine how happy I would Emma Watson. She is an
be when I achieve a particular amazing actress and I feel
el
Greatest risk you thing, and the excitement she has the talent to play me.
have ever taken? and motivation follows.
I let an internship offer in a What is the funniest thing that
non-actuarial role go because I What would be your personal has happened to you recently?
only wanted to intern in an actuarial motto? Recently, I calculated my attendance
department. Luckily, I secured a pricing Winners don’t quit and quitters don’t win. allowing for 2% error reduction and my
internship at Hdfc Ergo General Insurance. actual attendance turned out to be the one I
Name five dream companions to had calculated without the error reduction.
What sort of Actuary of the be stuck on a desert island with
Future will you be? Sundar Pichai, Edmond Halley, the Wright Alternative career choice?
An all-rounder, dedicated to my profession, Brothers (we won’t be stuck on the island A commercial pilot.
have a good work-life balance and an active for long) and Emma Watson.
IFoA volunteer. If you could go back in history,
who would you like to meet?
What kind of actuarial work are Agatha Christie. I would love to get some
you aiming to be involved in? tips on how to write a good mystery novel.
I would like to start my career in valuations
at a reinsurance company. If you could be anyone else, who
would it be?
PICTURES: ISTOCK / ALAMY

What’s an interesting actuarial JK Rowling.

topic you’ve been following?
I have been following updates on bicycle Do you know an actuary destined for greatness?
insurance and the companies that provide You can nominate an Actuary of the Future by
them. It’s fascinating to imagine what emailing aotf@theactuary.com

44 | THE ACTUARY | MAY 2020 www.theactuary.com

44 AOTF_The Actuary MAY 2020_The Actuary 44 27/04/2020 14:53

 At the back
Appointments

Jobs IPS GROUP IS STILL

To advertise your vacancies in the magazine and online please contact:
theactuaryjobs@redactive.co.uk or +44 (0) 20 7880 6234

FOR MORE INFORMATION VISIT

www.ipsgroupltd.com/covid-19/

MAY 2020 | THE ACTUARY | 45

ACT recr May20.indd 45 27/04/2020 17:04

 At the back
Appointments

Permanent and Contract Opportunities at APR

Permanent roles for entry-level (school leavers and graduates), mid / senior students and
qualified actuaries
Positions based in London and Edinburgh, with the option of locating to Dublin
Contracting opportunities across UK for actuarial professionals at all levels of experience

Join our growing team - opportunities for a range of placement and consulting projects
Drawing on the high quality of the solutions we are providing to clients, whether individuals on placement or delivering project-based
services, our business is continuing to grow. Our permanent actuarial staff gain exposure to a wide range of clients and projects, while
benefiting from our highly-regarded training and support. Those who contract through APR enjoy our professional, focused approach to
finding suitable roles and supporting our contractors on placement. We currently have the following opportunities:

Graduate Actuarial Associate Actuarial Contractor Roles

Our well-established graduate training programme is based on We are suppliers to most of the UK’s largest insurance firms, giving
comprehensive initial training and exposure to project roles selected you access to a wide range of contracting opportunities. Our actuarial
with your development in mind. expertise and targeted approach to filling roles maximises your
Our exam pass rate far above the UK average gives you maximum chances of securing contracts that suit your skills and preferences.
chance to qualify quickly as you launch a successful and varied We can work with contractors on a range of different engagement
actuarial career. bases, whether through limited companies or payrolled.

Actuarial Analyst (CAA) Actuarial Associate / Senior Actuarial Associate

Drawing on our experience and strength in training actuarial students, We are looking out for high-quality actuarial students and qualified
we have now been recruiting Actuarial Analysts for three years. actuaries to supplement our team.
As well as giving you experience across a range of client projects we Those attracted to an associate role at APR are often looking for
support our analysts to take the CAA qualification, hopefully as a first a broader range of actuarial experience or an increased level of
step towards full FIA qualification. responsibility through working for a smaller firm.

For further information see:

https://aprllp.com/working-for-apr/ Or contact: recruitment@aprllp.com www.aprllp.com
https://aprllp.com/actuarial-contracting-with-apr/

KEEPING
YOU IN
THE LOOP
As a professional, you’ll no doubt want to keep up with the
latest industry developments, people and news?

That’s why The Actuary’s weekly email alert brings you a handy
round-up of only the most relevant news stories and
comment, straight to your inbox every Thursday.

