Non-Traditional Actuaries: Opening Doors and Embracing Opportunities in the Insurance Industry

1. Canadian Institute of Actuaries L’Institut canadien des actuaires 2007 General Meeting Assemblée générale 2007 Montréal, Québec

2. Non-Traditional Actuaries: Does it Open or Close Doors? Lisa DeVos, FSA, FCIA Manulife Financial

3. Agenda • Introduction • What is a non-traditional actuary? • Does it open or close doors? • Risks, benefits, issues, opportunities • Lisa’s role – AVP Operations, Manulife Financial • Scott’s role – Manager, Actuarial Services, Pal Insurance

4. What is a “non-traditional” actuary?

5. Traditional Actuaries • Number crunchers • Responsible for financial aspects of a company • E.g. insurance companies – pricing and valuation; pension consultants

6. Non-Traditional Actuaries • A non-traditional role in an insurance company or consulting firm • Senior management (Marketing, Operations) • Corporate Compliance • Investments (Portfolio Manager or Analyst) • Actuarial Consultant

7. Non-Traditional Actuaries (cont’d) • A traditional role in a company other than a life insurance company or a consulting firm • Pension specialist in a fertilizer company • Member of an environmental board

8. Non-Traditional Actuaries (cont’d) • A non-traditional role in a company other than life or consulting • Independent financial advisor • Illustration software consultant

9. What are the Risks of moving to a non-traditional role? • Risk of failure • May not be easy going back to a traditional role after you’ve been out of it for a while (i.e. don’t you wear SOX on your feet?) • Some may feel your new role is less valuable than a traditional actuary’s • You may not WANT to go back to a traditional role!

10. What are the Benefits of moving to a non-traditional role? • New and exciting challenge! • Fairly easy to transfer your skills (assuming you have strong communication skills) & build new ones • Can add a lot of value in other areas of the company since you understand the financial impact • Will broaden your background • Nothing to lose – can go back • Opportunities for careers are endless!

11. What are the Issues that non-traditional actuaries need to face? • Salary scale being supported • Staying connected to peers e.g. attending actuarial conferences • Meeting on-going CPD requirements • How do we profile skillsets of actuaries to non-traditional departments or companies

12. Opportunities What are the Opportunities for non-Traditional Actuaries • Pretty much endless! • See the jobs listed previously in the 3 categories • Your financial skills could be applied to almost any business, so you just need to sell them on it!

13. Lisa’s Role – AVP Operations, Individual Insurance (Inforce) • How did I get here? • 1989 graduation from UWO & started at Manulife • 5 years actuarial student (life valuation; group pensions pricing) • 4 years individual life pricing (FSA in 1995) • 1998 – new “opportunity” which has kept evolving

14. Scope/Responsibilities • 70 people in KW and Halifax • 4 direct reports • 1 full actuary; handful of career ASA’s • Budget of $6 Million • Functions: • Illustration Project Team • Customer Service Team • Inforce Illustrations • Conservation • Special Case and Exceptions • Client Relations • Special Investigation Unit

15. Skills Needed • Strong people leadership • Excellent communication • Business acumen • Excellent customer service • Adaptable to change • Strategic thinker • Strong organization/prioritization

16. Skills Needed (cont’d) • Technical/actuarial an asset! • Illustration systems • Calcs; reasonability; CLHIA guidelines • Exceptions/Client Relations cases • Understanding financial impact • Consider pricing, tax, reinsurance, etc. • Managing my budget • Planning, tracking, reconciling, etc. • Metrics • Regular reporting; unit costs • Cost/Benefit Analysis • New FTE’s; project approval

17. Challenges • People leadership • Managing a remote team • Managing a large inforce block after merging with many companies! • Having a systems team within the business • Inforce is second to New Business • Constant pressure to reduce expenses

18. How do I maintain my CPD? • Important to me to maintain my FCIA and FSA designations • Fortunately, it’s important to Manulife too • If you work for a non-traditional company, negotiate up front • Perhaps harder to meet as non-traditional actuary but not impossible (business management category adds flexibility)

19. Examples of how I earn CPD Credits • In-house training e.g. leadership • Company meetings e.g. Senior Management; Financial Forums • Company Conferences • On-the-job e.g. CLHIA illustration guidelines • CIA/SOA meetings and webcasts • Doing a presentation!

20. Paul Lorentz – Senior Vice President, Group Savings & Retirement Services • Successfully held non-traditional roles • How does he add value? • Important skills needed? • Meeting CPD • Going back to the “dark side”?

