Deloitte UConn Actuarial Center Philosophy & Marketing Strategy

2 Mission Statement To integrate the academic resources of UConn with the professional expertise of Deloitte in order to enhance actuarial education, training and applied research.

3 Partnership between UConn & Deloitte is dynamic Director of the UConn Actuarial Center is an employee of both Deloitte & UConn All the activities of the Center attempt to balance both the education and research goals of UConn as well as the consulting and business advisory services of Deloitte Philosophy

4 US Shift towards investment oriented products with guaranteed options - Variable annuities with GMAB, GMIB, GMDB riders - Variable life with no lapse guarantees Focus on retirement products Focus on Principle Based Reserving and use of company’s own experience to set minimum reserves Enterprise Risk Management Developing Economies Strong insurance infrastructure and good risk management practices Market conduct practices Insurance products for local needs. Industry Trends

5 Two components : A.Insurance Infrastructure Development B.Student Outsourcing Services Marketing Strategy

6 3-tiered approach: 1.Setting up an Institute of Risk Management at a top university in a developing country to incorporate: a.A unique academic degree program in Actuarial Science, which includes a curriculum of education in the fundamental theory of Actuarial Science as well as formal practical training using state of the art actuarial software b.Short term professional training programs in other areas of insurance like underwriting, marketing, risk management, insurance accounting and finance c.Joint research projects and conferences with the UConn Actuarial Center 2.Creating an experience database for the pricing and managing of Life and General Insurance products 3.Developing a framework of actuarial standards and principles built around the experience database as a foundation for the insurance industry of the developing country Marketing Strategy A Insurance Infrastructure Development

7 Mainly US and domestic companies doing business in the developing country –Exclusive arrangement with a single major multinational company –Pool of funds via a tax levied on all companies International funding agencies like World Bank, IMF, USAID, etc. US government and the government of the developing country Sources of Funding

8 Negotiations undertaken with the following countries or organizations: –Brazil Seed funding provided by a major insurer to establish institute Academic program launched in 2005 –Tanzania Commitment by highest level of regulators to use taxing power to provide initial funding for the Institute Memorandum of Understanding on education and training signed –India In correspondence with world class Indian Institute of Management to champion project –China Relationship developed between Tsinghua University and the Deloitte UConn Actuarial Center –Dubai Relationship developed with Dubai International Financial Center to set up a Center of Excellence in Dubai Current Projects

9 Combine the academic resources & talent of UConn with the professional expertise of Deloitte for actuarial consulting projects Deloitte will utilize top graduate students at UConn as a part of its consulting team Deloitte will supervise and manage the entire project to ensure that it complies with the highest consulting standards of Deloitte The project will provide research associateships for students involved: –Students will work on campus at UConn, Storrs and meet with Deloitte –supervisory staff as needed in the Hartford office of Deloitte –Students will have full access to state of the art computing facilities, statistical & actuarial software systems available on campus to do in-depth and exploratory analysis needed for the project Utilization of students can provide a comprehensive analysis of the project to be done: –A broad range of scenarios could be tested –Different analytical tools could be used and compared –Alternative solutions could be analyzed Marketing Strategy B Student Outsourcing Services

10 Clients requesting consulting services Sources of Funding

11 Representative Projects Post Retirement Financial Planning Model –Only financial planning model in existence which addresses all the risks facing the retiree in an integrated fashion – investment, longevity, morbidity, and inflation risks –Determines optimal asset allocation strategies combining insurance & investment products to maximize value to retiree –Uses complex stochastic modeling techniques to determine optimal solution Pre Retirement Financial Planning Model to create an individually managed DB plan written a DC plan Dynamic GAAP Disability Claim Reserving Methodology –Actuarial procedure to explicitly recognize short-term fluctuations in DI claim reserves –Statistically rigorous procedure to adjust morbidity rates for long-term experience trends Comprehensive reinsurance pricing software model for Property & Casualty coverages –Historical loss development & trend analysis –Choice of an appropriate statistical model for exposure rating and determining reinsurance premiums Experience studies projects for the SOA Secondary market in insurance –Alternative strategies to provide liquidity to impaired policyholders –Securitization of secondary market assets

12 The UConn Actuarial Center is a unique partnership between academia and the industry that will benefit the actuarial profession and the insurance industry by having : –A planned experiential form of education in Actuarial Science & Risk Management –A strong industry partner for professional expertise & financial support Summary