Register for weekly email newsletters at

www.theactuary.com

Browse www.theactuaryjobs.com and

www.theactuaryjobsasia.com the official
jobsites of the actuarial profession.

www.theactuaryjobs.com The magazine of the Institute and Faculty of Actuaries

46 | THE ACTUARY | MAY 2020

ACT recr May20.indd 46 27/04/2020 17:04

 At the back
Appointments

Jacqui van Teutem Susan Bradley

Ireland’s Leading Actuarial Recruitment Agency

Actuarial Audit Manager Life Risk Actuary Deputy HOAF
Well-known insurance provider seeks Risk actuary required to join the A fantasƟc opportunity for a qualiĮed
both Life and Non-Life Actuarial team of an insurer/reinsurer. This actuary to join an internaƟonal
Managers for Internal Audit roles. is an excellent opportunity to take insurance organisaƟon. The role will
FantasƟc opportuniƟes for nearly ownership of many of the BAU risk inŇuence the further development of
or newly qualiĮed actuaries to acƟviƟes. The company are going to be the reserving and actuarial funcƟon. We
work with senior actuarial and building a new internal model and this are looking for an experienced actuary
business leaders. The role would work will bring further opportuniƟes with strong reporƟng and regulatory
suit independent actuaries with within the organisaƟon. A great step experience. A great opportunity to join
ambiƟon. towards being a CRO in future years. this company at a senior level.

Actuarial Solvency II Analyst Finance and Capital Roles IFRS17 Life Contract Roles
Reinsurance company seeks part A well-known mulƟnaƟonal requires Despite COVID 19 and the
qualiĮed actuary to join the Įnance and capital actuaries to join extended IFRS deadlines there
Solvency II team as an actuarial the team in Dublin. The company are sƟll upcoming IFRS contract
analyst. The role will work closely are open to individuals who are opportuniƟes in Dublin. Roles include
part-qualiĮed or nearly/newly both complete systems design and
with the HOAF. ResponsibiliƟes
qualiĮed, from either non-life or rebuilds so 12-month contracts are
include calculaƟon and analysis of
life backgrounds. This is an exciƟng
Solvency II. An excellent opportunity typical. We are looking for Actuaries
opportunity working for a company
to gain exposure the business side of with strong reporƟng and systems/
with an excellent reputaƟon as an
things. employer. modelling experience.

Financial ReporƟng Roles Pricing Actuary Reserving Analyst

Financial reporƟng opportuniƟes Do you want to move into a pricing If you want an exciƟng company
for a life reinsurer in Dublin city. role? Due to internal promoƟon a look no further. A reserving analyst
Roles available for nearly/ newly growing life insurance business have is required to work with a senior
qualiĮed, and management levels. a vacant role in their pricing team. team of Actuaries. Non-life and
Technical Life reporƟng experience Our client will consider high potenƟal solvency II experience is required.
is essenƟal. FantasƟc opportuniƟes candidates who want to move into Full support for compleƟon of
for individuals that enjoy a dynamic pricing. This is a senior role with actuarial exams is oīered here.
work environment. management potenƟal.

For further information on these and other opportunities in Ireland please contact us at jobs@raretec.ie
If you are a company looking for permanent or contract actuarial resources then call us on +35315311400

We look forward to hearing from you www.raretec.ie

MAY 2020 | THE ACTUARY | 47

ACT recr May20.indd 47 27/04/2020 17:04

 NON-LIFE
At the back
Appointments
RISK PRICING ANALYST PRICING DEVELOPMENT ANALYST
Midlands, up to £50,000 Midlands, up to £50,000

The actuarial team in a leading motor and household The actuarial team in a leading insurer is looking for
insurer is looking for an Actuarial Risk Pricing an Actuarial Pricing Development Consultant to join
Consultant to join their team. their team.
Key responsibilities will include individual pricing Key responsibilities will include assistance in
assessment risk, communicating the impact of results continuous improvement across the pricing function,
to the underwriters and analysis of data from pricing assistance in more accurate forecasting of pricing
models. Assistance of the building, review and activity and to identify capabilities of the pricing
maintenance of pricing models and business planning team.
will also be within your remit.
The roles offers a competitive benefits package.
The roles offers a competitive benefits package. The suitable candidate will have experience in
The suitable candidate will have a few years of general insurance pricing and experience with
experience in general insurance pricing. Emblem.
Contact: sam.baker@eamesconsulting.com | 0207 092 3230 Contact: sam.baker@eamesconsulting.com | 0207 092 3230

