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Event Highlights

HARI and HCCI-Two Major Health Research Initiatives

Attendees at today's session received an update on two major health research initiatives-the Health Care Cost Institute (HCCI) and the Health Actuarial Research Initiative (HARI).

The HCCI will allow researchers and policymakers access to a comprehensive collection of health plan and government payer data that will offer new insights into health care costs, utilization, and intensity. This new tool will inform the public policy process and assist in developing new solutions to long-term problems confronting the health care system. HCCI's mission is to promote independent research and analysis on the causes of rising U.S. health spending; to provide policy makers, consumers, and researchers with better, more transparent information on what is driving health care costs; and to help ensure that, over time, the nation is able to get greater value from its health spending.

HARI, an operational initiative, has dedicated significant resources to health research, targeted at wide audiences, which could include the public, policymakers, the media and actuaries. The HARI mission is to develop actuarial research, in partnership with the SOA's research function, that uses the Affordable Care Act (ACA) as a launch point for studying changes in health care systems in the United States and in other countries. The research will serve to inform the public and policymakers, and achieve the short time frames necessitated by the rapidly approaching implementation dates of the ACA.

Chief Risk Officers Roundtable–ERM Challenges, Successes, Communication and Evolution

This interactive discussion among chief risk officers of major insurance companies emphasized the broader aspects of systemic risk and the implications for effective enterprise risk management (ERM) in the various business sectors. Panelists discussed the evolution of risk management practice, offered opinions on the best ways to guide the direction of risk management practices and debated the challenges of developing a prudent ERM culture within various sectors where actuaries are employed.

The Outlook for The Life And Annuity Industry

The recent economic crisis and how it has shaped the future of the insurance sector was the focus of the Life and Annuity Industry Outlook session. Current and emerging changes that will have implications for actuaries to consider were brought to light.

It was stated that the years 2012 and 2013 will continue to be difficult. However, the sentiment that there is light at the end of the tunnel if debt can be reduced and consumers invest in the future, brought an optimistic feeling to the session.

Opportunities for Actuaries on Corporate Boards

Actuaries have been important contributing members of corporate boards for many years, particularly of insurers and pension funds. As a result of the financial crisis and the recent passing of financial regulations, government, the media and other stakeholders are calling for stronger, more independent boards of directors. Greater expectations are being placed on corporate boards to strengthen risk oversight and corporate governance. In order to do so, they may require additional and/or specific expertise to fill knowledge gaps, such as enterprise risk oversight, financial management, or executive compensation. Actuaries possess a vast array of skills and experiences to assist boards in their oversight responsibilities.

The panelists made the following key points:

• One of the best ways to get started is to get appointed to a community or non-profit board. Think United Way, the Girl Scouts, the Arts Council, etc.
• Industry contacts and networking are important. Don't be afraid to tell people you are interested in board service but keep a prudent balance in how many people you talk with about your interest. Solid relationships built on mutual respect with business leaders and their connectors (think executive search) are one of the keys to your realizing your goal.
• Due diligence on the company and board is a must before agreeing to join the board. The time commitment and responsibilities are enormous and important.
• Actuarial training will prepare you for a portion of your role however; you must also demonstrate strong broader business, executive management and communication skills.
• Boards recruit to fill gaps in their expertise. The top contributions actuaries can make to boards will deliver on objectivity, financial expertise, critical thinking and risk management practice.
• SOA members will receive a discount on National Association of Corporate Directors (NACD) learning programs.

A New Approach for SOA Research

Attendees of the Rapid Retirement Research Initiative session were given an update on the SOA's first rapid research project. The report, intended to serve the public and policy makers, was released on Oct. 3, 2011. More information can be found on the SOA website in the research section.

"Feedback to the initiative so far has been overwhelmingly positive," according to Joe Silvestri, the report's lead researcher and retirement research actuary for the SOA. "It has received coverage in the media and is gaining influence with congressional members," he added.

Actuarial Roles Are Expanding

Attendees of the Expanding Actuarial Roles in "Nontraditional" Risk Environments session at the SOA 2011 Annual Meeting heard the personal stories of three actuaries in employment situations that have unusual characteristics and have to use their creativity, adaptability, and underlying modeling and analysis skills to deal with potential conflicts with the Code of Professional Conduct.

