Slide1: ASNA/ANEA Harry H. Panjer Penultimate Past President January 7, 2005


Slide2: AUTOMATIC WASHING MACHINES: PLEASE REMOVE ALL YOUR CLOTHES WHEN THE LIGHT GOES OUT.


Slide3:   AFTER TEA BREAK, STAFF SHOULD EMPTY THE TEAPOT AND STAND UPSIDE DOWN ON THE DRAINING BOARD.


Slide4: TOILET OUT OF ORDER.  PLEASE USE FLOOR BELOW.


Slide5: 1. Risk Management


Risk Management: Risk Management SOA’s role RM Task Force Dave Ingram chair Numerous working groups RM Section June 2003 Board meeting Approved after signing up 200 members Elections held in Summer period First Section Council meeting in October 2003


Risk Management (contd): Risk Management (contd) RM Education June Board asked E&E to develop a specialty track for RM in the FSA syllabus October: report from E&E E&E developed learning objectives, and studied available materials E&E will offer a sub-specialty within the Finance Track Represents a significant addition of ERM material Implementation 2005


Risk Management (contd): Risk Management (contd) Relations with other RM specialists GARP: FRM PRMIA: PRM Actuarial Tracks: 2004 and 2005 NY GARP conference 2003/4 COSO reports: AICPA and auditors should be responsible for RM in all organizations 2003 ERM symposium jointly sponsored with CAS Numerous non-actuary RM specialists as speakers 2004 also co-sponsored with PRMIA “Topics inActuarial Analysis” column in Financial Engineering News


Insurer Solvency: Insurer Solvency IAA work on solvency and RBC led by Stuart Wason major report filed with IAA Nov 2003 For IAIS in early 2004 much future work to be done should put the actuary at the centre of risk measurement and management in insurance companies


Slide11: Value at Risk TVAR Coherent Risk Measures Risk Dependencies Copulas Credit Risk Operational Risk


Risk Management (cont’d) : Risk Management (cont’d) Evolution of CRO Becoming common in all financial institutions Standardization of concepts, jargon, measures Role of IAA WP on RBC Completed report published as a book in 2004 Principal guide for insurance solvency standard Should integrate well with Basel II for banks Risk measures New ideas of “coherent” risk measures


Slide13: 2. Meeting Employer Needs


Image of Actuaries by Employers: Image of Actuaries by Employers Traditional Actuarial Employers Surveyed Practice Areas Health Benefit Systems Finance Life Insurance Retirement Systems Consulting/Insurance/Government Broader Financial Services Employers Surveyed Banking: Commercial and Regional Investment Banking Mutual Fund Management Financial Advisors Brokerages


Slide15: Employer’s image of actuarial ability Source: 2002 SOA Market Opportunity Research, Leading Solutions Group Negative Themes Narrow Poor communication/interpersonal skills No imagination Lack in solutions Poor managers Too linear Lost in detail Not able to see big picture In technical box Cannot multi-task Positive Themes Hard workers Motivated Bright Potential Quantitatively skilled Expertise Communicators Solve complex problems Understand products Thinking ability Business advisor Manage risk


Level of skill desired by traditional actuarial employers : Level of skill desired by traditional actuarial employers Source: 2002 SOA Market Opportunity Research, Leading Solutions Group


Level of skill desired by employers in the broader financial service market : Level of skill desired by employers in the broader financial service market Source: 2002 SOA Market Opportunity Research, Leading Solutions Group * Both Quantitative and Risk Management skills averaged to an equal relative importance


Slide19: Relative Importance of Skill Sets by Traditional Practice Areas Relative importance of skills sought by employers varies by practices area…. Source: 2002 SOA Market Opportunity Research, Leading Solutions Group 2.4 2.7 2.4 2.0 1.3 1.9 1.3 1.0 2.0 1.7 1.4 1.8 1.4 1.4 1.5 1.8 2.7 1.7 2.4 2.3 2.6 2.5 2.9 3.0


Slide20: Percentage of member respondents who rated profession as the one profession posing the greatest competitive challenge % of Respondents 29% 24% 23% 12% 4% 3% 7% Source: 2002 SOA Member and Candidate Survey


Slide21: Other skills and credentials/degrees obtained by Members (Number of Members with other Degrees or Credentials -- 2002) Source: 2002 SOA Membership Database


Slide22: 3. International Strategy


Slide23: Country U.S. Canada Other 2000 69.9% 18.4 11.7 2001 67.4% 17.6 15.9 2002 64.8% 16.5 18.8 Course 1 Distribution by Country (%) Source:  The Actuary, April 2003, pg. 19


Slide24: Country U.S. Canada Other 2000-01 30% 30 74 2001-02 31% 28 71 Course 1 Growth by Country Source:  The Actuary, April 2003, pg. 19


International: International Course 1 exam centres for Fall 2003 New York 327 Beijing 231 Seoul 189 Philadelphia 164 Waterloo 161


International (cont’d): International (cont’d) SOA observations Exam process is highly valued outside Canada and USA Number of international Course 1 candidates exceed Canadian candidates since 2002 At current growth rates, by 2006 only 50% of Course 1 candidates will be from USA Major implications for future membership demographics