RISK CAPITAL MODELLING MANAGER PRICING AND RESERVING ACTUARY

London, up to £100,000 London, up to £90,000

A leading Lloyd's insurer is looking to bring on a The actuarial team in a leading global insurer is
Capital Actuary to their team. looking for an Actuary to join them across all lines of
business and work on a mixed role.
The role will involve providing leadership and
guidance on their internal capital model. You will also Key responsibilities includes assistance of the building,
have the opportunity to interact with a range of review and maintenance of pricing models and
senior stakeholders. business planning will also be within the candidates
remit. During the quarterly reserves, you also expected
This is a vital role in one of the best-renowned Lloyd's to assist the reserving team.
insurers and would offer a huge amount to
someone's career. The team below you is extremely This role involves giving a lot of support to the
talented and provides a great opportunity to help underwriters and pricing and reserving managers, so
them grow and act as a mentor. excellent communication skills are required.
Capital modelling experience is essential and there is The suitable candidate will have at least 5 years of
a slight preference for previous Lloyd's exposure. This experience in general insurance/ reinsurance Pricing,
is a very visible role within the business, so an Reserving and be nearly/newly qualified.
exceptional level of communication is also needed for
Contact: james.rydon@eamesconsulting.com | 0207 092 3239
the front-facing aspects of the role.
Contact: james.rydon@eamesconsulting.com | 0207 092 3239

PRICING ANALYST SENIOR PRICING ACTUARY

London, up to £60,000 London, up to £100,000

A global insurer is looking to bring on an Actuarial A Lloyd’s insurer is looking to bring on a Senior Pricing
Analyst to their Pricing team. Actuary to join their property division.
The candidate will support the Head of Pricing in The candidate will support the Head Actuary and
improving their pricing exercises and will be looking at underwriters to develop rating models and methods
a range of different lines of business. communicating the output from pricing tools and
reviewing the pricing.
The role involves strong interaction with team
members so you will have strong communication and This role will also have a lot of interaction with the
interpersonal skills. Candidates from a consultancy Reserving team so knowledge of standard reserving
background, reserving or capital modelling looking to methods used in the London Market are also
develop in-house pricing are encouraged to apply. important.
The ideal candidate will have 2+ years’ experience in The ideal candidate will have 6+ years’ experience in
general insurance and be working towards the London market Pricing and be a qualified actuary.
actuarial exams.
Contact: james.rydon@eamesconsulting.com | 0207 092 3239
Contact: sam.baker@eamesconsulting.com | 0207 092 3230

Our team work on both permanent and contract opportunities across life and non-life insurance and the pensions and
investment markets. If you are looking for your next career move or to discuss other opportunities we may have, get in touch
with a member of our team today for a confidential discussion. Alternatively, please visit our website for more information on
the opportunities our consultants are working on.

48 | THE ACTUARY | MAY 2020

ACT recr May20.indd 48 27/04/2020 17:04

 At the back
Appointments

SENIOR RESERVING ANALYST MIXED RESERVING/CAPITAL ACTUARY

London, up to £65,000 London, up to £75,000

A Lloyd’s insurer is looking to bring on a Senior A prominent Lloyd’s Managing Agency is looking to
Reserving Analyst to their Reserving team. bring on board an Actuary to assist across all lines
The candidate will focus on the delivery of of business.
quarterly IFRS 17 reserves and Solvency II technical The role will be split between the Reserving and
provisions, communicating analysis to a wide range Capital functions. Responsibilities will include
of stakeholders. The role will also extend to leading delivering the Solvency II technical provisions for all
ad-hoc projects within the reserving team, managed syndicates and risk parameterisation of the
overseeing and mentoring junior team members. capital model.
The ideal candidate will have at least 2 years of The ideal candidate is a near to fully qualified
experience within a General Insurance Reserving actuary with experience in a Reserving or Capital
role. Preferably within the Lloyd’s market or a modelling role within the Lloyd’s Market or a
Consultancy. Consultancy.
Contact: rafaela.fakhre@eamesconsulting.com | 0203 846 5909 Contact: rafaela.fakhre@eamesconsulting.com | 0203 846 5909

