The career crisis of the chief actuary of insurance, the dual identity of the technologist and the artist

Chief actuary

A prestigious position with a high salary

But it’s getting harder and harder these days

Total essence needs to find a balance between all parties

Strike a balance between the business side and the profit side

There is a balance between incumbency and incumbency

Balance between profit and loss

Strike a balance between professionalism, compliance and ethics

To paraphrase

Actuarial science is not just a technique

Actuarial calculus is more of an art

Some companies’ actuaries are hard to sit on

The chief executive’s qualifications have just been approved

Leave in a few months, six months

March is a high time for personnel changes, and actuaries, once regarded as the most stable paid profession, voluntarily quit frequently.

The chief actuary of Company A has stayed at home for a week, waiting for the exit audit.

The person in charge of human resources of B Company said, “The chief actuary of the company has changed his job, and there is no suitable candidate.”

The chief actuary is the chief designer of insurance products and has a high salary. But the reality is wearing thin, and some senior actuaries are leaving and not wanting to return.

Chen Donoghue, former president of Rue Re China, said bluntly, “In the past, as a general actuary is a very prestigious and respected position, but now it is not the same, the general actuary is not so easy to do before.”

A general actuary of a life insurance company believes that “general actuaries should balance the business end and the profit end. If the product pricing is aggressive, it is difficult to guarantee the profit end and the value end after taking care of the business end. Thinking too much about the value side and the profit side, the business is declining relatively fast. Four POTS with three LIDS going back and forth, there is always a pot without a lid. While the situation for chief actuaries at large and small companies are different, the overall pressure is greater than in previous years.”

An actuary who was born in the 1980s said I feel like I am not a human being inside or outside the company. It looks like you’re being put in a high position, it sounds like a fancy title, but it’s hard to describe. Insurance companies as a whole or sales for king, business oriented. Who pulls the premium, who is in charge, remind compliance, risk control in small and medium-sized companies is also very awkward; The company felt that you were paid a high salary, but you failed to solve the regulatory pressure for me; At present, the supervision is becoming stricter, and there are some responsibilities and requirements for the chief actuary to rectify such problems as data inauthenticity and product confusion. Extensive development, there are teams, institutions premium can increase, some contradictions will be covered up. But now the industry from rapid development to the era of stock competition, industry contradictions in the actuarial aspect is more and more reflected.”

What’s more, the chief actuary may face a test of professional integrity.

Zhao Young, former director of the solvency Supervision Department of China Banking and Insurance Regulatory Commission, once pointed out that many general actuaries are faced with the test of whether they can hold the professional bottom line when facing the opinions of shareholders and other operators that go against the rules of insurance operation. Actuaries cannot cater to the radical demands of shareholders or operators. As the chief actuary who holds the core technology of insurance operation, he should not only safeguard the interests of the company and help the company develop, but also be the guardian of the interests of consumers and the public.

Chief actuary who changes frequently

Actuaries in China are mainly concentrated in the insurance industry. According to Zhao Young’s Current Situation and Demand Forecast of Actuarial Practitioners in China, there are 3282 actuaries working in insurance companies and insurance groups in China, accounting for 85.4% of the total number of actuaries. Among them, 1,967 are from life insurance companies, 962 are from property insurance companies, 182 are from reinsurance companies, and 171 are from insurance groups.

Despite the small size of the actuary profession, the “threshold” is very high.

According to the Administrative Measures for Chief Actuaries of Insurance Companies issued by the regulatory department, general actuaries shall meet the following requirements: working experience in actuarial, insurance finance or insurance investment for more than 8 years, including more than 5 years working experience in the insurance industry; At least 3 years of actuary qualification in China or at least 3 years of actuary qualification abroad.

For insurance companies, actuary is the core technology for their survival and development, and actuary is the guarantee for the professional operation of insurance companies. The supervision also requires the career stability of the chief actuary.

The former China Insurance Regulatory Commission emphasized in the Notice on Strengthening the Management of the General Actuaries of life Insurance Companies that the general actuaries should not frequently change their offices. The proposed chief actuary of an insurance company shall, in principle, have worked continuously in the original institution for no less than two years.

