Michele Folli Comitato Lombardo degli Attuari MEF Welcome Meeting Actuary: a profession for the future Milano, October 4 th 2017
NUMBER OF ACTUARIES 20.000 FOR YEARS ONE OF THE MOST REQUIRED PROFESSIONS IN THE WORLD Both on the Italian and International markets In Italy, the profession of Actuary offers great opportunities for young people: there is strong demand both in the professional offices and in the insurance field with immediate entry in the world of work 2
BUT WHO IS THE ACTUARY? The Actuary deals with determining the future trend of demographic and economic-financial variables, drawing on what will be reality in the short, medium and long term Actuaries therefore own analytical tools to assess economic, financial and social phenomena The role of Actuaries is made even more important and central to the development of the insurance market, the strong growth in the social security sector and the greater need for risk management in companies and financial activities 3
BUT WHO IS THE ACTUARY? NOT JUST NUMBERS BUT EXPERIENCE IDEAS PROJECTS MANAGERIAL SKILLS GOVERNANCE THE ACTUARIAL APPROACH IT IS NOT ONLY ONE CALCULATION, BUT A UNIQUE WAY TO PERCEPT RISKS AND FACE THE UNCERTAINTY WITH QUANTITATIVE INSTRUMENTS, REPRESENTING THEM IN TRANSPARENT AND CLEAR WAY 4
BUT WHO IS THE ACTUARY? The keywords are Risk assessment Evaluation Estimate 5
BUT WHO IS THE ACTUARY? DATA QUALITY ASSUMPTIONS CHOICE ASSESSMENT FOR PROBLEM RESOLUSION CHOICE OF THE APPROPRIATE MODEL CRITICAL AND STRATEGICAL ANALISYS OF RESULTS DISCLOSURE AND REPORT ACTUARIAL CONTRIBUTION TO MANAGEMENT DECISIONS GOVERNANCE 6
BUT WHO IS THE ACTUARY? ACTUARY: A PROFESSION, NOT SIMPLY A JOB 7
HOW DO YOU BECOME AN ACTUARY? In order to practice the profession of Actuary, registration is required Registration to the Register of Actuaries is subject to the passing of an official State Examination For the purpose of admission to the State Examination for the attestation of the profession of Actuary, the master degree is required in one of the following classes: class LM16 - Finance class LM83 - Statistics, Actuarial and Financial Sciences class LM82 - Statistics 8
THE HISTORY OF THE ACTUARY IN ITALY A 75-YEAR HISTORY DEALING WITH UNCERTAINTY LIFE INSURANCE NON-LIFE INSURANCE FINANCE SOCIAL SECURITY RISK MANAGEMENT ERM AND SANITARY FUNDS NEW PROFESSIONAL SPACES An important journey based on professional contents, as a sign of the social value of the profession and at the service of the Country 9
THE HISTORY OF THE ACTUARY IN ITALY The most significant regulatory achievements In Life Insurance in the evaluation of reserves since the 50s Audit Appointed Actuary (1978) Life Appointed Actuary (1997) MTPL Appointed Actuary (2004) Actuary of pension funds (2013) Solvency II/Actuarial Function Actuary Fit and Proper (2015) The development of professional consulting structures started in the early 90s and is still continuing 10
SOME RECENT DATA ON THE ACTUARIAL PROFESSION IN ITALY WHERE DOES THE ACTUARY WORK TODAY? INSURANCE 45% SOCIAL SECURITY AND SANITARY FUNDS 16% FREELANCERS 13% FINANCIAL SECTOR 5% SUPERVISORY AUTHORITIES 5% OTHER SECTORS (TEACHING, NON-FINANCIAL COMPANIES, OTHER ACTIVITIES ) 16% 11
THE FUTURE? Mostly in NON-FINANCIAL COMPANIES (e.g. ENTERPRISE RISK MANAGEMENT) But also in SANITARY FUNDS and OTHER SECTORS In a project of development that the NATIONAL BOARD OF ACTUARIES is carrying on with success for some years, coherent with aims and targets of the ACTUARIAL ASSOCIATION OF EUROPE (AAE) and the INTERNATIONAL ACTUARIAL ASSOCIATION (IAA) 12
THE FUTURE, ALREADY PARTIALLY PRESENT, FOR ACTUARIES IN ITALY NON-FINANCIAL COMPANIES ERM (Entrerprise Risk Management) CERA - Chartered Enterprise Risk Actuary (CNA and IIA are working on their permission to release of the title) IAS 19 (Provisions for defined benefits) STOCK OPTION PLANS PLANNING AND CONTROL STRUCTURING OF PENSION AND HEALTH PLANS 13
THE FUTURE, ALREADY PARTIALLY PRESENT, FOR ACTUARIES IN ITALY SANITARY FUNDS BUSINESS PLAN PRICING AND RESERVING TECHNICAL FINANCIAL STATEMENT FINANCIAL MANAGEMENT THIRD PART ADMINISTRATOR (TPA) SELECTION 14
THE FUTURE, ALREADY PARTIALLY PRESENT, FOR ACTUARIES IN ITALY SOLVENCY EXTENSION COMMERCIAL ACTIVITIES PUBLIC ADMINISTRATION VALUATION MODELS FOR OTHERS RISKS (operational, reputational, counterparty, etc.) 15
THE FUTURE, ALREADY PARTIALLY PRESENT, FOR ACTUARIES IN ITALY Some examples: THE FINANCIAL AREA BANKS, AMC (Asset Management Companies), INSURANCE COMPANIES, PENSION FUNDS, HEALTH FUNDS Advisor for financial managers selection Financial Function Asset Liability Management Liquidity Management Securizations Financial instruments for managing some risks such as longevity Pricing of structured and derivative securities 16
THE FUTURE, ALREADY PARTIALLY PRESENT, FOR ACTUARIES IN ITALY IT BIG DATA DATA QUALITY STRATEGIC ASPECTS RELATING TO DISTRIBUTION AND MARKETING INTEGRATED AND ENLARGED WELFARE INNOVATIVE TELEMATICS PRODUCTS MANAGEMENT AND ASSESSMENT OF CATASTROPHIC RISKS MANAGEMENT OF ENVIRONMENTAL RISKS UPDATING OF THE INTERNATIONAL ACCOUNTING STANDARDS IAS/IFRS IN THE INSURANCE SECTOR 17
ACTUARIES IN THE GOVERNANCE Actuaries, particularly within Solvency II / Actuarial Function, but not only, are increasingly present in the Governance, or have assumed important positions such responsibility as to affect the "government" of Insurance Companies and Social Security Institutions. A big step forward essential to draw the Actuary of the future that is already a reality! 18
WHERE TO FIND MORE INFO ITALIAN http://www.ordineattuari.it/ (ONA CNA) http://www.sia-attuari.it/ (SIA Sviluppo Iniziative Attuariali) http://www.italian-actuaries.org/ (IIA Istituto Italiano degli Attuari) INTERNATIONAL http://www.actuaries.org/ (IAA International Actuarial Association) https://actuarial-academy.com/ (EAA European Actuarial Academy) http://www.ceraglobal.org/ (CERA Global Association Chartered Enterprise Risk Actuary) 19