Category: MSc Actuarial Management

The impact of Covid-19 on the insurance sector

The outbreak of the Covid-19 pandemic has had a huge and devastating impact across the world with its ramifications starting to be discerned across various sectors such as health, finance and aviation. This has threatened the global supply chain which resulted in an economic stall.

The insurance industry has not been spared with new questions arising as the crisis unfolds. Stakeholders want to understand the business’ exposure to the virus as well as what the future holds for the insurance market.

As an MSc Actuarial Management student, joining a student society and hosting events that impact the professional sector I am training has added a lot of value to my studying experience. As Co-President of the Actuarial, Insurance, Risk and Quants Society (AIR-Q), it was an honour to work on the ‘Impact of COVID-19 on the insurance sector’ webinar. The session was AIR-Q Society’s take on investigating and tackling these issues. The event’s keynote speakers, Mr Michael Tripp, Mr Dimitrios Velmachos and Mr Asif John, gave their thoughts on the implications of the pandemic to the UK insurance market, risk management techniques and the future of data analytics in modelling insurance products. The speakers also addressed any questions posed by the attendees based on their vast knowledge and experience in insurance. The event was hosted and moderated by one of our society Co-presidents, David Flanigan.

Why Covid-19 is not a ‘black swan’

This question was initiated by Mr Velmachos, an entrepreneur and insurance executive by profession. He highlighted that the black swan notion was brought about by the theories discussed by Nassim Taleb in his book, ‘The Black Swan: The Impact of the Highly Improbable’.

The notion was based on the similarities between Covid-19 and author’s definition of a black swan.

According to the definition: First, nothing in the past can convincingly point to its possibility. Second, it carries an extreme ‘impact.’ Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable.

Dimitrios explained that the pandemic does not fully satisfy the properties of a black swan. In fact, many warned the pandemic would happen, including influential people like Bill Gates who clearly stated that the world was not ready for the next pandemic.

With such discussions setting the mood for the forum, the speakers then delved into the insurance world by giving presentations on how various classes of insurance have been impacted in the UK.

Impact on general insurance

Mr Tripp’s discussion focused on the impact of Covid-19 on general insurance segments. As a general insurance actuary working at Mazars UK, Michael stated that actions taken by the government to curb the spread of the virus has resulted in a myriad of general insurance claims. For instance, several corporations have been counting their losses following regulations by the government to close business providing non-essential services. As a result, there has been an increase in business interruption claims prompting insurers to review their policy wordings.

Michael further stated that travel insurance business has also experienced an influx of claims due to cancellation of flights after many states issued travel bans. This argument was also backed up by Mr Asif John, an actuary by profession and founder of ARGenesis consultancy, who emphasised that many travel insurance policies did not exclude coronavirus from cover. Hence, insurers are expected to settle any claim that may arise from these policies.

John highlighted that classes such as commercial liability lines and credit insurance are likely to encounter significant losses in the long haul. For example, a number of health workers have taken to legal action against the NHS claiming negligence by the government in ensuring that personal protective equipment was delivered on time, thereby endangering their lives.

Nonetheless, some general insurance lines have had better claim experience since the pandemic emerged in late 2019 as pointed out by both Michael and John. Classic examples include motor insurance and household contents whereby fewer claims have been reported due to the imposed lockdown. This move by the government resulted in many individuals normalising working from home, thereby leading to a significant reduction in the use of vehicles. With fewer cars on our roads, there have been fewer accidents occurring.

There has also been a reduction in theft leading to fewer burglary claims reported. However, Michael also brought out the fact that the lockdown has also resulted in companies relying on IT systems to deliver value to their clients. As such, there might be an increase in claims relating to cyber risk in the future, and insurers should thus tighten their policy wordings on this cover.

Impact on life and health insurance

The impact on both life and health insurance seems to go hand in hand due to the short timeframe between diagnosis and death. This has led to an increase in both the morbidity and mortality experiences as highlighted by John. The country’s health insurance sector is thus facing losses as a result of the high number of coronavirus cases. The dramatic reduction of health workers available to attend to other serious cases such as cancer will exacerbate future morbidity experience.

