S2 2015 Orientation Commercial Actuarial Practice Communication The Course Case Studies PreCourse Work Assessment Logistics 2 CAP Orientation S2 2015 Commercial Actuarial Practice 3 CAP Orientation S2 2015 ID: 247760
Download Presentation The PPT/PDF document "Commercial Actuarial Practice" is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.
Slide1
Commercial Actuarial Practice
S2, 2015
OrientationSlide2
Commercial Actuarial Practice
Communication
The Course
Case Studies
Pre-Course Work
Assessment
Logistics
2
CAP Orientation S2, 2015Slide3
Commercial Actuarial Practice
3
CAP Orientation S2, 2015Slide4
Learning Objectives
apply actuarial skills across a range of traditional practice areas
and in unfamiliar (i.e. non-traditional) areas
by
contextualising
actuarial solutions or approaches in the wider commercial environment of the business as a whole
4
CAP Orientation S2, 2015Slide5
Learning Objectives
apply ethical concepts, corporate governance requirements and actuarial professional standards when
contextualising
actuarial solutions or approaches.
successfully communicate the actuarial solutions or approaches to a range of audiences.
5
CAP Orientation S2, 2015Slide6
CONTEXTUALISATION
Getting this right is essential to pass CAP
CAP Orientation S2, 2015
6Slide7
Contextualisation
Everything occurs in a particular context
There is rarely a single correct answer
All business decisions are about
optimising
between competing issues in the context of uncertainty
Our clients want to know the
implications of their decisions in their
particular situation
7
CAP Orientation S2, 2015Slide8
The technical work is not the end of the job.
It is merely the start of being able to provide proper actuarial advice.
High quality technical work is a Necessary but not a Sufficient condition for excellent advice.
Contextualisation
(cont.)
8
CAP Orientation S2, 2015Slide9
Contextualisation
(cont.)
The client is not interested in the actuarial answer !!!
They want to know what action to take
What does the result imply for action
This does not mean that we produce the answer the client wants!!
9
CAP Orientation S2, 2015Slide10
How do we Contextualise
Draw the right conclusions
Answer the right question
Do the right analyses with the right assumptions
Provide the advice which addresses the business issue
10
CAP Orientation S2, 2015Slide11
Draw the Right Conclusions
What’s going on
Where
Financial Services environment
Who
Organisations
Roles &
Relationships
Views
Risk Appetite
11
CAP Orientation S2, 2015Slide12
Draw the Right
Conclusions
(cont.)
Who (cont.)
People
Position
Views
Client
Professional Issues
Conflicts of Interest
12
CAP Orientation S2, 2015Slide13
Answer the Right Question
Determine the business issue
The right question is always of the form
What business decision(s) should I make to resolve the issue
It is not
What is the answer
CAP Orientation S2, 201513Slide14
Answer the Right Question
(cont.)
Scope
The scope is limited to
The business issue, and
Your recommendations for its solution
CAP Orientation S2, 201514Slide15
Do the Right Analyses with the Right Assumptions
What analyses?
What will the results be used for?
Set the right assumptions
Determine what assumptions are needed
Examine the experience
What will the future environment do to the expected experienceSet the assumptionDo the analysesCAP Orientation S2, 201515Slide16
Provide the Advice which addresses the Business Issue
The client is not interested in the actuarial answer !!!
They want advice which will be serious input into resolving the Business issue
They want to know what action to take
What does the result imply for action in respect to BUSINESS decisions !!
This does not mean that we produce the answer the client wants !!
Provide analysis of the KEY risksCAP Orientation S2, 201516Slide17
Contextualisation Example
17
CAP Orientation S2, 2015Slide18
Draw the Right Conclusions
-
Example
18
CAP Orientation S2, 2015Slide19
Draw the Right Conclusions
What’s going on
Marketing Director has sketched a new productBig Mac InvestmentInvestment earnings will be credited at the S&P Accumulation Index performance
No derivatives,
etc
The product will use the Econom
ist magazine’s Big Mac Index as the $US to $C currency conversion rateCAP Orientation S2, 201519Slide20
Draw the Right Conclusions
(cont.)
WhereCapland
No
regulations given
Who - Organisations
Exotic Investment Management (“EIM”)Speciality investment managerHas a “very good reputation” with customers Achieves a rate of business retention which is the “envy of all
Capland investment managers”
Specific financial targets
No specific info on risk
appetite but look at its name, its customers’ behaviour and its business summary
CAP Orientation S2, 2015
20Slide21
Draw the Right Conclusions
(cont.)
Who – OrganisationsActuaries for Weird & Wonderful Investment (“AWWI”)
Long track record of providing investment advice to EIM
No
specific info on risk
appetite but note its name
Who – PeopleDirector of Marketing
Owner of the new product proposal
You
Senior partner of AWWI
CAP Orientation S2, 2015
21Slide22
Draw the Right Conclusions
(cont.)
Client
EIM
Professional Issues
None obvious
Conflict of InterestNone obvious
CAP Orientation S2, 2015
22Slide23
Answer the Right Question
-
Example
23
CAP Orientation S2, 2015Slide24
What is the Business Issue
Investment strategy for this “very different” product
Carefully note the product specifications
CAP Orientation S2, 2015
24Slide25
What is the Business Issue
(cont.)
ScopeSingle piece of adviceWhat investment strategy should be adopted to ensure that the usual financial targets are achieved for the BMI product.
CAP Orientation S2, 2015
25Slide26
Communication
26
CAP Orientation S2, 2015Slide27
Audience
They assume actuaries know what they are doing
They want
Proposed actions
Why
Leading to results
Identification of key risksRisk management27
CAP Orientation S2, 2015Slide28
Understanding the audience means understanding how they process information, the language they use, what motivates them and what convinces them.
