THE SUSTAINABILITY ACTUARY: BRIDGING THE PHYSICAL AND FINANCIAL WORLDS
Edward Alant, Adam Balusik, Hayley Clarke
Panel Discussion
Relevant practice area: Wider Fields
Suggested audience knowledge level: Foundational
Actuaries have long been trusted for their expertise in managing risk and forecasting financial outcomes, but as the world grapples with sustainability challenges, their role is expanding beyond traditional boundaries. With the increasing focus on environmental, social, and economic sustainability, actuaries are uniquely positioned to bridge the physical and financial realms, leveraging their skills to drive resilience in an uncertain future.
In this panel discussion, we will explore how actuaries can contribute to tackling pressing sustainability issues across various sectors. From climate adaptation and agricultural insurance to rethinking traditional economic models, actuaries have the opportunity to design innovative solutions that foster long-term resilience. We’ll delve into the potential of parametric insurance products, such as those protecting agricultural livelihoods from climate risks, and examine the role of nature-based solutions like sponge cities and mangrove restoration in reducing environmental and insurance risks.
Furthermore, we will address the broader societal challenges of reconciling capitalism with sustainability. Can capitalism evolve to support a green growth society? How can actuaries help shape new economic models that balance growth with ecological limits? We’ll discuss alternative measures of success, such as the Human Development Index and Doughnut Economics, which promote sustainable development without sacrificing social welfare.
Outcomes:
- Understanding the evolving role of actuaries in sustainability, and how their expertise can extend beyond financial risks to help tackle global sustainability challenges.
- Insights into innovative insurance solutions for agriculture and climate adaptation.
- Exploration of the relationship between economic growth and ecological sustainability, and how actuaries can contribute to this shift.
- Discussing how capitalism can support sustainability, and how actuaries can help create new economic models that balance business growth with environmental care.
- A broader perspective on how actuaries can help shape a sustainable future, balancing short-term financial goals with long-term outcomes.
Join us for this unique opportunity to reframe our understanding of what it means to be an actuary in a world increasingly defined by sustainability challenges. Together, we can lead the way toward a more sustainable future and creating innovative solutions that benefit both people and the planet.
ACTUARIAL ADAPTATION: EXPLORING NEW ROLES FOR ACTUARIES IN RESPONSE TO CLIMATE CHANGE
Atiyya Ally, Kelvin Massingham, Ronica Chabalala, Savannah Reay
Presentation with Paper
Relevant practice area: Wider Fields
Suggested audience knowledge level: Intermediate
This paper explores new practice areas for actuaries in the context of climate change. It aims to provide a broad overview of areas where actuaries can apply their skills and expertise to assist with climate change risks and opportunities, and support the transition to a low-carbon economy. The paper will draw on current literature, case studies / industry practice and stakeholder interviews.
The paper aims to cover at least the following areas:
-Enterprise Risk Management
-Climate change risk modelling covering physical risks, transition risks and emissions
-Parametric Insurance: Design/pricing of parametric insurance products
-Finance and Investments – Incorporation of climate change-related considerations into asset allocation, fund design and valuations
-Strategy – Design/implementation of climate-resilient strategies (covering data, modelling, metrics, targets etc.) for organizations
-Governance: Setting/monitoring climate policies and targets, reporting and disclosing climate information, and explore oversight roles (CSO)
-Reporting: Preparation, accuracy and assurance of regulatory and best-practice reporting including IFRS S2 industry-specific disclosures
-Government: Supporting state-owned enterprises (SOEs) and public sector entities in addressing the social and economic impacts of climate change.
– Corporate support
The paper will also address at a high-level, areas in which actuaries will be required to enhance their technical climate knowledge to enable actuarial practice in this field and key stakeholders / other professionals that we will need to collaborate with.
Practical outcomes:
-Spark the development of a new practice area for the profession, including building a view of potential job descriptions/responsibilities of a climate change actuary. This includes educating the audience on the wide landscape / areas of involvement to allow actuaries to influence multiple sectors and domains affected by climate change
-Improve perception of the profession by demonstrating how actuaries could support the transition to a low-carbon and resilient economy and align professional values with global goals on climate action.
-Equip actuarial practitioners and researchers to act by helping understand key skill gaps needed to address climate change opportunities and, key stakeholders, professionals and policymakers that can be engaged.
-Raise awareness of the ethical and professional responsibilities of actuaries in relation to climate risks and opportunities (e.g., such as ensuring accurate/transparent reporting, contribution to closing insurance protection gap)
THE SUSTAINABILITY REPORTING INDEX: BENCHMARKING ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORTING OF GLOBAL PENSION PLANS
John Anderson, Kurtney Durgaparsad, Yuvern Dokie
Presentation with Paper
Relevant practice area: Retirement Matters
Suggested audience knowledge level: Intermediate
In 1987, the United Nations Brundtland Commission defined sustainability as “meeting the needs of the present without compromising the ability of future generations to meet their own needs.” In recent years, the sustainability agenda has grown in importance, with many countries, regulators, industries shifting to implement sustainable practices.
For retirement funds this means providing a lasting income in retirement for members, whilst ensuring a positive contribution to society and the environment. Retirement funds, with long-term liabilities, are therefore well placed and can play a significant role to contribute to the overall objective. This paper explores how retirement funds in various countries are progressing this agenda.
We then introduce a sustainability reporting index, which measures the breadth and quality of how retirement funds can report on pricing in social and environmental externalities in the provision of a pension promise. The sustainability reporting index includes the financial inclusion aspects of retirement funds as well as how social and environmental externalities can be factored into the running of a fund and how its assets are invested. It explores the key areas that need to be monitored, the types of data required and the types of analytics that can be used by various stakeholders.
The sustainability reporting index is intended to provide a benchmark against which various stakeholders can measure the effectiveness of their approach in pricing in these externalities. Actuaries of retirement funds can use the framework to go beyond focussing purely on the financial aspects of a fund, incorporating material non-financial aspects to ensure the provision of a sustainable pension income.
WHO’S GOT WHAT? A CLOSER LOOK AT DISEASE PREVALENCE
Sarah Bennett
Presentation with Paper
Relevant practice area: Healthcare
Suggested audience knowledge level: Foundational
Our paper / presentation will define disease prevalence broadly and then go into specifics of how it could be calculated for various diseases and for different purposes. It will include a literature review and a review of prevalence definitions used under other frameworks.
DEFINITION OF DISEASE PREVALENCE
Disease prevalence is the proportion of people in a population who have a particular disease or characteristic at a specified point in time (point prevalence) or over a specified period of time (period prevalence).
– True prevalence refers to all individuals in a population who have the disease.
– Apparent prevalence refers to individuals who appear to have a disease from their registration, claims data or pathology results.
– Registered prevalence refers to individuals who have a chronic disease or medicine registration.
Care should be taken when defining prevalence as it may impact on other measures, such as reported medicine adherence and readmissions.
CALCULATION OF DISEASE PREVALENCE PER DISEASE
The intricacies of calculating prevalence for the following diseases will be considered:
- a) Diabetes
- b) Hypertension
- c) Depression
- d) HIV
- e) Oncology
REVIEW OF DISEASE PREVALENCE DEFINITIONS
We will discuss the prevalence methodology under the following frameworks:
– SRM (REF) criteria under the HUASR requirements from the CMS
– Annexure A prevalence definition in CMS report
– Adjusted Clinical Groups (ACG®) methodology
– Effective Coverage Framework
– HQA prevalence definitions
– Research studies
– International definitions
PRACTICAL OUTCOMES
- The audience will have a deeper appreciation of the complexities and intricacies of determining prevalence.
- The audience will understand how true prevalence differs from apparent prevalence and registered prevalence and the limitations of each method.
- The audience will gain an understanding of the impact that the definition of prevalence may have on other measures, such as medicine adherence and readmissions, as well as the potential impact on evaluating disease management outcomes.
- The audience will be able to apply their minds to defining prevalence for the various diseases.
- The audience will appreciate the complexity of determining the 95-95-95 measures for HIV.
- The audience will be equipped to evaluate the robustness of definitions used under various frameworks.