SENIOR ACTUARIAL ASSOCIATE PRICING ACTUARY

- RESERVING London, £80,000
London, up to £95,000 (perm), £105,000 (FTC)
A large Lloyd’s Syndicate is seeking a Pricing Actuary
A prominent Lloyd’s Insurer is seeking a Senior to join their Strategic Business Unit.
Reserving Associate to join their Market Reserving The Strategic Business Unit encompasses the Marine
and Capital team. and P&C specialty lines. The candidate will therefore
The candidate will undertake a predominately focus on individual case pricing, undertaking a front
reserving role, focusing on the central reserving facing role and working closely with the underwriting
process. This will involve calculating surplus team.
reserves, investigating thematic aspects within the The ideal candidate is a near to fully qualified
market, and ad-hoc assistance within the capital actuary with at least 3 years of pricing experience.
modelling team. Candidates from all sectors of General Insurance will
The ideal candidate is a fully qualified candidate be considered.
with 5+ years of experience within the Lloyd’s Contact: rafaela.fakhre@eamesconsulting.com | 0203 846 5909
Market or a Consultancy.
Contact: james.rydon@eamesconsulting.com | 0207 092 3239

RESERVING ANALYST SENIOR ACTUARIAL MANAGER

London, up to £38,000 - RESERVING
London, up to £125,000 (perm or FTC)
A large Motor insurer is looking to bring a
Reserving Analyst into its Syndicate reserving team. A prominent Lloyd’s Insurer is looking for a Senior
The candidate will support the Reserving Manager Reserving Manager to join their Syndicate Reserving
in calculating Solvency II technical provisions, team.
providing input into the capital model, and The role will involve overseeing the Reserving process
communicating with the wider actuarial functions. of all Lloyd’s Syndicates. More specifically this will
The candidate will also provide input into the encompass determining surplus reserves, ensuring
business planning process, advising on strategy for regulations are met, and communicating with all
the reserving, pricing, and underwriting teams. syndicates to relay any analysis.
The ideal candidate has at least a years’ reserving The ideal candidate is a fully qualified candidate
experience and a 2:1 in Actuarial Science, Mathe- with extensive experience within a Lloyd’s Market
matics, or any other relevant field. Experience using reserving role.
ResQ is also desirable. Contact: james.rydon@eamesconsulting.com | 0207 092 3239
Contact: rafaela.fakhre@eamesconsulting.com | 0203 846 5909

MAY 2020 | THE ACTUARY | 49

ACT recr May20.indd 49 27/04/2020 17:04

 At the back
Appointments

The magazine of the Institute and Faculty of Actuaries

PAVE
A NEW
PATH

theactuaryjobs.com is the official

job board for the Institute and
Faculty of Actuaries.

To register for our Jobs by

email service simply go to
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50 | THE ACTUARY | MAY 2020
www.theactuaryjobs.com
ACT recr May20.indd 50 27/04/2020 17:04
 Q&A with leaders of the
OJ Actuarial Division
At the back
Appointments

Oliver James has been leaders in the Actuarial recruitment market for over
Live Global Jobs 761
15 years. Here, Rob Gormley and Laura Sharkey, two leaders within their UK Live UK Jobs 261
permanent and contract business, provide you with an exclusive insight into
the current state of the market and answer your frequently asked questions.
Life Roles 450
GI Roles 151
IS IT A GOOD TIME TO BE JOB SEEKING?
Contract Roles 73
Laura: We are experiencing a number of hiring pauses across the contract market, Pension Roles 64
allowing business to adapt and put the appropriate infrastructure in place. However,
many businesses will still be hiring for business-critical roles and are going above and Other Roles 23
beyond to onboard contractors remotely to enable business continuity.

Rob: Many businesses are rising to the unprecedented hiring challenges and are
Head of Financial Risk
undertaking vigorous assessments of their hiring forecasts to determine where their
JYP[PJHSOPYLZHYL-VY[OLZLYVSLZ^LHYLZLLPUNI\ZPULZZLZPU[LY]PL^PUNHUKVɈLYPUN Greater London
remotely, so it’s important to remain positive and patient with the market. £100,000 - £120,000 + Benefits
Richard Howard
+44 (0) 203 861 9191
richard.howard@ojassociates.com

ARE YOU SEEING ANY DIFFERENCES BETWEEN THE CONTRACT AND

PERMANENT MARKETS? Head of Pricing
London
£100,000
Laura: The recent 12-month delay of IR35 has meant businesses are becoming
more open to contractors making their own determinations, although some will not Damian Bialozynski
revoke their policy about engaging with PAYE contractors. With this and the impact +44 (0) 203 861 9208
VM*6=0+ ^OH[YLTHPUZJVUZPZ[LU[PZI\ZPULZZLZHYLZ[PSSOPYPUNJVU[YHJ[VYZ[VÄSS damian.bialozynski@ojassociates.com
critical roles.

