Actuaries in General Ins urance - Pas t, Pres ent and Future - PowerPoint PPT Presentation

Actuaries in General Ins urance - Pas t, Pres ent and Future Daniel Smith Donna Walker

B efore commencing …

… we’d like to pay our res pects …

… we’d like to pay our res pects …

We’ve borrowed heavily from Monty Python • Part I – The Miracle of Birth • Part II – Growth and Learning • Part III – Fighting Each Other • Part IV – Middle Age • Part V – Live Organ Transplants • Part VI – The Autumn Years • Part VII - Death

Part I – The Miracle of B irth • Mid-70’s to mid-80’s • There were a handful of actuaries who started to make inroads in GI • In effect, the first fish in the sea

Part I – The Miracle of B irth (cont.) •It wasn’t easy •High rates of inflation helped •Needed to develop a new breed of actuaries – those trained in GI •There were wide ranging practices

Part II – Growth and Learning •Late 1980’s and 1990’s •Development of GI methods •Expansion of consultancies •Development of GI course and text book

Part II – Growth and Learning (cont.) • GI Practice Note • Development of practices within accounting firms • Accident compensation schemes • Actuaries talked a different language

Part III – Fighting E ach Other •Late 1990’s and the naughties •Competition between actuaries in GI took hold •The start of the end of the extremely collegiate approach adopted in the forming years •HIH

Part III – Fighting E ach Other (cont.) • Estimated numbers of 400 Fellows shows the 300 rapid growth from the # of Fellows mid 90’s 200 100 0 1976 1980 1984 1988 1992 1996 2000 2004 2008 Year

Part III – Fighting E ach Other (cont.) •Move from consultants to insurers •AA’s and EPR’s

Part IV – Middle Age • When = Now •Several actuaries have provided broad details of the actuaries within their company – thanks to those that did •The resulting estimates are likely to provide a reasonable picture of the current market in GI

Part IV – Middle Age (cont.) •Estimate 350 Fellows and 400 non-Fellows Fellows Non-Fellows 1% 3% 38% 44% 55% 59% Consultancies Insurers Accident Compensation

Part IV – Middle Age (cont.) 70% 57% 60% 50% 40% 30% 25% 20% 7% 6% 10% 4% 0% Reserving Pricing Capital Management Advisory/Non- Trad

Part IV – Middle Age (cont.) • Now a generation of “accounting” actuaries • Decision making or decision supporting? • Professional standards • The role of the IAAust • The new small “a” actuary • As GI actuaries have “grown up”, they’ve moved into the steady jobs within insurers rather than the risky consultancy roles???

Part V – Live Organ Trans plants • Significant development in technical modelling – Statistical pricing – DFA – Price optimisation – Data mining – Stochastic reserving

Part V – Live Organ Trans plants (cont.) • Still not as widespread as it will be • Leading to a wider spread of actuarial skills – with some true “propeller heads” • Are we getting too clever?

Part VI – The Autumn Years •What will our “founding fathers” do over the next decade? •The brand of actuary and the small ‘a’ •Statutory overload? •Justification of the actuarial team

Part VI – The Autumn Years (cont.) •A continuation of the technical and management actuary diversion •Continued growth but at a much slower rate •Accident compensation involvement is somewhat dependent on nationalisation

Part VII - Death • Are we nearing the end? • No, but success in the future will not look like success in the past … sort of … • What will actuaries need to do? • What about the education system? • Compliance versus “value”

Death (cont.) •Death of the jack of all trades actuary •Increased regulator focus •Actuarial paradigm – what is ours?

Is there an afterlife? •Moving into non-actuarial areas but using GI skills •Making more of the reserving role •Avoid salmon mousse!

Anyone up for a debate?