Session K1 Actuaries in China - Actuarial Techniques as an Important - - PDF document
Session K1 Actuaries in China - Actuarial Techniques as an Important Cornerstone of Insurance Business Presenter: Yulong Zhao, HFIA, Ph.D. SO SOA A Anti titr trust D Disclaimer imer SOA P Presentatio ion D Discla laime Actuaries in
SO SOA A Anti titr trust D Disclaimer SOA P Presentatio ion D Discla laime imer
22 41 72 96 129 162 191 43 50 56 68 88 119 151 176 210 269 322 380 422 466 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Life Insurance Track Non-life Insurance Track * By the end of 2017, 23 people have obtained both life insurance and non-life insurance FCAA qualification
4
447 469 488 61 61 62 65 73 79
2015 2016 2017
FSA CAS FIA
*In addition, according to the industry statistic, by the end of April 2018, there are 13 FIAAust and 20 fellows from other actuarial associations
5
* Above data are provided by actuarial associations
* Out of the above data, the number of FCAA, FSA, FCAS, FIA, ACAA, ASA, and ACAS are provided by actuarial associations as of the end of 2017. The number of FIAAust, other fellows, AIA, AIAAust, and other associates are based on the industry statistics as of April 2018. ** * There are some differences between the data provided by actuarial associations and data from the industry statistics. This is because the assertion data are by the end of 2017, while industry statistics are by April 2018. Also, some members don’t keep most update to date database in the associations. Also, many association members are students, which cannot be collected from the industry statistics.
6
Types Number Reported P&C 88 Life Insurance 86 Reinsurance 11 Insurance Groups 12 Subtotal 197 Insurance Asset Management 14 Consulting 5 Accounting Firms 4 Internet start-ups 4 Securities fund 4 Insurance Agents 2 Others 5 Subtotal 38 Universities 24 Actuarial Association 5 Regulatory Institutions 4 Total 268
7
– Fellowship Qualification: 1,013 people have obtained one or more fellowship qualification, of whom, 605 have obtained the CAA qualification(FCAA), 500 people have obtained the SOA or the CAS qualification (FSA or FCAS), 72 people have
Of these, 269 have obtained two or more fellowship qualification from actuarial associations
29 people who have obtained the CAA qualifications, 50 people who have obtained the SOA qualifications and 7 people who have obtained IFoA qualifications were not in the scope of this statistical coverage because they might work in other industries or in other countries. – Associate Qualification: 1,152 persons have obtained one or more associate qualification, of whom 639 have obtained the CAA qualification(ACAA), 592 people have obtained the SOA qualification(ASA), 27 people have obtained IFoA qualification(ALA）, 10 people have obtained IAAust qualification(AIAA), and 6 people have obtained other associate qualification (excluding the people who have obtained any associateship qualification listed above).
* In this survey, actuarial practitioners refer to those people whose work require a professional background in actuarial science or work experience in the actuarial industry ** There are some differences between the data provided by actuarial associations and data from the industry statistics. This is because the assertion data are by the end of 2017, while industry statistics are by April 2018. Also, some members don’t keep most update to date database in the associations. Also, many association members are students, which cannot be collected from the industry statistics.
8
– Among them, 1,999 people work for life insurance companies, 962 people work for P&C insurance companies, 197 people work for reinsurance companies and 199 people work for insurance groups
– Among them, there are 207 people working for accounting firms, 81 people working for actuarial consulting companies, 15 people working for insurance capital management companies and 9 people working for actuarial associations
data from universities, securities funds and other industries
9
* The statistics above do not include college teachers
** The above statistics only consider the highest educational degree they had
10
– 194 people aged 24 and under, accounting for 5.2% – 1,455 people aged 25-29, accounting for 38.7% – 990 people aged 30-34, accounting for 26.3% – 641 people aged 35-39, accounting for 17.1% – 479 people aged above 40, accounting for 12.7%
11
200 400 600 800 1,000 1,200 1,400 1,600 below 24 25 -29 30 - 34 35 -39 40 -44 45 -49 50-54 above 55
38.7% 5.2% 26.3%
17.1%
8.7% 2.7% 0.9% 0.5%
2,750 people work in traditional actuarial areas, 69.9% – 1,067 people work in product development/pricing, 27.1% – 563 people work in reserve evaluation, 14.3% – 224 people work in solvency management, 5.7% – 181 people work in reinsurance, 4.6% – 174 people work in risk management, 4.4% – 541 people work in two or more actuarial areas, (Departmental level or Part-time), 13.7% 603 people work in non-traditional actuarial areas, 15.3%, including business department, asset liability management/investment, finance, planning and data management 167 people are in senior management level jobs, 4.2% 178 people work in education area, 4.5% 29 people work in the regulatory institution, 0.7% 210 people are engaged in non-actuarial work including non-actuarial positions in insurance companies, securities funds, Banks, Internet start-ups, etc., 5.3%
12
13
Beijing 40.9% Shanghai 29.9% Shenzhen 10.2% Tianjin 1.6% Chongqing 1.0% Qingdao/Dalia n/Xiamen/Nin gbo 2.3% Other provincial capitals 12.0% Other Cities 2.1%
– There are more male staff work in P&C insurance companies, Reinsurance, actuarial consulting companies, regulatory institutions, Internet start-ups, insurance capital management companies, securities funds – There are more female staff work in life insurance companies, accounting firms, and actuarial associations – There is relatively balanced gender ratio in the insurance groups
14
499 106 44 16 13 8 10 100 18 975 90 3 463 91 37 13 5 5 99 17 1,024 117 6 200 400 600 800 1,000 1,200
P&C Reinsurance Consulting Regulatory Institutions Internet start-ups Securities Funds Insurance Capital Management Companies Insurance Groups Others Life Insurance Accounting Firms Actuarial Associations