Rob: Many in the permanent market know that securing the best talent now will Reinsurance Pricing Actuary – Broker
enable them to emerge stronger when a degree of normality returns. Most businesses London
are working hard to ensure they have the technological infrastructure in place to £70,000 - £100,000
ensure of business continuity, including the onboarding of new starters. Robert Gormley
+44 (0) 203 861 9193
robert.gormley@ojassociates.com

Senior Life Actuary

WHAT MEASURES ARE COMPANIES PUTTING IN PLACE TO ENSURE THEIR City of London
EMPLOYEES FEEL SETTLED AND ENGAGED WHEN WORKING FROM HOME? £95,000 (will consider part-time)
Natalie Lightfoot
Laura: Mental health has certainly become a priority with businesses working hard to +44 (0) 203 861 9185
ensure employees’ welfare remains paramount. Mental health support networks and natalie.lightfoot@ojassociates.com
NYPL]HUJLJV\UZLSSVYZHYLILPUNPU[YVK\JLK[VVɈLYHKKP[PVUHSZ\WWVY[HUKI\ZPULZZLZ
are holding regular virtual social events to boost morale.
Capital Modelling Actuary - Igloo
Rob: Many are coming up with creative ways to maintain those important face-to-face City of London
PU[LYHJ[PVUZ6USPULS\UJOLZJVɈLLIYLHRZHUK-YPKH`KYPURZHYLILJVTPUN[OLUL^ £700 - £800 per day
UVYTHZI\ZPULZZLZ^VYR[VLUZ\YLLTWSV`LLZMLLS\UPÄLKLUNHNLKHUKZ\WWVY[LK Ani Pannell
whilst at home. +44 (0) 203 861 9163
ani.pannell@ojassociates.com

Prophet Developers (all levels)

WHAT DOES THE FUTURE HOLD FOR THE ACTUARIAL MARKET? New Zealand
Dependent on Experience +
Laura & Rob: We believe that aspects of home working will remain the norm across (relocation package/study support)
the profession as businesses see a comparable level of productivity, as well as being Laura Sharkey
in a better technological position to support it. Head over to our LinkedIn page to +44 (0) 203 861 9149
watch a recently recorded piece from one of our Associate Directors, Ani Pannell to laura.sharkey@ojassociates.com
ÄUKV\[TVYL

+44 (0) 203 861 9200

For further advice and guidance contact askoj@ojassociates.com and the team will
be in contact. ojassociates.com/theactuary
MAY 2020 | THE ACTUARY | 51

ACT recr May20.indd 51 27/04/2020 17:04

 At the back
PLEASE CONTACT US TO DISCUSS OUR CURRENT VACANCIES OR
Appointments
FOR EXPERT ADVICE TO HELP YOU ACHIEVE YOUR CAREER GOALS

INNOVATIVE CORPORATE ACTUARY FINANCIAL RISK ACTUARY PUSH PRICING INTO THE FUTURE
Qualified Growing Niche Insurer Qualified Global Player Qualified Leading Specialist Insurer
NON-LIFE LONDON / EUROPE STAR6207 NON-LIFE LONDON / FLEXIBLE STAR6202 NON-LIFE HEALTH GREATER LONDON STAR6213

An exciting corporate role, enhancing and A great chance to lead the team responsible Developing the pricing, data science, analytics,
developing financial, capital and underwriting for economic and capital modelling, providing and optimisation capabilities of a market
reporting capabilities. You will have strong oversight of financial risks. You will challenge leader, taking a strategic and technic role in
people skills, and gain exposure across capital the capital adequacy of the business and complex projects.
modelling, reserving, reinsurance and more. ensure effective risk management.

RESERVING AND CONSULTANCY REINSURANCE PRICING ASSISTANT RESERVING MANAGER

Part-Qualified / Qualified Award-winning Consultancy Part-Qualified / Qualified Global Reinsurer Part-Qualified / Qualified Specialty Lloyd’s Insurer
NON-LIFE LONDON / NORDIC COUNTRIES NSTAR037 NON-LIFE LONDON STAR6206 NON-LIFE LONDON STAR6101

Take this excellent chance to build upon your Reporting to the Chief Actuary, you will work Take day-to-day responsibility for reporting
reserving experience and your strong people on pricing reinsurance treaties across multiple workstreams, with a particular focus on
skills within an entrepreneurial team. Client- lines of business, collaborating with other teams Solvency II technical provisions and Pillar 3
facing consulting and project-leading experience and communicating results. You will also reporting. Talented exam-stoppers will be
would be advantageous. improve the efficiency of the pricing processes. considered.

