ALL HANDS ON TECH...news, features and opinion direct to your inbox, sign up at bit.ly/1MN3bXK 12 Up...
Transcript of ALL HANDS ON TECH...news, features and opinion direct to your inbox, sign up at bit.ly/1MN3bXK 12 Up...
From blockchain and insurtech to machine learning and automated trading, the digital revolution marches on
JULY 2020theactuary.com
Interview withTan Suee ChiehThe IFoA’s new president shares the vision for his tenure
ModellingTake a deep dive into the work of an algorithmic trading quant
RegulationUncovering the hidden links between operational and non-operational risks
Data scienceAn overview of the technologies that are reshaping the insurance landscape
The magazine of the Institute and Faculty of Actuaries
ALL HANDS ON TECH
1 cover_The Actuary July 2020_The Actuary 11 cover_The Actuary July 2020_The Actuary 1 26/06/2020 09:3126/06/2020 09:31
Get the appDid you know you can now read The Actuary magazine on any tablet or Android phone? Click through to read more online, download resources, or share on social media via our links in the app. It’s an exclusive free benefi t for our members. Download on the App Store at: www.theactuary.com/ipadVisit: www.play.google.com
s
VCO
VER:
SH
UT
TERS
TOC
K
Additional content including daily news can be found at www.theactuary.com
Weekly newsletter: for all the latest actuarial news, features and opinion direct to your inbox, sign up at bit.ly/1MN3bXK
12
Up Front4 Editorial
Dan Georgescu looks both forward and back, celebrating 30 years of The
Actuary and refl ecting on how data science is shaking up the profession
5 CEO’s commentMuch has changed since the beginning of the year, says Stephen Mann – but the IFoA has adapted, and continues to support members
6 IFoA news The latest IFoA news and events
11 Letters
Features12 Interview: Tan Suee Chieh
The IFoA’s new president onCOVID-19 and his goals for the year
16 Investment: Uncharted territoryJohn Bayliss shares a slice of his work at UK Government Investments
18 Modelling: Model behaviourModel risk management is crucial in the banking sector, says Alan Forrest
20 Modelling: Glancing backRadu Popescu and Daniel Suciu on backtesting in banking and insurance
24 Modelling: Algorithmic trading What does an algorithmic
trading quant do? Jing Xu explains
28 Regulation: Joining the dotsPatrick Kelliher discusses modelling dependencies between risk types
30 Data science: Pieces of the puzzle An overview by Małgorzata Śmietanka and Philip Treleavan
32 Modelling: What are you grouping for?
Sen Hu and Adrian O’Hagan on cluster analysis in claims forecasting
34 Technology: Action on insurtechWhere could insurtech take us? Ed
Plowman investigates
www.theactuary.com JULY 2020 | THE ACTUARY | 3
ContentsJuly 2020
30
18
At The Back36 Careers: New lessons in learning
Three actuaries who have moved into academia refl ect on their career paths
38 Technology: Around the blockDarko Popovic, Chadwick Cheung and Zhixin Lim explain blockchain
41 School of thoughtHow does corporate tax avoidance work? Jason Brett explores the issue
42 Puzzles
43 On the recordArpit Surana on solving problems
44 People/society newsThe latest news,updates and events
WebexclusiveLife: Repricing optimisationCould machine learning improve outcomes for customers?bit.ly/3180lbc
3 contents_The Actuary July 2020_The Actuary 33 contents_The Actuary July 2020_The Actuary 3 29/06/2020 18:3829/06/2020 18:38
12 | THE ACTUARY | JULY 2020
FeaturesInterview
“We must apply our actuarial skillsets more decisively, deliberately
and ambitiously to achieve social impact
goals of our time”
12-14 INTERVIEW_The Actuary July 2020_The Actuary 1212-14 INTERVIEW_The Actuary July 2020_The Actuary 12 29/06/2020 18:5729/06/2020 18:57
INTO
The high-flying new president of the IFoA, Tan Suee Chieh, talks to Dan Georgescu about his rise to the top and his
vision for the actuarial profession
PHO
TOS:
RU
SSEL
WO
NG
PH
OTO
GRA
PHY
Tan Suee Chieh has held some of the most prestigious roles in insurance during his 40 years as an actuary. Born in Malaysia, he came tothe UK to study for his A Levels and went on to read for a BSc in actuarial science at the London School of Economics, graduating with fi rst-class honours in 1981.
He started working at Prudential in London in a variety of roles, including within the valuation, product development, and international divisions,
before qualifying in 1986. His wide experience then secured him a role in the Malaysian offi ce, followed by positions as a deputy general manager and actuary in Singapore. By 1994, he was CEO of Prudential Singapore, and by the late 90s, managing director of Prudential Corporation Asia’s established businesses.