REFERENCES
Prevalence of chronic diseases in the population covered by medical schemes in South Africa, Council for Medical Schemes’ Research and Monitoring Unit, March 2019, Carrie-Anne Cairncross et al
Paper 6: An Actuarial Method for Evaluating Disease Management Outcomes, 29 March 2005, Ian Duncan
ASSA HEALTHCARE COMMITTEE, CV-19 TASK TEAM AND NHI SUB-COMMITTEE PANEL DISCUSSION
Alex Brownlee, Adam Lowe, Sarika Besesar
Panel Discussion
Relevant practice area: Healthcare
Suggested audience knowledge level: Intermediate
– Healthcare committee mandate and what the committee is about, including the CV-19 Task Team and NHI Sub-Committee.
– Relevant issues/topics that the committee is focusing on, including NHI, CV-19 pandemic, healthcare insurance and low cost benefit options, risk based capital, IFRS17 etc.
– Talk about past achievements and future plans.
– Requests for assistance.
CONSIDERATIONS FOR SUSTAINABLE BENEFIT DESIGN IN THE LOW-INCOME HEALTH MARKET
JF Bruwer, Nico-Louis Minnie
Presentation with Paper
Relevant practice area: Healthcare
Suggested audience knowledge level: Intermediate
Low-income options in medical schemes suffer the same issues as the broader medical schemes industry due to the lack of regulatory reform, but the impact on affordability and access to care is more dire. Low-Cost Benefit Options (LCBOs) are widely touted as a potential solution but is also subject to the same slow pace of regulatory reform. The growing low-income insurance market could provide another solution outside of this slow system and provides some insight into the design of sustainable LCBOs
- External environmental impact
There is a stark contrast between the growth, profitability and sustainability of insurance based low-cost health insurance compared to similar options offered within a medical scheme. In this paper we will compare the growth and underwriting results of these options. Some of the major contributing factors are:
PMBs increase the cost of providing the benefits and puts strain on the income cross-subsidies.
Community rating and open enrolment, whilst admirably aiming for access and fairness, complicates the pricing and risk management of these low-cost options. This is since the margins are already under strain to allow for affordable access. Income-bands meant to ensure income cross-subsidies in the Scheme can be difficult to verify and causes unintended additional risk cross-subsidies e.g. pensioner members with low incomes and high healthcare needs.
Type of business includes the nature of the business, i.e. voluntary or compulsory, and group vs individual. These additional factors were found to explain claims risks with a high level of confidence and provides considerations for a sustainable design.
- Innovation
Due to the rapid growth of the insurance-based options, product designers had to innovate in order to remain competitive, whilst managing the claims experience of growing and ageing books. To mitigate high healthcare inflation, which is typically 1-3% above CPI, telemedicine was aggressively adopted. Telemedicine has the benefit of reaching more members at a lower cost but also allows for a more focused healthcare and network management approach. The result was better health outcomes coupled with lower claims downstream, ensuring a significantly more affordable price point.
- Regulation
With the current constitutional challenges pertaining to the NHI it is likely that insurers and schemes offering low-cost healthcare will coexist for the foreseeable future. Therefore, it is critical to understand the nuances that come into play based on the choice of these products offered to the same low-income market.
ACTUARIES PUTTING AI INTO PRACTICE IN GENERAL INSURANCE
David Cummings
Presentation
Relevant practice area: Short Term Insurance
For more than two decades, actuaries practicing in general insurance have led the profession in leveraging the power of predictive analytics to transform the way their companies use data-driven insights in pricing, reserving, claims operations and many other areas. With the rapid evolution of AI capabilities, they are now putting AI into practice – drawing on their deep understanding of insurer financial operations and their commitment to ethics and professionalism.
In this presentation, David Cummings will describe recent applications of AI that his team is leading, demonstrating the opportunities these tools present across the insurance value chain. He will also share how the Casualty Actuarial Society is preparing actuaries to continue to lead these innovations to support a stronger, more agile general insurance industry.
INVESTMENT IMPLICATIONS OF THE TWO-POT RETIREMENT SYSTEM
Rowan Burger, Richard Carter, Sonja Saunderson, Jaco van Tonder,
Darryl Moodley (Moderator)
Panel Discussion
Relevant practice area: Investments
Suggested audience knowledge level: Intermediate
The proposed amendments to the Income Tax Act and the Pension Funds Act, which will establish the “two-pot retirement system”, are largely silent on the investment specific implications of the changes to the retirement system. Consequently, very little of the associated commentary from market participants has considered this and has rather focused on the practical working of the different components, administrative impacts, and timelines.
Even if greater clarity is provided from the final legislation, the considered views of experts as part of the panel discussion will highlight various investment implications that trustees, consultants, and retirement fund members must consider. This could include:
– The potential need for different investment strategies per retirement fund “pot” and its implications.
– Potential liquidity requirements and its impact, including the potential inappropriate de-risking of retirement fund portfolios.
– The impact, if any, of the regulations on the role of unlisted assets in retirement fund portfolios.
We therefore believe that there will be great value in a panel discussion about the potential investment implications of the system.
TWO POTS EXPERIENCE SINCE IMPLEMENTATION IN SEPTEMBER 2024
Joanna Combrink, Andrea Bezuidenhout, Michelle Acton, Johan Prinsloo, Brian Karidza
Panel Discussion
Relevant practice area: Retirement Matters
Suggested audience knowledge level: Intermediate
1 September 2024 is the effective date of the implementation of the “Two-Pot” system. This legislation has brought about the biggest and most debated change to the retirement fund system since the surplus apportionment legislation of the early 2000’s. It simultaneously gives members some access to their retirement savings prior to retirement (without the requirement to leave employment), while locking the remainder of retirement savings in the system until it is annuitized at retirement.
Following on from previous sessional meetings where we discussed the anticipated complexities and expected “readiness” for Two Pots, we now look at the actual experience over the first two months since implementation from representatives of some of the big administrators and the GEPF. We look to answer some of the questions which we had prior to implementation date such as: Has all the enabling required legislation been enacted? Have all the rules been approved by the FSCA? Are the SARS systems really ready? Has the communication to members been successful? What are the actual complications for DB funds? What is the public reaction and what are members really doing? What did we not expect? What are the issues which we now need to consider knowing what we know now?
And of course we don’t know the future, so the exact content will evolve and is subject to change depending on what actually transpires. We are aiming to share the most up-to-date information and experience with industry in this session.
ASSA INVESTMENTS COMMITTEE OVERVIEW
Andrew Davison
Presentation
Relevant practice area: Investments
Suggested audience knowledge level: Foundational
– Membership, mandate, key stakeholders, objectives, topical matters
– Focus areas of the ASSA Investments Committee including the work of subcommittees
– Enhancing the work and influence of investment actuaries
EMPLOYERS OF CHOICE: A RECRUITER’S INSIGHT OVER THE LAST 4 YEARS
Wilhelm De Wet, Jurie Gouws
Presentation
Relevant practice area: Wider Fields
Suggested audience knowledge level: Foundational
In our 2021 Breakfast Session, we shared our findings on what makes an employer of actuaries in South Africa an employer of choice. Our presentation was focused around these four topics, and combined insights from our own industry experience as well as 4 surveys that we ran prior to the 2021 Convention:
- Management and Leadership
- Company Values and Culture
- Opportunities for Growth
- Remuneration and recognition
This year, we would like to revisit and dig into these topics in an even more detailed and focused manner, to shed more light on those aspects that makes an employer of actuaries in South Africa an employer of choice in 2024. For this year’s presentation, we will be sharing further insights around these four topics, gained from Surveys that we will run closer to the time of the Convention with hundreds of actuaries and working actuarial students who have taken on new roles at new companies in the last 4 years, digging deeper into their unique experiences and what ultimately motivated them to explore opportunities outside of their organizations.
In addition, we will share key insights from our 8th annual SA3 Salary Survey, that included more than 1,200 actuaries and working students as participants, including a sneak peek into the results from the 2024 SA3 Salary Survey that we will be conducting from September until December.
To conclude, we will be providing a summary of the current actuarial recruitment market in South Africa, by sharing a brief overview of the available actuarial talent pool in South Africa, and with additional insights that are derived from a combination of our own experience as recruiters, as well as the experiences of our surveyed actuaries and working students who started roles at new companies in the last 4 years, based on their own time spent in the recruitment market.
To our attendees who are managing teams or who are from HR functions, we hope that the presentation will help them consider changes that they can make to HR policies to ensure that their teams and organizations position themselves as employers of choice.
