Matthew Maguire, Actuary at Pineapple Advisors and Past President of the Singapore Actuarial Society , wants to educate others on the wide-ranging Asian market, the state of the actuary’s role and where it can develop.
In the second instalment of the ‘Inside Asia’ podcast series, David Whittle, Principal at Deloitte, Councillor of Actuaries Institute chats with Matthew Maguire, Actuary at Pineapple Advisors and Past President of the Singapore Actuarial Society about the general insurance market in Asia and the actuary’s role in the region.
Listen to the podcast, read the transcript, or keep reading for a breakdown of the conversation …
A diverse market
To begin, Matthew stressed the importance of knowing that Asia is not homogenous and one ‘Asian Strategy’ won’t cut it.
“Countries in Asia are very different, and they have a wide range of capabilities. My experience has mostly been in Southeast Asia, so my comments will generally exclude places like Japan, China and India. Southeast Asian markets are relatively unsophisticated, some still have tariffs or nominally free markets with the focus being on distribution,” Matthew said.
High-level considerations of the general insurance markets:
Before discussing the actuary role in Asia, Matthew takes a high-level look at the general insurance market:
- There is low GI penetration relative to Western markets and it’s the insurance markets that are aiming to leapfrog over the delays in the processes.
- There are issues around the training and development of staff. The rapid development means people may not have gone through the learning process that occurred in other countries.
- Companies are trying to expand and develop quickly and catch up to other markets using enhanced technology.
- There is lots of developing infrastructure in the Asian markets alongside a developing middle class and a developing awareness of loss and the benefits of insurance.
Actuaries and their role in Asia
After an overview of the general insurance market in Asia, David and Matthew discuss the current role of actuaries in the market.
“Actuaries don’t really have the same history in Asia and general insurance as they have in other regions and as a result I’d say that the insurance companies have been more receptive to non-actuaries providing analytical advice,” Matthew said.
“Also given the small number of the actuaries in the region, companies have been exploring smaller or lower human touch techniques to determine things like liability reserves, so they’ll accept more algorithms rather than judgement within the analysis.”
The landscape is different for life actuaries. Matthew explains that life actuaries have had quite a lot of exposure in Asia. People recognised that they are looking at multi-year durations and so, they need the numbers to be robust. However, in general insurance, given the widespread use of tariffs until recently and the short tailed nature of the durations, the role of the actuary is being questioned. Matthew said the reason for this is that many companies have seen limited or little added value from the use of the actuaries and so have instead focused on ticking a box for regulators.
“Personally, I’ve seen that there is so much that we can do to help insurance companies in Asia,” Matthew said.
Matthew went onto say that beyond the traditional roles of pricing and reserving, there’s many areas around capital management, reinsurance, business planning and investment for example where the actuarial skills can be useful in Asia.
“As I mentioned, distribution has been the key concern and as many of the people in senior management come from a marketing background, they often need a little help and insight around the extrapolation of past trends or modelling of implications and decisions.”
Listen to the podcast to hear more about Matthew’s perception on the role of actuaries in Asia, how he’s flying the actuaries’ flag and the impact of Australian markets in Asia.
Matthew Maguire is the Chair of the 22nd Asian Actuarial Conference 2019 Organising Committee. AAC2019 will be held on 21 to 24 October at Resorts World Sentosa, Singapore.
Visit the AAC2019 official website.
CPD: Actuaries Institute Members can claim two CPD points for every podcast listened to.