Actuaries in Non-Traditional Roles Gail Ross, CAS Past-President Manager & Senior Consultant- Milliman, Inc.

Presented at the CAS/CIA Annual Meeting Montreal November 17, 2004

Outline

 What is “Traditional”?

 CAS Reports on Actuaries in Non-Traditional Roles  Case Studies  Non-Traditional Employers of Current CAS Members  Centennial Goal 2

What is “Traditional”?

 Employer  Insurer / Reinsurer  Actuarial / Insurance Consulting Firm  Regulator  Broker  Organization Serving the Insurance Industry  University 3

What is “Traditional”?

 Function  Ratemaking / Pricing  Reserving  Modeling  Programming  Teaching  Line of Business 4

CAS Reports on Non-Traditional Roles

 Survey on Actuaries in Non-Traditional Roles – 1997  Task Force on Non-Traditional Practice Areas - 1999 5

Survey on Actuaries in Non-Traditional Roles  Conducted in 1997 by the External Communications Committee.

 Purpose / Use:  To identify actuaries working in non-traditional roles  To develop case studies showing describing how actuarial skills can be applied in non-traditional ways  For distribution to business media as examples of how corporations and financial institutions can utilize casualty actuaries and the unique skills they possess 6

Survey on Actuaries in Non-Traditional Roles  91% of respondents indicated they perform at least one traditional actuarial duty as part of their job  64% perform ratemaking  48% perform reserving 7

Survey on Actuaries in Non-Traditional Roles  9% perform only non-traditional duties as part of their job  Marketing / underwriting  Claims operations  Financial planning / investments  Risk management  Valuation  Dynamic financial analysis 8

TF on Non-Traditional Practice Areas

 Appointed by the CAS BoD in 1998  Purpose of formulating recommendations for how CAS could better support members currently working, or wishing to work in the future, in non-traditional practice areas 9

TF on Non-Traditional Practice Areas

 TF identified four priority practice areas for which CAS should increase its education and research areas:  Asset/liability management and investment policy  Valuation of P/C insurance companies  Risk Management  Securitization/ risk financing  Advisory committees were formed in each of these areas 10

TF on Non-Traditional Practice Areas

 TF considered four other important practice areas but didn’t consider them priority since education and research was already underway within CAS:  Pricing of non-traditional exposures  Reserving of non-traditional exposure  Catastrophe analysis  DFA 11

TF on Non-Traditional Practice Areas

 TF also identified non-traditional skill sets that CAS should address through continuing education:  General business skills  Accounting – GAAP/SAP/Foreign  Nature/structure of financial instruments  Programming 12

Case Studies

 Weather Risk Management  Multiple Triggers for an Electric Utility  Role of Actuaries in Public Policy Development  Quantifying E-Commerce Risk www.casact.org/aboutcas/cstudies.htm

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Non-Traditional Employers of Current CAS Members

            Investment Bank / Private Equity Firm Law Firm Claims TPA Asset Manager Rating Agencies Management Consulting Firm Aerospace Insurance Company Drug Company Large Equipment Manufacturer Cheese Company Radio Broadcast Holding Company Scorekeeper for a Semi-Professional Baseball Team 14

Centennial Goal

 CAS will celebrate its centennial anniversary in 2014  Over the past two years the LRPC developed the long range vision for the CAS  Over the next 10 years all committees will focus on the steps that are needed to achieve the long range goal 15

Centennial Goal

The CAS will be globally recognized as the preeminent resource in educating casualty actuaries and conducting research in casualty actuarial science. CAS members will be recognized as the leading experts in the evaluation of hazard risk and the integration of hazard risk with strategic, financial and operational risk.

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Centennial Goal

The CAS will be globally recognized as the preeminent resource in educating casualty actuaries and conducting research in casualty

Traditional Practice

actuarial science. CAS members will be recognized as the leading experts in the

evaluation of hazard risk

and the integration of hazard risk with strategic, financial and operational risk.

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Centennial Goal

The CAS will be globally recognized as the preeminent resource in educating casualty actuaries and conducting research in casualty

Non- Traditional

actuarial science. CAS members will be recognized as the leading experts in the evaluation of hazard risk and the

integration of hazard risk with strategic, financial and operational risk.

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Centennial Goal

The non-traditional roles of today’ casualty actuary will become the traditional roles of the casualty actuary of the future!

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Speakers

 Duncan McCallum – RBC Capital Markets  John Ferrara – Arrowhead General Insurance Agency  Stephan Christiansen – Conning Research 20