Besides the significant impact on mortality, Michael also pointed out that the shock experienced in the financial markets will also impact life insurance companies. This stems from the fact that they have long term liabilities and as such tend to hold long term assets. Extreme market volatility will negatively impact both the income and capital on these assets such as equity, thereby creating tremendous asset-liability management risks.

Data analysis as a tool for risk management

Being an AI and data science specialist, Asif stressed the importance of data analytics to the current situation, in particular, areas which actuaries should start focusing on. Adoption of data techniques through the use of advanced models will, therefore, succour in eliminating data issues at the input stage leading to credible forecasting.

Analysis of data at a granular level is also key for insurance companies as highlighted by Dimitrios. Granularity helps in properly understanding the data thus making aggregation of datasets into different segments easier. Better risk management techniques may also be identified as a result of having detailed data as risks will be classified and assessed homogenously.

Dimitrios also touched on the importance of incorporating epidemiological features in the modelling process in order to expand the dimensions of the output. This will help in analysing the worst-case scenario hence help in pricing and reserving and proper risk management.

What does the future hold for insurers?

Insurers need to seize some of the opportunities arising out of this crisis. It is clear that the traditional distribution channels have been disrupted indicating the need for accelerated digital transformation. Process optimisation is inevitable for insurers as working from home has become the new norm. The introduction of additional covers such as telemedicine will also be a boost to the insurance penetration in the future.

Thank you!

Being part of AIR-Q has been an incredible addition to my master’s experience: I have gained much deeper knowledge of the actuarial field, networked and built many new friendships. Myself and my fellow Co-Presidents of AIR-Q Society (Rocio Plasencia, Juan Sebastian De La Torre, Evangelos Santas,  Adam Upenieks, David Flanigan and Peter Vodička) would like to thank the speakers, attendees and the Business School’s events team for making this webinar a success. Special thanks also go to Leon Cuthbertson from the events team for assisting with the event. We’d always like to hear your thoughts, so follow us on LinkedIn or  Instagram!

Lucy Nondi, MSc Actuarial Management (2020)

Will AI replace actuaries?

What is data science and how is it related to actuaries?

That is the main question that Mr Dimitrios Velmachos and Mr Michael Tripp, our keynote speakers aimed to answer in the Actuarial, Insurance, Risk and Quants Society’s latest forum.

As an MSc Actuarial Management student, I’ve greatly benefitted from being part of the Actuarial, Insurance, Risk and Quants Society (AIR-Q) as Co-President. Meeting key industry leaders and discussing developments in the sector has enhanced what I’ve learned in my studies.

Students and alumni who attended were eager to understand what trending topic of AI means for their future careers.

Mr Velmachos wears many hats: he is an entrepreneur, an Insurance Executive and an actuary. He has extensive international experience in the fields of finance, insurance and reinsurance. His main area of focus is utilising his technological skills in advising his clients on how to deliver value to the insurance industry.

As the first presenter for the forum, Dimitrios discussed how data analytics are transforming the insurance industry. He talked about the algorithms currently in use for risk assessment, claims handling and policy administration. One of the best illustrations he gave was how technology is being used in China to determine the morbidity rate applicable to a policyholder seeking out an income protection policy. By using AI, the insurer can know information such as the client’s lifestyle, health status and even the age without the need of filling out the proposal form. This trend has thus helped curb the uncertainty involved in determining the appropriate cover to be charged.

Mr Velmachos further explained how the data ecosystem has changed when it comes to pricing and reserving in general insurance. Insurers are now investing in advanced systems that can accommodate more data points, unlike ten years ago when actuaries had to rely on Excel as the primary data storage tool. As a result, more data groupings can be accommodated by this modern software which has resulted in better pricing of insurance products.