To our attendees who are building their careers, we hope that the presentation will help them to think about those factors that they need to consider when plotting out their career paths.
WHY TRADITIONAL RISK MANAGEMENT FRAMEWORKS ARE FAILING US IN A MORE COMPLEX WORLD
Adél Drew
Presentation
Relevant practice area: Enterprise and Financial Risk Management
Suggested audience knowledge level: Intermediate
Traditional Enterprise Risk Management (ERM) tools and approaches often operate in silos, creating segmented risk registers and risk management activities that overlook interconnections and potential cascading effects. These methods are predominantly backward-looking, providing limited insight and foresight for businesses. Additionally, they struggle to integrate both financial and non-financial factors, which are often critical to understanding systemic failures.
In an increasingly interconnected world marked by rising global uncertainties and the emergence of “polycrises” these limitations are more pronounced. Traditional frameworks are no longer reliable for anticipating future risks. Therefore, innovative approaches are required —ones that embrace complexities, uncertainties, and interdependencies to provide a more comprehensive risk perspective.
During this presentation, we will explore approaches to developing future-ready risk systems. The goal is to design more adaptive and resilient ERM frameworks, enabling organisations to better navigate the intricate and dynamic nature of modern risk landscapes.
Practical outcomes
- An appreciation of why risk management needs to evolve from maintaining oversight to bringing more insight to the business
- The importance of adopting organisational resilience
- Approaches to managing emerging risks
- The importance of embracing regular and frequent qualitative scenario exploration
“The world is undergoing multiple long-term structural transformations: the rise of AI, climate change, a shift in the geopolitical distribution of power, and demographic transitions. These structural forces are global, pervasive and charged with momentum.”
– WEF Global Risk Report 2024
WHY WE NEED TO TALK ABOUT HORMONES: ADDRESSING GENDER BIAS AND HEALTH DISPARITIES IN INSURANCE AND THE WORKPLACE
Adél Drew
Presentation
Relevant practice area: Professional Matters
Suggested audience knowledge level: Foundational
For the majority of medical history, the female hormone cycle was largely overlooked or considered too complex to integrate into standard practices. However, disregarding this natural process can have significant implications for employees, employers, and the way insurance products serve female customers. The health and employment inequities resulting from this oversight are largely unknown and underexplored.
For example, medical research has shown that cholesterol levels can vary by as much as 20% throughout the menstrual cycle, yet this factor is rarely considered when interpreting results. This is particularly concerning given that questions about cholesterol levels form part of standard insurance underwriting questions. This oversight can lead to misinterpretations that affect the validity of our data, product designs, and how companies serve and retain female employees.
By acknowledging and integrating these physiological variations, we can enhance the precision and inclusivity of the actuarial profession. This approach could not only improve the quality of life and health insurance products for female clients but also enable businesses to serve female employees more equitably and effectively.
Practical Outcomes
- A Greater Understanding of Medical Research History and Its Impact on Women’s Health: Gain insights into how historical biases in medical research have affected women’s health and explore the intersectionality between race and gender in healthcare outcomes.
- Revaluating Lifespan as a Metric for Women’s Health: Understand why lifespan alone is an insufficient metric for assessing women’s health and the importance of considering quality of life and specific health conditions that disproportionately affect women.
- Unacknowledged Impact of Hormonal Cycles on Insurance Products: Explore how not accounting for hormone cycles could lead to unfair premium rates for female customers in life insurance products, result in potential inequities and contribute to broader health disparities.
- Potential for Improvements in Female Health and Pricing Bases: Explore the significant potential for improvements in female health outcomes and how these advancements could influence pricing bases for insurance products tailored to women.
- Challenges of Male-Centric Systems in the Workplace: Examine why workplace systems that have evolved to serve predominantly male breadwinners are failing female employees, highlighting the need for more inclusive and equitable workplace policies and practices.
Suggested pre-reading:
- Invisible Women: Exposing data bias in a world designed for men by Caroline Criado Perez
- Pain and Prejudice: A call to arms for women and their bodies by Gabrielle Jackson
NEGOTIATION CHALLENGE BROUGHT TO YOU BY ASSA PERSONAL DEVELOPMENT (APD)
Billy Enderstein, Soshan Soobramoney, Siham Boda, Derek Pead, Nalen Naidoo, Paballo Makupu, Memory Zimba
Workshop
Relevant practice area: Widerfields
Suggested audience knowledge level: Foundational
As South Africans we live in a complex and volatile environment and until the historical moment of the forming of the Government of National Unity, we were classified as a highly polarised society. On the flip side, South Africa is showing that complexity and volatility can be negotiated if parties do not polarise. With this in mind we entreat Convention participants to witness a negotiation challenge which is based on two premises, 1) that both parties can achieve an outcome that they will be satisfied with and 2) the prospect of building as opposed to eroding relationships and therefore much else, becomes a reality.
South Africans looked to ASSA in COVID-19 to lead the discussion on mitigating risk of the spread of the disease and its leaders rose to the occasion providing direction based on available data. However, ASSA too became internally polarised on the best course of action for South Africa given the uncertainties. Three years later Schauer, Majer and Trötschel illustrated how important a role in overcoming societal challenges the COVID-19 vaccine supply negotiations were, where uncertainties were massive and consequential for all parties (Negotiation Journal, Spring 2023, pp 207 – 228). Together they developed a framework of uncertainty which considers both mathematical and circumstantial risk factors.
The first ASSA Convention negotiation challenge will illustrate the practice of negotiation utilising the Smolinski and Xiong Negotiation Competency Model (2020) which is the standard for the International Negotiation Challenge (INC). The model clusters “a variety of negotiation skills and attitudes into four broader categories: language and emotionality, negotiation intelligence, relationship building, and moral wisdom. The logic of such an arrangement follows the ease with which one may observe these skills and attitudes during negotiations.”
Our facilitators for the challenge:
Siham Boda is an admitted advocate who has an impressive record in the fields of conflict and dispute resolution, as well as commercial and workplace mediation. Derek Pead is a professional executive coach and mentor, as well as a highly qualified and experienced negotiator and mediator. In 2020, as the only African team in the competition, Siham and Derek won the International Negotiation Challenge for Professionals.
Our facilitators will select a case study for the negotiation and judge the challenge. They will provide the audience with insight on each team which the teams themselves will not be privy to before or while the challenge unfolds.
WHAT ARE THE POLICYHOLDERS REALLY SAYING? FEEDBACK FROM THE OMBUD ON DISABILITY AND SERVER ILLNESS PRODUCTS
Denise Gabriels, Neil Parkin, Adéle Goosen (Facilitator)
Panel Discussion
Relevant practice area: Life Insurance
Suggested audience knowledge level: Foundational and Intermediate
The panel discussion will focus on the complaints that arise from disability policies. These are complex issues which are difficult to deal with when received by the Ombud. Disability products issues are complex matters that are exacerbated by advancements in medicine. Specifically, the eligibility criteria that are required for a claim to be paid – as a result of the product design – has resulted in difficult disputes. A representative from the Ombud will provide a comprehensive exploration of the issue from the perspective of the National Financial Ombud, allowing actuaries insight into how non-actuarial professional untangle and assess complex conduct matters. A representative from a reinsurer will discuss why the market has designed these products in such a way and possibly explore if this is fair and if this should be changed.
Objectives: The audience can expect to:
- Gain an understanding of disability claims and why it leads to complaints.
- Gain insight into how complaints are assessed and resolved by the Ombud.
- Gain insight into experienced insurance practitioners untangle and assess conduct matters.
- Broaden their view of conduct matters by seeing how non-actuaries think about the matters.
MORE THAN A FEELING – IMPACTS OF EXTREME TEMPERATURES ON THE MORTALITY OF A SAMPLE OF INSURED LIVES IN SOUTH AFRICA
Pamela Hellig, Soshan Soobramoney, Dalia Solomon, Ronald Richman
Presentation with Paper
Relevant practice area: Life Insurance
Suggested audience knowledge level: Foundational
When considering climate change, many life and health insurers may feel that the impacts will not be material to their business – especially on the liability side of the balance sheet and in the measurement and management of their mortality and morbidity risks.
