Actuarial Placements Presenter: Chris Cannon Director www.the-arc.co.uk 11th November 2010 Presenter: Chris Cannon Director chris@the-arc.co.uk

Agenda Understanding what you want to do What Do Actuaries Really Do Actuaries in Risk Management Actuarial Placements The current actuarial industry climate A very useful website - graduateactuarialvacancies.com Questions

Introduction ME: Chris Cannon A part qualified actuary who worked for two large UK life offices in actuarial and transformation roles before moving into insurance management consultancy for over 6 years, working with most of the major UK life insurers. Also had recruitment responsibility within employers before joining The ARC in July 2006 to develop the Life, Pensions and Investment recruitment operation. THE ACTUARIAL RECRUITMENT COMPANY: Established in 2004 by Roger Massey & Andy Clark with an initial focus on Non Life recruitment. The business has made over 350 placements of actuaries and trainees in new roles across 85 clients. The ARC now has global capabilities and access to roles and candidates in all countries around the world through strategic agency partnerships

Understanding what you want to do What type of work do you want to do and why? Technical / Analytical or Client facing / People focused? Specialist or Generalist? Managerial? Even within the same discipline and qualification, each individual has their own strengths and interests, and will be suited to different role types. Be honest with yourself about what interests you and what matches your strengths

Understanding what you want to do Why do you want to become an actuary? Money, Maths/Finance, Stability, W/L balance Need to understand your own motivations to find a job you’ll be happy in Which practice area (Life, Non-Life, Pensions etc..) is of most interest to you? Why? What sector do you want to work in and why? Insurance Reinsurance Consultancy

Understanding what you want to do Company or Consultancy? Why? What is the difference in the kind of work? What are the different working environments like? Speed of development? Potential financial rewards? Where will I be in 5 years time – family, location? What happens if I don’t qualify? Research the different fields of work and be honest to yourself about what is really important to you.

Different environments offer different opportunities Understanding what you want to do Different environments offer different opportunities Environments: UK Household Names (RSA, NU, AXA, Zurich) Large London Market/Lloyd’s Small London Market/Lloyd’s Reinsurers Reinsurance Brokers Rating Agencies Regulator/Franchisor Consultancy Nature of Opportunity: Variety of work Impact on business performance Work/Life balance Interaction with others End to end involvement General culture Friendly/social Development focus Financially driven Run like a machine

Understanding what you want to do Where do you want to work? London, Abroad or in the Provinces? Why? If it doesn’t work out will you have to relocate to find a new role? Work/life balance vis-à-vis study? GI is basically SE. Life is Nationwide. Pensions is Nationwide

Where do you want to work? Understanding what you want to do Where do you want to work? Geographical Spread of GI Actuarial Market Very concentrated in London

Understanding what you want to do Geographical Spread of Life Actuarial Market NU Life (York 110) CIS (Manchester 74), AEGON (Lytham 14) Liberata (7), Royal Liver (Liverpool 30) Unisys (Liverpool 3), Resolution (Liverpool 14) NU Life (Norwich 10) Canada Life (Potters Bar 37) Royal London (Wilmslow 31) Windsor Life (Telford 25) Prudential Life (London 100) Met Life (London 20) SCOR Re (London 10) Pacific Re (London 20) Gen Re (London 25) NFU (Stratford 32) Phoenix (Birmingham 34) Wesleyan (27) Axa (Bristol 89), Capita (Gloucs 8) LBG (Bristol 40) Lincoln Ass (Gloucester 10) St James Pl (Cirencester 15) Zurich Life (Swindon 40) Capita (Whitstable 11), Forester Life (Bromley 4), Reliance Mutual (TunbWells 4) HCL (Romford 6) Capita (Banstead 6), L&G (Tad 140) Hannover Re (Virginia water 18) Liberata (Croydon 13) AIG / American Life (Croydon 16) Sterling Life (Richmond 2) UNUUM (Dorking 14) HSBC (Soton 44) Skandia Life (Soton 26) Axa (Winterthur Life) (Bstoke 28) Abbey Life (Bournemouth 12) Liv Vic (Bournemouth 26) SLoC (Bournemouth 4) Teachers Ass (Bournemouth 3) Unisys (Bournemouth 4) Friends Prov (Dorking 67) MGM (Worthing 9) Capita (Worthing 2)

What Do Actuaries Really Do? “So… what do you do for a living?”

