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A Bold New Look for the InstituteProposed Carbon Pricing Mechanism

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ACTUARY AUSTRAL IA ■ november 2011

3

contentsDiary Dates 2011Actuary Australia • november 2011

Challis House, Sydney

The Westin Hotel, Melbourne




30 Nov

1 Dec

1 Dec

1 Dec

7 Dec

Insights Networking – Risk Management Expert Visits Australia

Members Christmas Cocktail Party

Retired Actuaries Group – Sydney

YAP Sydney Event

Members Christmas Wine Tasting Evening and Presidential Handover

5 A Bold New Look for the Institute RevIeW – Katrina McFadyen

6 Actuaries Should Look Out For Good Governance

PResIDeNT’s CoLUMN – Barry Rafe

7 Actuary Unearthed exPosé – Jas Singh

8 The Actuarial Pulse sURveY – Ruth Lisha

11 Proposed Carbon Pricing Mechanism CoMMeNT – James Claridge

14 1st Australasian Compensation Health Research Forum (ACHRF)

RePoRT – Dr Alex Collie

16 Where Art Meets Numbers – Meredith Brooks INTeRvIeW – Candice Sng

18 Wanted... New Editor(s) for Actuary Australia NoTICe – Catherine Robertson-Hodder

19 Be an Influential Actuary RevIeW – Sen Nagarajan

20 Actuary – Professionalism Course – New Fellows

RePoRT – Scott Ellis / Rebecca Trouville / Wilson Ma / Wynnie Yeung

22 In the Margin PUzzLes – Genevieve Hayes

23 I’ll Never Forget Whatshisname! MoRe THAN MATHs – Martin Mulcare

24 Indispensible – Moi? / Who Will I be? Ask gAe – Gae Robinson

25 YAP – Tips From the President RePoRT – Nick Li

26 Actuaries in Leadership – Meredith Brooks RePoRT – Joyce Au-Yeung

27 Financial Services Forum 2012 – Call for Papers eveNT NoTICe

28 The European Union: A Year On sTUDeNT CoLUMN – Arreni Sriskantha /

Neeharika Prasad

29 Why Whingers Don’t Get Ahead Ceo’s CoLUMN – Melinda Howes

30 Letter to the Editor Matthew Wood


4 editorial

is needed (and know they can figure out the rest)?

I also attended a leadership forum on 19 October, which was a great opportunity to hear about what leadership means to others outside the profession. I found it both fascinating (for insights into an area outside of the corporate arena) and yet very relevant for us as actuaries.

At the same time, we need to keep a focus on what makes us special technically. With concerns about the input required from volunteers to deliver our education process, I imagine there are changes afoot. I understand the need for change but I also want to know that we are still a profession and that we control our education in some way. I don’t want it to become a commodity or to be cheapened.

Lastly, we will be stepping down as Editors at the end of this year. On page 18 we are calling for expressions of interest for a new Editor(s) in 2012. It is a great opportunity to have your say, show your leadership skills and potentially step outside your comfort zone. ▲

James Collier

[email protected]

Catherine Robertson-Hodder

[email protected]

I was sad to hear about the passing of Steve Jobs. He is someone that I think of when I think of leadership and innovation, and I personally love my iPad and iPhone.

Having said that, I read an interesting article about Steve Job’s leadership style and I imagine he would have been pretty tough to work for (depending on your own style, of course).

I am loving the leadership focus that is coming out of the Institute. There is a real focus on helping us to become the actuaries we could be. The article in our October edition by Andrew Brown struck a cord with me (if you didn’t read it, I recommend going to the website and looking it up). There have also been a couple of leadership sessions run by the Institute during October.

I was interested in ‘Be an influential actuary – relationship mastery’. Unfortunately by the time I got around to registering, it was oversubscribed and had a waiting list of 24 – a very good sign that there is demand for this topic! What appealed to me was that it was a topic many of us have done courses on, but I liked the idea that it was tailored to actuaries. This edition has a high level summary of the session on page 19.

It does also make me wonder if we undervalue our leadership skills. For example, do we feel we need to know 99% of something to take it on, where another professional might feel they can take something on when they know 1% of what

ContributionsContributions should be sent to the Actuaries Institute, marked to the attention of Katrina McFadyen (Communications and Marketing Manager) at: [email protected] contributions must conform to our submission guidelines which are available from the Communications and Marketing Manager.

Magazine Design Kirk Palmer Design, Sydney Email: [email protected]

Next edition AA166 December 2011 AA167 March 2012 Deadline for contributions: 1 February 2012

Actuary Australia editorial CommitteeJames Collier Editor: [email protected] Robertson-Hodder Editor: [email protected] mcFadyen Communications and Marketing ManagerDaniel Cooper Assisting EditorGenevieve Hayes Assisting EditorRuth Lisha Assisting EditorDavid millar Assisting Editor

Actuaries Institute ABN 69 000 423 656

Level 7, Challis House, 4 Martin Place Sydney NSW 2000 Australia Tel (02) 9233 3466 Fax (02) 9233 3446 Email [email protected] www.actuaries.asn.au

Published by the Actuaries Institute© The Institute of Actuaries of Australia ISSN 1035-6673

Advertising PolicyPlease refer to the Institute’s website for our advertising policy, and rates:www.actuaries.com.au or email: [email protected]

Disclaimer Opinions expressed in this publication do not necessarily represent those of either The Actuaries Institute (the ‘Institute’), its officers, employees or agents. The Institute accepts no responsibility for, nor liability for any action taken in respect of, such opinions. Visit:http://www.actuaries.asn.au/TechnicalResources/ActuaryMagazine.aspx for full details of our disclaimer notice.

Actuary Australia

Leadership


5review

On 24 October 2011, the Institute launched its new corporate identity, the first change to the look of our brand since 1996. The key components of our new look are a new logo and a new business name – Actuaries Institute.

So why change?It has been fifteen years since we last updated our corporate identity. We had to change because:● A more attractive and relevant corporate identity affects how we

are perceived by key stakeholders – by members, businesses, employers, policy makers and the students who are the actuaries of tomorrow. In the past our corporate identity addressed an internal audience. Now and in the future it needs to appeal to this wide range of key stakeholders.

● The media we use to communicate with members and other stakeholders has changed dramatically in the last 15 years. The existing logo did not perform well in digital formats such as email, the web and social media, additionally our PR consultants advised that our lengthy existing name (The Institute of Actuaries of Australia) limited our ability to capture media attention. The new logo works extremely well in digital media as well as hard copy publications like newsletters and event signage. Our shortened business name – Actuaries Institute – is more media friendly.

● ‘Enhancing the brand of actuary’ is one of our key strategic objectives. The existing identity looks dated compared to that of similar organisations and this affects perceptions of our brand. Evolving the corporate identity will enhance our brand, the reputation of the Institute and the value of members’ professional designations.

How did the new identity evolve?The process was methodical. We evaluated the risks and opportunities and consulted a series of experts in corporate identity and marketing, including a specialist design agency, our PR consultants, a specialist marketing communications consultant and a branding specialist. The consulting costs were approximately $15,000 – a very cost effective outcome.

We had some clear objectives:● Logo is clean and crisp to give visual impact in digital format, as

well as working in colour, black and white and reverse colour.● Colours and design of logo are acceptable to a global

audience.● Within the logo the format and font size of the name provide

better visibility.● The corporate identity looks modern. ● We have a short, succinct working name ‘Actuaries Institute’:

• thatworkswithorwithouttheword‘Australia’• thatisnottooclosetoothersimilarorganisations(suchasthe

IAA, Institute & Faculty of Actuaries) • that it has more impact (getting rid of ‘ofs’ and ‘the’) and

emphasises the word ‘Actuaries’.

The new business name and logo were first tested against these objectives and then reviewed to ensure they were acceptable in Asian markets. Next we went through a rigorous approval process. A formal Brief to Council was prepared and distributed, some of the consultants involved in developing the new identity went through a discussion process with Council members, and then the new identity was presented to, and approved by, Council.

Feedback from most members has been positive including some great (and quirky) suggestions for a new tag line – more on this in a future edition as Council will be discussing it at their December meeting.

What won’t change?Importantly, the traditional Institute logo of ‘Father Time’ and our full name ‘the Institute of Actuaries of Australia’ will still appear on all qualification certificates and legal documentation. Your post nominals will not change.

The ApostropheIt’s the question we knew you would ask – shouldn’t there be an apostrophe in the name ‘Actuaries Institute’? Short answer is no. We consulted grammar experts who assured us that in the context of our new business name, ‘Actuaries Institute’ was adjectival, not possessive – it describes the Institute rather than owning it. So… no apostrophe was required.

There’s a real buzz in the secretariat as we roll out the new look. The website and our e-communications have already been updated, it will be incorporated progressively at Institute events, on our stationary, promotional material and corporate gifts. New signage will soon be erected at Challis House. We’re also working hard to ensure that we answer your calls correctly (old habits die hard)! We do genuinely love to hear from you so please continue to let us know how we’re doing. ▲

Katrina McFadyenCommunications & Marketing [email protected]

A Bold New Lookfor the Institute


M embers of the actuarial profession have been active in the various working parties responding to the Stronger Super proposals coming out of Jeremy Cooper’s superannuation review. Our primary focus

has been on the various advisory committees dealing with some of the more technical issues regarding MySuper, capital adequacy and risk management.

My question is, “should actuaries also be interested in the broader issue of governance?” In effect, should the actuarial profession be observing the conduct and constituency of superannuation trustee boards?

I promoted the view in my blog that the profession should be very interested in governance issues. As a profession, I think we have a responsibility to the public to blow the whistle if we see major governance problems in any of the institutions we deal with.

This is a tricky area however. Should we blow the whistle if we are advising a trustee board or a board of directors of a major listed financial services business and witness conduct that is demonstrably against the interests of beneficiaries, the shareholders or the community generally? What if they are a major client and they pay us big fees, or we are a senior employee? Whilst actuaries may have specific responsibilities when it comes to the financial management of certain financial services organisations it is not clear that we should blow the whistle when there is demonstrable poor governance.

There were some interesting comments generated by my blog. Generally the view was that the individual actuary may have a responsibility to ‘blow the whistle’ if they witness a governance issue and there are whistle blower protections in place. There was a general view, however, that governance issues are not an issue the profession as a body should get involved with.

I am not sure if this is good enough. The Actuaries Institute is a member of the ASX Corporate Governance Council. The Council has developed a publication that sets out the principles of good corporate governance. Whilst some would argue that there is no specific formula for what is good governance, the Australian Institute of Company Directors and the Australian Council of Superannuation Investors have undertaken extensive research and prepared recommendations on best practice governance for publicly listed companies.

I see the role for the profession as being to encourage superannuation fund trustees to adopt the agreed best practice guidelines for good corporate governance of publicly listed companies. Superannuation funds are our sovereign wealth funds and the standards of governance on trustees should be at least as high as publicly listed companies, more so because many members do not actively decide on their fund.

Whilst I agree that, in particular issues of poor governance, the individual actuary needs to make their own decision regarding whistle blowing, I think if we see a systemic issue, the profession, in the public interest, should agitate for change. I think that there is a systemic weakness in the governance of both for-profit and not-for-profit superannuation funds. In the for-profit sector, there is currently significant ambiguity between the responsibility that the associated directors have to their employer and their responsibilities to the member.