This presentation seeks to impart the message that even though these impacts may, indeed, turn out not to be material, insurers need to rely on more than a feeling to justify this assumption. ASSA’s Climate Change Impacts on Mortality and Morbidity working party was established to assist insurers in navigating the process that will be required to identify, assess, manage, monitor and modify these impacts appropriately.
The main objective of the working party is deliver a framework that insurers can use to assess and quantify the impacts of climate change on these risks.
Part of the work has entailed undertaking original research to determine the relationship between mortality/morbidity experience (based on actual South African insured lives’ experience) and climate change indicators, such as extreme temperatures and air quality.
In this session, we will:
– Explain the structure of the working party’s framework and share considerations for life insurers when approaching these risks.
– Present our paper on the quantitative investigation of the impacts of climate change on the mortality and morbidity on South African insured lives.
Practical outcomes:
By attending this presentation, the audience can expect to:
- Understand the importance of rigorously assessing the materiality of the expected impacts of climate change on their mortality and morbidity experience.
- Become aware of the output of the working party and the framework they can use to quantify and assess these risks.
- Find out what is being done in other countries in this regard.
- Learn about the various statistical techniques employed in the literature to measure relationships between mortality/morbidity experience and climate change indicators.
- Be amongst the first to see the results of original research employing the aforementioned statistical methods to South African insured lives’ mortality and morbidity experience.
KEEPING UP WITH THE ERM COMMITTEE
Idelia Hoberg
Presentation
Relevant practice area: Enterprise and Financial Risk Management
Suggested audience knowledge level: Foundational
During this session Idelia will provide insights into ASSA’s ERM Committee. She will also provide insights into the current active working group under the ERM Committee. This Working Group is working towards providing Guidance on How to Assess the Appropriateness of the Standardised Formula in the ORSA.
LIVING TOO LONG IN YOUR ANNUITY: EXPLORING DYNAMIC DRAWDOWN STRATEGIES
Kyle Hulett, Anton Swanepoel
Presentation with Paper
Relevant practice area: Investments
Suggested audience knowledge level: Intermediate
Living annuities are a well-supported product offering in South Africa, with the Association for Savings and Investment South Africa (ASISA) estimating assets under management of R626bn at the end of 2023. Living annuities are versatile but riskier than other annuity options because the annuitant takes on the investment and longevity risk. The majority of the reviewed papers concluded that living annuities are inferior to traditional annuities – but these studies were done using living annuities with static drawdowns, which is not necessarily appropriate.
1) This paper explores how to improve the retirement outcomes of living-annuity users.
2) Investigating in a systematic manner the overall outcome of a static drawdown relative to dynamically varying annuity drawdown rates.
3) It compares different dynamic methods, considering a variety of drawdown rates and different dynamic methods, thresholds and triggers.
4) And finally it also identifies optimal asset allocations for South African investors, in different economic scenarios, for different levels of drawdowns.
ALL THINGS COST OF CAPITAL
David Kirk
Presentation
Relevant practice area: Life Insurance
Suggested audience knowledge level: Foundational
The topic will cover many aspects relating to the cost of capital, how it is used in different contexts, how it is specified, and how to estimate it.
Views vary massively on the appropriate discount rate to apply. Some insurers want to assume 1.5% over long bond rates, while many in corporate finance think 8% above T bills is an absolute minimum. I will discuss these different views and provide some guidance for actuaries when determining or reviewing discount rates and cost of capital in their own work.
Attendees will be brought up to date with the many developments in thinking on cost of capital rates in recent years.
This is directly relevant for EV reporting, may inform or adjust thinking on IFRS17 Risk Adjustments, and impact product pricing.
I will cover:
– lessons from IFRS17 Risk Adjustments from South African and around the world, and how these relate to Cost of Capital approaches
– lessons from Solvency II and Solvency UK reforms of the Risk Margin, including the cost of capital rate. I will discuss whether it might be appropriate to decrease the cost of capital rate under SAM and what role ASSA should have in this when the FSIs are reviewed.
– Why counterparty default risk on reinsurance is included in the RM – and why perhaps default risk on other current assets should be included too.
– latest thinking on estimates of the Equity Risk Premium, relevant for EV and other costs of capital
– frictional costs, how to estimate them, and the role of tax in increasing these costs for South African insurers relative to European peers
– How best to produce Embedded Values using IFRS17 figures, what adjustments are necessary and how to disclose (I can give an update on the progress of the Embedded Value Subcommittee here too)
– I will cover approaches to setting discount rates for transactions (M&A) and for non-insurance components added to insurance EVs
MICROINSURANCE COMMITTEE SESSION
Nabeelah Kolia, Melusi Baloyi, Francois Hugo, Bonolo Pelele
Panel Discussion
Relevant practice area: Micoinsurance
Suggested audience knowledge level: Foundational
– What is the Microinsurance committee mandate
– What are the relevant issues/topics that the committee is focusing on.
– Past achievements and future plans.
– Additional information on interesting occurrences in the microinsurance space
A QUANTITATIVE FRAMEWORK FOR TESTING MACRO-ECONOMIC AND FINANCIAL INDICATORS
Mayuresh Kulkarni, Mahdi Marcus
Presentation with Paper
Relevant practice area: Investments
Suggested audience knowledge level: Intermediate
- We have developed a consistent and quantitative framework to test the ability of indicators to predict asset class returns. As an example, we can take the OECD composite leading indicator for SA or US and use that to see how SA equities do when the indicator is high or low, rising or falling.
- We develop indicators of our work and test standard indicators that point to phases in economic or financial cycles. Our work can be used for any indicator that can be defined as a time series.
- We compare the phase or sign of the indicator to subsequent asset class returns and test the explanatory power of the indicator using statistical measure like the Granger causality test.
- We provide examples of good and bad indicators and give a sense of how certain asset classes perform in certain periods.
- Our work is based on previous well-published research, but we view and develop the framework from a practitioner’s lens.
Practical Outcomes
- Portfolio managers already use this research to position or tilt their portfolios to certain asset classes and away from others during certain cycles.
- We are able to easily test the efficacy of popular indicators and prove or show how useful they are. This is important because it cuts through the noise and gives an objective output.
- We have been using this research for the past year and it has improved our understanding of economic cycles and their effect on asset class behaviour.
- We can test out theories like ‘does China’s OECD indicator have an effect on SA resource shares’. In other words, we can easily come up with different hypotheses and test them in a standard and robust way.
- One of the important outcomes is the objectivity. We are surrounded by people making bold statements around these indicators, so taking a more humble and scientific approach helps us understand the nuances and the degrees to which these indicators work.
TO HEDGE OR NOT TO HEDGE – THAT IS THE QUESTION
Cecile Lotter, Kavir Patel, Yura Kaliazin
Presentation
Relevant practice area: Life Insurance
Suggested audience knowledge level: Intermediate
Hedging liability cash flows is a well-established method of mitigating financial risks and managing earnings volatility in the insurance world. But deciding how to approach a hedging programme, what to hedge, how to do it and when NOT to hedge is often a complex decision. This is especially so in our new IFRS 17 world, where the use of discretionary margins is no longer permitted – the appropriate choice of hedging programme is proving more critical than ever. We will cover the following:
Hedging 101 – Basic hedging of positive liabilities
Products with positive liabilities (such as annuities) typically require a simple matching of the liability cashflows with a corresponding portfolio of assets. The principle is straight-forward, but several decisions should be considered, such as the valuation curve, the duration matching technique and whether the hedging asset portfolio will be held outright or achieved via derivatives.
Hedging products with negative liabilities
The hedging programme becomes more complex when products with negative liabilities are introduced. Cash inflows will require hedging with short derivative positions. Robust curve construction becomes critically important to manage exposure compression on the short end of the curve as well as stable extrapolation at the back end to manage the long-dated exposures associated with these products. Also consider funding as well as margining on the derivative positions.
CSM – to hedge or not to hedge?
The basic principles behind hedging two out of the three IFRS17 liability components (BEL & RA) remain similar to those covered in sections above. But the third component – the CSM – is not a prospective discounted cashflow valuation, but a historic “fund build-up” of sorts, done at historic interest rates for risk type products. This introduces additional complexities when waiting to ensure that any investment volatility from the CSM is managed appropriately.
