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The Actuary The magazine of the Institute & Faculty of Actuaries

Careers: Can CERA change your career?

Since the introduction of ST9 — the enterprise risk management specialist technical subject — in April 2010, over 50 members of the UK Actuarial Profession have gained chartered enterprise risk actuary (CERA) status via this examination route — with more expected when the December results are published. One of the main aims of the CERA qualification is to enable actuaries to demonstrate greater breadth of understanding of risk management techniques and issues, which in turn can facilitate a move into wider fields.

As a reminder, the CERA qualification 
is gained on achievement of the 
Associate level qualification plus passing ST9, or at Fellowship level when this either includes ST9 as one of the required ST subjects or when ST9 has been passed after gaining Fellowship.

We wanted to find out what had attracted members to this qualification and asked three recent candidates whether they had found it to be of benefit to their careers.

Vincent Ngan, an actuary with Friends Life, became eligible for the CERA qualification in June, having taken ST9 while a student.

Angela Burns, a student with Hymans Robertson, became eligible for the CERA qualification in May.

Abigail Caldwell, a life actuary with the Financial Services Authority, bravely returned to study after gaining Fellowship, and became eligible for the CERA qualification in May.

Why did you decide to take the ST9 exam?

Vincent NganVincent Ngan (VN): Around the time when ST9 first became available, 
risk management had already become the hottest topic in the financial industry — not least due to the financial crisis. 
This revived interest in risk management made me believe that ERM would take on an increasingly important role, and actuaries with knowledge in this area would be well positioned and able to 
apply their unique skill-set. I also felt that the CERA qualification would be very useful in opening up opportunities for actuaries outside the traditional areas, leading to wider recognition. Also, being 
a subject that goes across practice areas, 
I felt that it would increase my flexibility in career options.

Angela BurnsAngela Burns (AB): My main reason for sitting the ST9 exam was to obtain the additional title of CERA, which is a globally recognised qualification. 
However, I also decided to take the ST9 exam because risk management is a very topical issue for the actuarial profession, and it is most likely where the profession is headed in the future. Actuaries have the skills and expertise to branch out into this field and to help promote and supervise good risk management. Sitting the ST9 exam meant being at the forefront of 
this change.

Abigail CaldwellAbigail Caldwell (AC): I qualified in 
2007 and felt that our profession had progressed markedly since then, both in terms of the sophistication of modelling techniques and the development of ERM. ST9 seemed to be a good way to keep myself up to date in order to be able to perform my job more effectively.

Did you find the ST9 course interesting?

VN: Very! Compared to other ST subjects, it has more technical content — bar ST6 — which is good if you like a fairly technical focus, as I do. What I found most refreshing was that while the syllabus touches upon the applications of ERM within the traditional areas in which actuaries currently operate, it also takes you outside that and considers its application in much wider areas.

AB: Yes, very and, in particular, the ‘softer skills’ element of risk management such as ensuring a good risk culture in organisations and making sure that risk management is integrated into everyday working practices. The concept of looking at an enterprise as a whole rather than across individual silos is an interesting one that seems like common sense but 
which many organisations fail to do. CERA-qualified actuaries are well placed to help organisations break away from the norm and assess their risks at an 
enterprise level.

AC: I thought the course contained a good mix of quantitative techniques and qualitative concepts and found the sections on copulas and extreme value theory particularly interesting.

Has it been relevant to your work since the exam?
VN: After passing ST9, I moved from a pension consultancy to financial reporting in a life insurance company. While there 
is no doubt that studying ST2 and SA2 would have better prepared me for a life insurance role, I do find that ST9 helped me in understanding wider ideas such 
as economic capital and risk capital. 
It definitely helped to ease the ‘shock’ of switching practice areas. I will also be moving to the asset liability modelling team soon and hopefully ST9 will be very useful in my new role there.

AB: I am currently working in pensions and trying to gain as much knowledge as possible in this field before branching off into other avenues. The skills I learned in the ST9 exam are not directly applicable to my current role but there are many opportunities within Hymans Robertson to use these skills, as we are currently branching out into risk management activities and using our consulting expertise to help clients with Solvency II and Basel III.

AC: Yes, especially when looking at the more technical aspects of internal 
model applications.

Do you think that the CERA qualification has made a difference to your career path?
VN: It definitely gave me a boost in confidence in dealing with ERM-related issues that I come across in my work and it has made a difference to how I perceive my career. Having the CERA qualification on my CV has attracted attention from recruiters and positive comments from potential employers.

AB: I think my potential career path is now much wider and there are many more opportunities for the future. The range of work in which I could get involved is much wider than it would have been. I now also have access to global opportunities as well as domestic ones, since the CERA qualification is globally recognised.

AC: Yes, the global aspect of the CERA accreditation and the wide-ranging course content and application has expanded my career opportunities.

What do you think were the most useful aspects of the syllabus?
VN: The sections relating to the implementation and structure of an ERM framework provided a good insight into how ERM works in practice. This is particularly useful if you haven’t worked on this directly in your career to date.

AB: I found the case studies very useful as they put risk management into a real-life context, something that some of the other subjects lack. It is very helpful to learn techniques for risk management by use of ‘this is what not to do’ examples.

AC: The technical overview of risk modelling and measurement was very useful, but the best parts for me were the concept, framework and process sections, which gave context to the rest of the course.

Are there any areas you would change or think should have been covered?
VN: I felt that the syllabus is appropriate for an ST subject, in the sense that it provides the necessary depth without drilling as deeply as an SA subject. However, there is a significant volume of reading required — the total including ActEd course notes can easily top CA1. It is also textbook-based in structure and you have to switch from one book to another, sometimes with different terminologies. This can be difficult to students unfamiliar with this style.

AB: Some of the maths in the syllabus 
is pretty heavy-going and may be 
better brought to life through 
real-world applications and examples. The ST9 course content should continue to evolve as the actuarial profession develops in the risk management area.

AC: I didn’t think that there was anything else that should have been covered — in fact, I thought that there was a lot of material overall in the syllabus for an ST subject. As this area develops, 
I think it would be good for the profession to consider whether an SA exam in ERM would be appropriate.

If someone is considering studying ST9, how would you convince them to do so in just one sentence?
VN: The course is very interesting and will reward you with a much broader understanding of ERM, which is one of the most discussed issues in the current financial crisis environment.

AB: If you would like an additional qualification that will let you shine globally, then go ahead — sit ST9!

AC: It counts as verifiable CPD!

As a final note, with many thanks to our willing interviewees, it is worth adding that the Profession has already taken on board feedback from students about difficulties with some of the textbooks, particularly the practical application of the quantitative aspects. Therefore, for students taking ST9 for 2012 exams, there have been definite improvements in this regard. If you would like to find out more about the ST9 syllabus or CERA qualification, then please visit http://bit.ly/r6yRQ7 and www.ceraglobal.org for further information.


Lindsay SmithermanLindsay Smitherman is a staff actuary working for the UK Actuarial Profession. Her responsibilities include the life, health and care, derivatives and ERM subject areas