In the not-for-profit sector many leading participants, including trustees, have their own stories about trustees who are clearly ill suited to the role or that there are significant and undisclosed conflicts generated by tribal loyalties and relationships that exist outside of the trustee boards.

If not the actuarial profession, then who should blow the whistle if trustees are not behaving in the beneficiaries’ best interests? Obviously other trustees but, the problem is that, on some boards, there are loyalties or ambiguous and conflicting relationships both inside and outside of the trustee board. The service providers could blow the whistle e.g. the fund managers, administrators and other professional service providers but what is in it for them? In many cases they are also closely associated with the fund or the trustees, or are even part of the same entity.

Potentially the auditors have a responsibility but I have certainly not seen any public statements from them on this issue.

I would argue that the actuarial profession has a responsibility in the public interest to speak out. The profession has thrown its support behind the proposal to increase the compulsory superannuation contribution rate from 9% to 12%. I think our support should be contingent on adopting governance for superannuation funds at no lesser a level than for publicly listed companies. ▲

Barry [email protected]

6

Actuaries should look out for poor governance

president’s column


7actuary unearthed

Title…Actuarial Recruitment Consultant

Organisation…Acumen Resources

My favourite energetic pursuit… Bike riding (love the outdoors and being in the sun)

The sport I most like to watch... Cricket

The last book I read (and when)...Self-promotion for introverts by Nancy Ancowitz (July 11)

My favourite artist/album... DJ Tiesto, few bands from the early 90’s – KLF, Snap (beginning to show my age)

My favourite film...Top Gun, Munich

My interesting/quirky hobbies...Collecting beer bottles

The person I’d most like to meet...King of Bhutan. I am very curious to find out how he governs a place where Gross National Happiness is the key driver behind decision making

What gets my goat… Unimaginative control freaks

What I wanted to be when I grew up...Entrepreneur

Why I decided to become an actuary...Did my maths and reached the conclusion that it required far less university lectures to graduate with an actuarial degree compared to medicine or law

Where I studied to become an actuary...Macquarie University

Qualifications obtained...BCom, BAppFin, FIAA

My work history... Tower (2000-2002, Pearl, UK (2002-03), Genworth, UK (04-06), MLC (07- Sep 11), Acumen Resources (Sep 11 onwards)

What’s most interesting about my role...Meeting lots of people and appreciating the diverse range of talented people in the actuarial profession. Being able to empathise with my candidates and providing them with trusted advice regarding their career. Pursuing new and exciting opportunities for actuaries in traditional and non traditional areas.

My role’s greatest challenges...Not losing my voice (as not used to talking as much in my previous roles) and learning to switch off as I am constantly thinking of new opportunities for my candidates

Who has been the biggest influence on my career (and why)... Nathan Rivett (ex Appointed Actuary Tower) for providing me lots of good advice when I started as a graduate at Tower. • Brad Louis (MLC) for always exhibiting human touch and sensitivity in his leadership. • Beth Lawson (General Manager Finance, MLC) for encouraging me to finish my Part III exams • Richard Crandell (Head of Finance, MLC) for instilling in me the commercial importance of planning and swift execution. My Parents and wife for supporting me through the Part III exams

My proudest career achievement to date… Successfully moving to recruitment where I can make a real difference to people’s lives

The most valuable characteristic an actuary can possess is… Foresight and a desire to shape the future

If I was President of the Institute, I would… Constantly look for new career paths and opportunities for the members especially in the data analytics field

which is going to be a boom industry of this century

My most important decision… Getting married and settling down

I’m most passionate about… My darling wife (Ruchi)

I’d like to be brave enough to… Keep going on the path which provides me with most career satisfaction and personal happiness

In my life I’m planning to change… My carbon footprint

At least once in life, every actuary should...Do something which they truly feel will make them happy but may have been avoiding due to risk aversion

If I win the lottery, I would…Fund charities which campaign against discriminatory abortion of female fetuses (very widespread in countries like India due to cultural reasons) and book a family holiday on the Virgin Galactic space flight

People say I look like...Billy Zane

To become an instant celebrity on YouTube, I would publish a video of myself doing….Modelling for a hair shampoo commercial

My most embarrassing moment… Showing up 24 hours late for an international flight

If I could travel back in time I would…Go back to ancient Rome

My best advice for my children…Live your life to the max and learn to work with the universe

Four words that sum me up... Adventurous, Curious, Optimist, Measured ▲

Jas [email protected]

Jas singh


8 survey

The Actuarial Pulse is an anonymous, web-based survey of Institute members, run on a monthly basis, giving members an opportunity to express their opinions on a mixture of serious and not-so-serious issues.

In a recent article by Nadia Gilani published in the UK’s Daily Mail (http://www.dailymail.co.uk/news/article-2044372/Men-indulge-spending-month-women.html), 2nd October 2011; 2000 people were surveyed by Capital One about their spending habits in the previous month. The results were very similar to those of this survey. “35 per cent of people said they don’t need a reason to treat themselves. For some one-in-six, having the blues was reason enough to go to the shops for a spot of retail therapy. A further 13 per cent of people were most likely to reward themselves after a pay rise or promotion.”

I can only speculate why the ‘pick me up’ percentage is so much higher for females than for males and why the males have a higher percentage in the ‘whenever I feel like it’ group. Females are more emotional and males are just more hedonistic. Men are from Mars and Women are from Venus? I’ll leave it up to the psychologists.

The IndulgencesFood, glorious food! Almost one in five responses related to food. The table below shows the top three responses by age band.

Based on the comments included by the respondents, food meant either chocolate, cake or dinner; clothes/shoes were a mixture of watches, shoes or handbags; and holidays were mostly to Europe.

PulseThe Actuarial

Next Survey New questions will be available in February 2012.

What would you like to know? If you have a question you would like to put to the membership, email it to [email protected]

Results Report generated on 14 October 2010, 382 responses.

T he Indulgence survey This month’s Actuarial Pulse investigated our behaviour when it comes to the delicious trait of indulgence. According to the Collins English Dictionary, to indulge is

to allow oneself the pleasure of something, to treat yourself, splash out, spoil yourself or to luxuriate in something. Although I like the sound of any one of these definitions, the term indulgence is usually associated with overdoing the do-able or allowing your vices to take hold. But surely indulging oneself can’t be bad? As the saying goes, ‘everything in moderation, including moderation’.

To Indulge or Not to IndulgeMost of us indulge ourselves at some point. Just over 90% of the respondents to the survey advised that they partake in an indulgence – but only occasionally (with less than 2% denying any indulgences at all). The remaining 10% put themselves in the category of treating themselves all the time. Across the age bands, those in the under 40’s group admit to more frequent indulgent behaviour than their older counterparts. Between the sexes, the results were similar, although there is a considerably higher proportion of guys who believe they rarely indulge.

The reasons why we venture into this self satisfying state vary. For the guys (75% of respondents), the most popular response was that when it comes to indulging themselves, no reason was needed. This was consistent across all age bands. However, a different observation was made for the ladies. For one third of the female respondents, indulgence was associated with making themselves feel good, particularly for the under 35’s.

0%10%20%30%40%50%60%70%80%

Never Rarely Now and Then All the �me

Indulgence Frequency

Male Female

0%5%

10%15%20%25%30%35%40%45%

Pick me up Achieved a goal Working Hard Whenever I feel like it

Reasons for Indulging

Male Female All

Most Common Response

Age Group 1st 2nd 3rd20 to 24 Food Clothes / Shoes Time off25 to 29 Food Holidays Entertainment30 to 34 Food Holidays Entertainment35 to 39 Food Entertainment Electronics40 to 49 Food Holidays Time Off50 to 59 Food Alcohol Holidays60 + Food Alcohol Clothers / Shoes


9survey

▲

Chocolate Image: Suat Eman / FreeDigitalPhotos.net

Looking at the results split between the sexes reveals, perhaps, some stereotypical answers. Clothes/shoes and pampering were in the top five for the girls, and electronics and pastimes/hobbies were in the list for the guys.

Are there any differences in the type of indulgences depending on the reason for the indulgence?

Females

I can relate to this result. Grab that chocolate bar or cake or biscuit (or anything sweet) when you are feeling down – it really does work – or find a new outfit – look good, feel good! When you have done well, reward yourself with a holiday – big or small – or go to that overpriced concert (even if you are sitting in the boondocks needing binoculars to see the stage). I note that alcohol has creeped into the top five responses for the ‘pick-me-up’ category. Clothes remains in the top three regardless of the reason (this should go without saying.)

Males

It is still food, food, food for the guys. From a stereotypical view, I thought that electronics would be higher up, but it does appear in all cohorts. I note that, in the ‘pick me up’ category, alcohol is the number two response followed closely by the need for time off. Perhaps it is true what is said about men needing cave time. The individual responses contained in the survey were:

Food – as I mentioned previously, chocolate was mentioned frequently, otherwise there were expensive degustation dinners or just eating too much.

Alcohol – a few bottles of Grange were purchased for special occasions.

Holidays – mostly to Europe, but otherwise to Africa, Antarctica, Asia, world tours or business class travel. Seems that most people enjoy holidaying outside of Australia for those special treats.

Hotel Image: Salvatore Vuono / FreeDigitalPhotos.net

Entertainment - mostly sporting trips – Australian Open, FIFA world cup, Rugby world cup, Golfing events or the AFL.

Electronics – TV’s, computer equipment or cameras.

Most Common Response Female Male1st Clothes / Shoes Food2nd Food Holidays3rd Holidays Entertainment4th Entertainment Electronics5th Pampering Pastime/Hobby

Most Common Whenever I Response Pick-me-up Achievement feel like it

1st Food Holidays Clothes2nd Clothes Entertainment Food3rd Holidays Clothes Holiday4th Entertainment Food Entertainment5th Alcohol Pampering Pampering

Most Common Whenever I Response Pick-me-up Achievement feel like it

1st Food Food Food2nd Alcohol Electronics Entertainment3rd Time Off Holidays Holidays4th Electronics Entertainment Pastime/Hobby5th Pastime/Hobby Time Off Electronics


10 survey

Regrets or Rejoice Overwhelmingly, most respondents (75%) rejoiced in their indulgences. I have to say that reading everyone’s comments gave me a feeling of inspiration: ● “A lifelong dream realised. Tried to ignore the hole in my wallet!” ● “It has given me memories that I will never forget” ● “Money and time well spent, only if I could do it more often!” ● “It was worth working towards that target” ● “You only live once!”

And from those who had regrets – most of the assessment was based on over-indulgence: ● “The ’idea‘ is often more appealing than the reality” (in reference to an expensive meal); ● “That last piece always tips the euphoria over the edge” (in reference to eating too much cake); ● “I felt fantastic until the guilt set in” – after half a bottle of Bacardi.

While I find the tales of those who have had wonderful experiences to be uplifting, for those who have had regrets, think of the very wise words from the great Mae West: “Too much of a good thing can be wonderful!”

Alcohol and Cigarettes I’m pleased to say that very few of the respondents smoke. About 5% admitted either to social smoking or regular smoking. This is well below the national average.