Case study – Negative liabilities
Finally, we present a case study that considers alternative approaches around the decision to hedge or not to hedge negative liabilities. Under-hedging negative liabilities can be a strategic decision to support a stable capital coverage ratio, but comes at the cost of more volatile earnings.
An overlay of strategic investments in market-sensitive assets when liabilities are hedged can counterbalance the impact on capital, ensuring stable Own Funds and SCR coverage. Opting not to hedge offers cost savings, reduced basis risk, and mitigates sovereign risk, though at the expense of earnings stability.
Nalen Naidoo, Adriaan Rowan
Presentation
Relevant practice area: Transformation
Suggested audience knowledge level: Foundational
Expected Outcomes:
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This session will revisit the ASSA Demographic Model initially presented in 2017, providing an updated analysis. It will explore the projected trends in race, gender, and membership types over the next ten years, offering valuable insights into the future landscape of ASSA’s evolving membership demographics.
GET TO KNOW THE INTERNATIONAL COMMITTEE: AFRICA
Karabo Morule
Presentation
Relevant practice area: Professional Matters
Suggested audience knowledge level: Foundational
– What is the committee mandate/what is the committee about.
– What are the relevant issues/topics that the committee is focusing on. It would make sense to align this with subcommittees so will be Country Liaisons, Events and CPD, and Regulations and Guidance
– Talk about past achievements and future plans.
– Let members know where your committee needs assistance.
– Anything else you think members might find interesting
CONFLICTS IN PUBLIC INTEREST – ENGAGING CONSTRUCTIVELY IN MATTERS OF PUBLIC INTEREST
Lusani Mulaudzi, Simon Louw
Presentation with Paper
Relevant practice area: Professional Matters
Suggested audience knowledge level: Foundational
The emergence of the COVID-19 pandemic placed a renewed focus on when and how ASSA members engage professionally and constructively in public interest matters.
Public interest matters are by nature; complex, and multi-faceted therefore ASSA and its members should seek to engage constructively and professionally with all stakeholders to contribute to the development of sound public policies.
Two common obstacles to achieving constructive engagement could be 1) Differing opinions and perspectives and 2) Actual and Perceived conflicts of interest.
This discussion paper aims to identify gaps in the current governance documents for dealing with these complex public policy discussions within ASSA and to identify practical ways of managing both conflicts of opinion and conflicts of interest.
THE ROLE OF ACTUARIES IN THE SOUTH AFRICAN GOVERNMENT
Lusani Mulaudzi
Presentation with Paper
Relevant practice area: Wider Fields
Suggested audience knowledge level: Intermediate
The vision of the Actuarial Society is an actuarial profession of substance and stature, serving, and valued by, our stakeholders as a primary source of authoritative advice and thought leadership in the understanding, modelling, and management of financial and other measurable risks.
The Public Interest Strategy 2021 – 2024 focuses primarily on building successful co-creation projects between actuaries, government officials and researchers from other public interest organisations.
Co-creation opportunities arise in various ways and this paper aims to present ways to maximise these opportunities through various roles that actuaries can fulfil within the South African state.
Actuaries have been involved in various capacities within the state including:
– As board members and senior managers of insurance entities, regulatory entities, and state investment entities
– As actuarial specialists and consultants in these entities
– As consultants on cost-benefit and risk-management exercises for various government departments.
The paper aims to answer the following questions:
– Are the current roles of actuaries in the state adequate?
– How feasible is it to create full-time roles for actuaries in key government departments such as Social Development, Health, Treasury and the Presidency?
– What should the Actuarial Society’s role be in promoting the creation of these roles in these departments and the creation of the necessary support structures?
METABOLIC HEALTH: THE MAIN ROOT CAUSE OF NON-COMMUNICABLE DISEASES TODAY
Alna Prinsloo, Tobias Schiergens
Relevant practice area: Life Insurance
Suggested audience knowledge level: Foundational / Intermediate
Metabolic health remains an under-recognised key risk factor for life and disability insurance and has been linked to the incidence and severity of diabetes, cardiovascular disease, and cancer, amongst others. Influenced by lifestyle factors such as diet, physical activity, sleep, and stress, as well as genetic and environmental factors, improvements to metabolic health can reduce morbidity and mortality risks and enhance quality of life.
Metabolic health is having a significant impact on both the general population and the insurance pool. It impacts both the standard and preferred risk classes and we are seeing shifts in mortality rates across these classes.
Similarly, Metabolic Syndrome, formerly known as “insulin resistance syndrome”, and its components (hypertension, obesity, diabetes, dyslipidaemia) are often considered individually by clinical medicine, but all share a common root cause — a condition called insulin resistance. Insulin resistance can, through lifestyle and nutrition, be prevented and significantly reversed.
Our presentation will be significantly out of the box providing a wide variety of learnings for participants. We will aim to show:
- To make this real and tangible for participants we will demonstrate the impact of glucose monitor testing at the conference. A glucose monitor tests a person’s blood and glucose levels and show them how their nutrition is impacting their insulin and hence their health.
- We will also do a live demo during our session demonstrating the value of a continuous glucose monitor and how wearing it for two weeks gives significant insights into your nutrition and health potential.
- The impact of metabolic health on both the insured and general population.
- The future forecasting of metabolic health on mortality and the different viewpoints of where it aims to shift from a short-term as well as a long-term mortality perspective
- Impacts on different risk classes across underwriting
- The potential for metabolic health interventions through digital offerings and the business case of running these interventions. We will look at the key partners that are leading in this space and the business case by comparing potential for claims reductions versus the costs.
- The potential impact on pricing as well as on an in-force portfolio and what could be happening to your portfolios.
CREDIT MODELLING LANDSCAPE: DO WE HAVE IT FIGURED OUT?
Gerhann Pieters, Luvan Bezuidenhout
Presentation
Relevant practice area: Banking
Suggested audience knowledge level: Intermediate
– Credit modelling ecosystem:
Unpack how model calibration, application, validation, and monitoring integrate into a single modelling ecosystem.
– Shortcomings in the ecosystem:
Examine common challenges encountered within the credit modelling ecosystem.
– Impact of Validation Problems:
Assess the tangible costs and repercussions associated with these challenges. Explore the financial implications, risks and operational strain incurred.
– Strategies for Improvement:
Propose practical strategies to mitigate these challenges and bridge the gap between the current practices and recommended standards.
– What it should look like:
Visualise to the audience what it can look like.
Outcomes:
- Understanding Model Validation:
Attendees will grasp the fundamental principles and objectives of credit model development, and its significance within Banks.
2. Integration Awareness:
Gain insights into the interconnected nature of calibration, application, validation, and monitoring components within the model lifecycle, fostering a holistic understanding of model management practices.
3. Ideal Approach Awareness:
Acquire knowledge of ideal approaches and strategies to close the gap between existing practices and optimal standards.
4. Visualisation:
Visually grasp what the implementation of optimized practices can look like, and the upside it presents.
FROM VCR TO NETFLIX: THE EVOLUTION OF THE PENSIONS ACTUARY
Sudhir Ramdass, Natasha Huggett–Henchie, Mathias Sithole, Subedra Reddy, Michael De Villiers
Panel Discussion
Relevant practice area: Retirement Matters
Suggested audience knowledge level: Intermediate
Pensions actuaries have long been a cornerstone of ensuring financial security in retirement. However, over the years, shifts in the financial landscape, such as the transition from defined benefit (DB) to defined contribution (DC) schemes and consolidation into larger umbrella and commercial arrangements, have raised questions about the relevance of the pensions actuary. In this panel discussion, we will explore the evolution of the pensions actuary’s function and responsibilities, addressing the critical importance of actuarial expertise in modern times.
Firstly, we will delve into how the role has transformed over the years. From traditional valuation and funding advice to a more dynamic involvement in strategic investment strategizing, and risk management, pensions actuaries have adapted to meet the changing demands of the industry, which underscores the ability to stay relevant and indispensable.
Secondly, we will examine why the role of actuaries, though critical, has become less transparent. Despite the essential nature of their work, the intricacies and technicalities involved often obscure the actuary’s contributions from the broader public and even from some industry stakeholders. This discussion will highlight the need for increased visibility and appreciation of actuarial work.