What Do Actuaries Really Do? “WOW!!”

What Do Actuaries Really Do? “AMAZING”

What Do Actuaries Really Do? “WHAT THE ****?!

What Do Actuaries Really Do? “Making financial sense of the future… Actuaries are problem solvers, business analysts, consultants and financial risk assessors who look at past and present information, to develop and communicate a picture of the future” (Faculty & Institute of Actuaries) “An actuary is a business professional who analyzes the financial consequences of risk.” (Society of Actuaries) “An actuary is an expert in assessing the financial impact of tomorrow's uncertain events by: - Analysing the past - Modelling the future - Assessing the risks involved, and - Communicating what the results mean in financial terms” (www.actuaries.org)

What Do Actuaries Really Do?

What Do Actuaries Really Do? Product Development Pricing Reserving / Financial Reporting Asset Liability Matching Capital Modelling Pension Scheme Management Investment Management Risk Management Systems Development

What Do Actuaries Really Do? Life Insurance Products “Common” Products: Term Assurance Whole of Life Endowment Immediate Annuity Deferred Annuity Critical Illness Long-term Care Long-term Sickness Variations Include: Convertible / Renewable Index Linked Unit-Linked With-Profits / Non-Profits

What Do Actuaries Really Do? Pensions / Benefits Products Defined Benefit (DB) / Final Salary occupational schemes Defined Contribution (DC) occupational schemes DC individual schemes (such as stakeholder pensions) Employee Benefit Services Overlap with Life products (long term duration / savings) Car / gym / flexi-days / vouchers / dental / private medical insurance (flexible benefits) Merger & Acquisition Work

What Do Actuaries Really Do? Investments Advising on client investment portfolios Risk/reward + matching = key concepts A lot based on investments of pension funds ALM / LDI analysis Quant analysis Hedging strategy

What Do Actuaries Really Do? General Insurance Products “Common” Products: 3rd Party Liability Employer’s Liability Product Liability Marine Aviation Commercial Property Financial Loss “Little Less Common”: Weather Exposure Contingency Riot Insurance Terrorism War Fine Art Live Stock / Blood Stock Commercial Space & Launch

What Do Actuaries Really Do? And all these exams are for what exactly?! Qualifications Diploma in Actuarial Techniques (“DAT”) – complete CT1-9 Certificate in Finance & Investments (“CFI”) – CT1, CT2, CT4, CT7, CT8, CT9, CA1 Associate (“AIA” / “AFA”) – complete CT1-9, CA1-3 plus 1 year’s work experience if joined after 1 July 2004 Fellowship (“FIA” / “FFA”) – complete all exams & complete relevant work experience (minimum 3 yrs for FIA)

Communication Skills What Do Actuaries Really Do? Technical Skills Key Attributes: Technical Skills Detail Conscious Good Judgement Commerciality Communication Skills

An example of Insurance Risk Management - Categories Actuaries in Risk Management An example of Insurance Risk Management - Categories Categories Responsibilities Risk Managers and their teams are responsible for measuring, limiting and managing the component items within these risk categories Credit Market Insurance Operational S&P: ERM Insurance Company Practices

An example of Risk Management - Components Actuaries in Risk Management An example of Risk Management - Components Categories Components: Bonds, CDOs, Loans, Reinsurance ceded, other assets Components: Interest rate, equity, derivatives, forex, real estate Credit Market Components: Distribution, process, people, fraud, internal control, IT, HR, legislation, compliance, business continuity Insurance Operational Components: Pricing, reserving, catastrophe, claims, policyholder behaviour S&P: ERM Insurance Company Practices