The graph below illustrates the responses regarding alcohol consumption. My apologies for not including a category in the survey for the abstainers. I’m not sure whether that was a silly oversight or a subconscious disbelief that some people don’t drink any alcohol at all.

The graph shows that just less than 90% of respondents have at least 1 drink each week. For the females, this percentage reduces to less than 10% for those who have more than 10 drinks per week, but is almost twice that for males. For the guys, the percentage of those who consume more than 10 standard drinks per week is consistent across the age bands over 30. For both males and females, around 25% of respondents feel that they sometimes drink too much. For the group of males who are in the ‘more than 10’ drinks per week group, almost 80% feel that they drink too much either sometimes or all of the time (17%).

Favourite Responses This is only my second Pulse and on both occasions I’ve had a good giggle at some of the responses. Here are a few of the more interesting from this survey.

Man Versus FoodThis respondent consumed a chicken family meal by himself – 12 pieces of fried chicken, 4 large chips, gravy, corn and a 1.5 litre bottle of Pepsi all in one sitting! His comments were “Never mind (how I felt ) after – I felt bad halfway through! But after watching shows like Man vs Food and EpicMealTime, I had to finish it.”

Man Escapade To the man who had an overnight business trip and enjoyed the company of a stranger... well I’m not sure what to say, except, I’m certain you’re not the only one to indulge in such a pastime, but perhaps the only one to admit it in an actuarial magazine.

Beach House FemaleTo the lady whose biggest extravagance was purchasing a beach house – interest rates are on their way down, so relax about that mortgage!

Finally... I’d like to finish with a few wonderful quotes.

From one of the respondents:● “Life is for living. Money is for spending. You might get hit by a bus tomorrow.”

Opposing this is what my father always said to me:● “Money is made flat to stack.”

But finally, my favourite from one the world’s most well known indulgent people, especially when it came to husbands:● “The problem with people who have no vices is that generally you can be pretty sure they’re going to have some pretty annoying virtues” – Elizabeth Taylor

Ain’t that true! ▲

Ruth [email protected]

▲

0%

20%

40%

60%

80%

100%

At least 1 drink More than 2 More than 4 More than 6 More than 8 More than 10

How much alcohol do we drink each week?

Female Male

Beach Image: Stoonn / FreeDigitalPhotos.net

Large fries: stock.xchng


11comment

The Australian Government has just passed legislation that will place a price on key Greenhouse Gas (GHG) emissions (principally carbon dioxide, hence the name ‘carbon price’) with the intention of reducing Australia’s

contribution to global warming. The purpose of this article is to offer IAAust members an overview of the proposed carbon pricing mechanism, as this is potentially a field where actuaries could add value. This article does not discuss the science of global warming or the merits of Australia taking action to reduce its GHG emissions.

GHG Reduction GoalsThe Government and Opposition have committed to reducing Australia’s annual GHG emissions in 2020 to 5% below the level of emissions reported in 2000. This target is estimated to represent a reduction of 23% below Business As Usual (BAU) emissions for that year. In addition, the Government has pledged to reduce annual emissions in 2050 to 80% below 2000 levels, assuming there is comprehensive action globally to reduce emissions. It is the Government’s intention to maximize Australia’s economic growth whilst meeting these emissions reduction goals.

Proposed Carbon Pricing

Mechanism

Souces of Emission Reductions under the Government Policy Scenario

Source: Strong Growth, Low Pollution, Modelling a Carbon Price, Australian Government (Treasury), July 2011, Chart 3.


12 comment

Carbon Pricing Mechanism – An OverviewOver the long-term, the carbon pricing mechanism is intended to help reduce national GHG emissions at the lowest economic cost by:

● Placing a cap on the aggregate quantity of GHGs emitted each year from specified activities/emitters;

● Issuing emission permits up to that cap;● Creating a market for emitters and others to buy and trade

permits; and● Requiring emitters to surrender permits equivalent to their

emissions.

However, it is not proposed that the carbon pricing mechanism will operate in isolation. Rather, it will be part of a broader response to energy security and global warming considerations, including three other national emissions and energy reduction programs:

● Renewable Energy – ongoing development and installation of renewable energy technologies e.g. the Large Scale Renewable Energy Target (LRET) and the Small Scale Renewable Energy Scheme (SRES);

● Energy Efficiency – improvements in energy efficiency e.g. Energy Efficiency Opportunities program (EEO); and

● Action on the land – reduce clearing, preserve soil and address other farming-related emissions e.g. the Carbon Farming Initiative (CFI).

Emissions and energy use are monitored under the National Greenhouse and Energy Reporting System (NGERS), which provides mandatory reporting for high-end energy users and emitters. NGERS commenced in 2010.

Carbon Pricing Mechanism – Some DetailsWhen will the carbon price commence?1) 1 July 2012 – Fixed Price Period.2) 1 July 2015 – Floating Price Period.

Who and what is covered?

1) Emissions covered:a. Four GHGs are included (out of six identified in the Kyoto

Protocol): carbon dioxide, methane, nitrous oxide and perfluorocarbons from aluminium smelting.

b. Emissions from combustion of fossil fuels, fugitive emissions (the escape of gas from a process or operation of plant) and emissions from non-legacy waste (i.e. waste dumped after 1 July 2012) are all covered. Emissions from the combustion of biofuels are not covered.

c. About 60% of Australia’s GHG emissions, or approximately 350 MtCO2-e in the first year, will be covered by the Carbon Pricing Mechanism.

[NOTE: For the purposes of measurement, GHGs are converted to their Global Warming Potential (GWP) equivalence with carbon dioxide (CO2). For example, 1 tonne of methane in the atmosphere is estimated to have the equivalent warming effect or GWP as 25 tonnes of CO2. Quantities of GHG emissions are, thus, normally expressed in tonnes of carbon dioxide equivalent or tCO2-e]

2) Emitters covered:a. Facilities with Scope 1 (i.e. direct) GHG emissions greater

than 25,000 tCO2-e p.a. This includes, for example, most coal-fired power stations, large gas turbines, cement and steel manufacturers, etc.

b. Retailers of natural gas.c. Operators of landfill.d. Transport – rail, domestic shipping, aviation, off-road and

non-transport users of fuel. Heavy on-road transport may be included from 1 July 2014.

(Note: Agriculture and forestry are excluded. However, carbon credits generated under the Carbon Farming Initiative can be sold locally and internationally to meet obligations of emitters.)

How will Australian permits be allocated?

1) Most emitters will have to purchase sufficient permits to cover their emissions. However, some emitters, such as those in emissions-intensive and trade-exposed industries (EITE), will receive an allocation of free permits to cover a portion of their emissions (the size of that allocation varying according to emissions intensity and level of trade exposure). Coal-fired electricity generators may also receive some free permits, cash and government loans to ease the transition to lower emissions.

2) Fixed Price Period – Sufficient permits will be issued to cover all emissions included under the scheme, so any reductions in emissions will be ‘voluntary’. Except for free allocations, permits will be issued at a fixed price.

3) Floating Price Period – The total number of permits issued each year will be capped at a level reflecting the targeted national emissions trajectory. Except for free allocations, permits will be auctioned by the Government and can then be traded in a secondary market. In the instance that an emitter has been unable or unwilling to purchase sufficient permits to cover its emissions, the emitter will pay a penalty rate to cover those emissions for which it has not secured permits. The penalty rate during this period will be twice the average cost of permits for the relevant year.

What is the likely price of carbon?

1) During the Fixed Price Period, permits will be issued at $23 per tCO2-e, increasing by CPI + 2.5% p.a.

2) For the first three years of the Floating Price Period, permits will be sold at auction, but with a price floor of $15 per tCO2-e (increasing by CPI + 4% p.a.) and a price ceiling of the Expected International Price + $20 per tCO2-e (increasing by CPI + 5% p.a.).

3) Australian Carbon Credit Units (ACCU) issued under the Carbon Farming Initiative (CFI) may be used to cover up to 5% of emitters’ obligations during the Fixed Price Period and any proportion thereafter.

4) After the commencement of the Floating Price Period, emitters will be able to use some types of emissions permits/carbon

▲

13


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comment

credits issued in other countries. This will link the carbon price in Australia to the international carbon price (‘international linkage’). However, up until 2020, emitters will need to meet at least 50% of their obligations using Australian permits.

Business and the EconomyApproximately 500 businesses will have obligations under the Carbon Pricing Mechanism, including power stations, natural gas retailers, mines, waste disposal operators and heavy industry (such as steel, cement and aluminium production).

Based on the starting Fixed Price of $23 per tCO2-e, the annual amount paid for permits in the first year would be of the order of $8 Billion. However, allowing for free allocations to EITE industries and power stations, the actual total cost of permits in the first year may be significantly lower than that figure.

An estimated one-off increase to the CPI of the order of 0.7% is expected during the first year. Another 0.2% increase is expected at the start of the Floating Price period. The total increase in CPI of 0.9% resulting from the carbon price mechanism is a bit over one-third of the increase in the CPI following the introduction of the GST.

The impact on real growth in per capita GDP is estimated at 0.1% p.a. over the period to 2050 and the impact on net jobs growth is estimated to be approximately nil.

Some Sources of Uncertainty● The long-term trend and variability of the carbon price itself,

once the Floating Price Period commences;● The impact of the carbon price floor and price ceiling, in relation

to amounts paid for permits, incentives to reduce emissions, and international linkage;

● The relationship between the carbon price mechanism and actual emissions reductions;

● The impact of a significant breakthrough in clean energy

technology (generation and storage) on the carbon price;● Relationship between the carbon price and foreign exchange

rates (due to international linkage); and● The impact of the carbon price on business, investment and the

economy in general.

Areas where Actuaries may Add ValueThe long-term nature of the emissions reduction goals, the large amounts of money involved, the structure of the carbon price mechanism (including price floor, price ceiling and international linkage) and the many sources of uncertainty may make this an area where actuaries can add significant value.

Some examples include:

1) Financial and risk modelling of the impact of the carbon pricing mechanism, including the implications of the carbon price floor and price ceiling, for:● Federal Government/Treasury;● Businesses (including some government authorities that will

be affected e.g. some generators, landfill operators, etc);● Consumers; and● Investors.

2) Development of carbon price risk mitigation strategies for existing businesses and their investors; and

3) Valuation of proposed energy projects, taking into account the uncertain carbon price into the future (e.g. scenario-based or stochastic modelling of NPV, IRR, etc, allowing for variable carbon price). ▲

James [email protected]

CPI Impact from Carbon Pricing Compared with History Source: Strong Growth, Low Pollution, Modelling a Carbon Price,

Australian Government (Treasury), July 2011, Chart 4.


14

1st Australasian Compensation Health Research Forum (ACHRF)

report

The first Australasian Compensation Health Research Forum was held in Melbourne on 13 and 14 october 2011. The Forum brought together leading Australian, New zealand and international compensation scheme practitioners and researchers (including actuaries) in compensation health and injury recovery.

