Obituary September 2018
Tony Fine's death was reported in the September issue of The Actuary, but space constraints meant that I could not do full justice to a man who was not only an outstanding actuary but also one of the last of a kind we no longer breed. Fortunately, The Actuary has permitted me to publish this longer homage to him on its website.
An early aptitude for mathematics won Tony a place in an Oxbridge college - I can't remember which one. There is a story about his first date - he plucked up courage to invite her to his room for tea and told her that he had a surprise for her. She went at the appointed hour, wondering what the surprise was: A book? An LP? A box of chocolates? Alas, it was nothing of the sort. Tony had managed to smuggle a portable radio in (this was 1964, the Jurassic Age for electronics) and the meeting was scheduled to coincide with the live broadcast of the Cassius Clay-Sonny Liston world heavyweight championship fight.
Although the story is said to be true, I have to say that I watched the return fight live on black and white TV - it was around 4am and the fight was over before I was fully awake. It must have been the first match they watched, but it would still have been in the early hours of the morning. How did he manage to get her into his room at that hour? Perhaps the story is apocryphal, but it had legs because it has what Neville Cardus called 'the higher truth' - it captures the essence of the man.
He started his actuarial career at Pearl Assurance, but didn't find the work interesting and might well have gone the same way as John Kay, who left Scottish Widows to become a famous economist. Luckily, he joined Bacon & Woodrow, where he came under the influence of Sidney Benjamin - one of the foremost actuaries of his generation. Sidney was a pursuer of ideas, always finding new ways of solving existing problems, searching out new problems and solving them. The actuarial profession owes Sidney a great deal for the work he did and for the inspiration he gave to others. He was never really a consultant at heart - revisiting similar problems time and again bored him, and he was liable to switch off or be transported elsewhere when a fresh but entirely unconnected train of thought came to him.
That was not Tony's style at all. First of all, he reveled in company. Sitting in a back office solving Fermat's Last Theorem or how to value a structured option was not for him. What he liked was solving people's problems, not abstract theory. Without losing his respect for Sidney, he soon developed a style of his own, more akin to John Prevett and Colin Lever, two other actuaries he revered.
He was, above all, a client-oriented actuary. Clients particularly liked the fact that he actually listened to their problems and didn't spend all the time spelling out his capabilities. What's more, he came back with just the solution the client wanted. He never unduly socialised with them - the relationship had to be professional. Bacon & Woodrow invited clients to Test matches; Tony, a die-hard cricket fan, never took a client to one of those events.
For an actuary with an MA in mathematics, he was surprisingly computer illiterate. By and large, Tony shunned details and analysis, leaving them to his protégés Alasdair Brown and Howard Froggatt. Not getting deeply involved in detailed number-crunching enabled him to focus on the key messages, which is what any client wants from his adviser.
Tony had two principles that could potentially lead to conflict, but never did in practice. He would never do anything that was inconsistent with the professional standards expected from an actuary, even if the client wanted it done - but as a client-focused actuary, he always gave them what they wanted. He reconciled the two, if necessary, by persuading his client that what they wanted wasn't the right thing to do or in their best interests. He didn't always succeed, of course, but he was prepared to lose business.
Two milestones in his career saw his professionalism challenged to the full. Interestingly, they both arose in the mid to late-80s, when he was in his prime.
In the first example, he was brought in to advise the board of a listed life company on the value to be placed upon its direct sales force, which had been set up five years previously. The management had a shadow share incentive scheme, which was to be based upon the business it produced. There was no clear formula. Tony was not required to do any calculations, but simply to review the values produced by an in-house actuary, who had an interest in the result. The numbers and the programme code were checked by Alasdair Brown and seemed reasonable, but there was no consensus on either the methodology or the assumption.
The sales force management wished to use a sort of appraisal valuation, forecasting strong business growth. Tony was inclined more towards the embedded value. After all, the Financial Services Act 1986 was law and the future of direct sales forces was uncertain. On the Friday preceding the Monday, when the board planned to make an announcement of the valuation to the Stock Exchange, there was still no agreement on the price. He couldn't get through to the CEO and his anxiety increased when he heard on the grapevine that he had got the assignment after a rival firm had turned it down. He went home that weekend, leaving strict instructions that the client should not finalise a valuation without his consent.