Currently there is no definitive answer to the question of how to work within the code of conduct when working in a nontraditional role. Discussion at the seminar was lively and will certainly foster future research and analysis.

Will You Outlive Your Assets?

The "Retirement Security in the New Economy" session addressed planning for the future – now! Emphasis was placed on the new financial landscape and the challenges individuals face with regard to retirement planning. Many people face difficult choices and decisions under a system that is dominated by defined-contribution plans.

The message is clear: The future of retirement is work. People won't have traditional retirement as they once knew it. Ten retirement planning steps serve as a simple, but practical way to have a healthy retirement: 1) Have a realistic assessment of resources; 2) Stay healthy; 3) Protect against catastrophic health risks; 4) Work as long as possible; 5) Maximize Social Security income; 6) Maximize employer pensions; 7) Be prudent with withdrawing retirement savings; 8) Adopt simple, effective investment strategies; 9) Be thoughtful about tapping home equity; and 10) Adjust living expenses to match your income.

What's "App"ening?

If you don't know the answer, then you should have attended this morning's session on apps for actuaries. After a primer on the difference between native apps and web apps, the presenters discussed various apps that actuaries can utilize to help simplify the complex information they need to communicate. Some of the apps discussed were Instapaper, which will save articles you want to read later and send them to a read-later file; Soulver, which is an all-purpose calculator that does cool things like currency translations; and ScannerPro which turns an iPhone into a document scanner.

Impact of Health Care Reform on the Marketplace

This session focused on the impacts that health care reform will have on both the small group market as well as on the individual market. While the small group presentation focused on Wisconsin, it showed how states will have their own mixture of issues. For example, some relevant provisions of PPACA already are covered by states' legislation. Many provisions not covered in Wisconsin, for example, include annual limits on essential benefits and lifetime maximums. The second half of the presentation dealt with how pricing transparency affects health care spend and quality. Many studies show that price and quality do not necessarily correlate.

Advanced Business Analytics and the Society of Actuaries

Should actuaries venture out of traditional roles and look to fill advanced business analytic roles? This was the question Lisa Tourville, ASA, MAAA, vice president of Intelligence & Informatics at Humana, Inc., posed to attendees of the Health Section breakfast Wednesday morning. Tourville discussed business analytics, how they are used in other industries such as professional sports and Humana's own journey from "siloed" analytics to a higher stage on the maturity model.

The SOA currently has a team of volunteers and staff focusing on advanced business analytics and how to get actuaries involved by attracting new people to the profession and encouraging companies to hire actuaries to fill these roles.

In an effort to enable the broadest view of health care cost drivers and trends, the SOA has partnered with the Health Care Cost Institute (HCCI). HCCI's mission is to promote independent research and analysis on the causes of rising U.S. health spending, provide various stakeholders with better information on what is driving health care costs and help ensure that the nation is able to get greater value from its health spending.

Having Fun In Retirement

What's on your bucket list? Today at a 2011 Annual Meeting session, actuaries Tom Egan, Richard Joss and David Pelletier explained what's on theirs and how they're making most of their retirement. Activities include volunteering at their local high schools and colleges as mentors and math teachers; traveling the world; doing actuarial consulting; and much more. "You have to find the balance between your financial resources and bucket list," Egan said. "There's a lot of fun things you can do," Pelletier said, "but don't over commit yourself," he warned.

The panelists answered the question, "What planning did you do close to retirement," with answers such as planned a cross-country automobile trip the day after I retired so I wouldn't get any phone calls from the company; and three years prior to retiring I began asking myself what I could do today to prepare for it.

Presidential Luncheon Highlights

Outgoing President Donald J. Segal passed the official badge of honor to Bradley M. Smith, the 63rd president of the Society of Actuaries, at today's Presidential Luncheon.

"This is a truly humbling experience for me. I'm deeply honored to be chosen to lead such an impressive group of professionals," said Smith, as he took the microphone to address meeting attendees.