Over the past few years we have observed a growing level of interaction between compensation scheme practitioners and researchers, and an increase in the compensation health research activity in Australia and

New Zealand. By hosting this first forum, the Institute of Safety Compensation and Recovery Research (ISCRR) and the Accident Compensation Corporation (ACC) aimed to provide opportunities for interaction on important system issues, and to increase the capacity for policy-relevant research in Australasia.

Opening the Forum, Professor Niki Ellis, CEO, ISCRR, said that it was fantastic to see researchers and policy makers from all over Australia at the Forum. She said that a key and contentious finding was that the compensation system causes unintentional harm to claimants with personal injury claims. “We are moving into a phase of interventionist research which means policy makers and researchers will come together more and more to address questions such as these,” Professor Ellis said. “Compensation health research is a small sector but with the proposed National Disability Insurance Scheme a bigger agenda is emerging.”

The forum theme of ‘Research to Action’ emphasised the focus on exchange of ideas and dialogue. This was reflected in the Forum program, which was designed to offer plenty of opportunity for discussion, debate and interaction. The event was oversubscribed and unfortunately we were forced to refuse registrations. However the 120 attendees made the most of the opportunities for interaction during the sessions and the coffee and lunch breaks. The Forum ran over two days and focused on the most important issues in compensation systems and compensation health research.

Day 1 – Thursday 13 October – was focussed on ‘Current challenges in compensation systems’ and included sessions on the role of legal practitioners in compensation settings; the national disability insurance scheme; alternatives to medical models of treatment and rehabilitation; and impairment and disability rating systems.

The opening keynote presentation was given by Professor Arno Akkermans from the Interdisciplinary Centre for Law and Health at Vrije University in Amsterdam. Arno spoke from a non-adversarial justice perspective, about the impact of lawyers on client recovery from compensable injury. He summarised the research evidence suggesting that compensation system processes cause unintentional

report


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Panel discussion

harm to injured persons. He also described the findings of a recent study from the Netherlands that identified five important characteristics of the injured person’s lawyer that impact on the lawyer-client interactions and the injured person’s recovery.

The keynote presentation set the scene for ‘The Great Debate’, which saw a panel of six eminent legal practitioners and academic legal experts debate the question “Should lawyers be involved in dispute resolution?” Following a lively (and often light-hearted) hour of debate the audience voted in favour of the negative team. The focus of this team’s argument was that it was not that lawyers were not needed in the process, but that a system needed to be designed whereby they were needed as little as possible. An award for the best rebuttal was presented to the affirmative team’s Professor David Studdert from the University of Melbourne for his ‘tongue-in-cheek’ premise that it was a question of equity and not involving lawyers in the process amounted to discrimination.

After lunch on Day 1 John Walsh, Assistant Commissioner of the Productivity Commission Inquiry into Disability Care and Support and an actuary with PricewaterhouseCoopers, gave an inspiring presentation on the proposed National Disability and Injury Insurance Schemes that revealed both the huge opportunities and challenges that the proposed schemes would have for the research community. John described how the extensive consultation process undertaken as part of the Inquiry revealed the appalling economic and social conditions endured by many people with a disability. He emphasised that it was clear to all involved in the process that a better funded, fairer and more equitable scheme was needed to provide care and support. He felt, despite the challenges, cautiously optimistic that progress would be made, and that research would be an important component of any future scheme.

Day 2 – Friday 14 October – was focussed on ‘Recovery and Return to Independence’ and included sessions on return to work, mental health and psychosocial predictors of recovery and the impact of claims management, treatment and rehabilitation.

The opening keynote presentation on Day 2 was given by Professor Ben Amick, the Scientific Director of the Institute of Work and Health in Toronto, Canada on factors influencing return to work and work role functioning. Ben pointed out that measurement of performance had advanced from indicators of return to work, to indicators of

functioning in one’s work role. He presented research that revealed that if the desired outcome is improvement in work role functioning then the most important predictive factors are organisational support (employer) and self-efficacy (injured worker), with the role of external occupational rehabilitation providers becoming less significant. In the discussion that followed it was clear that this research has significant implications for regulator policy.

The final keynote was given by Ms Liz Cairns, Manager of the ACC Serious Injury Service, on the impact of claims management, treatment and rehabilitation practices on recovery. Liz detailed the ACC’s experience in developing its serious injury service and outlined the problems identified in the previous system. She then provided an exciting example of how the ACC has gone about identifying and selecting solutions to these problems and the role of research in the process. Her presentation was a great example of the important role that research can play in compensation systems.

There were also a number of sessions in which delegates discussed the related issues of ‘evidence informed practice’ and ‘practice informed evidence’. This included a participative, roundtable discussion on Day 2 that sought to capitalise on the collective expertise of Forum delegates on the barriers and facilitators to use of research evidence in compensation policy, and the opportunities for improving use of evidence in policy. The major points of this discussion were captured and will be used to develop a consensus statement regarding the use of research evidence in compensation systems. The Forum program committee will lead the drafting of the consensus statement and Forum delegates will be asked to provide feedback on the draft.

The Forum marked the culmination of 12 months hard work by researchers and compensation system practitioners on both sides of the Tasman. It was truly a collaborative effort that engaged many people from compensation authorities and research organisations. Both the ACC and ISCRR have committed to hosting the second forum in Wellington in 2012 and we look forward to welcoming an increased number of actuaries at the next meeting. ▲

(On behalf of the ACHRF organising committee)Dr Alex Collie Chief Research Officer, Institute of Safety Compensation and Recovery [email protected]


16 interview

Where art meets numbers

– Meredith Brooks –in profile

How a classical ballet dancer made her mark on the finance world and eventually came home to her creative roots...


17

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interview

Known for her career in the highest echelons of funds management in Australia and overseas, former Actuary of the Year Meredith Brooks buzzes with energy as she shares her hard-earned insights into her

career, leadership, and forging a unique path in life. Meredith’s own career has been far from linear. A classical ballet

dancer from a young age with an affinity for numbers, in the economic climate of the late 1970s Meredith decided actuarial studies would secure a job. After graduating from Macquarie University and becoming a Fellow of the Institute of Actuaries in the early 1980s, Meredith worked as an actuary at AMP for two years, where she soon realised that being an actuary was not for her.

“I’m good with numbers, but my personality doesn’t match that –I prefer big, splashy ideas, rather than the minutiae,” she explains. Drawn into the world of funds management and investment banking, Meredith spent her 20s in roles at Bankers Trust and Towers Perrin followed by 14 years with Russell Investments in Australia and abroad, including four years as managing director for Russell’s Australian business and then five years as head of the US institutional business in New York.

While her career trajectory shows a mastery of numbers, Meredith says managing people has been the most satisfying career challenge to date. “To me, numbers are easy but people are hard.” When I ask what makes a great leader, Meredith is careful not to generalise. “Everyone needs to find their own style but I prefer a pull, not push approach, so I work at inspiring others so they want to achieve.”

Meredith has also always abided by her golden rule of honesty and disclosure as a leader. “I’ve never understood why you would hold back information from your team until every detail was finalised. I think people respond to being included and informed.”

Consistent with this spirit Meredith says good leaders need to be prepared to take the blame and that also requires keeping the ego in check.

Good leaders also need to figure out how to make more use out of talented women. “If we’re ever going to see more women in senior management the system has to change and change will only come when men take a greater share of the household duties – if they start having to help more at home, they will change the system.”

Leadership has its downsides too, Meredith warns. “Running a business can be lonely at times and I found it really important to find an outlet I could offload to. I didn’t want to burden and bore family and friends so I sought professional counselling when I was running the Russell business in Australia,” she recalls candidly.

Although her time at Russell was a challenging and rewarding one, Meredith decided when she assumed her role as Head of Institutional Business she would retire at the end of the five year contract. “Life is short and after decades working in intense corporate roles I felt the world was passing me by; I felt I had more to offer. I didn’t have a plan when I left Russell at 42 years old but I thought maybe something in the arts,” she recalls.

After retiring from full-time work in 2004, Meredith was quickly recruited to the board of Perpetual limited (member Audit, Risk and Compliance and Investment Committees) – a natural fit given her

professional background. (She just stepped down from this role in October 2011). Meredith did go on to further immerse herself in the arts, chairing Synergy & TaikOz Limited from 2005, while also launching her career as a Pilates instructor on Sydney’s north shore.

For a woman who proudly says she officially retired some seven years ago, Meredith clearly still thrives on having a great deal on her plate. “I’m turning 50 soon, but honestly it’s just a number. Life is really good.” When Meredith will actually stop working altogether is an unknown even to her, noting her parents in their 70s are still active on numerous committees. “I have no set date when I’ll stop working. I’m looking forward to keeping on doing what I’m doing as long as it’s interesting.”

As to what’s next on the agenda, Meredith’s experience in funds management sparked a realisation she wants to be on the investors’ side of the system. “People need more help navigating the complex superannuation system so they can get a better outcome. I’m not sure exactly what that role would look like but it’s certainly what I’d like to do next.”

By any reckoning Meredith has had a successful career and continues to flourish. But she shies away from the term – ‘success’. In her own words, Meredith was never ambitious per se. “Having an ambition implies there’s an end goal where ‘you’ve made it’. You never actually get there, it’s a constant process for me, continually striving to do something interesting and worthy. Ambition is a distorted way of looking at a short, passing life.”

Notwithstanding different interpretations of success, I wanted to ask the obvious question of a woman who has had such an impressive career to date – what should young actuaries and other

professionals keep in mind as they build their careers?Meredith has a few key pieces of advice. “Above all, don’t be too

hard on yourself,” she says, noting that it is easy to lose perspective. Consistent with the theme of our conversation and with her Pilates practice, she advises “you must know yourself, who am I, how do I interact with others?”

In terms of skills, Meredith attests her material success to having strong self-discipline to finish anything she starts, developed through years of classical ballet training and actuarial studies. “Even though I didn’t end up being an actuary, that background helped me develop my confidence, vital problem solving skills and the ability to think abstractly about technical issues. This is a great defence in the finance industry, where people can try to confuse you with complex numbers.”

Finally, Meredith advises young professionals to engage in constant self-reflection. “Your career path comes down to who you are as a person. How do you contribute and feel rewarded in the work you do?” Coming back to her view on success and ambition, she says “the question should not be how to be successful, but how to have a fulfilling life. To do that you have to decide who you want to be.” ▲

Candice [email protected]

The question should not be how to be successful... but how to have a

fulfilling life.


18 notice

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Wanted...– new Editor(s) for Actuary Australia

James Collier and Catherine Robertson-Hodder will be stepping down as Editors of Actuary Australia at the end of this year.

• Areyoukeentogetyourviewsouttothemembership?• Doyouhaveacreativestreakthatneedsanoutlet?• Wanttoraiseyourcareerprofile?• FeellikecontributingtotheInstituteinaprofessionallyrewarding

and practical way?

This role presents a great opportunity to have your say, make new connections, show your leadership skills and potentially step outside your comfort zone.

What do you need to do?• Workwith theEditorialCommittee to identifycurrent issuesof

relevance to actuaries and source content and authors for the magazine articles.

• Write,orfacilitatethewritingof,aneditorialforall10editionsofthe magazine (March – December).

• Reviewarticlesforsuitabilityforpublishinginthemagazine.• ActasConvenoroftheEditorialCommittee.

