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September 30, 2006

Actually I’m an actuary

Mary Kate Smith applies her love of mathematics to assess the risks of life

Mary Kate Smith loves mathematics, and while going to graduate school figured out a way to turn it into a rewarding career: She became an actuary for an insurance company. The job lets her revel in regression analysis, forecasting, model building, probability distribution and similar such things that most people barely understand. Her employer is First Insurance Company of Hawaii Ltd. in Honolulu, which she joined last year after working for an insurance brokerage in Chicago. A native of Los Angeles, Smith has a master's degree in mathematics from the University of Virginia and a bachelor's degree in mathematics from California State University, Northridge. She is married to Norman Rhines, with whom she lives in Waikiki. Smith, 42, said she walks to her offices near Thomas Square from home every day. "I walk to work and I love it," she said. "It's 40 minutes each way, so I get lots of exercise and I don't have to fight the traffic."

Question: How would you describe your job?

Answer: Well, I work for a property casualty insurance carrier that does business in the state of Hawaii, and what I do for this company is evaluate the loss reserves, which is part of financial reporting. There's a lot of regulations surrounding insurance, so we're here to support the loss-reserves estimates, to basically make sure the company has enough money to pay all its claims.

Q: So there's some law saying the company has to have so much in reserve?

A: There's uncertainty. For example, in workers' comp, the ultimate value of a claim might not be known for many years. We have a claim from 1960 that we're still paying off. So these claims go for many years, and it requires an actuary to determine how much these claims will actually cost so the company can set aside enough funds to pay the claims.

Q: What kind of insurance does First Insurance sell?

A: We offer all types of insurance. We have homeowner and auto products, and then for the business community we offer workers' compensation, liability, auto ... those are our main product offerings.

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Posted by Tom Troceen at 11:18 AM

Boug is Named Chief Pricing Actuary for Transamerica Re

Transamerica Reinsurance, a major worldwide reinsurance supplier, announced today that Scott A. Boug has been named Vice President and Chief Pricing Actuary of its U.S. life reinsurance business. In this role Scott will lead a team of actuaries in pricing new business, which involves risk analysis, projection modeling and the development of customized reinsurance solutions. He will also be responsible for maintaining pricing and risk knowledge to provide the best offers and service to clients.

Boug brings proven experience in product design and valuation with a particularly detailed knowledge of risk and capital management structures. For the past seven years he has worked within the AEGON group establishing and executing risk and capital management strategies. Before joining AEGON, Scott held positions in individual product pricing and investment management at Prudential UK and Sun Life.

“Ours is a technically demanding and knowledge-driven business,” said Glenn Cunningham, executive vice president of Transamerica Reinsurance’s life reinsurance operation. “We are pleased that Scott is joining us at a time when success requires an exceptional combination of actuarial and financial expertise. Scott strengthens our ability to meet complex client needs with effective and cost-efficient reinsurance programs.”

“I’m delighted to be part of the Transamerica Reinsurance team,” Scott said. “My experience on the primary side – both in product design and enterprise risk management – will be useful in understanding ceding company needs and working toward solutions that address growth and profitability challenges.”

Scott, who holds a Bachelor of Science degree in statistics from the University of Western Ontario, is a Fellow in the Society of Actuaries and a Member of the American Academy of Actuaries.

Posted by Tom Troceen at 11:17 AM

Actuaries criticise NPSS

In its response to the Government’s White Paper, the Association of Consulting Actuaries said it was supportive of proposals designed to expand pension provision to a wider number of people.

But it added that this should only be done if it did not undermine good existing pension provision.

According to the body, the Government’s plans will still result in too many pensioners remaining on means-tested benefits in 2050.

As a result, the association warns that there are “real dangers” of mis-selling the proposed new personal accounts, particularly to low earners.

It adds that there could also be high levels of opt-outs, making the system less cost efficient.

It its response to the government’s White Paper, Standard Life raised similar concerns over the appropriateness of the NPSS for lower income employees.

It stated: “Very few people earning less than UK median full-time earnings (£25,000) and over 40 years of age in 2012 will benefit from having a personal account.

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Posted by Tom Troceen at 11:15 AM