Smith talked about the actuarial profession—the opportunities we have and the challenges we face. He stressed the importance to remain relevant by committing to lifelong learning and developing skills outside of one's area of expertise. He emphasized working, not only on our weaknesses, but also on our strengths, to build well-rounded individuals.

In addition, Smith expressed his view that the three major U.S.-based actuarial organizations (the SOA, the American Academy of Actuaries and the Casualty Actuarial Society) should consolidate into one organization.

He also emphasized the need for actuaries to be a voice and help non-actuaries understand the issues of the day, such as health care reform and the funding of public pension plans. He put out a call to action for actuaries to speak out about these issues whenever possible—at community meetings, with friends and family, and at the workplace.

Keynote Speaker General Stanley McChrystal

General Stanley McChrystal, former commander of U.S. and Internal Forces in Afghanistan, took center stage. A commanding voice and presence, McChrystal discussed leadership lessons from the field, and likened them to leadership in corporate America.

McChrystal said we can't think of leadership as an inanimate object, but rather leadership is about people and the ability to connect with them. He continued to say that the most effective leaders are those who create a sense of shared consciousness and purpose with the people on their teams. He added that great leaders tend to be relentlessly focused, courageous, and find it essential to build genuine trust with the people who work for and with them.

It may seem basic, McChrystal emphasized, but communication is at the heart of leadership. It's how well you foster relationships that will give you the ability to achieve common goals, connect with people, and turn experiences into wisdom.

New Study: Retirees Increasingly Concerned About Paying for Nursing Care

The number of retirees who expressed concern about having enough money to pay for a nursing home stay or for in-home nursing care jumped 13 percent from 2009 to 2011. Researcher Mathew Greenwald, whose company conducted the research, presented these results Tuesday as part of the 2011 Risk and Process of Retirement Survey Results session. Greenwald, of Mathew Greenwald & Associates, told attendees that retiree concern about having money for health care in retirement increased, as did retiree concern about savings and investments keeping up with the cost of inflation. The survey was conducted in July 2011 and included interviews of 1,600 Americans ages 45-80.

Where ERM Meets Capital Management

In this fast paced session, attendees received in-depth information on the rapidly evolving global regulatory and industry developments that have an important influence on both enterprise risk management (ERM) and capital management practices. The discussion included an international look at the topics own risk solvency assessment (ORSA), Basel III and more.

Panelists Outline Issues and Challenges for Public Pension Plans

Three panelists covered a gamut of topics related to public pension plans Tuesday, during the Public Pension Plans—Financing, Accounting and a Framework for Risk Management session. FSA Kim Nicholl discussed "game changers," including accounting for cost-sharing plans and decoupling expense and funding. Nicholl also covered changes in total pension liability in the year, recognition of items traditionally deferred and changes in assets where certain deferrals are allowed. Speaker Dave Sandberg, FSA, CERA, MAAA, said that the actuarial control cycle offers unique professional value by clarifying the risks faced and actions to take. He also told attendees that it's important to ask the right questions. Panelist William Hallmark, ASA, EA, FCA, MAAA, reviewed the historical practices and discussed changes and issues including the increase in maturity of plans and increase in risk. The session was streamed live and included a question and answer period for each panelist.

Are You Afraid of Making Sales Calls?

This session quickly turned into a lively, interactive workshop. People shared their fears, feelings and frustrations with regard to making sales calls. The presenter often had participants break into teams and small groups to discuss sales calls in general. A series of short exercises focusing on transforming one's thinking really inspired some enthusiastic conversations. Laughter, a little lecturing and lots of learning made this session a winner!.

Leadership Opportunities For SOA Volunteers

In a highly interactive session at the 2011 SOA Annual Meeting, attendees were led through all of the volunteer opportunities at the SOA. One very important aspect of volunteering that should be remembered, one of the presenters said, is the benefit to the volunteer and the volunteer's company. Volunteering allows people to practice skills in a safe environment that will help them grow professionally, which is also a plus for the person's company.

The areas for volunteer opportunities at the SOA are: Education, Research, Sections, Professional Development, Academic, Governance, Strategy, Marketing and Communications, and International. To learn more, visit www.soa.org/volunteer.