You won’t be doing it alone...in this role, great support is continuously provided by:• theothermembersoftheEditorialCommittee;• the Institute’s Marketing & Communications Manager who is

responsible for overseeing all aspects of production;• ourgraphicdesigner,and• ourvolunteerproof-readers.

The role involves Editorial Committee meetings at the Institute once a month (free lunch included if based in Sydney); and a couple of hours per week of magazine coordination involvement.

Interested?Email the Editors at [email protected] – we’d love to hear from you if are interested; or know of someone else who might be suitable for this engaging and rewarding role.

“As Editor of Actuary Australia, I’ve pushed my boundaries,worked with a great team, extended my contacts within theInstitute and have loved every minute of it!!! – Catherine Robertson-Hodder


19review

T he influential actuary – an oxymoron or tautology? The roomful of actuaries I was with would be hoping it is the latter, at least by the end of the course. The Institute recently hosted David Miller, a US actuary with

16 years of actuarial experience and now a full-time leadership coach. David presented a course titled Be an Influential Actuary – Relationship Mastery.

The objective of this course is to be more influential in business and work settings by understanding your behavioural style as well as the style of those you wish to influence. David’s approach utilises the ©DiSC profile framework for understanding the way that different people communicate and are motivated. At the start, David had us break off into groups representing our own behavioural style based on two questions. These were: (1) Are you Active or Thoughtful? (2) Are you Questioning or Accepting? Depending on how you answered these two questions you ended up in one of the four corners of the room.

● Active and Questioning – means you are someone with predominantly D style (Dominance)

● Active and Accepting – i (Influence)● Thoughtful and Questioning – C (Conscientiousness)● Thoughtful and Accepting – S (Steadiness)

Once we split in our DiSC profiles, each group then workshopped aspects such as:

● What we like and dislike about workplaces?● What are the characteristics of people that we like or dislike

working with?

Essentially each personality type has preferences around these aspects. For example, C’s like time to work through problems and get good solutions, and like structured work environments.

David also showed videos of people with different styles and we were asked to observe them. Were they were more reflective or more assertive? Did they show empathy? For me, this was a good reminder of a fundamental fact: it is important to observe and listen to those that you work with and would like to influence.

The second section dealt with tailoring your communications. David showed video examples of effective and ineffective interactions. For example in communicating with D’s get to the point and keep it high level, for I’s be more social but still high level.

S’s for example are more reflective and more people focused and C’s are also reflective but more task focused. While at times the interactions seemed artificial, the message is valid. DiSC terminology aside, the idea is simple: communicate in a way that you know the person who is receiving information likes to receive the information.

A useful approach is to look at the gap between your style and the style of the person you are looking to influence. David detailed four aspects of the messaging.

● Focus: Goal/Task oriented (D and C) at one end and Relationship (i and S) at the other

● Information needs: General (i and D) or Specific (S and C)● Social Interaction: Outgoing (D and i) or Reserved (C and S)● Pace: Fast (D and i) or Slow (C and S)

As an example, if I was say a C and wanted to influence a D, then I would need to focus on the goal more than the relationship side. However the gap is not large (both D and C types are more goals focused). In terms of the content of the message, I would want to keep the information as high level as possible, certainly more high level than C would be comfortable with. Also my pace would need to be much faster.

As technical professionals, I believe us actuaries fall into the trap of focussing on the technical side: the analysis, the models, the results, etc. However the delivery is as important as the technical content. A framework such as DiSC helps to understand how people differ in behaviours, motivations and approach to relations. This can be used to consciously tailor the message to best suit the audience. ▲

Sen [email protected]

Be an

Influential Actuary Dave Miller


20 report

Iwork for Investec, a South African investment bank. Over my career of seven years, I have always worked in banking. However this has covered a vast range of sectors including mining, power, oil and gas, infrastructure, transport and

property. The types of investments I have been involved in also vary greatly across the spectrum of risk, from straight ‘vanilla’ lending, to direct equity investments into Property or Corporations.

My current role is probably best described as a combination of a traditional property developer, an investment banker and asset manager. I look to invest the bank’s capital into direct property/infrastructure developments, specifically focused on those assets with government, semi-government or institutional leases. Investec will undertake development and delivery risk, meaning we engage in a project at a much earlier stage than a bank typically would. As a result, our team must possess a balance of property specific expertise and financial structuring skills. Through appropriate discipline and diligence, we are in a unique position to create and unlock value for the project, partners and the bank. My actuarial studies have held me in good stead to be able to critically analyse the risk/reward trade-offs inherent throughout the development phase of our projects.

We utilise a structured finance solution, which can not only deliver significant financial benefits through strategic risk mitigation and optimal application of funds; it is also predicated on transparency and accountability for performance. Again, my actuarial studies have assisted me to always remain objective and professional; skills which are particularly critical when valuing our projects.

Scott [email protected]

My actuarial career to date has spanned nearly nine years and I consider myself fortunate over this time to have gained experience in both traditional areas and ‘wider fields’. Currently I work in what is broadly

considered to be a ‘wider fields’ area, and my role combines actuarial

skills with an understanding of financial derivatives and executive remuneration strategy and design. In a nutshell, our team at Mercer values and models complex financial transactions and share plans.

Our team is quite small so each team member is involved in all stages of the valuation process including collating and analysing the data, setting the assumptions, tailoring the valuation model to suit the plan design, analysing the results, preparing the report and discussing the outcome within the team and with the client (and often with the client’s auditors!).

My role involves more than just sitting at a computer and crunching the numbers. Communication skills are an important part of the work because there is ample opportunity to get involved with presenting the results, in both verbal and written form. The vast majority of our client contacts have a limited background in finance so we get a lot of practice at explaining complex ideas in simple terms. Not only do we deal with Australian clients in Australian markets, but we also have a solid client base overseas. Overall, I really enjoy this work because it is dynamic, it supports the actuarial skill set, it relates to both Australian and international markets, and the techniques allow us to be flexible with our service offering.

Rebecca [email protected]

Although I work in an insurance company, my role is very much unrelated to that of an actuarial function. I lead a team in AXA’s Asia regional office that reports to the Regional CEO and our main responsibility is to

help him manage our operations in the region – i.e. our core focus is on the business and strategic management of our Asian business. Being a regional role and supporting eight markets, I also need to have a good understanding of the countries that we operate in and appreciate their unique culture

I was fortunate enough to have worked and lived in a number of countries in Asia Pacific (Australia, Hong Kong, South Korea, Malaysia and Taiwan) and also worked in almost all of the functions in

Four recently qualified Actuaries / Fellows from the September 2011 Professionalism Course talk about their current roles and their journey to achieving the Actuary designation.

Scott Ellis Wynnie YeungWilson MaRebecca Trouville

Actuary


21

▲

report

a life insurance company. Having such local experience is important as quite often one would come up with strategic ideas that would work well in theory but not so well in practice – a common cause of tension between regional and local offices!

This role also requires a fair bit of travelling which can be quite challenging from a work-life balance perspective. When I am on the road, my day would typically end at around midnight as I would be attending meetings all day then finish off my other work in the hotel room at night (I am writing this at 1.00am in Mumbai!). Despite this, I find the role exciting and rewarding as I have a first hand view of how the Company is performing and also have the opportunity to play a big part in how to support the growth of our businesses around the region.

Wilson [email protected]

My career has always been connected with the retirement/ pension fund industry. I have migrated from Melbourne to Hong Kong as an actuarial analyst and have transitioned from working in the

private sector to the public sector. I now work for the Mandatory Provident Fund Schemes Authority in Hong Kong. There are relatively few actuaries at my workplace and I probably work with more lawyers than actuaries ton a day-to-day basis. What I have enjoyed most has been the opportunity to liaise, coordinate and work alongside different professionals on a diverse range of projects: from what would be considered ‘actuarial’, e.g. revising the reserving framework for MPF investment guarantees, to anything ‘non-actuarial’, e.g. conducting public consultations and developing a web based electronic platform for comparing fees and charges of MPF funds.

To me, a major challenge working in policy development has been the process of reconciliation amongst stakeholders with widely different views and objectives, as it is not possible to accord with the wishes of everyone. Knowing where to draw the line and coming to a position that takes into account the overarching principles (the long-term good) and the consensus of views expressed, is certainly more an art than a science. Having an open mind and genuine respect for people from all walks of society have been some of the key lessons I have learnt during the process. ▲

Wynnie Yeung [email protected]

FellowsAnkit BansalNion Hung Chin ChangLee Hung ChoiLiang DongRiley Philip Anthony EllsmoreRoland FanClaire FergusonSurath Anthony FernandoAmitoz Singh GillSilvia Siliang HeSimon Siu-Sang HoYi Hao HuangWilliam Hai Jian LiangWilson LuuWen Yu JiClaymore James MarshallBradley John ParryHitoshi SonobeMerry Li Si TangShemin TejaniMark Anthony ThambyrajahNelson VasconcelosShona VijPu Shen XinWynnie Lai Ping YeungHui ZhangWei Zhang

ActuariesSandra Catherine ChapmanCindy Siu Ying CheungYuan DengScott James EllisBabak Golestan-NejadSarah Jiali HePeter LaneVictoria GwiWeon LeeWing LamWilson Wing Yiu MaJohn MokJer Horng OoiMegan Gai ReynoldsHeng ShenHecy Wei Han SuYan Lei SunRebecca Lauren TrouvilleNicholas Keith WhitlockJinnan XieDaxiao ZhongMin Yi Zhou

Congratulations to our New Fellows and Actuaries – September 2011


22

Mind Boggle (AA163 Solution) The grid given in AA163 is a Boggle game grid, with the list of words being words made from the letters on the grid, according to the rules of

Boggle (these can be found at http://www.boggle-game.com/rules-boggle.php). From examining the words, it is possible to deduce that the arrangement of letters in the grid is as follows:

16 correct answers were submitted. The winner of this month’s prize, selected randomly from among the correct entries, was Nick Stolk, who will receive a $50 book voucher

Native MathKatherine Gainsborough and Allan Quatermain stopped in front of a wall of the cave they were passing through on their journey to King Solomon’s Mines.

“What many people don’t realise is that the natives of this area are very talented mathematicians,” said Allan. “Completely independently of mathematicians in the more developed parts of the world, these people have managed to derive many of the mathematical formulae that we are familiar with. The people here use the same mathematical operation symbols as we do. A plus sign is still a plus sign, for example. Their numbers are also the same as ours. However, because of the differences between their language and ours, they have come to use different letters to symbolize common variables from what we use. Take, for instance, the formula for the area of a triangle: half base times height. We would write that as: 0.5 x b x h. The native mathematicians, however, would write that as: 0.5 x s x f.”

“So, does that mean that all of the formulae written on this wall are formulae that we’re also familiar with?” asked Katherine.

“That’s right. They’ve just used different letters from what you would be familiar with. There is a consistent, one to one mapping between our letter variables and theirs, though.” “What’s this?” said Katherine, pointing to a string of letters on another part of the wall.

SYβBT FYB∂ FV∂IT

Allan looked at the letters for a moment and then shook his head. “I’m not sure what that means, but don’t worry about it. It’s not a mathematical formula. Just take a look at the formulae over here and see if you can translate them back into the letters and symbols that you are familiar with. All of them are formulae that you should know from your schooling and actuarial education.”

