THE ROLE OF ACTUARIES IN THE TAKAFUL INDUSTRIES

Ibrahim Muhanna FCAA, MSAA, FLAAManaging Director & Actuary

21 & 22 September 2004 Jeddah, Saudi Arabia

                 

     

                                     

Actuaries make financial sense of

the future

WHAT IS AN ACTUARY?

An actuary applies mathematical skills to

financial and business problems, especially

those which involve uncertain future events,

such as in Takaful - life insurance, general insurance, risk management,

health care financing, investment, corporate finance, banking, pensions

and social security

ACTUARIAL TRAINING

mathematics statistics modelling investment finance financial management

MAJOR FIELDS OF ACTUARIAL WORK

life insurance general insurance pensions social security investment

health care financing

corporate finance government service personal financial

advice education

ROLE OF ACTUARIES IN THE TAKAFUL INDUSTRY – 1/5

product design pricing reserving investment strategy reinsurance/securitisation

ROLE OF ACTUARIES IN THE TAKAFUL INDUSTRY – 2/5

profitability measurement control of bonus systems assessing shareholder value disclosure to policyholders dynamic financial analysis

ROLE OF ACTUARIES IN THE TAKAFUL INDUSTRY – 3/5

DYNAMIC FINANCIAL ANALYSIS (STRESS-TESTING)

realistic future cash-flows impact of regulatory requirements alternative scenarios use of stochastic modelling identification of risks risk management strategies

ROLE OF ACTUARIES IN THE TAKAFUL INDUSTRY – 4/5

ACTUARIES IN INVESTMENT portfolio management research and analysis portfolio performance measurement asset/liability management strategic asset allocation investment indices complex financial instruments

ROLE OF ACTUARIES IN THE TAKAFUL INDUSTRY – 5/5

PERSONAL FINANCIAL PLANNING assessment of needs insurance solutions pension products cost of care

ROLE OF APPOINTED ACTUARY

adviser to Board and senior management responsible for assets as well as liabilities continuous financial monitoring annual valuation of assets and liabilities hot line to supervisor in case of

difficulties operating under professional standards

WHISTLE-BLOWING professional responsibility underpinned by legislation interests of policyholders responsibility to company responsibility to regulator

PUBLIC INTEREST

quasi regulatory functions protection of policyholders protection of pension scheme

members serving the public pursuit of excellence

Overview on:i.e. Muhanna Group & its Founder

The 1st & Largest Actuarial Consulting Firm in the Arab World

The 2nd Actuarial Foundation in the World

The 4th Largest Actuarial Firm in Social Insurance Consulting in the World

The 1st & only Regional Insurance Rating Agency

Concluding Remarks

Transparency Fairness Development of Human Resources

Overview of The Muhanna Group Actuarial consultancy - established in 1986

Life, P&C & Health Insurance Pensions & Social Insurance Insurance supervision Management Consulting ( Risk Management - Mergers &

Acquisitions) Software solutions - established in 1990 Actuarial Education - established in 1994 Rating services - established in 2000

As of end 2003 Services were rendered in 32 countries Provided services to 41 government & semi-government organizations Advised 52 life & general Insurance companies Provide services to 94 other private institutions Financed & sponsored 23 actuarial students Delivered & published 67 actuarial and insurance papers & studies

Points of Strength Observer member of IAIS since 2001 Active member of IAA insurance regulation

committee since 1999 Advisor to SAMA between 2000 – 2003 Large team of professionals including life actuaries Appointed actuaries to major Takaful Companies Unique perspectives and insights Corporate Governance Strategy Formulation Structuring of Groups – Optimization of Value Largest Data Base on Saudi Arabia

Sites to note: i.e Muhanna & co.

www.muhanna.com

The Muhanna Foundation www.muhanna.org

Address 1501-B Gefinor Center Beirut – Lebanon Tel +9611 752 999 Fax +9611 751 292 E-mail actuarial@muhanna.com