But they did. The first Tony heard about it was from a Stock Exchange announcement. He was furious, and determined to make an issue out of it. He spoke to his firm's legal adviser, who spoke to the client's company secretary. The reply: "I don't see why he is concerned. If you read the press release it says: 'After receiving independent actuarial advice, the directors valued the direct sale at £Xm.' That statement is chronologically correct and Mr Fine can't complain as we don't say that we followed his advice."
What can a principled actuary do when faced with a devious lawyer?
He was ambushed in that example, but at least he didn't give misleading advice. The shareholders lost a great deal of value because the directors chose to go through with the deal on a price that was way in excess of the range quoted by independent actuaries. It put him on his guard when, a couple of years later, he was involved in two separate transactions, acting for the seller in both cases.
The first was a case of deja vu - a French company with a direct sales arm selling unit-linked business. Worse, it had a shadow share scheme for its sales management and its sales force. Tony advised it not to go down that road, as it would lead to crazy numbers. The crucial assumption was the rate of new business growth; he was told that it was too late, the basis had been specified in great detail at the very outset when the sales force was set up. Tony accepted that, as it was a fact.
Of greater long-term significance was his role in advising AMP on the value of Pearl Assurance. The fact that the actuarial firm advising Pearl was the same one that had turned down the assignment from the listed life company referred to earlier gave added piquancy to the situation. This was more than 30 years ago, when life companies rarely came up for sale and embedded value techniques were in their infancy.
Today the situation seems surreal, but that is largely because of the dispute and Tony's terrier-like tenacity. Tony and Ian Salmon produced a joint paper, Reflections on a Takeover of a United Kingdom Insurer; A Case Study (JIA 118, 59). It was met with a threat from the competing firm: "If you publish that, we'll sue you." Tony and Ian did publish it, and it led to the creation of a joint working party to review what actuarial information was needed for the proper evaluation of a bid for a life company. Its report was published in 1993 (JIA 121, 1). I can only refer to the sage from Omaha, Warren Buffet: "Someone is sitting in the shade today because someone else planted a tree long time ago." In this instance, Tony was the planter.
Tony's professional contributions were few, but profound, and dealt with practical problems. We've already seen the takeover problem. In addition, he was a key contributor to David Purchase's Reflections on Resilience Working Party, a group that has not received the accolades it merited, and a paper on the role of the appointed actuary in the UK.
He was a wonderful man, a great friend and a genuinely caring soul. Not everyone's cup of tea, mind you - he had firm views. While those he trusted he trusted completely, those he didn't he had no time for, and sometimes the feeling was reciprocated.
He had a rare quality that clients particularly liked: he actually listened to their problems and came back with just the solution they wanted. His popularity with his clients was a mixed blessing for his firm, as it did not spread by osmosis to the rest of the organisation. His clients would have him and no one else. He never sought business, business came to him. Not surprising, as he was one-off; God threw the mould away after he had cast Tony.
Once, when Bacon & Woodrow was pitching for a large assignment, it asked the finance director of a major company to vouch for it. The reply was: "I can't vouch for the firm as I don't know all of them, but I certainly can vouch for Tony Fine."
Tony retired at the time Bacon & Woodrow's insurance arm merged with Deloitte. Early last year he had an operation to remove a brain tumour. Unfortunately, they couldn't remove all of it. I met him last October at a Cricket Society Dinner. He was clearly unwell, and said to me, knowing that I was an advanced Parkinson's sufferer: "Icki, you and I probably have the highest expected rate of mortality in the audience." Typical gallows humour - matter of fact, no trace of emotion. So far, he has been half right, as he died a few months later. Time will tell whether his forecast was 100% reliable.
He was a bachelor most of his life, though not by choice - I mentioned his undergraduate episode. Somehow, he lacked the flair for saying sweet nothings. Mind you, he made no efforts to make himself presentable. He was a shabby dresser, rather like the mad inventor from Back to the Future. Somebody joked that he didn't have to wear kipper ties as the kipper on his tie was from yesterday's breakfast. He lived in an untidy bachelor flat in Barbican and drove a beaten-up old Mini. He wasn't the safest of drivers, either.
Tony did eventually get married, to Mo, around the same time as he retired. It was a happy marriage, with Tony acquiring a ready-made family in the process. Alas, the life of bliss was short-lived as Mo died after six years. Tony then had a relationship with Ingrid, a Dutch widow, and commuted between Bournemouth and the Netherlands, where he died. He is survived by Ingrid, a brother and a cousin.