1. kd = β avvcd

2. exp(vo) = -1

3. h(d) = (2m2o)0.5 exp(-(d – p)2/(2m2))

4. K = oq2

5. S + Dexp(-q(Y – y)) = C + B

6. J(d) = (d – 1)J(d – 1)

7. d = (– t ± (t2 – 4ks)0.5)/2k

8. W(Qv) = Qh + nv(W(Qf) – Qh)

9. rA/ry + 0.5m2B2(r2A/rB2) + qB(rA/rB) – qA = 0

10 x = W[(D – pd)(U – pu)]

11. u = fd + t

12. Kd = ed

puzzles

In the Margin with Genevieve Hayes “I have discovered a truly marvelous proof of this, which this margin is too narrow to contain” – Fermat.

with Genevieve Hayes

“I have discovered a truly marvellous proof of this, which this margin is too narrow to contain” – Fermat

in themargin@actuar ies.asn.au

For your chance to win a $50 book voucher, rewrite the given

formulae using the symbols and letters that are commonly

used in English language text books and email your solution to:

[email protected] . ▲

v = 1

g


23

T his month’s column has been prompted by some conversations at Professionalism Courses and a chance encounter with a young actuary* who suggested I take up this topic. It’s one of my favourites and fundamental

to communication – using names.

Now I know that not everyone thinks this is important but, before you stop reading, think about how you felt the last time someone forgot your name (or got it wrong). The aim of this column is to help you avoid having that effect on other people.

I am not going to spend a lot of time with methods for remembering names as there seems to be a wide range of ‘systems’ – and different things work for different people. However, some of the following generic tips may help support your own ‘system’:

● When you hear a name, use it! It might help embed it in your memory and it also allows you to check you have got it right.

● If you are not sure that you heard it correctly the first time I suggest that you check it straight away. It may have been hard to detect Nick v Mick, or it may be an unusual name or an accent may have made it difficult to identify. In any case it won’t hurt to ask something like: “I’m sorry, would you mind repeating your name?” Alternatively, if relevant, feel free to refer to their business card.

● You may also like to confirm your pronunciation, if their name is difficult for you to say. (I think it’s polite and it may help embed it.) You may also like to check their preference (e.g. Dave v David) before you take inappropriate liberties. (Please don’t call me “Marty”!)

● If you are at a function where name tags are provided then use them. If you are organising a gathering then remember to at least consider providing name tags.

● You can help other people with names by providing clear introductions. You can also help in more subtle ways. If you are at a function and there are two people that you know and you suspect that they know each other you could say something like: “Hi Barry. You remember Melinda of course?” That allows Barry to say, “Of course, hi Melinda” and everyone is happy.

● If you are attending a meeting where there are a few unfamiliar

faces you can make note of their names on a hand-drawn diagram of the room or meeting table. Alternatively, if most people have given you their business card, you can arrange them in a way that corresponds to their seating position to help you recall who is who.

● If you are meeting with a group of people that you have met before but your recollection is vague you might undertake some preparation. Check your memory with a colleague or see if their photo is on Linkedin. (Another benefit to continue with last month’s topic). Be careful relying on their Facebook photo.

Sounds pretty straightforward? Let’s consider three tricky situations…

1. Following on from the fifth bullet point above, what happens if Barry and Melinda haven’t met? That’s OK, a simple response like “I’m sorry, I thought you both were famous” may overcome the problem and you can switch to a normal introduction, perhaps reminding them where they may have met.

2. What happens when you forget someone’s name? No, avoiding them is not the right answer! You can look for clues in the conversation or simply be upfront, saying something like, “I’m really sorry. I know we have met before but I can’t recall your name.” Most people are not perfect with names and will appreciate both your honesty and your willingness to check.

3. What happens when you get their name wrong? Again, I think it is best to be upfront and apologise. If you are brave enough you can also promise to get it right next time! This may not be sufficient, of course, if it is your children’s names or your partner’s name – that probably requires flowers!

In summary, I think that the most important factor is caring. If you believe that it is valuable enough for your relationship to focus on his/her name then I am confident that you will improve. It takes more than maths to use the right name when you are communicating. ▲

Martin [email protected]

* Sorry, Alex

more than maths

I’ll Never Forget Whatshisname!


24 advice

with Gae Robinson

[email protected]

Indispensable – moi? I’ve been working at a consulting firm for a few years, since I left uni. I’d like to take three months’ holiday to do a big Europe trip, but I’m hesitant to ask – my absence would make it difficult on some crucial projects. Take your holiday. You need holidays, and if three months in Europe is what you want, that is what you should do. Holidays refresh, holidays give your brain a rest, they expand your horizons, they give you perspective. Life is too short to not go on holidays because of work.

Sure, your absence may cause some inconvenience – and perhaps the exact timing of your holiday can be chosen to minimise it – but it is too easy to say you won’t go because work needs you. Won’t this always be the case?

Your firm and your clients will cope without you for a while. You could resign tomorrow, right? And they’d have to deal with that. So a few months of your absence is not going to bring the business to its knees. And you can help by giving plenty of notice.

Almost no-one is indispensable. And even when the genuinely indispensable leave – guess what? Turns out they aren’t indispensable after all. I even left myself once!

Who will I be?I’m getting married in a couple of months and haven’t made up my mind about whether to change to my husband’s surname. Can you help? Q1. Have you ever done anything so embarrassing that leaving

your current identity behind, thereby removing all links between you and this embarrassment, would be a blessed relief?

Q2. Is your current surname almost impossible to spell or pronounce?

Q3. Does the combination of your first name and surname form a

snigger-worthy phrase, which has been a source of ongoing strife between you and your parents and for which you may or may not have forgiven them?

Q4. Is your current name terrifyingly similar to that of a public figure of ill repute – criminal or politician – or a cartoon character?

If you have answered yes to any of these, I encourage you to change your name. However I find the following reasons for a name change less convincing:

● It will be an expression of your undying love for your husband-to-be. Statistics tell us that the mortality rate of love – and with it marriage – is not looking good. And I know it’s unkind of me to mention it, but what will you do with your surname should the worst befall your relationship? And what if you marry again? (At this point I offer you my admission that, if the people of the world were divided into ‘romantics’ and ‘those who are not so romantic’, I would be in the small third group in the naughty corner called ‘so unromantic we don’t have a category for them’)

β● It will be administratively simpler – particularly if you have children. I promise you that today’s world is 100% capable of coping with a mother whose surname is different to her children’s.

● You would like to introduce just the slightest hint of an age-old chauvinistic tradition whereby a wife is the property of her husband. Of course, no-one wants to do that, but doesn’t the idea hang around just a LITTLE bit?

● Everyone else changes their name.

Here’s one thing. With five minutes on the internet, I can track down pretty much any male I’ve ever been friends with, and find out what he’s up to. I can probably find a Facebook account or an email address and re-establish contact, even after 20 years or more. (And, obviously, he can ignore me if he likes.) But, sadly, if a female friend I haven’t seen for years has changed her surname, I can’t find her. My BFF’s from primary school – gone! My tennis partner from uni days – lost to me! β

Last, you ask “OK, if I keep my surname, what surname do we give to any kiddies?” Do you go the double-barrel name? Well, I’m not a big fan, as this approach breaks down within two generations (eight-barrelled surnames?). So, it’s your surname or his. Choose the most exotic/interesting. Or the one that goes with your favourite first names. Toss a coin. Arm wrestle. Give the boys his name and the girls yours. Or let the profession decide – use Actuary Australia’s The Pulse! ▲

Remember to send me your questions! – the more controversial, the better.

Gae answers your serious and not-so-serious questions about life in the office, career, study and coping as an actuary in the real world

Indispensable – moi? • Who will I be?


25report

In September, the Young Actuaries Program invited the Institute President Barry Rafe, to speak to young actuaries about his experiences and how to succeed in their careers. Barry’s messages were clearly

articulated, but what was unexpected was the fashion in which they were delivered.

Barry started by describing his journey from the beginning. He had graduated as a nerdy, long-haired and bearded maths student who began taking actuarial exams because it was a great way to continue to study whilst working, and also so he could avoid having to talk to people. In fact, Barry claims that during his uni days he used to use his beard as a pen holder, in a similar way to how Sideshow Mel from the Simpsons keeps a bone in his hair. It was a hilarious story which made the stereotypical actuary who keeps a calculator in the breast pocket look cool.

Then, one day he met a smooth, well- dressed actuary who also happened to be an excellent communicator. It was a moment which made him want to become a good communicator as well. This smooth actuary showed him the importance of effective communication which became something Barry continually tries to improve on and encourages others to do so to this day (Tip 1 – communication).

In fact, Barry told a story where he has taken this to the extreme by performing in stand-up comedy nights where he recently won an amateur competition. He described his nervousness, as he lined up back stage readying himself for the stage, as beyond anything he has faced in professional presentations. Barry said you should always be challenging yourself; if you never feel nervous then you should

be challenging yourself on something else (Tip 2 – early on in your career, make sure you are constantly challenging yourself).

Barry’s stand-up comedy story actually had one more learning. He said you need to be yourself to put others at ease. Trying to be someone else won’t work in the long run and people will appreciate you more if you show them your true self (Tip 3 – be yourself).

Barry also mentioned that it is important to keep your humility. Don’t be arrogant as clients don’t like to be told to do this and that. There are lots of smart people out there so never underestimate non-actuaries. In fact, when I asked how actuaries compare to management consultants when tendering for the same projects, Barry said actuaries often looked like ‘boffins’ in comparison (Tip 4 – humility is a must when working with clients and non-actuaries).

For consultants, often clients bring you in to do the dirty work. You want to involve them when making decisions. If the client pushes you, you have to push back a bit because ultimately they want someone who can stand up for something (Tip 5 – be assertive).

Barry’s presentation was capped off with one of the most interactive Q&A sessions we’ve seen at the Young Actuaries Program. His stories and jokes and ability to weave them into his main points were definitely the highlight of the evening.

I would like to thank Barry for his presentation, everyone for coming, and our sponsor Ernst & Young for providing a fantastic venue as always. I look forward to seeing you all at the December Young Actuaries Program event. ▲

Nick [email protected]

YAP Barry Rafe presents to an attentive audience

YAP delegates

Tips from the President


26 report

Most people who know how to spell the word ‘actuary’ would describe actuaries as among the most intelligent, talented and hardworking people. However, there seems to be disproportionately few actuaries who break through the ceiling of respected trusted advisors or middle management, and into C-level roles and Board of Director positions. I think there is much to be learned from the journeys of those actuaries who have successfully emerged as influential leaders in our business community. The ‘Actuaries in Leadership’ speaker series has been established to engage prominent actuaries in senior leadership positions to share their tips and ‘war stories’ with the audience.

On Thursday 27 September, Ernst & Young generously hosted the inaugural ‘Actuaries in Leadership’ speaker series for the University of Melbourne Actuarial Alumni and Melbourne members of the Institute of Actuaries of

Australia at their premises on Exhibition Street. Co-host, Kent Griffin, Partner and Head of the Actuarial Services and Financial Services Risk Management in Melbourne, spent considerable time in senior executive positions at AXA prior to joining E&Y. Kent welcomed 60+ attendees and keynote speaker Meredith Brooks. He referenced the fact that the Institute’s membership base in Melbourne has reached approximately 600 and is a relatively tight community, making networking and professional development opportunities such as the ‘Actuaries in Leadership’ event all the more relevant.