Thirdly, we will argue that the complexity of modern pension schemes and financial instruments is increasing rather than decreasing. The actuarial skillset and mindset are more relevant than ever, especially in the context of data science and machine learning. Actuaries are uniquely positioned to interpret and apply these advanced methodologies, adding significant value to the decision-making process. Furthermore, a strong actuarial presence is needed to navigate the evolving legislative and regulatory landscape.
We will further discuss the importance of Environmental, Social, and Governance (ESG) considerations in pensions. ESG factors are increasingly integral to investment strategies and risk assessments. Actuaries are key players in developing and embedding ESG considerations, especially regarding financial and social sustainability of pensions schemes over the next century.
Lastly, we will explore the concept of a “Future Imperfect” and why it is “perfect” for the pensions actuary. Rapid changes in an uncertain financial world, and significant demographic challenges, create opportunities for actuaries to apply their analytical and strategic skills to anticipate and manage future challenges. Actuaries remain vital in ensuring the retirement industry remains future-ready in an ever-changing financial and socio-economic landscape.
Join us as we unravel the critical, evolving, role of pensions actuaries and reaffirm their significance in the retirements landscape.
THE CREDIBILITY TRANSFORMER
Ronald Richman
Presentation with Paper
Relevant practice area: Short-term Insurance
Suggested audience knowledge level: Intermediate
Recent advancements in deep learning, particularly attention mechanisms and Transformer models, have shown great promise in improving the accuracy and interpretability of predictive modeling across various domains. This talk explores the potential applications of these cutting-edge techniques within the field of actuarial science. We aim to provide an intuitive introduction to attention and Transformer models, discuss their connections to classical actuarial concepts, and illustrate how they can be used to enhance traditional actuarial modeling, focusing on ratemaking. Through real-world examples and case studies, we demonstrate the power of these models in developing sophisticated predictive models that can describe data more accurately while maintaining a good level of interpretability. Furthermore, we highlight the parallels between attention mechanisms and credibility theory, LOESS regression, and regime-switching models. Attendees will gain valuable insights into leveraging attention and Transformer models to improve actuarial practice and stay at the forefront of the rapidly evolving field of AI in insurance.
Outcomes:
Gain a deep understanding of attention mechanisms and Transformer models, and their potential applications in actuarial science
Learn how to apply these cutting-edge techniques to enhance traditional actuarial modeling, particularly in ratemaking
Discover the connections between attention mechanisms and classical actuarial concepts such as credibility theory, LOESS regression, and regime-switching models
Acquire practical knowledge on implementing attention and Transformer models using real-world examples and case studies in the P&C insurance domain
CODES, DISCIPLINARY PROCEDURES AND CONSTITUTIONS – UNDERSTANDING WHAT IT MEANS TO HAVE A CODE
Louis Rossouw, Paul Lewis, Emile Stipp, Roseanne Harris
Presentation
Relevant practice area: Professional Matters
Suggested audience knowledge level: Foundational
The Professional Matters Board is reviewing the Code of Conduct and the Actuarial Governance Board has recently reviewed the Disciplinary Procedure. This presentation aims to provide thoughts on the Code, the Disciplinary Procedure as well as the recent changes.
We want to cover:
- Why do we have a Code?
- Overview of the Code of Conduct (with a comparison with that of the IFoA)
- Overview of ethics
- Freedom of speech vs. the Code
- Overview the Disciplinary Procedure
- Review recent changes to the Disciplinary Procedure
- Discuss the roles of various parties in the process (Complainants, Respondents, Disciplinary Committee, Actuarial Governance Board, Council and the broader profession)
- Transparency of the process
The session would aim to encourage debate within the Profession around these topics and provide input into the changes in the Code and the Disciplinary Procedure.
CSI COMMITTEE CHRONICLES: UNVEILING PROGRESS AND FUTURE PLANS
Brice Salence, Stephen Burgess, Karsten Roux, Erkin Burna Asefi
Panel Discussion
Relevant practice area: Life Insurance
Suggested audience knowledge level: Foundational
This panel discussion aims to
– Introduce ASSA’s CSI Committee and unpack the aims of the committee
– Unveil the progress made to date with respect to industry studies on fully underwritten retail products
– This will mainly cover new generation mortality, critical illness, lump sum disability and annuitant products
– We will highlight some of the interesting and perplexing results to date
– We will share our future plans, which include streamlining data processes through our data subcommittee
– Highlight plans to reignite a new funeral industry study
– Spotlight plans for the continuation and rebranding of ASSA’s Covid Dashboard
To find any of the current CSI studies: click here
To find ASSA’s COVID Dashboard: click here
ENSURING AN INSURABLE SOUTH AFRICA
Lindy Schmaman, Farzana Badat, Michael Cheng, Priyen Mehta, Ronald Richman, Lily Xu
Panel Discussion
Relevant practice area: Short-term Insurance
Suggested audience knowledge level: Foundational
There has been a dramatic increase in weather-related events and natural catastrophes globally and in South Africa. This has had a significant impact on the short-term insurance industry. The repricing of risk has sparked a significant rise in premiums. Reinsurers and insurers are starting to exit in some areas or withdrawing coverage for certain perils, leaving more risk to primary insurers or policy holders. This has led to an emerging concern about the availability and affordability of insurance. Such a trend could test the sustainability of the insurance market, a failure of which would be a detriment to society.
The panel discussion will aim to explore the practical extent of the growing challenge of uninsurability and explore ways to enhance the resiliency and sustainability of the short-term insurance sector in the face of climate change.
The panel will bring together perspectives from different players in the market. We will discuss:
- The key trends and insights gained from a 2024 ASSA uninsurability survey conducted in the South African short-term market.
- A global reinsurer’s perspective on the shift in the NatCat landscape and where they are facing challenges in providing coverage.
- A local insurer’s outlook on coverage and pricing decisions and what insurers need to do to ensure the sustainability of the industry; and
- The FSCA’s concerns on the climate protection gap and the role that financial sector regulators could play in addressing the risks to financial consumers, and the potential for disaster risk financing in South Africa.
Practical outcomes that the audience can expect:
- Insight into what the insurance market is observing in terms of frequency and severity of claims events.
- An appreciation of the challenges that reinsurers are facing with respect to coverage of certain areas or perils in South Africa.
- A view of the main drivers, challenges, and opportunities for the industry from an underwriting perspective in adapting to the changing climate and providing adequate and affordable coverage for customers and society.
- Insight into how the FSCA plans to monitor how the South African insurance market responds to these issues.
By bringing together experts from different areas of the industry, we aim to facilitate a holistic and informative discussion on this important issue.
STEPS TO INTEGRATE PUBLIC AND MEDICAL SCHEME HEALTHCARE FUNDING IN SOUTH AFRICA
Daniel Shapiro, Barry Childs
Presentation
Relevant practice area: Healthcare
Suggested audience knowledge level: Intermediate
Healthcare expenditure in South Africa consists primarily of the public sector and medical schemes. The public sector covers most of the population and has significantly lower spend per person compared to medical schemes. The NHI Act envisages taxes to fund a more equitable healthcare but its ability to cover growing expenditure is likely to be constrained by available funds.
This presentation proposes an alternative set of steps to achieve a greater integration of medical schemes and public funding. The model allows a transition towards a central fund envisaged by the NHI Act without constraining cover purchased by medical scheme members and overcoming the above-mentioned financial constraints. The framework would likely generate less resistance than the significant paradigm shift envisaged by the NHI Act and would allow the role of medical schemes to evolve as the scope of NHI benefits increases.
Specifically, the steps consists of :
Medical scheme reform in which minimum benefits expand to include primary care and a simultaneous reduction in the cost of minimum benefits. The benefits would align with NHI benefits as far as is feasible and allow greater equity in benefits entitlements.
Raising additional funds for public sector funding through an contribution from taxpayers who are not medical scheme members and not directly contributing to a healthcare funding pool. This would enable the NHI fund to start collecting revenue.
As The NHI Fund improves its ability to contract and expands its benefit package, medical scheme beneficiaries may port cover to the NHI fund, whereupon the fund automatically increases its revenue collection.
Further unification through an overall fund for the common NHI benefits. The contribution to this fund would arise from the public health budget, the medical scheme tax credit and an income tax contribution. The central fund would allocate funds to public funders or medical schemes on a risk adjusted basis.
The presentations projects contributions and expenditures of the steps and the impact of the contributions on South African households.