Male Female
In terms of the proportion of actuarial background senior executive in the head office, on average, there are 1.2 actuarial background senior executive per life insurance company (99/86). However, there is only 0.4 per P&C insurance company (37/88) – Because the non-life insurance business started late compares to the life insurance. Also, P&C companies pay less attention to the actuaries and its chief actuaries supervision systems are not integrated compares to life insurance company. On average, the number of actuarial background department –level head is 2.2 time of the number of actuarial background senior executive in life insurance companies. This ratio is 2.7 in P&C insurance companies and 3.7 in insurance groups. – This proportion in P&C insurance companies is higher than that in life insurance companies, mainly because there are more actuarial background department leaders in the life insurance companies. Insurance groups have the highest proportion because they tend to hire people with the actuarial background in the risk control, business planning, finance, investment and other business areas.
15
Staff Levels Life Insurance Companies （86） P&C Insurance Companies （88） Insurance Groups （12） Number of Actuaries Proportion Number of Actuaries Proportion Number of Actuaries Proportion Senior executive in head office 99 5.0% 37 3.8% 7 3.5% Actuarial background department- level head in the head office 215 10.8% 99 10.3% 26 13.1% Actuarial background division-level manager in the head office 397 19.9% 107 11.1% 54 27.1% General actuarial staff in the head
1,230 61.5% 441 45.8% 112 56.3% Branch actuarial staff 58 2.9% 278 28.9% 0.0% Total 1,999 100.0% 962 100.0% 199 100.0%
On average, the number of actuarial background division-level manager is 1.8 time of the number of actuarial background department-level head in life insurance companies. This ratio is 1.1 in P&C insurance companies and 2.1 in insurance groups. This proportion is low in P&C insurance companies because the actuarial team’s organizational structure is relatively flat in many small and medium-sized P&C insurance companies. It‘s mostly in the form of 1 -2 actuarial background department-level head with several general staff and has very few division-level manager positions for the actuaries. On average, the number of general actuarial staff is 3.1 time of the number of actuarial background division-level manager in the head office in life insurance
groups. In terms of the proportion of branch actuarial staff with the total number of actuaries in the industry, 29% of actuaries in P&C insurance companies work in the branch, while this is only 3% in life insurance companies. Because many large and medium-sized P&C insurance companies have set up actuarial positions in branches to deal with the local reserve evaluation, risk pricing and other work.
SDUFE, CQU, SYSU, NECUFE, TJUFE, FJJXU,SDU, DLU, GDUFE, SHUFE
undergraduate program (UIBE, FJJXU, GDUFE, HNU, NKU, SDUFE, SWUFE, SYSU, CUFE), 9 have master program : ( DUT, UIBE, ECNU, NKU, SDUFE, SWUFE, SYSU, CUFE), 6 have doctoral program (DUT, UIBE, HNU, ECNU, NKU, SWUFE) – Universities with an actuarial program: 9 undergraduate schools, 7 master program， 5 doctoral program – Universities who have set up actuarial research direction: 15 undergraduate schools, 20 masters program, and 16 doctoral program
16
the number of actuarial practitioners is only 15% of that of United States
* premium scale data source: Swiss Re issued World insurance in 2016: the China growth engine steams ahead * * The USA actuarial data source: http://www.projectionscentral.com/
17
At present, there are 29 actuarial personnel in the regulatory institution, accounting for only 1%
while this percentage in Hong Kong is 9%, that in the UK is 3% and that in the USA is 10%
Only a few people have actuarial qualification: 9 people have fellowship qualification, 8 people have the associate qualification
Only 6 actuaries work at the head office regulatory and participate in the supervision of legal entities, while most of the actuaries in Hong Kong regulatory institution, the UK regulatory institution and the USA regulatory institution work at the head office regulatory participate in the supervision of legal entities
High employee turnover: 7 actuaries have left in the past 5 years, all of them have rich regulatory
staffs in the regulatory team, some of them are newly recruited staffs with only limited experience
Great changes have taken place in the regulatory policy, but the number of actuaries has not increased correspondingly. Taking HK as an example, at the beginning of the planning of RBCII, the regulator in Hong Kong established a comprehensive actuarial team as soon as possible and recruited 26 actuaries to formulate and implement rules
18
In the past, the industry did not pay enough attention to actuaries The whole industry management lacks actuarial concept and consciousness Low quality of industry development Development is deviating from standard Resulting in serious problems Actuaries are in short supply Influence of actuarial work is impaired
19
– Traditional actuarial field: in-depth empirical data analysis, new regulatory policies etc., have increased the demand for actuaries
With the changes in the development stage of the insurance market, insurance companies have accumulated more and more empirical data. However, at present, the use of empirical data is far from enough, so that more actuaries should be involved in the data analysis. − Take life table construction as an example: currently, only a few companies have developed a successful life table but in the future, all companies have the need to use their own data to build a life table − Take medical big data analysis as an example: the medical data accumulated by insurance companies are growing rapidly, and more actuaries are needed to participate in the future after connecting with the social security system
Big data and cloud computing technology can greatly improve the work efficiency, but the technology is still dependent
get involved.