The speaker also highlighted how the use of telematics has improved policyholder behaviour in motor insurance, thus reducing the number of claims significantly. The use of Google Maps in property insurance has also helped mitigate fraudulent claims arising from such cover. By using such examples, Mr Velmachos concluded that data science is a significant contributor to the digitisation of the world of insurance.

Data Science and the IfoA

Our final speaker Mr Tripp talked about how the Institute and Faculty of Actuaries (IFoA) have started embracing data science by offering courses and assessment to its current members in partnership with the Royal Statistical Society. Being a general insurance actuary with over 40 years of experience in the insurance industry, Michael can comfortably say he has been part of the transformation. Being part of the data science steering committee in the IFoA council, he has helped push forward this transformation.

 

Michael emphasised that the council aims to reposition the actuarial profession by enhancing members’ experience based on what is currently happening in international markets. It is for this reason that the team considered it wise to include elements of programming to some of the professional papers offered by the body to build skills and maintain professional competence.

In his concluding speech, Michael also agreed with Mr Velmachos by stating how artificial intelligence has aided time series prediction, data analysis and modelling and optimising logistics. Thus, by applying these features, AI has been able to use cognitive reasoning in the decision-making process.

What Does the Future Hold for Actuaries?

So, what does this mean for the actuarial profession? Will AI surpass human intelligence in such a way that fewer actuaries will be needed in the future? These, among other questions, were discussed at length during the panel session led by Dr Zoltan Butt, a senior lecturer at Cass Business School and our event moderator for the Cass AIR-Q Actuarial Forum.

 

 

Both speakers disagreed with this notion as actuaries will stay play a big role in making data science a success. It is apparent most systems require some form of human interaction to execute a job. Thus, AI will help make work easier for the role that actuaries play in the insurance and finance market. Dimitrios also stated that although it is not a requirement for excelling in the profession, it would be advantageous for student members to learn some element of programming language.

Michael highlighted that the decision between needing humans or machines is more a philosophical debate. The answer will depend on how you see intelligence: is intelligence natural or artificial?

Thanks to AIR-Q and Cass!

The Cass AIR-Q Actuarial Forum was an eye-opener for the attendees as they were given a chance to interact with the speakers during the networking session that followed the panel discussion. The society aims to bridge the knowledge gap between our student members and the industry— and I can say the forum did justice to this goal.

Myself and the fellow Co-Presidents of AIR-Q Society (Rocio Plasencia, Juan Sebastian De La Torre, Evangelos Santas, Lucy Nondi, David Flanigan, Adam Upenieks and Peter Vodička) would like to deliver special thanks to our speakers, our moderator, and the entire Cass Business School events team. We would also like to congratulate the audience who participated in making the event an engaging one.

The AIR-Q Society will also like to thank the LSE Actuarial Society representatives that came to offer their support. We are looking forward to meeting you in the next academic year but in the meantime, stay safe and follow the regulation of the government towards fighting the coronavirus pandemic.

Lucy Nondi, MSc Actuarial Management (2020)

Top 3 Tips for International Students in the UK

Having been in London for quite some time as an international student, I’d like to offer some of my personal tips that I hope will make any prospective students’ life a lot easier!

1.      Get visiting!

The UK is full of places to visit, like Hollyrood Palace in Edinburgh and Blenheim Palace in Oxford just to name a few. If you will be doing quite a fair bit of travelling while you are here, I would recommend getting a 16-25 Railcard as it saves 1/3 of your train and underground fare in off-peak and that can really add up to some serious savings! Do not forget to ask the staff in the underground to help add your Railcard discount to your Oyster Card as you cannot do it on your own.

2.      Make the most of the careers support

Second of all, the careers support offered by the Cass Careers Team is excellent, especially if you are looking to find a job in the UK. It is important to note the differences in the interview style between your home country and the UK as they can be vastly different. Make good use of the career workshops and 1-2-1 sessions as they help you learn much more about the recruitment process in the UK.