The actuary of property insurance started relatively late. Although there is no requirement that the tenure of the chief actuary should not be less than two years, a member of the board of directors of a property insurance company said, “the company usually hires the chief actuary for three years when submitting proposals to the board of directors.”

She revealed that in reality, several chief actuaries of many companies left a few months or half a year after their qualifications were approved by the China Banking and Insurance Regulatory Commission.

Take Beau Gulf Property Insurance as an example. Since October 2019, five chief actuaries have been replaced in three years. Recently, some companies due to the departure of the general actuary vacancy. Public information shows that Dubbing Property Insurance, Everest Property Insurance, Zhuhai Property Insurance, Asia Pacific Property Insurance and other companies still lack a chief actuary.

According to an industry insider, chief actuaries leave for a variety of reasons, mainly the following reasons: to have a better position; Pay or authority falls short of expectations, but responsibility is great; Some data of the company is not true, and the chief actuary leaves early to avoid risks; Internal strife in the company; The company’s business risk is too big, voluntarily quit……

“Since the company needs the signature of the general actuary to report the products, the last general actuary resigned, the company must immediately hire another general actuary. Otherwise, if there is no signature of the reported products, it will not be able to report the new product terms, thus affecting the business.” Analysis by an actuarial insurance executive

In his opinion, many small and medium-sized property insurance companies appoint chief actuaries, often for the purpose of hiring, and operators are not very clear about the role, positioning and ability requirements of actuaries.

Some professionals believe that the responsibility and difficulty of the general actuary are more important and complex than that of the general actuary. The international practice has a set of specific norms for the resignation of the chief actuary, which requires that the insurance company must notify the insurance regulator if it changes the appointed actuary. The new appointed actuary must also meet with the former appointed actuary to determine whether there were professional code considerations in the latter’s resignation.

However, for the chief actuary to leave the reason, the insurance company more disclosure for “personal reasons” and a write-off.

The actuary’s dilemma

Actuary, which is respected by the public, has gradually become a “high-risk profession” in the eyes of some practitioners, which is not easy to do.

GUI Wenchow, former president of China South Korea Life Insurance, believes that the general actuaries of insurance companies are facing greater pressure. The chief actuary is responsible for the control work of product development, actuarial model, reserve provision, etc. In particular, the reserve provision has a great impact on the current profit and loss, which is not only subject to radical requirements of various actuarial assumptions required by the liability side, but also under pressure from shareholders, the board of directors and the management. After all, the actuarial report must be signed by the chief actuary before it can be submitted to the regulatory department.

GUI Wenham said, “In recent years, the regulatory authorities have strengthened the back checking of product design, and asked the chief actuary to explain the increased difference between the pricing assumption and the actual situation. All these have forced the chief actuary to be cautious, which is often criticized by the business departments, especially the insurance industry is facing a large balance sheet gap and other issues. The supervision department strengthens the supervision from the Angle of preventing systemic profit and loss, which makes the chief actuary become the point of contradiction.”

From the perspective of responsibilities and rights and interests of the chief actuary, the chief actuary is one of the senior management personnel of the insurance company, and has the right to participate in the board of directors’ meetings, responsible for the development and pricing of insurance products, and the provision of reserves. The chief actuary also acts as an auditor and accepts the mandate of the regulatory body to examine the compliance and reasonableness of insurance product rates, product demonstration benefits, reserve items, dividend distribution and reinsurance plans, and issues actuarial opinions.

And its main responsibility of reserve assessment and product pricing design rationality is also easy to face disputes.

A life insurance company general actuary Mr. Zhang (pseudonym) frankly, now the industry performance is not good, everyone’s first thought is the product that the product can save everything. Want to break through the product, bring up sales.

At present, the product homogeneity of insurance companies is relatively serious. Several chief actuaries have reported that they often encounter such situations in their work. “If a certain product is released to the target company, the boss or sales leader will ask: ‘Why can they sell it, but we can’t? ‘”

“Why is the price of insurance products of Company A lower than that of Company B? Is the actuary too conservative? Is he ignorant of the market?”

From the other responsibility of the actuary reserve assessment, the actuarial results estimated by the actuary, and the insurance company is losing or earning a great relationship. The reserve of insurance company will affect the profit presentation of insurance company. Such as increasing insurance reserves, will have some negative impact on its current earnings

 

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