Technical standards such as solvency and accounting standards, as well as new regulatory policy such as the marketization
the demand for actuaries. – Non-traditional actuarial field: investment, finance, data management and other service lines are gradually showing the demand for actuaries
21
– Departments involved in the supervision of legal persons shall be staffed with a certain proportion of actuarial background personnel and a certain proportion of actuaries – The actuaries in Chinese regulatory institution account for only 1% of the total number of staff in the regulatory system, while the number in the UK is more than 3%, the number in HK is 9% and the number is about 10% in the USA
22
23
24
Traditional Insurance Fields Traditional Actuarial Area Product Development/Pricin g/Reserve
Large companies: 40-150 Medium companies: 20-40 Small companies: 5-20
Solvency Management, Risk Management, Reinsurance
Large companies: 15-30 Medium companies: 5- 15 Small companies: 2- 5
Non-traditional Actuarial Area Asset Liability Management / Investment
Large & Medium companies: 10- 20 Small companies: 2- 10
Business Planning & Finance and other business
Large& Medium companies: 30- 60 Small companies: 10 -30
Non-insurance & Non-traditional Insurance Fields Big Data, Internet, AI etc. Needs 15,000 to 25,000 people In the next 10 years Pension, Social Security etc. Needs 4,000 to 6,000 people In the next 10 years Universities & Consulting etc. The proportion of actuaries in this section over that in the traditional insurance industry will increase by 50% Regulator Needs 300 people in next 10 years
Actuaries demand in 10 years
25
（Insurance Groups, Insurance Companies）
（Universities, Consulting, Asset management etc.）
26
28
Stick to principles in product development and hold the bottom line of risk Strengthen the matching of assets and liabilities, and balance the cost and structure of liabilities with the use of funds Identify risks in solvency management and capital management, and guide companies to establish risk-
Improve the company's management capabilities in the construction of risk management system Guide the correct direction of business development in value and performance assessment
29
Fully realize function
and establish a sound regulatory system Solvency Management System Products Regulatory System Assets and Liabilities Regulatory System Reserve Regulatory System Implementation of prudent regulation
Precaution and mark the insurance with problems
Regulatory approval and filing of institutions/personnel /capital/products and
30
Resume the CAA exam as soon as possible. Apply for validating CAA exam as the professional level evaluation test with Ministry
Set up an "actuarial talent training fund" to support universities and actuarial associations in cultivating talents and subsidize people with financial difficulties to take actuarial exams Encourage actuaries to actively participate in social security, pension, disaster mitigation, and other non-traditional actuarial areas Encourage CAA and foreign actuarial association and insurance institutions to establish the educational cooperation relationship with universities to strengthen the actuarial talent training Insurance institutions are required to be staffed with sufficient numbers of actuaries in certain positions through the relevant regulatory system or supervisory opinions
Concentrate on the actuarial power in the regulatory system, reform the supervision personnel system, gradually recruit and enrich the supervisory actuarial team, and make more full use
31
Strengthen industry self-discipline and punish actuaries who violate laws and regulations or have problems with professional ethics. In addition to the penalty of existing laws and regulations, actuarial associations should establish and improve their own professional ethics system. Disqualify the actuaries who have lost their bottom line and principle, and punish or educate the actuaries who make mistakes
32
Improve the chief actuaries system and provide guarantees for actuaries to express professional opinions independently and
Strengthen actuaries’ ability in financial and solvency management audit Encourage the actuaries to participate in social security, catastrophe risk management, and other fields, to play more important role in the social management Encourage actuaries to take part in the development of the regulatory regime Encouraging the actuaries to participate in international law studies, introducing China's actuarial practices to the world to achieve the win-win situations for all parties
33
34