Insurers need more actuaries

AS THE INSURANCE industry expands rapidly in Hong Kong, more actuaries will be needed. Demand in China has also intensified in line with its fast-developing economy.

More opportunities in the profession have also been created due to the generally improved economy and market conditions in the Asia-Pacific region.

'The China market is like a magnet - it is drawing talent from Taiwan, Singapore, Malaysia and Hong Kong. As its insurance industry is exploding, [companies] are not only recruiting actuaries but also senior agency directors,' said Esther Chin, senior manager at Trowbridge Deloitte, a leading actuarial consulting firm.

Though several universities in China had started to produce actuarial graduates and more professionals were qualifying at a faster pace, the numbers did not match the demand, she said.

'Hong Kong is a more mature market compared with the countries surrounding us. However, it is not as developed as markets such as Australia and the United States. We still have room for growth,' said Ms Chin.

Most actuaries work for insurance and reinsurance companies. The second-largest group works in consulting firms, while the rest work in public and government service, education, financial institutes, rating agencies or recruitment companies.

Insurance companies were hiring many actuaries, Ms Chin said. Fresh graduates could contribute in a few key areas: marketing, investment, finance and data management.

'They might work in the marketing department to analyse market trends, design new products and determine pricing, or in the investment division where they manage the assets,' Ms Chin said.

In the finance division, they will work in managing capital and setting reserves; in the data management division the focus is on analysing and interpreting information.

There is also a foreseeable growth in the public and government service sector.

'Governments are getting more serious about regulatory matters, especially China. They are investing more resources to set up and reinforce regulatory policies. An actuary will help to determine the general social policy according to studies on population growth and segmentation,' Ms Chin said.

The actuarial science curriculum prepares students to excel at number crunching - a skill that is highly prized at investment banks or fund management companies, where they hire graduates as analysts. Effective communication is crucial; actuaries need to master this skill in order to fly.

'No matter how good we are, there is absolutely no value when others do not understand what we are doing. One must be able to explain numbers in plain format for laymen to understand.'

Insurance actuaries are required to present and explain their products to the agency force. 'Agents are from all walks of life, the actuaries need to be very convincing and knowledgeable to disseminate the message clearly,' Ms Chin said.

As risk management has been increasingly emphasised, all correspondence needs to be done in a precise manner; actuaries need to ensure their documentation is of utmost accuracy.

When recruiting for a consulting firm such as Trowbridge Deloitte, Ms Chin is more concerned about the candidates' aptitude.

'Most graduates who come to us are straight-A students. We do not worry much about their ability or knowledge. Rather, we focus on their aptitude.'

Curiosity was of utmost importance, she said. 'A lot of our work is investigation work. We need to dig out layers of facts and data to bring out the solution. Plus, we are constantly under time pressure to meet tight deadlines.'

In a more general perspective, an actuary must have an eye for detail and clear logic.

'Most of the time, we have to deal with loads of information and convert it into meaningful solutions,' Ms Chin said.

A junior actuary can expect to earn more than $10,000 per month in an insurance company. Consulting firms tend to pay more at a junior level. 'In our first few years of practice [young actuaries] aim to get qualified as quickly as possible.'

on course for success

It usually takes five years to complete all the examination papers to be qualified as an actuary.

Job rotation to different product lines and departments is usually offered at insurance companies.

Intensive on-the-job training, seminars and learning case studies are used to train up actuaries at consulting companies.

Periodically, the Actuarial Society of Hong Kong organises evening discussions, lunch meetings and presentations for knowledge enhancement.