In my experience, job interviews in Asia are focused on your technical knowledge while interviews in the UK assess on your competency. I would advise preparing and memorising examples that you have demonstrated qualities in areas such as leadership, communication and giving presentations.

3.      Student discounts

You will be surprised by the number of shops which offer student discounts in the UK. When in doubt, always ask at the till if they offer any. Sites like Studentbeans and UNiDAYs can help you go a long way when shopping online, helping you keep within your budget while you splurge out money buying stuff that you don’t need!

Make good use of the Online Student Ambassador platform offered by Cass should you have any questions or just want to chat to find about more life in London and Cass in general. Student ambassadors (myself included) from various courses are always here to answer your queries! Ask a student a question here.

Toby Tsz To Chea, MSc Actuarial Management (2020)

AIR-Q Insurtech Forum: the Future of Insurance is Now!

Tech is a game-changer across all industries, but none more than insurance.

I was delighted to work on this year’s Actuarial, Insurance, Risk and Quants (AIR-Q) society forum. This year, we selected a focus on insurtech, which is a very pertinent issue within the insurance space. The event brings together students from the actuarial, insurance and risk master’s cohorts as well as insurance industry practitioners and is held at Cass Business School.

The impact of technology cuts across both market needs and service delivery for insurance providers. As Co-President of the AIR-Q society, myself and the rest of the committee felt it was important for students to consider the changing landscape as we prepare to start our professional lives in the sector. Being an MSc Actuarial Management student, it is always an exciting prospect to be at the heart of conversations happening in the career of my choice.

Through keynote addresses provided by esteemed guests Madeline Bailey, James Norman, Massimo Vascotto and Rahul Mathur, attendees had the chance to listen in on how insurtech is expected to transform the future industry roles and market needs.

Speakers illustrated how the sector is already changing. For example, the US-based insurtech startup Lemonade uses AI for most of its operations, including underwriting and claims management. This presents opportunities for “insurance-on-demand” which could be as influential a disruptor as Uber was in the taxi sector.

The speakers’ talks were followed by an interactive panel discussion. One of my key takeaways was that insurtech can be a tool for the optimisation of insurance products and services. Madeline Bailey gave an example of how the Insurewave platform uses blockchain technology to make marine insurance more efficient, thus providing better protection for the very complex maritime logistics sector.

For students to gain an edge in this changing market, they need to equip themselves with modern skills such as programming and data analysis. It is therefore clear why Cass shows support for this by offering modules such as Python Programming, Machine Learning, Modelling and Data Analysis and VBA programming among others.

It was not all praise for insurtech though. Insurtech does indeed present new opportunities, but it is also important to remember that at the centre of it all lies the end-consumer of insurance. Domain knowledge and a good understanding of human factors are crucial in the successful implementation of insurtech. This provided a very balanced debate and an engaging learning experience for both speakers and students.

Leading up to the event, myself and my Co-Presidents Maria Bou-Rizk, MSc Insurance and Risk (2019), Vinit John, MSc Insurance and Risk (2019) and Peter V, PhD candidate in Actuarial Science, worked with support of Cass’ events team to book the speakers and venue. With immense gratitude, we received further support by the Faculty of Actuarial Science and Insurance, with Dr Simone Krummaker moderating the panel discussion. It was an incredible learning experience that tested our teamwork and organisational skills. Hearing all these current conversations in the sector and mixing with industry leaders has helped bring into focus many of the academic aspects of my programme.

At the end of the event, we hosted a networking session which provided the chance for all the attendees to mingle. Overall, it was a great evening and I look forward to many more successful forums!

Eric Ndoria, MSc Actuarial Management (2019)

From Joburg to London: life as a master’s student

Nderitu Ndegwa, MSc Actuarial Management (2019)

My name is Nderitu Ndegwa. I was born in Kenya, raised in Botswana and studied Actuarial Science and Mathematical Statistics in South Africa. Thereafter, I worked as a Senior Actuarial Analyst at Deloitte in Johannesburg, South Africa.

