Working in Hong Kong vs. China

Transcription

1 Working in Hong Kong vs. China Raymond Li 22 March 2003

2 Topics to cover Why? Comparison Working environment Student program Getting technical Outlook for actuaries 2

3 Why? Tremendous growth of China life insurance industry Annualized growth rate of over 23 percent during the 4-year period from 1997 to 2001 Relatively low penetration rate of the Chinese insurance market so the expected growth in the future is huge. Great demand for insurance expertise and actuarial skills. 3

4 2001 Life Insurance Premium Income (USD millions) Individual Group Total Market Company Business Business Business Share China Life 7, , , % Ping An 3, , , % China Pacific 1, , % New China Life % AIA % Taikang Life % Manulife-Sinochem % ING Pacific-Antai % Citic-Prudential % AXA-Minmetals % Allianz-Dazhong % China Life-CMG % John Hancock-Tianan % Total 13, , , % 4

5 Working Environment Working hours Work pressure Communication channel in office Language (Written) Language (Spoken) Long on weekdays and sometimes on weekends Medium to High and phone English and Chinese (Traditional) Cantonese and English Usually 9-5, no work on weekends Varies at different level, generally low to medium. Phone, hard-copy memo and meetings Chinese (Simplified) Mandarin 5

6 Working Environment (Cont d) Access to external information Exposure to nonlocal knowledge or expertise Work Control/Accuracy Efficiency Quick and easy Easy access to international knowledge Analyses and checking of work are always done High team work is emphasized Limited, slow to internet access. Limited unless staff with significant overseas experience is hired Mainly subject to regulation Low individuals are responsible only for his/her own duties and do not know what others do 6

7 Working Environment (Cont d) Actuarial software or system used Employer type Type of work Life companies use developed software such as Prophet, TAS, MoSes, etc. Insurance companies (both direct and reinsurance), consulting firms, and the government. Various. Examples are reserving under different GAAPs, pricing, experience study, asset-liability study, market research, Embedded Value Calculation. Some are still using selfdeveloped software such as VB but have started to migrate to international accepted software. Mainly insurance companies. Mainly statutory reserving and pricing. But started Embedded Value Calculation, and experience study. 7

8 Student program Exams Study leave Textbooks Exam fees Usually SOA, UK, or Australian exams. Depending on the exams taken, usually from days per sitting. Usually offered by the employer. Usually paid by the employer. Mainly SOA and. Similar. Varies. Varies. 8

9 Getting Technical Regulatory body Products - Life Products - General The Office of the Commissioner of Insurance ( OCI ) Traditional Participating Unit-linked Heavy savings type Motor Commercial Property Employees Comp. Marine Hull Marine Cargo Similar. Motor Commercial Property Marine Hull The China Insurance Regulatory Commission ( CIRC ) Marine Cargo 9

10 Getting Technical (Cont d) Statutory Reserving Standard (Life insurance) Reserving Approach Mortality Assumption Valuation Interest Rate Assumption Lapse and Expense Assumption Premium Setting Profitability Testing 1.5-yr Full Preliminary Term or 3.5% Zillmer Selected by the Appointed Actuary Selected by the Appointed Actuary Not required Determined by company actuaries Varies 1-yr Full Preliminary Term China Life Table (90-93) Min (pricing rate, rate announced annually by the CIRC) Not required Highly regulated Varies 10

11 Getting Technical (Cont d) Sum of Solvency Margin Requirement 4% of mathematical reserves; AND 0.3% of sum-at-risk ( SAR ) But subject to a minimum of $2m. Long-term business: Sum of (4% of the fiscal year-end policy reserves of the life insurance policies and 1% of the fiscal year-end policy reserves of the investment-linked policies); AND 0.1% of SAR with <3 yrs term; 0.15% of SAR with >=3 and <=5 yrs; 0.3% of SAR with >5yrs; 0.3% of SAR for others Short-term business: %-age of net premium or net paid claims 11

12 Outlook for Actuaries Number of actuaries Mobility Actuarial Community Social status Potential growth Pay 183 Fellows 89 Associates 144 Students (as of May 2002 from AS website) Higher, chances to go to elsewhere in Asia or even out of the region. Periodic gathering, conference, luncheon, etc. Actuaries get to know each other easily. High but people do not have idea on what an actuaries do! Low Comparatively high 43 locally qualified 30 internationally qualified Limited occasionally overseas training is offered for some companies. Not many. High a lot of media exposure recently. High High in local terms 12