The actuarial profession in insurance Renata De Leers, Executive Director, Actuaries Without Borders, IAA Section Actuary IA|Be Queenie Chow AIAA, Associate Actuary, ACB Consulting, Lomé, Togo (Melbourne, Australia) AIO Life Seminar, November 2015, Lomé (Togo)

Actuaries: who they are and what they do UARIES – What The Do and Where They Practice  WHAT IS AN ACTUARY? Actuaries are highly qualified business professionals who analyze the financial impact of risk for organizations like insurers; pensions fund managers, and more. Governed by rigorous standards of practice, they apply their mathematical expertise to forecast and minimize financial uncertainty.  WHAT DOES AN ACTUARY DO? Actuaries design and develop ways in which to manage risk. This requires a combination of strong analytical skills, business knowledge, and understanding of human behaviour to manage the complex risks facing our society. 2 AIO Life Seminar, Lomé Togo, November 2015

List of activities of the actuarial profession  Evaluate the likelihood of future events;  Design creative ways to reduce the likelihood of undesirable events;  Decrease the impact of undesirable events that do occur;  Assist in the scientific analysis and quantification of risks;  Measure, manage, and mitigate risks;  Establish premiums, policy and claim liabilities, and appropriate capital levels;  Assess financial security systems;  Evaluate pension plan liabilities; and  Determine the level of contributions required to finance pension, health care, and social insurance programs. 3 AIO Life Seminar, Lomé Togo, November 2015

Who needs an actuary?  WHO NEEDS AN ACTUARY? Many companies, organizations and agencies employ actuaries:  Banks;  Life insurance companies;  Property and casualty insurance companies;  Employee benefit consulting firms;  Universities-teaching actuarial studies and undertaking research;  Government agencies;  Organizations that have oversight roles;  Other financial institutions; and  The public, and customers and users of all of the above. 4 AIO Life Seminar, Lomé Togo, November 2015

Organisation of the profession worldwide: International Actuarial Association ( The IAA is the worldwide organisation representing professional country-level actuarial associations. IAA Vision The actuarial profession is:  Recognized worldwide as a major player in the decision-making process within the financial services industry in the area of social protection and in the management of risk  Contributing to the well-being of society as a whole. IAA Mission  To represent the actuarial profession and promote its role, reputation and recognition in the international domain  to promote professionalism, develop education standards and encourage research, with the active involvement of its Member Associations and Sections, in order to address changing needs 5 AIO Life Seminar, Lomé Togo, November 2015

Ensuring the quality of the work  Qualifications: who is an actuary?  Professionalism (ISAPs, ethics code, deontology, junior and senior levels)  Continuous professional development (mandatory in most FMAs,..)  Regulation and supervision 6 AIO Life Seminar, Lomé Togo, November 2015

3 out of 4 good governance functions need actuaries (ICP8): AF, RM and IA Function  Actuarial Function: at least following tasks:  Coordination and review of the actuarial liaibilities (A.L.)  Methods, assumptions and data:  Appropriateness of methodologies, assumptions and models  Sufficiency and quality of data used in evaluation of A.L.  Compare best estimates against experience  Reporting requirements:  Express an opinion on underwriting and reinsurance policies  Inform on the reliability and adequacy of A.L.  Contribute to risk management system with respect of risk modelling and to ORSA  Risk Management Function: 60 % of CRO’s are actuaries (CERA)  Internal Audit function 7 AIO Life Seminar, Lomé Togo, November 2015

Actuarial Function / Appointed actuary Relations between Acturial Function, Appointed Actuary and External Auditor  Actuarial Function: usually internal function (but can be externalised)  AA: Comparable with the ‘external accountant’: ‘usually’ established by regulations  Always a qualified actuary  Internal/external  Also ‘whistleblower’ in some jurisdictions  Preparation of the financial condition report, certification of new products or amended products, etc.  Issues paper on ‘role and relation between the Actuary and the External Account in the preparation and audit of the financial report’ from IAIS (October 2009) 8 AIO Life Seminar, Lomé Togo, November 2015

What role should actuarial profession play in microinsurance?  MI is a relatively new field for actuaries – the role is still being debated…  Role is largely driven by product complexity. Examples levels of actuarial involvement. 9 AIO Life Seminar, Lomé Togo, November 2015

Questions? Thank you ! 10 AIO Life Seminar, Lomé Togo, November 2015