Who is the audience for your written report?
What are they wanting to see in the report ?
How familiar are they with the content, and how will this affect the words, language and analogies you may use?
Understanding the Audience
28
CAP Orientation S2, 2015Slide29
Written Reports - General
Executive Summary
Introduction
Reliances
and Limitations (Only if appropriate)
The Issue
The SolutionKey assumptionsKey model issuesKey implications
Risk ManagementRecommendations/AdviceAppendices
Data
Model details
Results
29
CAP Orientation S2, 2015Slide30
The code and legislation may impose communication requirements
30
CAP Orientation S2, 2015Slide31
The Course
31
CAP Orientation S2, 2015Slide32
Assumed Knowledge
There are no formal prerequisites but students are assumed to have the knowledge sufficient to have passed Modules 2&3 in one of the traditional practice areas
They are also assumed to have the level of investment understanding required for a pass in Control Cycle (or the previous Module 1)
Students are assumed to be competent in the use of MS Word, Excel &
Powerpoint
32CAP Orientation S2, 2015Slide33
Non-Traditional Practice Areas
Students are
not
expected to have the same level of knowledge as assumed in a traditional area
They are expected to have a general understanding of the areas selected based on the materials supplied and the suggested readings
33
CAP Orientation S2, 2015Slide34
The Specified Practice Areas [S2, 2015]
Traditional
Investment & Finance
General Insurance
Life Insurance, including funds management
Global Retirement Systems
Enterprise Risk ManagementNon-TraditionalHealth Financing
BankingEnvironment, Social, Governance
34
CAP Orientation S2, 2015Slide35
The Learning Environment
Residential course
Case study based learning paradigm
The course staff comprise senior actuaries with wide business experience
35
CAP Orientation S2, 2015Slide36
Residential Course Program
[Semester 2, 2015]
Tuesday 15 September to Friday 18 September
Starts 8:30am
Drinks, Tuesday [Institute President]
36
CAP Orientation S2, 2015Slide37
Residential Course Program
[Semester 2, 2015] {cont.}
Tuesday AM –
Contextualisation
Six case studies
Each non-
trad case is proceeded by a teaching session on the areaCommunication teaching session – Andrew BrownFriday PM – Review Session on “How to Pass CAP”
37
CAP Orientation S2, 2015Slide38
Case Studies
38
CAP Orientation S2, 2015Slide39
The Case Studies
Eight – one in each specified traditional and non-traditional area
But only do six - choose one of General, Life or Global Retirement Systems
At the course each case will be considered in syndicates and discussed in plenary sessions
No actual report is required for the course discussion but some cases may require the production of an Executive Summary
39
CAP Orientation S2, 2015Slide40
Case Studies
General session structure:
Introduction
One (or more) syndicate discussions
Plenary for the delivery of one (or more) syndicate solutions according to the type specified by the session leader
Summary by session leader on
the key issues which should have (or were) identified, particularly those required for a pass in the assessment Review of an actual past answer
40
CAP Orientation S2, 2015Slide41
Pre-Course Work
41
CAP Orientation S2, 2015Slide42
Pre-Course Work
Orientation session
Read the material for the non-trad areas
Read the Professional Behaviour notes
Read the Communications material
Decide on one of General, Life or Global Retirement Systems case study
42CAP Orientation S2, 2015Slide43
Pre-Course Work [2]
Prepare notes on the following six cases
General, Life or Global Retirement Systems
Investment
Environment
Health Financing
BankingEnterprise Risk ManagementAs follows2 to 5 pages
ALL quantitative analysesA copy of these notes MUST be handed in prior to the first session on the Tuesday
43
CAP Orientation S2, 2015Slide44
Assessment
44
CAP Orientation S2, 2015Slide45
Assessment
One assessment
Two parts
Post-course assignment [20%]
Case study exam [80%]
Marks from each part weighted and added together
45CAP Orientation S2, 2015Slide46
Assessment Part One
A full written report on a non-traditional case study.
The case study will be provided to students at the end of day 4 of the residential course [18 September ]
Students will be randomly assigned one of the three non-traditional areas. Each non-traditional area will be completed by 33% of the students
Report to be submitted by 30 September
Feedback provided
13 October
46CAP Orientation S2, 2015Slide47
Assessment Part Two
A case study style question.
One to be chosen from the five case study questions available with one in each specified traditional area.
The answer is to be a substantial piece of written communication which will be assessed in respect of both its content and the quality of its written communication.
As a guide to the extent of the answer expected, a report of around 10 pages of text, single spaced, excluding graphs, tables, etc., plus a one page executive summary would generally be quite adequate. There is no explicit limit.
Must comply with any applicable Professional Standards and the Code of Conduct.
47
CAP Orientation S2, 2015Slide48
Assessment Part Two [cont.]
Institute exam centres in Sydney and Melbourne
Students in other centres MUST contact the Institute well in advance to arrange temporary examination centres.
48
CAP Orientation S2, 2015Slide49
Logistics
49
CAP Orientation S2, 2015Slide50
Residential Course Location
Macquarie Graduate School of Management,
99 Talavera Rd North
Ryde
, Sydney
50
CAP Orientation S2, 2015Slide51
Course Material
Eight case studies, including supporting material and data (in spreadsheets)
Background notes and suggested readings for each non-traditional area
Background notes and suggested readings on Professional
Behaviour
& Corporate Governance
Communication readings51CAP Orientation S2, 2015