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The Actuary The magazine of the Institute & Faculty of Actuaries

Actuaries in the Pacific

I started my Pacific tour in Japan. My first appointment, under the big red lantern at the temple in Asakusa, Tokyo, looked like a no-show. While I was waiting, a German businessman spoke to me, I took a photograph for a tourist, and a kimono-clad man smiled at me. As the rain pelted down, I felt like someone in a second-rate detective movie and wondered what the codeword was. The only special package I had brought from England was a bowler hat, acquired at Lock’s of St James’s, but that was for another contact. There was no actuary in sight.
However, it turned out that there were two other lanterns nearby one of which was much bigger and was at the gate to the entire complex which comprised shrines, shops, houses, restaurants, and a hotel within its grounds. I had been under the wrong lantern.

Friendly people
I had imagined the Japanese to be formal (which they were at first), but in no time they become friendly and easy-going. I had also expected a vast impenetrable city but, once you get the hang of the metro, Tokyo is no more difficult than Paris. A series of sub-cities, each with its own identity, Tokyo is complex, like the people. Fortunately the actuarial market is straightforward. It is a small community and everyone knows everybody else. Of course, that is not to say that the Japanese are gossips. In my experience, they are trustworthy, decent types who do business the way the English did 20 years ago.
For over ten years the Japanese economy was like a sumo wrestler powerful but slow. China has been attracting the bulk of the region’s investment while Japan positions itself as the source of technical expertise for Chinese development. The strategy is beginning to bear fruit and growth in Japan is beginning to return, although the restructuring of China’s banking system may dampen the newfound confidence.
Many multinational insurers seem to regard Japan as a niche that is not worth the effort in itself, though the recent granting of a reinsurance licence to a big name could change that in future. The insurance market is being gradually deregulated and my assessment is that eventually there will be growth leading to new opportunities for actuaries, perhaps even as soon as next year. Foreign actuarial skills are well regarded, but tackling the language is quite an undertaking.

A niche market
Across the Pacific, yet feeling closer to home culturally, is the niche actuarial market of New Zealand. Historically a country that produces sound actuaries, the profession there is now suffering from legislative change that means saving for retirement is likely to involve property investment. There is still an active actuarial community but the centralisation culture of multinationals often leads to the transfer of systems to Sydney, leaving New Zealand out on a limb. This is a shame, because the economy is going well, the active lifestyle is fun, and the cost of living is very reasonable.
Sydney lived up to its world-class billing in every way for me. The city itself is stunning. Culturally diverse, but with a strong Australian identity, it has positioned itself as the capital of the Pacific. In the actuarial world I believe it is stealing a march on Hong Kong. If China lets its economic treasure tarnish then Sydney will step in. Located in the ideal time zone for the emerging countries, Australia offers a lifestyle to multinational executives that is bound to encourage regional offices to relocate there. Financial institutions have already spread to the leafy suburbs and I would not be surprised to see them go further and develop across the harbour at Manly or beyond, to get the full benefit of the beach. Why not? Work hard, play hard! People jetting around the world are attracted to a base that is beautiful, stylish, and cosmopolitan, but not too congested.

A time of change
The Australian actuarial community is in flux. Legislative change has damaged the demand for pensions actuaries as it has in New Zealand. The British foray of AMP has engendered caution. Turmoil within the consultancies, some of which seem to have swapped whole teams, has created uncertainty. However, I believe the challenges are being faced up to and opportunities grasped. The sale of regional operations to locals is encouraging entrepreneurial activity. In addition, a new breed of life and non-life insurer is emerging, and the tendency to develop a semi-corporate regional base in Sydney may lead to more opportunities.
The influence of the Chinese is obvious throughout the Pacific, and many tip China to be the economic superpower of the future. Perhaps so, if the growth can be harnessed. However, if democracy takes hold, the ability to develop may be hampered by new political considerations.