The practical outcomes of the presentation will be:
-A summary of the current state of private and public healthcare funding in South Africa and regulations
-Presenting the authors’ proposed framework for more integrated healthcare funding including public funding and medical schemes
-Providing projections of contirbution and expenditure in the steps and the household impact of contributions
-Suggesting how the proposed framework can fit into the objectives of the NHI Act
ACTUARIAL SCIENCE STUDENT PERFORMANCE AT STELLENBOSCH UNIVERSITY
Prof Garrett Slattery
Presentation with Paper
Relevant practice area: Education
Suggested audience knowledge level: Foundational
In this paper I will draw on my over 30 years of experience as a university academic and report on various studies carried out over the period for the Stellenbosch University programme.
In particular, the paper will cover:
- A brief history of Actuarial Science at SA universities.
- Curriculum and exemptions
- University admission requirements
- Student intake and throughput
- Staffing levels
- Teaching styles commonly adopted
- Time taken to graduate
- Success rate in Actuarial Science modules
- Factors contributing to success and failure
- Postgraduate studies
The audience will have a better appreciation of:
- The evolution of university actuarial science education in SA
- What is required to make a successful actuarial science programme
- The trends relating to university intake and throughput
- Time taken to graduate
- The hurdles to student success
DO NO HARM: WHAT COULD A GENERATIVE ACTUARIAL EDUCATION SYSTEM LOOK LIKE?
Soshan Soobramoney, Prof Shivani Ranchod, Rosie Chirongoma
Presentation with Paper
Relevant practice area: Transformation
Suggested audience knowledge level: Foundational
In South Africa, some students traverse the actuarial study path with significant harm incurred, some of which is rooted in the trauma of inequality, systemic racism and sexism. Making the profession safe enough for members to boldly and courageously apply their skills to solve societal problems requires emotional resilience and wellbeing. We wish to develop a framework that will: (1) enable discovery of where our education system inflicts harm and hinders independent thinking; and (2) shine a light on parts of the system that are places of healing and growth. As a starting point, we propose using the ten components of a thinking environment (defined by Nancy Kline) to lay out a new path for creating a generative actuarial education system – one that imbues a growth mindset and treats people in a way that enables them to think for themselves.
The paper and trans-disciplinary panel covers:
- potential sources of harm in the actuarial education system and how such harm could be defined;
- a proposed educational approach that moves away from a deficit model that perpetuates exclusion and bias towards one that is strengths-based, cultivates a growth mindset and ignites independent thinking;
- how the ten components of a thinking environment provides a useful framework for a generative actuarial education system;
- what relationships exist between decolonial approaches to education, and trauma-informed approaches to education;
- potential opportunities to dismantle systems that cause harm to students while instilling a sense of pride and dignity in the unique lived experiences of people and in indigenous cultures and knowledge systems; and
- how research could be done with ASSA members to surface their sense of where harm occurs in the actuarial education journey, considering curricula and environments, and where they feel collective healing and generation of independent thinking takes place.
The audience can expect to:
- Develop an understanding of the ways in which trauma manifests in actuarial education;
- Learn about what it means to create a thinking environment;
- Generate ideas on how we can promote healing in actuarial education;
- Experience the physical effects of some of the healing modalities that the presenters are trained in, including breathing, mindfulness exercises that regulate the nervous system, and connecting more with feelings, to allow emotional release and unearth assumptions that are limiting our lives;
- Feel more equipped to open up difficult conversations about race, inequality, injustice and trauma.
NATIONAL LIFE INSURANCE – NHI’S IMPACT ON LIFE INSURERS
Richard Taylor
Presentation
Relevant practice area: Life Insurance
Suggested audience knowledge level: Foundational
NHI is expected to have a far-reaching impact on the health insurance and medical scheme industry. This has been discussed at length. But what of the life insurers? How will they fair?
This presentation will explore this question, and the potential future challenges and opportunities that NHI presents to life insurers.
The key message is the NHI is not something that will only impact the medical schemes and healthcare providers but also the life insurance industry.
NHI will have a major impact on overall public health and with these knock-on impacts on mortality, longevity, and quality of living.
The presentation explores the potential impacts for insurers with improved mortality in some population sub-groups, while potentially more difficulty in access to health care in other groups.
Furthermore, it will look at how disability rates and disability recovery rates might be impacted.
The impact on preventative screenings will be discussed and how this impacts Critical illness/dread disease rates especially over the transition period.
It discusses the potential disruption from the transition to NHI (spike in certain claims drawing from the lessons from Covid-19)
The evolution of medical underwriting with NHI will be covered. How will medical underwriting change? And does the NHI allow for the private medical underwriting of prospective policyholders? Will insurers that use non-medical underwriting be at an advantage?
The presentation will also consider the potential impact on lapse rates and new business volumes.
Lastly, with the establishment of NHI will this pave the way towards a national life insurer, where there is a tax funded mandatory funeral cover?
Key Outcomes for audience members
- Awareness that NHI will have an impact on their business.
- Potential impacts on mortality and longevity rates with sub-groups.
- How this might impact disability insurance (both temporary and permanent) and critical illness.
- How medical underwriting might have to change.
- Understanding the potential for future national insurance programs.
ASSA BANKING COMMITTEE & IAA BANKING VIRTUAL FORUM UPDATES
Michael Tangenhamo Tichareva
TED TALK
Relevant practice area: Banking
Suggested audience knowledge level: Intermediate
This session will discuss the work of the ASSA Banking Committee and the IAA Banking Virtual Forum. This will include past achievements, current work, and future work. It will also highlight opportunities for Actuaries in Banking that continue to develop.
The session will encourage members to consider banking as a viable option for members in other practice areas to consider, and for your members who are joining the profession. It will also highlight banking education and CPD opportunities as members transition into banking.
HOLDING THE CENTRE: SOLUTIONS THAT SERVE END USERS WITH FIDELITY AND COMPASSION, WHILE STRUCTURED FOR EFFICIENCY, PROFESSIONAL PARTICIPATION AND INNOVATION
Ursula Torr
Presentation
Relevant practice area: Professional Matters
Suggested audience knowledge level: Foundational
How Alignd implemented a Value Based Care model offering in the midst of an existing healthcare system, which was not structured to support the offering. And how exactly we did it, and why it succeeded, and what the impact of it has been.
* Why we did it at all – the need for patients, providers, funders
* How we did it and why it succeeded – the common incentive structure to do good, that is backed with remuneration muscle – for ourselves, for scheme, for providers
*The necessary design skills – technically accurate AND not missing the point – using clinical input to design the program well but NOT to overengineer so that the rules prohibit innovation. The measurement of suitable outcomes for end users, creating data sources where none existed, if necessary. Describing counterfactual and analytics magic – a new kind of maths
* The legal tapdance to implement and the provider skills paucity that needs addressing to be able to offer the program. Working with unlikely partners in the dance — administrators, oncologists, other programmes – and how to think generatively as an ecosystem.
* Most importantly, the ethics and culture that it takes to dance with all these parties and internally, without breaking the overall model, allowing competition and participation without crowding or crushing the solution or each other. Intentional culture and practices to maintain and improve focus on achieving patient outcomes.
* What the impact has been for patients and as a model of care – demonstrated through perfirnance metrics and stories, the number of patients and providers.
Practical outcomes for participants
* Fresh thinking about end user outcomes, incentive structuring and data collection to support monitoring these outcomes
* Genuine collaboration as a performance driver and what it takes to build this
* Ethical input to challenge thinking about existing system efficacy and our ability to shape it positively
Key message:
A call to others (actuaries as key product designers and landscape architects) to take action to centre solutions on end users, despite any difficult circumstances and through the methods available to them, in whatever field they find themselves To cross boundaries in pursuit of serving the market as a whole. To find ethical and professional backbone through like-minded communities.
RISE OF AI AND THE DEATH OF THE ACTUARY
Ashleigh Theophanides, Anton Gerber, Matthew Zylstra, Carl Yssel, Adriaan Rowan
Panel Discussion
Relevant practice area: Data Science
Suggested audience knowledge level: Intermediate
Based on the 2024 Data Science Survey Results
The actuarial profession is increasingly confronted with opportunities and challenges due to the emergence of new analytic technologies, tools, and techniques. The 2024 results of the annual survey conducted by the Actuarial Society of South Africa (ASSA) Data Science Committee, aims to poll and trend the impact of these emerging technologies on the profession as well as the level of engagement, expectations and needs of the members with respect to these. The survey covers topics such as education, professionalism, data science & artificial intelligence techniques, and the role ASSA can play to support members going forward.