Suee Chieh then took an 18-month sabbatical to study for a masters in psychology at Columbia University, New York. His interest in the topic began in London, where teaching by organisational change professors at the London Business School included exercises to demonstrate the process and value of designing high-performance teams. “Study of psychology was key in raising my self-awareness and understanding of how to build eff ective teams, and the value of purpose and strategy,” Suee Chieh explains. “I remain motivated by a strong desire to understand myself.” His next role was as president of SHL Group’s Asia Pacifi c Region business. The fi rm specialises in organisational psychology and psychometric testing, which allowed him to further his study of good
leadership, the importance of objective assessment of strengths and weaknesses, and the impact leadership teams have on organisations. He describes his own strengths as intensity and focus, but recognises his tendency towards impatience.
The next stageAfter four years at the helm of SHL, Suee Chieh became CEO of NTUC Income, and then group CEO at NTUC Enterprise – the holding entity for all NTUC social enterprises. At NTUC Income, Singapore’s pre-eminent life, motor and health insurer, he transformed the culture into one where power was no longer concentrated at the top, and people felt empowered to own their decisions. This meant employees were more inclined to be creative, challenge constructively and go the extra mile, because they were invested in the outcome. For his eff orts, the Singapore Business Awards named him ‘Outstanding CEO of the Year’ – a fi rst for someone from the insurance industry. Since 2017, Suee Chieh has held a number of non-executive positions, including at the LSE Trust, the Singapore University of Social Sciences, Singapore Management University and Singapore Children’s Society; he has also been involved in IFoA aff airs as a keynote speaker.
Behind the scenes during COVID-19While Suee Chieh only began his tenure as president at the end of June, he has been active in driving change behind the scenes. At the beginning of March, he organised the COVID-19 Actuaries’ Response Group, a group of actuaries and medical professionals that meets
FeaturesInterview
JULY 2020 | THE ACTUARY | 13
12-14 INTERVIEW_The Actuary July 2020_The Actuary 1312-14 INTERVIEW_The Actuary July 2020_The Actuary 13 29/06/2020 18:5729/06/2020 18:57
www.theactuary.com
regularly to discuss the evolving crisis and publish impartial actuarial advice. To date, members of the COVID-19 Actuaries Response Group have had two articles published in The Actuary and one in The Spectator. The Group has also been quoted in The Wall Street Journal and many other news outlets. This initiative has shown how co-ordinated actuarial teamwork can help to inform and infl uence the public, both in the UK and abroad.
While actuaries always have a duty to put the public interest fi rst, the terms of reference have been key to the group’s rapidity and profi le, promoting an agile response to developing situations, and enabling the group’s voice to be added to social media discussions – without insisting on 100% accuracy, or even complete consensus within the group. “The point was not to wait for a perfect answer and risk contributing too late to shape the debate, but rather to highlight that there is good actuarial judgment to be made about the future, even when assumptions are changing every day,” Suee Chieh explains. “A model that is roughly right but tells you the ship is sinking can still be acted on.” This work highlights his deep ambition to make actuaries more infl uential in societal and regulatory reforms.
Vision for the profession“We are apt to be accurate, cautious, consistent and reticent, and in this lies our strength – but if we do not leave enough room for impulse and imagination, this can be a weakness. The actuary who is only an actuary is not an actuary,” Suee Chieh says, paraphrasing Frank Redington. This is even more true today than it was in Redington’s day. During his tenure, Suee Chieh will call for a reinvention of the profession by advocating a multi-disciplinary approach to problem solving, anchored to our mathematical and analytical core – but at the same time emphasising a new mindset of courage, curiosity, adaptability, judgment, imagination and continuous learning.
“We need a braver response to the problems facing our society,” he says. “The COVID-19 crisis off ers us a unique opportunity to reinvent our profession and rethink how we want to operate the IFoA as a body, how we want to educate and train our actuaries, and how we want to reposition the profession to have a greater infl uence in this world of uncertainty and opportunity.”
The presidential address on 18 June 2020 was not short on bravery: Suee Chieh argued that we risk becoming weighed down by cautiousness and reticence. The perfect is the enemy of the good, he stated, when all around us seismic changes, such as the digital revolution and climate change, are happening at a macro level. He spoke of doing away with practices and processes that are unhelpful and anachronistic, and the importance of courage,
FeaturesInterview
learning, experimentation and imagination. The point of this change is to make sure actuaries will thrive in the digital age and a future fraught with uncertainty and opportunity.
“In line with our public duty, we must apply our actuarial skillsets more decisively, deliberately and ambitiously to achieve social impact goals – for example in environmental degradation, ageing, AI and ethics, economic and health security, and now, more topically, in epidemiology and the long-term consequences of pandemics.”
Outside interestsA family man, Suee Chieh and his wife spend their free time with their children, watching fi lms and going on family bike rides. His interests are wide-ranging, including running, yoga and meditation. He considers the work-life balance crucial, and relaxes by listening to jazz and reading – the answer to almost every question comes with another book recommendation, demonstrating the depth to which he goes into any topic that interests him.
If now is the time to reimagine our profession, it is hard to picture anyone having more breadth of experience and energy with which to do it.
14 | THE ACTUARY | JULY 2020
“A model that is roughly right but
tells you the ship is sinking can still
be acted on”
12-14 INTERVIEW_The Actuary July 2020_The Actuary 1412-14 INTERVIEW_The Actuary July 2020_The Actuary 14 29/06/2020 18:5729/06/2020 18:57