Growth in ASA’s: Growth in ASA’s


International (contd): International (contd) Board Advisory Group on International Issues Chair, Stuart Wason Related groups International Section International Policy Committee China Region Committee Folded into Asia region Committee Joint actuaries office in HK International ambassadors (28 currently) Latin America Committee IAA


International (contd): International (contd) Goals include Support of exam takers in developing countries Exam fee subsidy program (currently $50) Reference Center support (currently 14 all in Asia) Focus will be on specific regions Support of new actuarial associations in developing countries Support of exam material development in China e.g. August Chow leading development of ALM exam SOA secures copyrights, etc. Expectation is that local associations will become members of IAA


International (contd): International (contd) Proposed improvements in international support offer Course seminars, professionalism and FAC courses regionally offer certificate programs that may be used as a base for local qualifications offer programs by video/teleconference, internet, etc develop mentoring programs for international candidates expand CPD opportunities for international members although SOA has no CPD requirements, it is a provider Expand research to less US-oriented requires cultural change in committees


International (contd): International (contd) IAA SOA members are active in IAA SOA supports significant expenses of IAA participation of SOA members SOA makes $25k annual contribution to IPEF


International (contd): International (contd) Mutual recognition expanded in 2003 to remove reference to US/Canadian work Governance audit includes a recommendation for a slotted seat for an international member (non US/Canadian resident)


Slide33: 4. Canada vs USA


Canada/US issues: Canada/US issues SOA recognized explicitly that nation-specific issues are best dealt with by national associations (e.g. AAA, CIA) System doesn’t work perfectly even though CIA and AAA have parallel roles


Canadian vs US membersSmall Differences: Canadian vs US members Small Differences 1. The value of the ASA as an employment credential is rated higher in the US. 2. Preferences for technical continuing education events (US members place greater emphasis on technical over strategic information, and also on in-depth over broad coverage of issues). 3. Use of non-SOA source of continuing education (e.g. employers, universities, professional associations). 4. Use of SOA publications (They are used by 91 percent of US members and 83 percent of Canadian members). 5. Usefulness of several Section publications including The Financial Reporter, Product Matters, Health Section News, Pension Section News. US members rate these higher. 6. Research priorities (in addition to experience studies) US and Canadian members differed slightly in their ratings of 4 out of 10 research topics.


Canadian vs US membersNo Differences: Canadian vs US members No Differences 1. Overall satisfaction with the SOA 2. Priorities for SOA action 3. Usefulness of The Actuary and NAAJ 4. Usefulness of most Section publications 5. Balance in emphasis between issues with immediate practical application and those with potential long-term significance 6. Views of the actuarial profession


Slide42: 5. The Future


The marketplace is changing !: The marketplace is changing ! Mergers. Acquisitions. Consolidations. Outsourcing. Downsizing. Management changes. Growth of competitive credentials.


Perception is reality: Perception is reality Ethical, problem solver, analytical, thought leadership potential. Competitors are better communicators and more business savvy. Broader financial services sector doesn’t know we exist.


Opportunity is at risk: Opportunity is at risk Narrow, technical image undermines our leadership opportunities. Lack of awareness jeopardizes expansion into new markets. We must be proactive to create our future.


SOA’s response:An opportunity-focused strategy: SOA’s response: An opportunity-focused strategy


Four strategic themes: Four strategic themes Knowledge management Fill the knowledge and skill gaps. Marketplace relevance Market the profession and professional. Membership value Increase the value of membership. Professional community advancement. Build the profession’s global stature.


Knowledge managementIdentify and fill the knowledge and skill gaps: Knowledge management Identify and fill the knowledge and skill gaps


Finalized E&E redesign: Finalized E&E redesign Deliver practical applications earlier in career. Reduce travel time. Provide an education foundation for future success.


Expanded ERM offerings: Expanded ERM offerings Delivered record-setting ERM symposium with CAS and PRIMIA. Implemented new specialty examination on ERM. Conducted international ALM seminar in London, Tokyo, and Quebec city.


Marketplace relevanceMarket the profession and the professional: Marketplace relevance Market the profession and the professional


Launched an image campaign: Launched an image campaign


The entire profession is involved: The entire profession is involved Grassroots focus. Key audiences: business leaders and actuaries, media, recruiters.


Membership valueIncrease the value of membership: Membership value Increase the value of membership


New benefits for SOA members: New benefits for SOA members New sections: taxation, younger professionals. Finalizing conversion to state of the art member database. Launched monthly e-newsletter. Upgraded The Actuary to bi-monthly magazine.


Professional community advancementBuild the profession’s global stature: Professional community advancement Build the profession’s global stature


Increased visibility on key issues : Increased visibility on key issues Sponsored groundbreaking “Living to 100 and beyond” conference. Partnered with Academy on Capitol Hill briefing on retirement risks and options.


The SOA strategic management systemA new way of doing business: The SOA strategic management system A new way of doing business


Benefits to members: Benefits to members More input from all sources. Stronger, more “connected” sections. More efficient decision-making and implementation.


Mega-issues for the profession: Mega-issues for the profession Enterprise risk management. Image of the actuary. Academic relations. International relations.


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