120 seconds with the 4most Insurance Team

What’s the lowdown from the growing 4most insurance team? We find out, all in 120 seconds, GO:

1. In your role, you have led many projects. How would you suggest insurers prepare for the impacts of IFRS 17? (Ramesh Indran)

IFRS17 is complex in systems implementation and areas of methodology. Given this, the standards affect not only reporting requirements but also wider business and commercial functions. Preparing the necessary processes and systems in advance will be key; the impacts extend beyond traditional actuarial functions given the standard’s aim is to improve overall transparency and consistency. The deferred implementation date of 1st of January 2023 is an opportunity for many firms to ensure compliance. It is likely to be a welcome relief for all, especially with the onset of COVID-19 and its implications.

2. What do you think will be the most challenging aspect of implementing IFRS 17? (Jonny Skerratt)  

Transitioning to a new reporting regime will have major impacts on the way insurers manage their business. IFRS 17 will substantially change the presentation of statutory accounts; there will be material changes to profit recognition, insurance contract grouping, and data systems, which will squeeze reporting deadlines and require careful planning. Personally, I believe getting data quality and data management to the necessary standards will be particularly difficult. For transition, this can involve collecting retrospective data for calculation of the CSM (Contractual Service Margin); firms will need to find a means of quantifying their expected future profits at the inception date. Once live, data governance and control will remain equally important, as data feeding the actuarial models and finance systems will need to marry up in a way they have not needed to before, and any errors rising will lead to potentially large P&L impacts.  

3. What do you believe will be the key trends in the insurance industry over the coming years? (Chintan Patel)  

Climate and technology immediately spring to mind.

Climate change is likely to influence the future investment strategy adopted by insurers. It may be the case that regulators start to encourage firms to invest in sustainable finance projects through changing the solvency capital charges for certain “green” assets.

Regulators are now demanding more from insurance companies as automation and modelling software improves. Firms are increasingly being asked to increase their reporting disclosures and incorporate both quantitative and qualitative uncertainty. I think insurance firms, particularly in the life industry, will aim to find ways of utilising ‘big data’ collected through health and lifestyle apps on wearable technology and machine learning techniques. Going forwards this could have a major impact on pricing, reserving and underwriting as firms look to incorporate these modern data science techniques.

Lastly, three quick questions on the actuarial profession with Naomi Venables, Justine Jefferies and Daniel Gill  

1. What interests you the most about the actuarial profession? (Naomi Venables)  

With a background in mathematics and my first graduate role in marketing analytics, I was drawn to the actuarial profession because it centres around real-world problem solving and allows me to utilise my mathematical skills. Given the industry is constantly evolving, it is often the case that substantial change is just around the corner which provides an exciting and ever-changing environment to work in. I enjoy the mix of technical and softer skills required and value finding a balance between the two.

Actuaries working in the life insurance sector are often asked to make informed decisions about events that will happen far into the future. Applying my specialist actuarial skills gives me the opportunity to help clients better understand their future risks and work on projects that are not only interesting, but also important for the development of the insurance industry.

2. What advice would you give to someone who has just joined the profession, or is thinking of doing so? (Justine Jefferies)  

Being an actuary requires you to be a strategic thinker in order to analyse problems involving risk. I would recommend being prepared to get involved with any project that comes up. There is always something to be learnt and having a breadth of skills and knowledge will help you become a better actuary. In my early development, I found it particularly useful to develop my Excel and PowerPoint skills – having both is critical, so this has saved me a lot of time over the years!

The path to becoming a qualified actuary can appear like a long and daunting one at the start. The exams are tough and the demand to balance work, study and a social life can be hard to adjust to. Setting out a clear study plan was key for me to ensure that I could fit everything in. Qualifying is a major achievement and was well worth it in the end!

3. How does working for a consultancy such as 4most present a unique opportunity for an actuary? (Daniel Gill)  

4most has built a dynamic reputation in the actuarial world, where our consultants have the chance to drive the success of the business in an entrepreneurial setting. It provides a perfect opportunity to build technical actuarial knowledge – working on a range of diverse projects – and develop softer skills in a client facing environment. The IFoA promotes personal development to all members and this fits with the culture at 4most. The company offers a vast variety of development opportunities to expand knowledge and broaden horizons. In particular, the company recognises the importance of coding and encourages its actuaries to acquire skills to meet a growing need.

The company trusts its actuaries to take responsibility and form strong client relationships which draws on the expertise of the whole team. I really believe I have a chance to make a difference.

Do you have any questions? Please contact Ramesh at ramesh.indran@4-most.co.uk