Transcript 6707-Daykin - Logo CIA Meetings

CIA Annual Meeting
LOOKING BACK…focused on the future
CIA Annual Meeting
Session 6707: Brave New World
Chris Daykin CB, MA, DSc, FIA, FSA
UK Government Actuary
Past-President, Institute of Actuaries
LOOKING BACK…focused on the future
CIA Annual Meeting
Session 6707: Brave New World
SYSTEMIC FACTORS
• consolidation of insurance industry
• growth of conglomerate groups
• decline of defined benefit pensions
• rise of international accounting standards
• need for advanced solvency tools
• emphasis on risk management
• greater public expectations
LOOKING BACK…focused on the future
CIA Annual Meeting
Session 6707: Brave New World
PRESSURES ON THE ACTUARIAL PROFESSION
• need to eradicate conflicts of interest
• peer review will have to become routine
• regular re-tendering of appointments
• independent review of advice
• whistle-blowing roles
• external influences on standard-setting
• demonstrably independent discipline
LOOKING BACK…focused on the future
CIA Annual Meeting
Session 6707: Brave New World
CONSEQUENCES FOR ACTUARIAL EDUCATION
• strengthen understanding of and
interaction with financial economics
• need for familiarity with international
accounting framework
• ability to value complex embedded
options
• measurement and communication of
uncertainty and risk
• broader skills in risk management
LOOKING BACK…focused on the future
CIA Annual Meeting
Session 6707: Brave New World
IS ACTUARIAL PROFESSION UNDER THREAT?
• Has it failed to adapt?
• not enough expertise in related subjects
• criticised for favouring certain groups
• too dominated by commercial interests
• not responsive to public opinion
• self-serving and introspective
LOOKING BACK…focused on the future
CIA Annual Meeting
Session 6707: Brave New World
WHAT ARE OUR SKILLS?
• mathematical modeling
• understanding of probability and statistics
• strong financial toolkit (discounted cash
flow; pricing; setting provisions; risk;
managing solvency)
• helping companies to be profitable
• protecting the interests of stakeholders
• risk management of financial institutions
LOOKING BACK…focused on the future
CIA Annual Meeting
Session 6707: Brave New World
WHAT ARE OUR WEAKNESSES?
• poor communication skills
• capture by employers and clients
• difficult to maintain multi-skilling
• slow to change and adapt
• poor level of implementation of
intellectual capital
• inadequate levels of academic research
and linkage into profession
LOOKING BACK…focused on the future
CIA Annual Meeting
Session 6707: Brave New World
WHAT ARE THE OPPORTUNITIES? - 1
• financial engineering
• enterprise risk management
• health care financing
• design and management of retirement
products
• asset-liability modeling and management
• banks and other financial institutions
• personal financial advice
LOOKING BACK…focused on the future
CIA Annual Meeting
Session 6707: Brave New World
WHAT ARE THE OPPORTUNITIES? - 2
• utility pricing
• all types of financial management
• design of frequent flyer/loyalty schemes
• evaluating contingent liabilities
• nuclear decommissioning
• environmental liability issues
• assisting the Courts in valuation
• measuring and communicating risk
LOOKING BACK…focused on the future
CIA Annual Meeting
Session 6707: Brave New World
A GLOBAL ENVIRONMENT
• global skill shortage
• obstacles to financial stability
• need for immediate expertise
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skill transfer
support for education
development of professional bodies
LOOKING BACK…focused on the future
CIA Annual Meeting
Session 6707: Brave New World
A global
profession
LOOKING BACK…focused on the future
CIA Annual Meeting
Session 6707: Brave New World
Survival of the fittest
LOOKING BACK…focused on the future