life as an actuary matthew mikola 14/3/2012 life as an actuary 14.03.12
TRANSCRIPT
Life as an Actuary
Matthew Mikola
14/3/2012
Life as an Actuary 14.03.12
Agenda
• What is an Actuary?
• Areas Actuaries work in
• The Exams!
• My Roles at Aviva
– Protection Pricing
– With Profits Reporting
– Solvency II Project
• Opportunities at Aviva
• Q & A
Life as an Actuary 14.03.12
Life as an Actuary 14.03.12
What is an Actuary?
• Future uncertainty or risk
• Business and Statistical knowledge
• Models to value the financial impact
Problems they help solve:
• Risk management
• Investment Strategy
• Business Problems
Life as an Actuary 14.03.12
Areas Actuaries work in
• Insurance - Life
- General
• Pensions
• Consultancy
• Investment
• Government
• Contractor
• Any area with uncertainty and risk
Life as an Actuary 14.03.12
The Exams!
9 Core Technical:
• Cashflows
• Accountancy
• 2 * Statistics
• Mortality
• Life Assurance
• Economics
• Options and Derivative pricing (Black Scholes)
• Business Awareness
3 Core Application - general, modelling, communication
3 Specialist
My Roles at Aviva
Protection Pricing
Life as an Actuary 14.03.12
Life as an Actuary 14.03.12
My Roles at AvivaProtection Pricing
• Protection = financial security to dependents upon death or illness
• Pricing = calculate the premium to charge the policyholder
• Balance:
o Profit
o Competitiveness
• Products:
o Term Assurance => loan/mortgage cover
o Whole of life => inheritance/funeral expenses
o Critical Illness => pay medical expenses/loans
Life as an Actuary 14.03.12
Protection Pricing - Day to Day
Factors:
• Age
• Sex
• Smoker status Each combination known
• Marriage status as a "Cell"
• Term
• Benefit amount
Life as an Actuary 14.03.12
Protection Pricing - Day to Day
1. Profit Testing
• Sample subset tested
• Reflect actual number of policies sold by scaling
• Set premiums for each "Cell"
• Choose model assumptions
• Analyse expected profit
• Sensitivity test
Life as an Actuary 14.03.12
Protection Pricing - Day to Day
2. Competitor Matching
• Find out premiums charged by other companies
• See where we rank
• How much premiums differ by
• If we beat their premium, how it affects profitability
My Roles at Aviva
With Profits Reporting
Life as an Actuary 14.03.12
Life as an Actuary 14.03.12
My Roles at AvivaWith Profits Reporting
With Profits =
• Savings product where the benefits equal:
o guaranteed minimum amount
o increased by discretionary bonuses
Reporting =
• Actual profit to shareholders and market
• Reserves to regulator
Reserves = money held to meet benefits
indication of financial security
Life as an Actuary 14.03.12
With Profits Reporting - Day to Day
Reporting Period
• Update the assumptions
• Obtain results
• Analysis
• Prepare reports
Life as an Actuary 14.03.12
With Profits Reporting - Day to Day
Other Times
• Improve the model
• Add new products
• Improve processes
My Roles at Aviva
Solvency II Project
Life as an Actuary 14.03.12
Life as an Actuary 14.03.12
My Roles at AvivaSolvency II Project
New regulatory framework for:
• Measuring risk taken on
• Measuring financial security
• Enough capital to support the business
Benefits of Solvency II:
• Boost consumer protection and confidence
• Reward good risk management
• Improve transparency of information
Impacts many areas of the business
Life as an Actuary 14.03.12
Solvency II Project - Day to Day
Initially
• Analyse impact to existing models/processes
• Writing development papers
Development & Testing of New Asset Model
• More accurately calculate the value of our assets
• Asses impact due to market stress tests
Life as an Actuary 14.03.12
Opportunities at Aviva
Summer Internship
• Penultimate year students
• 2 months – paid
• Send CV to: [email protected]
Graduate Roles• www.aviva.co.uk/graduates
Summary
• What is an Actuary?
• Areas Actuaries work in
• The Exams!
• My Roles at Aviva
– Protection Pricing
– With Profits Reporting
– Solvency II Project
• Opportunities at Aviva
• Q & A
Life as an Actuary 14.03.12