RESERVING AND ANALYTICS CASUALTY & SPECIALTY ANALYST SENIOR PRICING ANALYST
Part-Qualified Leading Global Insurer Part-Qualified Leading Reinsurer Part-Qualified Managing Agency
NON-LIFE LONDON / SOUTH COAST STAR6219 NON-LIFE LONDON STAR6075 NON-LIFE LONDON / SOUTH EAST STAR6180

Take up this excellent opportunity to plan and Take responsibility for the analysis and Deliver pricing decisions to manage the
analyse the business performance of our client’s modelling of risks across casualty and performance and competitiveness of our client’s
extensive portfolio, reporting your findings to specialty lines, whilst working closely with personal lines products. You will lead on pricing
senior stakeholders. Part-time or job-sharing senior actuarial and underwriting colleagues. reviews and key projects whilst utilising a variety
plans possible. Casualty treaty pricing experience advantageous. of software tools and data sources.

RISK ACTUARY SENIOR ACTUARIAL ANALYST LEADING-EDGE PENSIONS

Part-Qualified / Qualified Major Global Insurer Part-Qualified Global Reinsurer Part-Qualified / Qualified Leading Consultancy
LIFE SOUTH WEST STAR6208 LIFE LONDON STAR6048 PENSIONS BRISTOL STAR6103

Join a leading risk team, supporting the CRO, In this key role, you will manage existing and Deliver pensions advice across a wide range of
and providing risk opinions for a variety of new protection treaties throughout their projects, including valuations, accounting
areas, including reinsurance, investments, lifecycle, and contribute to the development disclosures, options for de-risking, and advising
product design and pricing. Flexible working of reinsurance solutions and services, on PPF levies.
options are available. considering risk appetite and client needs.

Star Actuarial Futures Ltd is an employment agency and employment business

IN-HOUSE PENSIONS ACTUARY INNOVATIVE INVESTMENT CONSULTANCY INVESTMENT EXPERT
Part-Qualified / Qualified Global Leader Part-Qualified / Qualified Leading Consultancy Part-Qualified / Qualified Growing Consultancy
PENSIONS SOUTH EAST STAR6014 INVESTMENT SOUTH EAST STAR6216 INVESTMENT SOUTH WEST STAR6187 / STAR6188

An exciting opportunity to join a specialist Take the lead, developing, influencing and Develop bespoke, end-to-end investment
in-house pensions team. Longevity swap enhancing our client's products. This role strategies based on ALM output for a wide
experience would be beneficial. Our client offers genuine variety with exposure to a range range of clients. You will provide advice on
offers excellent benefits and flexible working of projects, as well as client-facing consultancy establishing, maintaining and developing
arrangements will be considered. work. interest rate and inflation hedges.

Irene Paterson FFA Lance Randles MBA Peter Baker Jan Sparks FIA
Ja Paul Cook
P
PARTNER
P PARTNER PARTNER PARTNER
PA ASSOCIATE DIRECTOR
A
+ 7545 424 206
+44 +44 7889 007 861 +44 7860 602 586 +44 7477 757 151 +4 7740 285 139
+44
iirene.paterson@staractuarial.com lance.randles@staractuarial.com peter.baker@staractuarial.com jan.sparks@staractuarial.com
ja
jan paul.cook@staractuarial.com
pa

Jo Frankham Adam Goodwin Satpal Johri Clare Roberts Diane Anderson

D
ASSOCIATE DIRECTOR ASSOCIATE DIRECTOR ASSOCIATE DIRECTOR ASSOCIATE DIRECTOR SSENIOR CONSULTANT
+44 7950 419 115 +44 7584 357 590 +44 7808 507 600 +44 7714 490 922 + 7492 060 219
+44
jo.frankham@staractuarial.com adam.goodwin@staractuarial.com satpal.johri@staractuarial.com clare.roberts@staractuarial.com ddiane.anderson@staractuarial.com

Antony Buxton FIA Louis Manson Joanne O’Connor

MANAGING DIRECTOR MANAGING DIRECTOR OPERATIONS DIRECTOR
+44 7766 414 560 +44 7595 023 983 +44 7739 345 946
antony.buxton@staractuarial.com louis.manson@staractuarial.com joanne.oconnor@staractuarial.com

52 | THE ACTUARY | MAY 2020

ACTUARIAL POST RECRUITER OF THE YEAR staractuarial.com
2012 . 2013 . 2014 . 2015 . 2016 . 2017 . 2018 +44 20 7868 1900 staractuarial.com
ACT recr May20.indd 52 27/04/2020 17:04