My Actuarial Working Life

If you ask me what a fresh graduate should learn first when he joins your actuarial department, I will definitely answer he needs to learn  movement of policy  (MOP). In my view, MOP is the basic of all actuarial studies - it is about how a policy " behaves" during the entire life cycle, i.e. from when the policy is set in force until the policy is terminated (including maturity / expiry). By having a good understanding in MOP, it will be easier for us to visualize the relevant cash flows occur during policy term - especially when we setup an actuarial model to project cash flow. When I setup the Takaful Library for my client, the "base" variables I setup first are MOP related variables. From what I learn from friends in the industry, many companies are struggling to get the " correct " MOP statistics - which are known as L6, L7 & L8 for conventional insurers and FT5, FT6 & FT7 for takaful operators (namely "New Business", "Termi...

If you ask someone: "Do you think you can complete all required tasks by this evening?" and the answer you get is "Well, it depends... ", do you feel irritated? I would say most of us will answer "Yes", as it is not much different compared to not getting any answer at all! This was one of the most valuable lesson I learned from Mark Saunders , the speaker of Presentation 4: " Actuaries and communication skills -- an oxymoron? Some thoughts and tips ", during Jointly Regional Seminar 2011 recently held in Kuala Lumpur, Malaysia (19-20 July 2011). I totally agree with Mark that "it depends" is a really bad answer that does not give any meaningful / value-added feedback to the person who is looking for answer - especially if we would like to make the CEO upset. I posted Mark's "it depends..." in my Facebook and my friends shared with me other irritating ways of answering a questions, such as: " I will get back to y...

I have a great discussion with the HOD of life claim department this afternoon, and I have learned plenty of things. I always like to talk to the HOD of claim department (either in the previous company or current company I work), as he/she shares a lot of real life examples which make make me know better how insurance works in reality, and the problems and challenges he/she faces in managing insurance/takaful claims. Actually, the main purpose I had the discussion with the HOD was to understand how the claim process is carried, so that later the system development team starts working on the claim module enhancement, the problems the claim assessors facing now (that related to system) can be resolved together. Well, I am glad that he shared some real life cases with me during the discussion, helping me to understand better how he & his staffs assessed claims. I always agree that claim department is an important “gatekeeper” of insurance/takaful companies, apart from the underwri...

I have a chat with my ex-staff, J, last Friday in UAT Room. I was assisting the Business Analyst (BA) in supervising the new product User Acceptance Test (UAT), and Jeff was one of the user from Actuarial Department. Since J joined the company, he has been working in the system implementation team – well, in short, most of his work is to carry out UAT for new products and migrated products. I asked him: “How long you have been here already?” He answered 2 years, and he hasn’t had any chance to really involve in other actuarial works like pricing and valuation. I was a bit worried with his limited experience – I told him it was high time for he to start to learn other types of jobs, as he doesn’t even have any experience in preparing the statistical reporting (like new business report & termination report) or experience studies (like mortality study and persistency study). The situation will be more difficult when he becomes a senior executive but doesn’t know how to really do a j...

Hooray, I finally completed the Takaful Library! Working together with Ms. H, we finally setup the Takaful Library from scratch and created 32 “Products” (and another 19 “Same As” products). I am glad that the Valuation Team (headed by my ex-boss Mr. R) can now using a consolidated workspace to do the actuarial studies, especially asset share study and reserve & liabilities capital charges for new valuation basis and Risk-based Capital (RBC) submission. After around 4 months of hard work, finally I can really sit down and “document” this exercise. I will share the experiences I have in this article and several subsequent articles later – hopefully they can help to provide some ideas to you… The above flow chart summarizes the approach I used to complete the Takaful Library project for my Client: Approach Papers I started the project by preparing documentation (Excuse me, I think I heard someone just shouted “Oh no!!”…), which I generally called them as “approach papers” fo...

Are you a hardcore football fans? Are you extremely stressed when you are watching the match which the team you support is about to lose? If your answer is "Yes", you better take care your heart well during the World Cup Tournament... I learned an interesting fact during a seminar yesterday, i.e. a study reported that during World Cup Tournament time, hospital admission from people having heart attack  increases tremendously due to emotional stress - the example given was when Argentina beat England in a penalty shoot-out during the 1998 World Cup, there was a 25% increase in hospital admissions for heart attacks in England ( You may refer to " Can Watching Soccer Give You a Heart Attack? " for details ). Oops, look like football can appear as a hazard which affect the losses arising for health / critical illness insurance...? (I never understand how the emotional stress is because I have no interest in football...)

I was a bit surprised when Ms. Z called me. She asked me for a favor if I could provide a brief explanation on how actuarial modeling is done, especially related to Prophet – because she needed to review of the actuarial modeling processes. “OK, I can only share with you whatever I did in the past. But you need to check with Actuarial Department for the latest practice they have.” I am no longer with Actuarial Department, hence I couldn’t say on behalf Actuarial Department – furthermore, there is a new leader for the Modeling Team. What I could do was only sharing my past experience when I did my reserve workspace and simplified asset share workspace. I met Ms. Z the next day, together with her colleague (Oops, I didn’t ask what her colleague’s name is…). I explained how Prophet works in a very brief way, so that they could have some ideas how Prophet helps actuarial people doing the job. “Then what were the documentations you had when you setup the actuarial model in Prophet?” Y...

During my discussion with Mr. L & Ms. H on Prophet modeling, I briefly touched about how to organize variables more efficiently into various Variable Groups (from A to Z). In the existing reserving workspace and simplified asset share workspace (deterministic models) which set up by Ms. H & I (also Ms. B) previously, we also split the Variable Groups into “ core variable groups” and “ input variable groups”, which is similar to the standard Conventional Library. The major different between our approach and the standard Conventional Library is we have the same type of classifications for both core variables & input variables – i.e. A-M for core variables, and N-Z for input variables. For example, we have created Variable Groups for decrements like mortality rates – say we used Variable Group “D” (the 4th alphabet starting from A) for core variables (D – Decrements (C)), and similarly we use Variable Group “Q” (the 4th alphabet starting from N) for input variables (Q –...

I had an hour chat with Ms. H & Mr. L on Prophet Modeling yesterday. Ms. H is my ex-staff when I was the leader for the Modeling Team, she is quite brilliant in helping me setting up the Prophet models (simplified) the Valuation Team currently uses; while Mr. L is my replacement. The objective of the short chat was to exchange some thoughts on how to proceed the work to model a comprehensive cash flow projection model for the Takaful business. Well, although I have partly did the projection model before I resigned from Actuarial Department, I suggested to Mr. L that he should start setting up the model from scratch – instead of continuing from my partially complete model or doing amendments from the Conventional Library. Well, doesn’t this consume more time? This sounds correct if we only have a quick thought, but if we really make a thorough consideration, actually setting up the model from scratch is easier and more efficient. Let’s talk about doing amendment from Conventional Li...