Newsletter

STAKEHOLDER ENGAGEMENT

June 2017

ILO–Eurostat Joint Workshop 
By IAA Past President Rob Brown and International Labour Organization (ILO) social security actuary/pension specialist Costas Stavrakis

This workshop on methodological and technical considerations of pension liabilities of social security pensions was a follow-up to a similar session held in Paris in March 2016. Participants of the Luxembourg workshop included national accounts statisticians and actuaries/pension experts from each European Union (EU) member state, as well as representatives of other EU institutions and international organizations.

Many of the questions raised in Paris now had answers. These primarily involved:               

  • For what systems are we reporting liabilities?
  • How do we arrive at the desired values?

The workshop included a presentation by the IAA on the reporting of liabilities for pay-as-you-go or partially-funded social security systems. One opinion is that these systems represent social contracts and that the correct manner to determine the liabilities of such systems is on an open-group basis. The Eurostat requirements (European System of National and Regional Accounts 2010 – ESA 2010) are that these liabilities should be reported on a closed-group basis, as would be necessary for a private pension plan that could close on any given day. We emphasized the approach used for the Canada Pension Plan, which discloses both an open-group and a closed-group value but focuses on the open-group liability and only carries forward the open-group value.

Finally, it was acknowledged by participants that the closed-group data to be reported under ESA 2010 should not be taken as measures of the sustainability of social security pension schemes. In addition, the workshop confirmed the need for the creation of a robust framework for effective communication and interpretation of the closed-group figures, and perhaps consideration of adopting a multiple-disclosure approach, under which closed-group disclosure is supplemented by numbers prepared on an open-group basis.

This venue provided a unique opportunity for the IAA’s voice to be heard in this important debate and contributed to the above workshop conclusions.

Deutsche Aktuarvereinigung—Annual Meeting 
XVth International Symposium on Insurance 
By Immediate Past President Malcolm Campbell

The DAV held its annual meeting in Berlin, Germany, at the end of April. Our German colleagues used the occasion to conduct a live test of the facilities we will be using next year for the International Congress of Actuaries (ICA 2018), and I can report that both the facilities and logistics worked well. So, everything is well-prepared for next year. As usual, the meeting consisted of a large number of interesting parallel and plenary sessions, covering everything from scientific presentations and current issues to topics of a more general and philosophical nature. I can also report that the social activities were also of a high class, and I look forward to meeting you all in Berlin next year.

The Serbian Actuarial Society and Economics Department of Belgrade University organized a symposium in Zlatibor in the beautiful Serbian mountains, with participants from Serbia and other countries in the area. I gave a presentation on how I saw the future of the profession and the IAA. Other presentations covered a number of issues of current interest, and it’s fascinating to note how the same issues are occupying minds all around the world. It was also gratifying to note that the profession is alive and kicking not just in what might be regarded as traditional actuarial countries.

Institute and Faculty of Actuaries—Asia Conference 
Actuaries Institute Australia—Actuaries Summit 
By President Tom Terry

I was pleased to attend the Asia Conference of the Institute and Faculty of Actuaries (IFoA) in Hong Kong in May. Actuaries from around the world—with an obvious abundance of Asian actuaries—participated in two days of plenary and break-out sessions on a diverse set of cutting-edge practice topics. 

A highlight was a keynote address by Dr. Moses Cheng, chair of Hong Kong’s new Independent Insurance Authority, who spoke of the promise of further professionalizing the insurance industry in Hong Kong.  

On a closing panel with presidents of other actuarial associations, I participated in an animated discussion of the future of the profession.

Also in May, I attended the Actuaries Summit in Melbourne, Australia. This conference, which takes place every other year with actuaries from all across Australia and elsewhere, was focused on a theme of thinking differently. 

I was certainly impressed by the way this theme was imbued into virtually every presentation and panel discussion. I can report that innovation and forward thinking are alive and well in Australia!

Joint IAIS/IAA Roundtable 
By International Association of Insurance Supervisors (IAIS) principal administrator Jules Gribble

From June 7–8, the IAIS hosted a roundtable discussion in Basel, Switzerland, to discuss work in progress on the joint project regarding actuaries and inclusive insurance. Ten participants were present and several more dialled in for parts of the meeting. As a joint initiative between the IAA and the IAIS, the meeting was opened with a message from IAA President Tom Terry and in person by IAIS Secretary-General Yoshihiro Kawai. Under the chairmanship of Peter Braumüller, the meeting discussed drafts of the two key project deliverables involving inclusive insurance markets: an IAA paper on providing actuarial services in such markets and an IAIS paper on the actuarially related aspects of proportionate prudential supervision within them. These papers will complement each other and, read together, should make an important contribution to the development of inclusive insurance from an actuarial perspective. Members from both drafting groups and the project’s advisory group were present and contributed valuable input. These papers will be progressed over the coming months and are currently scheduled for completion around the end of 2017.

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