Upbeat and energetic guest speaker Meredith Brooks had many insights to share on the topic of leadership, emphasising that the importance of putting people first cannot be overstated. In Meredith’s words,

“Numbers are easy, people are difficult.”

Meredith described how successful corporate relationships are predicated on a culture of trust; particularly in a climate of change. In Meredith’s experience, there is no template for success – it is up

to the individual, with luck and talent of course playing roles as well. Knowing yourself and recognising one’s own strengths is also key.

“It is important to understand what you are good at. There is no prize at the end for hitting your head

against a wall.”

Meredith has had a varied and successful career as an actuary, starting out in a technical role with the AMP, which she perceived as ‘mind-numbingly boring’ at first! However, taking every opportunity that came her way and ‘lucking out’ with a great boss, she was introduced into management-level decision setting her on a trajectory that took her to locations like Dublin, London and New York. Meredith was entrusted with the role of Managing Director, Australasia, of the Frank Russell Company at the age of 34. Four years later, she moved to New York as Managing Director, US Institutional Investment Services.

Returning to Sydney in 2004, intending to take a personal break, opportunity came knocking again. Meredith doesn’t strike me as the kind of person to turn down a good opportunity and so it transpired that she joined the Board of Directors of Perpetual Limited as a Non-Executive Director.

These days, Meredith balances her corporate responsibilities with her role as a registered pilates instructor, which she says has helped her balance her life and priorities. Her pilates teaching has reinforced that everyone reacts to the same information very differently, and as business leaders, we must be mindful of our impact on others. Read more about Meredith on pages 16 and 17 in this edition.

In a nutshell, Meredith’s top tips for aspiring leaders are:

1. Know yourself. You’ll get nothing out of pretending.

2. Find a supportive workplace culture. Share the same philosophy as your organisation.

3. Take your job seriously, but don’t take yourself too seriously.

4. When faced with too many options, eliminate the obviously stupid ones, then pick one option, stick with it and make it work. Do not go back to get more data and re-analyse the options. You can make any reasonable decision work.

We appreciate Meredith making the time to share her wisdom with us. Special thanks must also go to Kent Griffin and Ernst & Young for hosting the launch of the ‘Actuaries in Leadership’ speaker series. We look forward to welcoming more University of Melbourne alumni and Actuaries Institute members at the next event in 2012. ▲

Joyce Au-Yeung [email protected]

For an overview of postgraduate courses in actuarial studies offered at the Faculty of Business and Economics, please visit: http://www.gsbe.unimelb.edu.au/courses/actuarial-studies/.

Actuaries in Leadership

Joyce Au-Yeung, Kent Griffin and Meredith Brooks


27

event notice

The Actuaries Institute will convene the 2012 Financial Services Forum in Melbourne on 30 April – 1 May 2012. The theme for the Forum is ‘Think Big’.

We must ‘think big’ if we are to successfully navigate the short-term turmoil whilst preparing for the long-term structural changes facing Australia and the global community. How can we manage the risks, capitalise on the opportunities and push the boundaries to continue to add value to our industry and to the millions of Australians who entrust their money to us?

The program is now being prepared and we are seeking papers or presentations. A limited number of concurrent presentation slots are available. Presentations will be 20 minutes in duration and presenters should be prepared for another 20 minutes of discussion and question time. Supporting papers are encouraged but not required.

Suggested Master Topics – Structural Reform & Public Policy

– Driving Value in Financial Services

– Superannuation & Wealth Management

– Enterprise Risk Management & Corporate Governance

– Connecting with Consumers

For a more comprehensive topic list, key deadlines, and a copy of the Submission Form and Synopsis Template, visit: www.actuaries.asn.au/fsf2012

Deadline for submitting Expressions of Interest is: Friday 2 December 2011.

Melville FSF Prize

The Melville Financial Services Forum prize (monetary value $4,500) may be awarded to an author of a paper considered by the judging panel to have either effected significant advance in the actuarial profession’s understanding or knowledge of a specific subject or sphere of knowledge;

OR

collected or presented existing material in such a way as to raise the awareness of the profession regarding an important contemporary issue.

Contacts

Rob Daly [email protected] +61 (0) 2 9448 9877

Ismar Tuzovic [email protected] +61 (0) 2 9220 1375

Sean McGing [email protected] +61 (0) 3 8641 6970

2012 Financial Services ForumCall for Papers and Presentations


28 student column

IIn the student column of the October 2010 issue of Actuary Australia, Arun Isaac wrote a compelling

article entitled ‘The European Union: A Modern-Day Fairytale’. What a difference a year makes. In his article, Arun highlighted the benefits provided by the EU to its member states including; the sense of unity rather than segmentation, a shared currency as well as its political strength. Now, two of these three benefits have transformed the EU from a modern-day fairytale into a dystopian nightmare. The ongoing sovereign debt crisis has exposed the flaws of this once perfect economic and monetary union.

What started off as a seemingly isolated Greek debt problem has now spread to all of the ‘PIIGS’ countries (Portugal, Ireland, Italy, Greece and Spain). Two of these countries, Portugal and Ireland, have since received tens of billions of Euros in bailouts, and Greece has agreed to a second bailout package. Spain and Italy are also on the verge of a financial crisis and may require multi-billion Euro rescue packages if their situation deteriorates. This would be catastrophic to the EU as these two countries are the third and fourth largest economies in the EU.

The single currency, Euro, was introduced in 1999 in order to eliminate exchange rate problems due to the high volume of internal trade, to provide price stability and, most importantly, to offer a political symbol of integration, among other things. While this system was effective during 1999-2008, a period characterised by strong economic growth and fiscal stability, the Global Financial Crisis of 2008-2009 revealed the downsides of this currency system.

For a country with monetary independence, its currency acts as an automatic buffer against the negative impacts of a downturn as well as acting as an effective tool in assisting economic recovery. This tool is not available to countries within the Eurozone, as the economic situation of one country, especially a smaller country such as Greece, will not have a significant impact on the value of the shared currency. On the other hand, if a large economy, such as Germany, faced an economic or fiscal crisis, this would more than likely drag down the value of the shared currency, which may have a detrimental impact on smaller countries with strong fiscal positions.

In addition, a shared currency also means a common interest rate. The interest rate is primarily a tool used to control inflation, however, the effectiveness of this tool drastically declines when there is differing inflation within areas which share the common currency and interest rate. Hence, while the monetary union of the EU initially seemed to be beneficial for all member states, a deterioration of the fiscal and economic positions of several member countries has questioned the soundness of this policy.

The political strength of the EU has made it a powerhouse, second only to the US, and has also allowed it to have a say in global issues. However, within the EU itself, having strong political leaders such as Angela Merkel and Nicolas Sarkozy makes it difficult to come to an agreement on issues such as the size of bailout packages as well as the introduction of Eurobonds. As a comparison, imagine if an Australian state, such as New South Wales, was divided into several small autonomous regions. Envisage the difficulty and the number of laws that would need to be implemented in order to share resources found in different parts of the state – such as the water in the Murray-Darling river system. This overregulation is a major problem for the EU as more time is spent deciphering the rules rather than implementing any policies. For example, there are 26,911 words for the EU regulation on the sale of cabbage, compared to only 7,818 words for the entire US constitution inclusive of all 27 amendments.

If it continues on this path, the future of the economic and monetary union that is the EU appears to be bleak. The waning of the single currency model as well as constant bickering between the member states has exposed the weaknesses of the system. Unless drastic changes are implemented, the EU may fail to remain a successful example of a harmonious monetary union. ▲

Arreni [email protected]

Neeharika [email protected]

The european Union: A Year on

L to R: Neeharika and Arreni


29

On 31 October we tried something new. I interviewed investment business leaders Greg Cooper and Peter Warne, both actuaries, at an Insights Networking session (and webinar) called ‘The CEO and the

Independent Director – Tips for your Investment Career’. The session can be viewed online at https://actuaries-institute.webex.com/actuaries-institute/ldr.php?AT=pb&SP=MC&rID=7226077&rKey=01732cb9213c1cb5 or you can use our Search Resources function on the website homepage.

Greg Cooper is CEO of Schroders Investment Management Australia Limited. Peter Warne was Head of Bankers Trust Australia Limited’s (BTAL) Financial Markets Group from 1988 to 1999 and is a Director of ASX Limited as well as being on the boards of several listed entities.

Greg and Peter had not met before that night, and we did not rehearse before the intervtiew. What was remarkable was how similar their tips were on what it takes to succeed in investments, and many of their tips are applicable to all young actuaries looking to succeed in any field.

How to get a job – differentiateThis is the hardest part at the moment for many young graduates, with investment banks shedding staff world wide.

To be noticed you will need to stand out, to demonstrate your difference. CVs are becoming generic as everyone has been to the same course on how to write one – so they are less useful to employers as a differentiator (they are used for the short-listing process, but don’t assume the person interviewing you has read your CV in detail).

Be able to think outside the box – you will need to demonstrate this in the interview. Greg said that he asks people questions that have no right answer – he wants to see how a person thinks or reasons.

When putting a team together, companies look for a mix of personalities and skills. Highlight and demonstrate how your training as an actuary makes you different from other candidates. Both Peter and Greg said that being an actuary was a help for a career in investment, because an employer knows that you are smart, numerate and (especially if you have progressed to Fellowship) can think outside the box.

How to keep a job – communicateBoth Greg and Peter said that the key things that had made them successful were their strong communication skills and their ability to

deal with and work with people. Peter talked about the joy of working collaboratively in a team, and in fact the necessity of doing so. He said that if you got a job in investments but then just kept to yourself and did not interact with your workmates, you wouldn’t last long.

Greg talked about how he gets the best out of people he leads and works with by working out how they tick and how to communicate with different personality types. (The ‘Be an Influential Actuary’ sessions held recently were all about this – we are planning to hold some more in 2012.) If you are interested in purchasing the book The Influential Actuary please contact our receptionist Enas Hammad on (02) 9233 3466.

Communication and dealing with people are key skills. Being a strong communicator is vital and both Greg and Peter said this was the main way in which they both succeeded.

Do not be afraid to say what you think. Be willing to state your views and challenge the status quo – but constructively and not aggressively. E.g. “have we thought about doing it this way?” Rather than blindly accepting what you have been taught and applying it by rote, they like people who question things. Think big picture. For example, if someone studies a CFA they are taught that economics works a certain way, and a set of theories which explains markets. To succeed in investment it will be important to educate yourself more widely – to understand different theories on economics and that there is not just one school of thought. Understand that what you were taught at university or in your post-graduate study may be wrong, or at least limited.

Accept that no matter how smart you are, you are not perfect and may have a lot to learn, especially on the soft skills side. Learn from mentors. Be open to feedback and critique – ask for it. The more open you are, the more feedback you will get and the more you will improve.

