University of New South Wales Presentation to Actuarial Students Here today representing the IAAust Council 1997 – 2002 President in 2002 Work at APRA (prudential regulator of Financial Services Sector) Before that worked at Towers Perrin in super and employee benefits consulting for most of my career Helen Martin BA FIAA IAAust Past President August 2003

The Actuarial Profession in Australia Role of the Institute Initiatives & activities Education – Part III Review Why it’s a great profession! Agenda for today

Role of the Institute Professional body: representing, and providing services to, members of the actuarial profession since 1897 Over 2600 members, including students, Associates, Fellows & Affiliates Vision: IAAust aims to position the profession so that wherever there is uncertainty of future financial outcomes, actuaries are sought after for their valued advice and authoritative comment. 2654 members 1258 Fellows & Accredited Members 565 Associates 722 Students 9 Affiliates Key focus of IAAust activities is to: - educate future actuaries (directly or through others such as universities); and - promote profession/actuaries to employers, Government, Govt departments and advisers, regulators and other industry bodies IAAust Strategic Plan – Vision & Mission Actuaries as business-focused problem solvers Uniqueness of actuarial qualification is that it combines mathematical, statistical and financial techniques and applies them to a wide range of business and social problems/issues

Role of the Institute IAAust represents the actuarial profession by creating, expanding and maintaining an environment where the skills of actuaries are widely used and valued through: development of professional standards providing education, CPD & forums for discussion promoting research & development of actuarial science, and contributing to public policy. Code & Standards – developed by actuaries to maintain professional standards and assist actuaries in their day to day work. Cover wide range of areas, particularly legislated responsibilities Will come back to education & CPD and also public policy Research - fund projects via research grants, encourage through universities, ongoing studies eg mortality and disability investigations, IFSA genetics data collection & analysis Important for profession to stay at leading edge to remain relevant Also need to be aware of developments in other fields & professions Actuaries are not the only people with strong quantitative skills in the areas in which we work – need to learn from and work with others to continue to develop actuarial science

Initiatives & Activities Education Recognised as world class - flexible and innovative Continually evolving – eg current Part III changes Partnership with universities important Asian education strategy CPD, Discussion forums, member services Conventions, forums & seminars Journals, magazine, web-site Links with industry and other bodies Research, experience studies Education - Flexible structure Development leads rest of world – ACC, specialist areas (finance) Part III – make more modular to enhance flexibility; increase emphasis on business problem solving through case studies and residential approach Universities – exemptions & accreditation; financial support IAA education principles - global requirement readily met by Australian actuarial programmes Promoting actuarial education in Asia – e.g. India, China, Hong Kong & Singapore – tuition, links with universities etc CPD etc many & varied – visit website to look at programme for recent Convention – international guests impressed with range and depth of topics covered students are encouraged to attend IAAust activities eg Horizons series

Initiatives & Activities Policy submissions & representation General Insurance Public Liability & Medical Indemnity Health Financing Ageing & Retirement Incomes Governance & prudential issues Financial reporting, accounting and executive options International involvement International Actuarial Association International Accounting Standards Board International Association of Insurance Supervisors As a profession a key role is to inform/enhance public debate on relevant issues and to act in the interests of the public Focus on implications of policy initiatives rather than advocate particular approach/position GI – major reforms in 2002 incl. legislated role for actuaries; Likely to expand in future. Actuaries have influenced developments PL & MI – active particpation in reforms/debate; AGA, IAAust and indiv. actuaries; developing solutions to enhance market stability, build capital, make pricing more robust; balancing needs of different stakeholders important Health – IAAust round table meetings and CPD courses; range of participants (not just actuaries); aim to develop solutions to long-term health funding/financing/provision. Growing area for actuaries Governance – IAAust rep on ASX Corporate Governance Council Financial reporting – international accounting standards (esp insurance – shift from P&L to B/S, fair value); valuation of Exec options; GN on economic valuations of financial entities

Education – Part III Review equivalent to UK 100 series subjects covers core technical material Part II (Actuarial Control Cycle) practical application across all areas leads to AIAA qualification Part III Specialist subjects by practice area leads to FIAA qualification Exemptions from Parts I & II for university courses (subject to grades achieved) Part III must currently be undertaken through IAAust - no exemptions available Also need to do Professionalism Course and meet experience requirement to be FIAA

Education – Part III Review Current Part III Structure Pass two Specialist subjects in: - Finance - Investment - Life Insurance - General Insurance - Superannuation & Planned Savings Finance subject unique to Australia but UK to include in their 2005 changes Super course recently revised and name change

Education – Part III Review Proposed Part III structure Each module is a half-year subject, all four modules must be completed Module 1 Investment Management Module 2 Specific Practice Area Skills Module 3 Specific Practice Area Skills Module 4 Business Applications Part III

Education – Part III Review Proposed Part III Structure Module 1 - compulsory provide adequate level of investment knowledge Modules 2 and 3 - at selection of student only one specialist area required develop technical and judgment skills   Module 4 – compulsory non-practice area specific use judgement & apply knowledge and skills to simulated commercial problems. Reasons for change: make structure more flexible; allow students to sit twice per year increase business/commercial/practical focus include different assessment approaches build on ACC approach to better equip actuaries to apply skills in different/new areas ensure all actuaries have minimum investment knowledge needed beyond what is covered in ACC subject

Education – Part III Review Proposed Part III Structure Modules 2 and 3 Existing courses split into two modules for: - Life Insurance - General Insurance - Superannuation & Planned Savings New combined Investment and Finance course established as two modules Choose one from four under new srtucture

Education – Part III Review Proposed Part III Structure Module 4 combination of self study material & 5 day intensive residential course traditional and non-traditional areas ethical issues & corporate governance professional standards accredited communications course Focus on: understanding overall business and its impact on actuarial advice/recommendations measuring and communicating risks associated with alternative solutions recognise cost/benefit of further analysis and value trade off in developing solutions applying actuarial skills to both familiar and new/non-traditional areas (similar to ACC approach)

Education – Part III Review Assessment Modules 1 - 3: combination of assignments & exam (max. 20% based on assignments) Module 4: combination of case study (completed under exam conditions) & examination Exploring possibility of other methods eg Viva Voce

Education – Part III Review Transition 2005 & 2006 modules offered twice yearly from 2005 two years to qualify under old structure Part III subjects passed prior to 2004 = credit of two modules in the new structure Pass in one paper in 2004 = credit of one module in new structure

Why it’s a great profession! Valuable technical skills with wide application Areas of work many and varied Opportunities in financial services and beyond Member of respected profession Global qualification - mutual recognition Access to IAAust services and programs Industry/professional/political/regulatory involvement The opportunity to make a difference! 2125 members in Australia (so 20% overseas) 20% in non-traditional areas (investments, energy/greenhouse, health, education, IT etc)

Want more information? Visit the IAAust website www.actuaries.asn.au Contact the IAAust Secretariat Institute of Actuaries of Australia Level 7 Challis House, 4 Martin Place Sydney 2000 AUSTRALIA Telephone: 02 9233 3466 Fax: 02 9233 3446 Email: insact@actuaries.asn.au