21. Agenda • Emerging Practice Areas (EPA’s)(aka Non-Traditional Actuarial roles) • What I do and how I got here • What is needed to succeed? • What keeps me awake at night? • Do EPA’s open or close doors? • Could / Would I go back?

22. “Traditional” actuarial roles • Insurance Company Head Office • Pricing • Valuation • Appointed Actuary • Consulting • Pension • Group L&H • Reinsurance Company • Academia

23. “Traditional” actuarial skills • “good with numbers” • Able to build spreadsheets / computer models • Computer training for mainframe applications / valuation systems was helpful

24. The Actuary of the Past? • 2.3.3 The U.S. Task Force surveyed those actuaries who worked closely with, or employed other actuaries in the U.S.A.. The U.S. poll highlighted the view that actuaries: • - are bright problem solvers- are narrow, unwilling to look at the broader picture- are trained as individualists, and have poor management skills- make things complicated- are poor communicators with non-actuaries- are ethical beyond reproach- are defensive, arrogant and rigid- are best prepared to put money and risk together- need to increase public awareness of the profession • The Actuary of the FutureJIA 119 (1992) 13 - 44

25. A profession under pressure • 1988 Jobs Almanac ranks Actuary #1 • Industry consolidation • Professional services vs Actuarial Opinion

26. Emerging Practice Areas • Expert Witness • Software development • Asset / Liability management • ERM • Rating agencies • Investment banking • Sales & Marketing • Private industry • Political life • Etc…

27. What do I do? • Pal Insurance Services • Working with affluent Canadians • Protecting wealth for future generations • Clients are worried about • Dying too soon • Living too long • Losing their good health

28. What do I do?

29. What do I do? • Insurance Product Education (Life, CI, DI) • ClientsAccountants, lawyers, bankers, etc • Liaison with direct writer • Product developmentIllustration and Large Case MarketingUnderwriting & ReinsuranceNew Business Legal departmentCompliance Customer Service

30. How did I get here? • Individual Life • Product developmentDividend ActuaryValuationReinsuranceMarketing • Group Insurance • Product developmentUnderwritingValuationMarketing • Pension Consulting

31. How did I get here? • Professional activities • SoA exam committeesActuarial Resource co-ordinatorLecturer UWO Stats & Actuarial Science • Volunteer activities • Church finance committeesChurch TrusteesParkwood Hospital Planned Giving committeeBoard of Directors – Original Kids theatre

32. The Actuary of the Future • 2.2.4 In 1989, a task force of the Society of Actuaries produced a valuable report on “The Actuary of the Future”. • “exposure to economics, accounting and law makes actuaries conversant with, but not experts in these subjects … the combination of subjects studied (is) a combination few other professions are likely to have encountered” • The Actuary of the FutureJIA 119 (1992) 13 - 44

33. What actuarial skills do I use? • Product knowledge • Pricing • Reinsurance • Actuarial knowledge • Economics • Demographics • Investments • Communication • Common Sense • Business savvy

34. What excites me about the job? • Role as educator • The “A HA” moment • Working without a net

35. What is required to succeed? • - problem solver / Can Do attitude- see the broader picture- co-operative outlook- effective management and negotiation skills- explain complicated concepts clearly, simply- excellent communicator with non-actuaries- ethical beyond reproach- open minded, flexible, willing to listen- seek solutions that are good for everyone

36. What keeps me awake at night? • Advisor misconduct • Acts of omission and / or commission • CPD & “Actuaries of the Past”

37. What keeps me awake at night? • The Society should develop career planning prototypes for individual actuaries to develop paths leading from where there are today to new opportunities” (Actuary of the Future Task Force (1991)- Society of Actuaries) • A professional culture that encourages actuaries to trail blaze in new areas(Vision 2020 TaskForce-Institute of Actuaries of Australia) • Develop opportunities for actuaries in new areas(Strategic Plan 4(d) - Canadian Institute of Actuaries)

38. Do EPA’s open doors? • The “public” doesn’t know what an actuary is • “FCIA” opens doors • The rest is up to you

39. Do EPA’s close doors? • A recent job posting from a recruiter • Develop and manage inforce conservation programs • Manage credited rates and margins on inforce business • Analyze and report results to senior management • Analyze and develop strategies for non-performing blocks of business • Problem solving, strategic thinking and analytical skills

40. Could / would I go back? • Of course I could • But Why?