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

Fellows shows the rapid growth from the mid 90’s

100 200 300 400 1976 1980 1984 1988 1992 1996 2000 2004 2008 Year # of Fellows

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

59% 38% 3% Consultancies Insurers Accident Compensation 55% 44% 1%

Part IV – Middle Age (cont.)

57% 25% 7% 4% 6% 0% 10% 20% 30% 40% 50% 60% 70% 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?