I chose Cass Business School as I wanted to improve upon my leadership skills. I currently serve as the President of the Actuarial, Insurance, Risk and Quants (AIR-Q) Society.

My time at the Cass Business School has been challenging but amazing. The UK is the first European country I have visited independently. I experienced some culture shock at first, but the student diversity that exists here made me feel at home, as I discovered my peer group is partly comprised of Kenyans, alongside Chinese and Indian students, too. Studying with such a varied group of students has allowed me to learn more about different cultures and perspectives.

A positive attitude, I believe, helps one overcome any challenges or obstacles in one’s path. I believe that any student who has ambition and drive will be able to resolve anything; the students coming out of Cass Business School are future game-changers!

In the near future, AIR-Q Society will host both a Sports Day and a Casino Night. The Casino Night will see members use their skills collaboratively to win a Casino game. Alongside my fellow Actuaries, I hope to make a positive impact during my year at Cass Business School.

Priceless resources at Cass

Quality resources

I think one of the most important factors when choosing a business school is the quantity and more importantly, the quality of resources and facilities available. Cass has certainly exceeded my expectations in providing resources for studying and facilitating guidance for job applications. When I chose Cass for the MSc Actuarial Management degree, I did not have much of an idea of the vast number of resources that were going to be provided to me.

Careers support

When I joined in the fall of 2018, I was given the opportunity to attend numerous workshops such as getting to know the library resources, job market trends in the UK for graduates and experienced people, job search strategy, writing effective cover letters, the art of networking, how to prepare for interviews, how to prepare for assessment centres, commercial awareness, the visa process and how to make a strong LinkedIn profile, CV and application. These workshops have helped me a great deal to improve my knowledge on how to land a good job. The resources were of great help during the different stages of the application process while I was applying for graduate roles. The Cass Careers team were always there to support and give feedback on crucial stages like online interviews, assessment centres etc.

The library: a hub of financial resources

The Cass library has numerous academic resources, journals, articles and research papers in the business domain. Most of the books are also available online which does away with the fear of running out of hard copies. In the library there is online as well as in-person support, helping you in understanding how to use these resources efficiently. There is a separate database for financial information, which provides access to a wide range of financial data for both public and private companies. It is accessible across a range of platforms, on-site and from your own computer, giving you a brilliant opportunity to analyse the market data and have the fundamental and technical analysis. There are many other resources to do market research and industry research through customer demographics, behaviours and trends.

Bloomberg

Cass has a relationship with Bloomberg, which gives access to Bloomberg’s past and ongoing analyses over the market, providing news, analytics, real-time pricing for over 5 million securities worldwide plus extensive historical pricing and stock charts. Also provided is an opportunity to attend Bloomberg courses and get certifications for the same. Cass also provides resources to get information about the companies, which really helps while preparing for coursework, projects and also in job interviews. It helps in gaining a holistic understanding of the company under one roof.

Financial Times subscription

Cass also offers a subscription to the Financial Times, which helps to keep updated with the current events and news of the financial markets across the globe. The business school also regularly organises workshops which cover a wide range of trending topics.

Hopefully, by knowing what opportunities there are to take advantage of, you will be prepared for the many resources that will be provided to you.

Aditya Gupta, MSc Actuarial Management (2019)

If you’d like to find out more about Aditya’s experience or have any general questions about studying on a master’s degree at Cass, contact him on our ‘Ask a student‘ platform.

7 things to know about the MSc in Actuarial Management

1. Un-learning

This might seem counter-intuitive given that our primary purpose when studying the MSc Actuarial Management this year is, essentially, to learn. However, unlearning in our course underpins our study practices, presentation methods and even our exam techniques. Most of us here have already done Core Technical actuarial exams that require a certain level of mathematical and analytical ability. While this is still important as it gives us a necessary foundation for this course, there are no numbers now. Lectures, instead, are discussion-based and require a lot of idea-generation and creative thinking (within reason, of course). This has required us to utilise a completely different skillset than the one we used before. That has taken a lot of re-training, both of our minds and habits, while preparing for exams and for life after Cass.