Build your network – but not for the reason you may think. It helps you know what’s going on and so you do your job better. In the process your name gets out there and known – which may help you get future opportunities. Knowing people will not give you the inside running on a job these days – but you may find out about more opportunities.

Volunteer – for your profession, for your industry association. Take the opportunity to do extra curricular stuff and put in extra work. This will build your network and get you noticed.

Be open to opportunities. Be willing to take a risk e.g. to move

Why Whingers Don’t get Ahead

CEO’s Column


30 CEO’s Column / Letter

sideways or even backwards – even take a pay cut – to get broader experience.

If you are offered a chance to work overseas – take it. Experience of different markets, cultures and workplaces is a big plus and will not only make you more employable but will give you that big picture framework that leads to success in any role. Being a big fish in a smaller Asian branch office of a multinational can lead to many opportunities e.g. more varied work or the ability to switch tracks (as Greg did from super to investment). At the moment the strong Australian dollar and high pay rates in Australia means most young actuaries would have to take a pay cut to work in, say, Hong Kong. But if you have your eye on the long game, taking a risk like this could be an investment that could pay you back many times over.

You get noticed by getting on with your job and doing it well. Offer to do the dirty work – the stuff no-one else wants to do – and do it well. Stick at the role you are doing – persevere. Don’t think you’re ready to move on after three to six months of doing the same thing. Expect to spend up to three years in each role.

And finally, but probably the number one rule – don’t whinge! This is related to the above tip of sticking at something. Gen Y came in for a fair bit of criticism for starting to whinge after a short time of doing the same role. Whingers do not get ahead. Those that get the opportunities are the ones that get stuck in and do what needs to be done with a good attitude. That’s how to get noticed.

Greg also said that the culture in the workplace is the most important thing. It’s hard to build, and with the wrong person (too

aggressive, not speaking up and saying what they think, too whingy, not collaborative, not a team player) it’s easy to damage.

These are great tips for anyone in any workplace, and not just for those at the start of their careers.

It was great to have an investment topic on the agenda for an Insights session and we plan to do more of these next year. To do this we need the support of our members working in investments to suggest topics and speakers – please give me your thoughts!

New Corporate IdentityI am very excited that we’ve had a positive reaction from most members to our new corporate identity ‘Actuaries Institute’ and our new-look logo which is designed to refresh our look (after 15 years) and to work in both digital and hard copy media. You can read all about the change on the website under ‘About Us’ and also on page five in this edition.

Whilst our legal name is not changing, and neither will your post-nominals (FIAA and AIAA remain), the new identity gives us an edgier, shorter and more memorable name to use when promoting the profession externally. Council will consider some taglines (a phrase to appear under our name) in December, so stay tuned!

Please keep the feedback coming in on this or other things we’re doing – we love to hear from you! ▲

Melinda [email protected]

Letter to the Editor

Dear Editor,I very much enjoyed reading the article in the October edition about the actuary who is now a Medical Officer. I was a little dismayed at the end when I read that Katelyn had to cancel her membership because she would have had to pay the full Fellow fee rate rather than, as was previously available, a lower fee as a non- practicing member.

From time to time, various people at the Institute have talked about how to deal with the problem of the ‘Lost Sheep’, those actuaries who move on and leave the profession. It would seem that the people involved in making the decision around changes to the fee structure did not see this as a problem anymore. Would anyone at the Institute like to comment on this?

In the same edition I also enjoyed James Morris’ article which looked at a scenario where nobody could die. He then went on to say “Setting aside the fact that all of the actuaries would be out of a job...”

I know he was trying to be a little tongue-in-cheek but it might be worth stressing that the role of actuaries extends far, far beyond simple life insurance – lest the rest of the world think that actuaries have a very narrow role in society.

Life insurance of course extends far beyond simple death cover – there is TPD, Trauma, Disability Income etc – all of which create far more complex modelling exercises and issues. Investment products, participating products etc. create a lot of work for actuaries – the death component being only a minor part. Then of course, actuaries work in General Insurance, Banking, Risk Management and numerous wider fields.

So rest assured, if there was no death anymore, most actuaries would still have a job. ▲

Matthew [email protected]

▲

Lesley Traverso James Lecoutre Claire Street Tania Lee Rachel EagletonT: +61 2 9226 7459 T: +61 2 9226 7412 T: +61 2 9226 7418 T: +61 2 9226 7411 T: +61 2 9226 7410 M: +61 433 129 390 M: +61 404 397 503 M: +61 401 606 171 M: +61 412 445 612 M: +61 404 397 [email protected] [email protected] [email protected] [email protected] [email protected]

Strategically placing Actuaries around the globe.

Exciting opportunity for a nearly/newly qualified actuary to join this International Reinsurer. You will be responsible for providing actuarial pricing for Asia Pacific markets which includes developing tools, training, overseeing treaty pricing and conducting market studies. You will be either an AIAA or FIAA with excellent technical capabilities as well as strong communication skills.• Maintain strong working relationships with

underwriters• Communicate effectively with pricing teams in

other locations and other functions locally and globally

• Provide training to team members, underwriting assistants and underwriters regarding pricing methodologies and tools

• Minimum of 6 years actuarial GI experience

Contact James Lecoutre for more information.

You will have overall responsibility for the commercial pricing for the Asia Pacific region. This is a senior role within the actuarial team and will have significant involvement in actuarial strategy and other actuarial disciplines. Key customers will be the Asia Pacific Underwriting team, with this role acting as the single point of contact for actuarial advice.• Particular focus on individual large

account pricing • Ability to build strong relationship with

senior executives• Qualified Fellow with at least 8 years

of experience• Manage key relationships with actuarial, finance

and risk management functions• Responsible for the line management, training &

professional development of direct reports

Singapore – Chief Commercial Pricing Actuary

Contact Rachel Eagleton for more information.

International Insurer with a strong reputation in Asia requires an experienced Fellow to lead the Korean actuarial function, with overall responsibility for Korean actuarial work. You will be responsible for the technical oversight, line management, training and professional development of the other Korean actuaries.• Provide high quality and efficient actuarial advice

on pricing and reserving as well as other work necessary to meet the insurance regulations

• Experience advising senior management • Strong management ability as you will be

managing a team of actuaries• Qualified Fellow with at least 8 years

of experience• Korean language, whilst desirable is not essential

Korea – Chief Actuary, General Insurance

Contact James Lecoutre for more information.

EUROPE | ASIA | AUSTRALIA & NEW ZEALAND | MIDDLE EAST | NORTH AMERICA | SOUTH AMERICA

Contact Claire Street for more information.

We are looking for an actuarial analyst who has between 2 and 4 years of actuarial experience to join the Actuarial and Financial Modelling team of this leading Reinsurer. The team assists their clients to analyse the risk to their business and advise on the most appropriate reinsurance and risk mitigation strategies. Ideally you will have experience in a similar field but at least have had a minimum of 2 years’ experience within an insurance environment:• AIAA and be progressing in your exams

towards fellowship• Knowledge of regulatory considerations affecting

insurers and reinsurers• A genuine interest in insurance and reinsurance• Ability to work with brokers and CAT Modellers

Sydney – Actuarial Analyst,Reinsurance

A well-known Australian Insurance organisation is looking for a junior SAS analyst to be part of their actuarial team. The role will provide support to the team on a range of SAS and data related tasks to manipulate and extract data, contribute to ongoing improvements on data structure, develop, maintain and enhance various models and analyse and interpret data findings. The role is perfect for a candidate who is looking for a long term role with a strong focus on SAS responsibilities and in return would receive substantial support and development. The main key requirements for this role are as follows:• Minimum 1 year SAS working experience• Strong analytical background• Advanced Excel skills• General Insurance experience, whist desirable is

not essential

Sydney – SAS Analyst

Contact Tania Lee for more information.

Working for a leading Workers Compensation organisation, this is a rare opportunity for a nearly/newly FIAA to help set strategic direction and to develop new value add tools and processes. This role is broad in scope and commercially focused and would be perfect for a General Insurance experienced candidate looking for a long term role that would offer huge growth and development. Reporting to the Chief Actuary, the main responsibilities and key requirements of this role are as follows: • Benchmarking and forecasting future claims

performance outcomes• Identifying opportunities and recommending

strategies for performance improvement• Strong SAS skills• At least 3-5 years of experience including WC or

long tail product exposure

Contact Claire Street for more information.

Sydney – Senior Actuarial Analyst, General Insurance

Singapore – Senior GI Pricing Actuary, Reinsurance

1300 22 88 279 (1300 Actuary) www.dwsimpson.com

DWS_Actuary Ad_NOV_2011.FINAL.1.indd 1 31/10/11 12:52 PM

Runbyactuaries foractuaries

London Dublin Sydney Hong Kong

John Killick Jas SinghTel 02 8235 7912 Tel 02 8235 7901Mobile 0430 145 810 Mobile 0418 310 [email protected] [email protected]

www.acumen-resources.com

Acumen Resources is an industry leader in global actuarial recruitment. All of our consultants have either worked as actuaries or have an in-depth knowledge of the profession. We truly understand the important role you play in the industry and, as a result, can effectively assist in fulfi lling your career aspirations. As we approach the conclusion of 2011 we have a number of key clients focused on creating new opportunities to support business growth for 2012 and beyond. Please contact us to discuss all of our current assignments or with reference to a specifi c role below.

Pricing Actuary, General InsuranceSydneyHaving successfully secured a range of new pricing contracts this highly regarded Australian consulting fi rm is seeking to expand the team to meet the demands of its blue-chip, long-term clients. This is an outstanding opportunity to join a growing yet well established business and contribute to the ongoing success. Ideally with 5 to 10 years’ experience, this role will suit an actuary with a strong pricing background across multiple lines of business. Sponsorship is available for non-residents.

Life Contractors x 4 – Qualifi ed & Part Qualifi edSydneyFollowing signifi cant restructuring, this life insurer requires experienced qualifi ed and part-qualifi ed actuaries to work on a 6 to 12 month contract basis. Work involves specifi c valuation and reporting projects including a reporting system overhaul as well as product review and rationalisation tasks. You will have at least 4 to 5 years’ broad-based technical life insurance experience at the part-qualifi ed level and 10 years at the senior level. Flexible arrangements will be considered for those who wish to

work part time.

Senior Manager, Banking/Credit RiskMelbourneConsiderable growth in activity has created the need to hire a qualifi ed or part-qualifi ed actuary with a depth of experience in the risk-management function of a banking environment. This is a global powerhouse business with an enviable array of clients and projects. To satisfy the requirements of the role you will possess at least 3 years’ dedicated experience in credit and/or operational risk. Exposure to Basel II will be well regarded, as will tenure in a relevant UK-based business. This client will sponsor overseas nationals if required.

Investments Analyst/ResearcherSydneyThis newly created role represents an exciting opportunity for a qualifi ed actuary with 3 to 4 years’ experience to move into the world of funds management and investments. With signifi cant FUA, a list of blue-chip clients and a highly credible leadership team, this consulting fi rm drives business internationally and continues to expand. This role specialises in quantitative analysis and you will bring to the table a comprehensive knowledge of the Australian equities, infrastructure or property sectors, coupled with a passion for investment markets and research. Prior experience with databases/VBA is desirable.

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