U.S. Actuaries In Demand Across The World
Gail M. Ross, vice president, AM-RE Consultants told attendees that opportunities abroad for American actuaries will include providing a variety of services, as well as including product and market development, pricing, reserving, mergers and acquisitions and developing cost savings strategies.
"There are diverse opportunities available for a wide range of actuarial skill sets," said Ross. "I feel actuaries will play a promising and very exciting role in the worldwide insurance arena."
As a recent example, Ross pointed out the expertise that American actuaries have provided in developing rates and a ratemaking model for the newly privatized workers compensation system in Portugal which had historically operated with tariff rates.
She cautioned, however, that there are a number of obstacles U.S. actuaries must overcome to succeed internationally, including language as well as the need to understand the insurance system, economy and culture of a foreign country.
Dr. Thomas Struppeck, actuary, Centre Re, observed that among the significant differences actuaries will face abroad is a lack of consistently reliable data available from individual companies or on an industry-wide basis.
Struppeck suggested that statutory coverages would differ from those in the United States. He noted that tort and contract law may not be based on common law and as a result, "canned wording might not be appropriate in some countries."
He also drew attention to market instability in countries that have recently privatized their insurance systems, pointing out that "there is massive competition going on without any experience with what the equilibrium rate level will be."
Additional challenges are posed by accounting differences as countries have their own version of Generally Accepted Accounting Principles (GAAP) with the equity of European companies being very different from the US equivalent. Struppeck also warned that the rules for risk transfer may not be codified.
Thomas R. Bayley, vice president, Aetna International, Inc., reported that more than seven percent of American actuaries are working outside of the United States, often involved in non-traditional areas, such as risk management, marketing or general management.
The paths to actuarial professionalism are different among many nations, according to Bayley. In the United States, Canada and the United Kingdom, actuaries are qualified by exam in addition to their academic studies. While in most other nations, a university degree is the prerequisite for practice.
Actuarial firms may enter foreign practice in a number of ways, including corresponding relationships, strategic alliances, joint ventures, total purchase or start ups. "A 100 percent purchase or a start up are extremely difficult" ways of starting a practice in another country, Bayley observed.
"U.S. actuaries are well-trained in all aspects of insurance," said Bayley. "They are intelligent, practical problem solvers with a wide array of experience beyond the strict actuarial role." Bayley stressed that for actuaries, "success abroad will require vast quantities of flexibility and creativity, learning a second language and understanding the local customs."