2. Learning to take failure graciously

Of course, the transition mentioned above has not been seamless, but the worst thing you can let failure do to you is make you afraid to keep trying. Case in point: Professional Communications. The only thing I will say about this module is that if (i.e. when) you don’t succeed the first time, don’t worry, you’re in good company. Just keep trying.

3. Embracing diversity

Actuarial Science is a global career in every sense. Our class is filled with people from all over the world. This is exciting in that our course is a melting pot of different ages, cultures, perspectives and personalities. This, when handled with respect, is a perfect recipe for success.

4. Networking and refining your soft-skills

Networking and socialising have been essential parts of my experience at Cass. During induction, we were given the chance to meet our fellow classmates in a relaxed environment at the Magic Roundabout, which was a great way to start the term. There have also been more professional workshops with industry professionals like the Actuarial Panel Event. These events – organised by the Careers Team – have given us access to the actuarial market in London, which has proved invaluable.

5. AIR-Q Society

The newly-refurbished Actuarial, Insurance, Risk and Quants Society is another way we’ve been able to interact and share ideas. There are also events in the future to look forward to that involve industry-players’ participation that provide another insight into life post-MSc.

6. Self-imposed down-time

This course requires you to start making decisions right from the start; what Specialist Technical exams to sit for, when to sit for these exams to maximise the probability of success, whether to take your chances with Professional Communications, how to structure your day to maximise studying time, whether to take your second nap of the day… The list is endless. It is very easy to get overwhelmed. I’ve found that taking time for things like dance classes at City, going to concerts, going to food markets and even simply going for walks makes life seem less daunting.

7. If you need the nap…

Take the nap!

Sanau Kantai, MSc Actuarial Management (2019)

Keep Calm & Trust Cass Careers

After one long year of brainstorming, I finally decided to quit my Senior Actuarial Analyst job at AXA XL Catlin in New Delhi and begin an MSc in Actuarial Management at Cass Business School.

Like most of my peers, I aspire to work in the UK and I’m keen to explore the various routes to employment here.

Two weeks into the course, Cass gave us an opportunity to meet more than 60 employers under one roof at the Cass Careers Fair. Here, we could network with an array of leading companies: Aviva, KPMG, Deloitte and many more.

Before the Careers Fair, we were given access to online sessions and workshops on how to make the most of the event. Looking back, it really helped me understand the application process of the companies that interested me.

The Cass Careers Service organises weekly sessions to enhance our employability. In those sessions, they address various topics like the preparation of CVs, covering letters, interview skills and sessions on industry-specific knowledge.

I made sure I attended each session at least once and they turned out to be very helpful in the application process. Moreover, the Cass Careers website has a real-time update on graduate jobs in different industries in the UK market, making it easier for us to keep track of opportunities.

I was invited to a telephone interview with KPMG. Afterwards, I had to record a series of answers and send them back by the end of the day. I had classes until 3pm that day, so I went to Cass Careers immediately afterwards. Although I’d not booked an appointment beforehand, they assigned an expert who helped me refine my answers until they were perfect and ready to be sent off.

As of today, I’ve been invited to five video interviews (stage three of the applications process for many companies). I’ve made it this far thanks to the Cass Careers Service. The detailed guidance and feedback at every stage– from drafting application answers to psychometric tests – really makes it easier.

The Cass Careers Service employ experts who have worked in the industry for more than 10 years, so they understand better than anyone else what makes your application stand out from a pool of thousands of other applications. Soliciting their advice throughout the different stages of the application process is really helpful.

So, if you enrol to Cass, then you can be confident and trust their Careers Service.

Sambhav Jain,  MSc in Actuarial Management (2019)

If you have any questions for Sambhav or any of our other student ambassadors about the student experience, visit our Ask a Student page. 

© 2020 Cass MSc Blog

Theme by Anders NorenUp ↑

Skip to toolbar