An example of Insurance Risk Management - Actions Actuaries in Risk Management An example of Insurance Risk Management - Actions Components: Bonds, CDOs, Loans, Reinsurance ceded, other assets Category Risk Measurement Actions: Concentrations, credit value at risk, name exposure, and compliance reports Credit Operational Risk Limiting Actions: Concentration limits, underwriting guidelines, counterparty limits, and portfolio value at risk Risk Management Actions: Diversification, hedging, selling discipline, and underwriting S&P: ERM Insurance Company Practices

An example of Insurance Risk Management - Actions Actuaries in Risk Management An example of Insurance Risk Management - Actions Components: Interest rate, equity, derivatives, forex, real estate Risk Measurement Actions: Value at risk, duration and notional value Category Market Risk Limiting Actions: Value at risk limits and tolerances Risk Management Actions: Asset/liability matching, hedging, and selling discipline S&P: ERM Insurance Company Practices

An example of Insurance Risk Management - Actions Actuaries in Risk Management An example of Insurance Risk Management - Actions Risk Measurement Actions: Claims reporting, compliance reports, exposure reports, and lapse and renewal studies Risk Limiting Actions: Per-risk limits, per-market limits, per-case limits, and authority limits Category Insurance Risk Management Actions: Reinsurance, contract design, benefit design, customer communications, market avoidance, and underwriting Components: Pricing, reserving, catastrophe, claims, policyholder behaviour S&P: ERM Insurance Company Practices

An example of Insurance Risk Management - Actions Actuaries in Risk Management An example of Insurance Risk Management - Actions Risk Measurement Actions: Compliance reports, exception reports, loss-event reports, self Assessment and risk register. Category Operational Risk Limiting Actions: Processing lags, complaints, and supplier limits Components: Distribution, process, people, fraud, internal control, IT, HR, legislation, compliance, business continuity Risk Management Actions: Action triggers, training, documentation, policies and procedures, contingency plans, codes of conduct and ethics. S&P: ERM Insurance Company Practices

Actuarial Placement Overview 12-Month Paid Actuarial Placements Opportunities Throughout the UK 2nd Year/Postgraduate Students Placements Start Jul-Sep 2011 ‘Proper’ Actuarial Work Counts Towards Experience Requirement

Actuarial Placement The Process: Download and fill in CV template on our website www.the-arc.co.uk/actuarial-placement Email over the completed template to chris@the-arc.co.uk CV Feedback Provided Mock/Screening Interviews + Feedback Employer Selection Process Offer + Acceptance Start Work!

Actuarial Placement The Benefits: Gain Relevant Work Experience Prove Yourself to an Employer Develop Technical Knowledge/Soft Skills Make Actuarial Contacts Earn a Salary Benefit from Expert Coaching Enhance Your Marketability!

Actuarial Placement What The ARC can offer in finding actuarial placements: It’s Free! One Application  Multiple Employers Efficient for Employers – they value our relationship CV feedback and advice Mock interview feedback & coaching All by experienced actuaries with recruitment experience

Actuarial Placement Next Steps Visit The ARC Website: www.the-arc.co.uk/actuarial-placement/ Read Information Fill in the CV template and email it back to us Deadline: ongoing Apply early to benefit from early employer opportunities

The Current Actuarial Industry Climate Where did the recession have most impact? On Investment sector, but proportion of actuaries is low there, now recovering Life and pensions reduced in 2009, life now much stronger, pensions recovering slowly Lower impact on non life sector, hiring consistently strong Still a mixed market – some hiring, some not, some permanent, some contract What are the prospects for the actuarial industry They remain as strong, if not stronger than before the financial crisis New Solvency 2 legislation, new areas e.g. risk management and risk transfer Remains a relatively small and specialist profession

A really useful website !! www.graduateactuarialvacancies.com A specialist website service for actuarial graduates

Contact Details Website: www.the-arc.co.uk Email: enquiries@the-arc.co.uk Chris Cannon BA CFI DAT M: 07711 228 449 E: chris@the-arc.co.uk