We will share the main findings of the survey with members through a brief presentation to form the basis of a subsequent panel discussion that will explore the implications and opportunities for the profession.
The panel discussion will be divided into the themes mentioned above.
In addition to sharing the results of the survey this section will give members of the audience an opportunity to share their experiences and potential areas of application possibly touching on how certain business and other risks are magnified using these techniques by antagonists.
Throughout the session we will outline the current role and function of the committee and invite members to discuss their expectations in this regard, considering some inputs from the survey.
The discussion will aim to understand how the committee can continue to serve the needs and interests of the members and provide value and support to the profession.
A HALF AN HOUR WITH THE LIFE ASSURANCE COMMITTEE
Peter Tripe, Sandthiren Mudaly, David Kirk, Delisha Perumal, Wynand Louw, Nabeelah Kolia
Panel Discussion
Relevant practice area: Life Insurance
Suggested audience knowledge level: Foundational
The objective of this panel discussion is to showcase the relevant topics that the LAC is working on.
The presentation will aim to answer the following questions:
– Who is the LAC?
– What does the LAC do?
– What are the LAC’s focus areas?
– How can members assist the LAC?
RESPONSIBLE AI: THE ROLE OF ACTUARIES IN BRIDGING THE TRUST DEFICIT
Michael Van Der Merwe, Ronald Richman
Presentation
Relevant practice area: Data Analytics
Suggested audience knowledge level: Intermediate
Overview of Generative Artificial Intelligence: An overview of the potential of GenAI, supplemented by insights from the PwC Global Emerging Tech Survey.
o Explain how LLMs differ from traditional ML and narrow AI tools
o LLM use cases and anticipated productivity gains
o Results from the PwC global survey
o Predictions based on the survey responses and local industry experience
- GenAI risks: Addressing the emerging risks associated with the GenAI systems and the importance of responsible adoption.
o A list of AI model risks for specific and generative AI tools
o How large language models heighten AI risks
o A list of additional risks associated with large language models
o The complexity of navigating risks associated with large language models using traditional techniques directly.
- Responsible AI Principles and Toolkits: Covering key principles such as fairness, transparency, accountability, and privacy, alongside model risk management toolkits tailored for GenAI.o Responsible AI principles
o A framework covering responsible AI considerations
o Actuarial considerations – compliance with guidance and standards
o A model risk management toolkit setting out statistical metrics to track GenAI model risks
o Techniques to mitigate GenAI risks
- Case Study: A demonstration of GenAI systems in action (i.e. using a GenAI use case), with audience engagement through a live poll on risk management considerations.
- Implementing Responsible AI: Building on the case study, the responsible AI framework is unpacked in a step-by-step manner to highlight inherent risks in the system. Risk mitigation strategies are explored together with a demonstration of actuarial techniques/skills being leveraged as part of the model risk management process i.e. initial validation and ongoing monitoring.
Practical outcomes:
- Gain an understanding of both narrow and GenAI, latest global trends and themes as well as some local perspectives on its impact on the actuarial field
- Learn about the risks and ethical challenges posed by GenAI
- Acquire knowledge of Responsible AI principles and how actuarial skills/experience can be leveraged to apply these principles in practice.
- Participate in a dialogue about the intersection of actuarial work and AI, emphasizing the importance of actuarial skills in risk management and bridging the trust deficit on AI.
- A case study demonstrating the responsible use of GenAI.
The presentation will conclude with a call to action for actuaries to lead the way in Responsible AI adoption, ensuring that GenAI technologies are used to enhance societal well-being.
SHORT TERM INSURANCE COMMITTEE SESSION
Nicola Viljoen
- Who is the STIC? An introduction to our committee, its structure, and the various subcommittees that contribute to our work.
- What does the STIC do? A detailed look at our primary functions, objectives, and the role we play in the short term insurance industry.
- Focus Areas: An exploration of current projects and key focus areas.
- Member Involvement: Guidance on how members can engage with the STIC, contribute to our initiatives, and benefit from active participation.
LESSONS FOR SOUTH AFRICA’S PROPOSED SOCIAL SECURITY RETIREMENT REFORMS FROM THE EXPERIENCE OF OTHER SUB-SAHARAN AFRICAN COUNTRIES
Stephen Walker
Presentation
Relevant practice area: Retirement Matters
Suggested audience knowledge level: Foundational
The SA government intends reforming the current social security system, including retirement benefits. Views on how this should be done vary, even within government. Proposals often consider international experience, but ignore other sub-Saharan African countries’ experience.
The region is experiencing demographic change, especially reduced infant mortality, reduced fertility and increasing longevity. SA is advanced relative to other countries in the region, despite high unemployment levels. Our informal sector is large relative to developed countries, but smaller than elsewhere in Sub-Saharan Africa.
In order to analyse experience it was necessary to extend existing social security models and the following framework was developed:
Level A: non-contributory DB; poverty alleviation; universal or means-tested.
Level B: national scheme; at partially compulsory; DB/DC/NDC.
Level C1: mandated by state; group arrangements; DB/DC.
Level C2: mandated by employer; group arrangements; DB/DC.
Level D1: voluntary group arrangements; DC.
Level D2: voluntary retail arrangements; DC.
Countries in the region have tried several reform approaches. Level A non-contributory pensions in SA are advanced, relative to our region. Most other countries have mandatory, contributory, government-run level B funds, the closest equivalent in SA is the UIF. DB level B schemes are the norm. Many countries are experiencing strain on the financial sustainability of these schemes, a number have had to increase scheme contributions or reduce benefits. Occupational retirement funds in SA are well established and have experienced significant reforms recently. SA’s level C2 occupational retirement fund coverage is not mandated by government but is high relative to our region, even those countries with compulsory level C1 coverage. SA is still relatively new to introducing contributory pensions for informal sector workers. Other countries have tried various approaches under levels D1/D2 without finding a perfect solution.
Maximising coverage requires all pension types. Pension reform is iterative, there is no perfect solution and phasing-in change is best. Government should decide what incremental improvements can be made and start implementing these. The sequencing of reforms is important, what happens at each level of pension provision influences what can/should be done at the next level. SA should move towards universalisation of non-contributory pensions but in a cost-effective manner. Regional experience should be considered when targeting coverage of informal sector workers by contributory schemes. Compulsory contributions should be introduced for formal sector workers, shifting the approach. Expanding the UIF to cater for retirement benefits as opposed to creating a new level B national fund should be explored.
TRANSFORMATION SERIES – BEYOND THE NUMBERS: EMBRACING NEURODIVERSITY
Jeanine Wilson, Natan Brittz, Corneil Claassen, Didi De Kock, Baveshan Harbhajan
Panel Discussion
Relevant practice area: Transformation
Suggested audience knowledge level: Foundational
Deloitte has held a session on Transformation, Diversity and Inclusion in the Actuarial Society at the ASSA convention for the past 5 years. Our topics have included panel discussions on race, gender, LGBTQ+ and generational inclusivity.
For our 6th edition, we will be discussing neurodiversity. Neurodiversity is about embracing that people’s brains work in diverse ways, including those with conditions such as autism, ADHD and dyslexia. It is estimated that between 15 to 20% of the world’s population is neurodivergent and as research shows that people with superior mathematical abilities are more likely to fall on the autistic spectrum, the proportion of actuaries who are neurodivergent may be even higher.
Neurodiversity is an important category to have under Transformation, Diversity and Inclusion and may not have had as much attention in the past. This topic will focus on the importance of including neurodiverse individuals in the workplace to foster creativity, innovation and diverse perspectives.
This session will consist of a panel of a neurodiversity specialist and actuaries who have experience with neurodiversity on a personal or work basis. The panel will discuss what neurodiversity is, how one copes with being neurodiverse, how to work with neurodiverse people, and will also give insight to the audience of how they can assist neurodiverse individuals to excel in their daily work life.
Practical outcomes:
- understanding what neurodiversity is
- understanding how to be inclusive of neurodivergent individuals
- The importance of including neurodivergent individuals
- Understanding of the struggles and celebrations of neurodivergent individuals