Jemima Ayton and Dan Georgescu talk to Prudential UK's chief actuary about his role and his belief in actuaries developing strong communication skills to broaden their careers
31 JULY 2012 | JEMIMA AYTON AND DAN GEORGESCU
The chief actuary of Prudential UK and Europe has seen many changes to the role of the actuary during his 30-year career. In this interview he tells The Actuary how he sees the role evolving as we approach Solvency II and what he looks for in a senior actuary.
How did you start as an actuary?
I did a maths degree at Merton College, Oxford, followed by an MSc in statistics at University College London. I then worked as a tutor for the Oxbridge entrance exams for a year, before deciding I ought to get a 'proper' job. I liked statistics, and so I applied to the Pru in 1983 as an actuarial trainee. I was concerned that the work would be very high powered and slightly beyond me. But I discovered that I did it well enough, and have been here ever since. I have really enjoyed my career so far. An actuarial background gives you a strong sense of doing the right thing for policyholders, while ensuring that shareholders also get a fair deal, and I have always found my job technically challenging and interesting. I am still learning, which I hope is not atypical. Financial crises provide particular scope to learn: 2002/3, 2008/9 and now the lowest interest rates for 300 years have all meant new things to do and new challenges to meet.
What is your current role?
I am the actuarial director of Prudential UK and Europe. I am also head of the actuarial department, which has some 280 people, including 100 qualified actuaries, 90 students, 70 technicians and 20 temporary staff. In a professional sense, I am the actuarial function holder (AFH) for the Prudential's UK subsidiary companies, making sure that their long-term business is operated along sound financial lines.
What is your typical day?
It is dominated by meetings; there are board meetings for the six insurance companies of which I'm a director, and governance meetings at the level below that, where a lot of the day-to-day work gets done. I also have a weekly team meeting with all of my direct reports, plus further one-to-ones. In between those meetings, and on the train to and from work, I read papers. All the actuarial papers that go through the governance process will have been reviewed by me and my team.
How do you expect the AFH role to evolve?
Under solvency II, the role is likely to be much more technically focused on the calculation of best-estimate liabilities and commenting on underwriting and reinsurance arrangements. At the moment, it is much more wide-ranging, providing judgment and advice to the board on a variety of issues.
The future reserved role of the actuary seems to be more technically orientated, which is positive for those who like the technical aspects of the job, but I would expect that actuaries will also continue to develop wider skills so that they can take on senior positions in insurance companies. I would hope the role of individual actuaries is not constrained by the narrowing of the AFH responsibilities: there are plenty of finance and risk posts that actuaries should be good candidates for.
Some actuaries find management the most challenging part of their role. Would you agree?
Actuaries tend to be highly technical and intellectual, and are attracted to the profession by the technical content. I suspect not many will have joined because they want to lead. Actuaries can certainly be good people managers, but it's a skill that you acquire on the job rather than through exams. I would encourage students to get involved in people management as soon as they can. Early on there is time to learn and appropriate support will be available; by the time you are in a senior position, it will just be assumed that you have those skills.
What are your tips for managing a team?
You need good people to start with, then you need to set a clear direction, with high standards, and provide support - in the form of appropriate training, feedback and experience - so that they can meet your challenges.
What do you look for in actuaries?
I look for people who are technically excellent, show sound judgment, strong commercial awareness, with good communication and management skills, and a focus on delivery.
Actuaries are often poor writers of reports. Is this something you have had to work on?
I think all actuaries ought to be able to write good reports. They should treat report writing as a key part of their task; this means leaving enough time for writing the report, being aware of the audience and their level of understanding, and focusing on the key messages. I try to think of it as telling a story, taking the board through a process of logic, rather than just writing down my workings. I also think actuaries write reports that are too long: I am sometimes guilty of that, if only because of the underlying governance requirements. It's important to give the board summaries that land key points succinctly.
Should aspiring senior actuaries be devoting time to improving their communication skills?
Actuaries have a deep understanding of the business; it is therefore important that they communicate that effectively to other decision-makers and so influence them to ensure they make good decisions. You will only get the best out of your technical skills if you have the communication skills to get your points across to non-specialists. Even technical modellers have to be able to explain the model. Sharing knowledge across an organisation is the key to making it successful.
What would your advice be for actuaries aiming to develop into an AFH or equivalent role?
I would encourage younger actuaries to work hard, enjoy the work they are doing, and make sure they understand it so they can learn and add more value. In addition, they ought to be widening their experience. Typically, actuarial trainees need to move sideways in order to move up in an organisation, so they should not assume they are going to move up in a straight line. While there will always be specialists, the people with potential and ambition to move into the senior roles will have wide skills and knowledge. I started in a reporting area, then did product development, some systems development, general insurance, financial reporting and M&A, before becoming chief actuary. In each role, I enjoyed what I was doing, but I was always happy to move to get new skills and perspectives. So my advice would be to keep moving around and learning.
Lastly, what keeps you awake at night? Nothing keeps me awake at night, but I have plenty to worry about during the day. Fairly high up the list would, of course, be the financial markets. The eurozone is clearly in a muddle and there are going to be episodes of market volatility, and low interest rates, for some time to come. On top of that we have Solvency II, which also has the potential to create issues for European insurance companies, because it is a radically different regime. Insurance companies rode out the credit crisis of 2008/9 pretty well, and the ideal solution for Solvency II would be to have a long transition. Otherwise, there is potential for additional market disruption, which is something the EU could do without just now.
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