Long-Term Care Experience Trends

How do they impact pricing, rate increases and reserving? Information presented at this session highlighted the results of the SOA Long-Term Care Experience Report and helped answer those questions. Topics discussed included data sources, claim incidence by policy duration and experience year, home health care policies, mortality rates, and voluntary lapse rates.

LTC industry issues were discussed in detail. Topics covered included: What morbidity rates should be assumed in gross premium valuations? What continuance rates should be used in setting claim reserves? When is observed experience to be considered a "trend" rather than a random anomaly? Should future morbidity improvement be expected? Can we truly separate mortality from lapse? Have we properly accounted for terminations from benefit expiration? How much has mortality improved in the past? How much will mortality improve in the future? Does mortality improvement vary by attained age group? Benefits of the SOA Long-Term Care Experience Report were also discussed and prompted several questions from attendees.

Business Books for Your Must-Read Lists

Winners of the second annual book review contest were announced at the Management & Personal Development Section's annual breakfast book review session. Winners were Mary Pat Campbell, Mark Danburg-Wyld, Scott Haglund, Brian Pauley and Ben Wadsley. The submission deadline for next year's contest is September 30, 2012.

Section team members presented reviews of a number of business books they have read this past year. On the list was The Personal MBA by Josh Kaufman. The premise of this book is that it is not worth your time and money to attend MBA school. The author calculated that the net present value of an MBA is – $53,000. While the reviewer thought the book was cumbersome to read, she felt it is a good reference for someone wanting to open his own business as it provides good advice for creating a new business.

Another book which received a more favorable review is The Truth About Leadership by James Kouzes and Barry Posner. The reviewer felt this book could benefit all actuaries as it deals with being a leader no matter what one's role is in an organization. The book lays out 10 fundamental truths for being an effective leader, three of which are you can't do it alone, the best leaders are the best learners, and leadership is an affair of the heart. If you want to know what the other seven fundamentals are, you'll have to read the book!

Successful Project Management Strategies

Attendees at the SOA 2011 Annual Meeting were treated to an outline of simple strategies for project success, including a discussion of common barriers and approaches for managing them. Doris Orr, SVP and Project Director at XL Insurance, shared tools for successful project management, and the traps to avoid. Attendees also received a refresher on project management basics. The content of the session included two actuarial project case studies: one small single-person project initiative and one large global project initiative.

Medical Trends 101–Future Drivers and Bending the Cost Curve

This Annual Meeting session provided an overview of the key micro and macro trend drivers of health cost increases, as well as potential longer term trend dampeners. Topics discussed included types of trends and what employers are doing to bend the trend line.

IFRS–The Future of Accounting for Insurance

In July 2010 the International Accounting Standards Board (IASB) issued the Exposure Draft: Insurance Contracts. This session provided an overview to a standing-room-only crowd of convergence efforts, the SOA's insurance contracts project, and implementation considerations.

LTC Topics–What's Hot?

A variety of topics was discussed at this session, in large part, given the recent regulatory and industry developments, such as the CLASS Act, LTC Think Tank, and more. An update on LTC uniform standards, combination products, LTC rate increases, rate stability efforts, and annual actuarial certification was given. Presenters provided an overview of the major topics and initiatives currently affecting the long-term care market.

An Extremely Social Session

Social media and networking have moved beyond staying in touch with friends and family. They are rapidly integrating into the mainstream business world and are expected to become the most common way we will communicate with colleagues, clients and vendors. Every business and industry–from the Fortune 1000 to independently owned retail stores to nonprofits and associations–are embracing these new communication tools.

In what may have been the best attended session of the afternoon, attendees heard from fellow SOA members who are using social media to share their professional expertise (and grow their business) and learned how the SOA is using social media to further dialogue with members and candidates. They also gained insights on how to raise their professional profile to garner the attention of the executive search industry.

Annual Meeting–Actuary of the Future Section Celebrates 18 Years

Actuary of the Future council members Jennifer McGinnis and David Snell took section members for a trip down memory lane. When the section launched in 1993, gas was $1.16 a gallon, the average price of a movie ticket was $4.14, and the Beenie Baby craze had just begun.

Over the years the section has been involved in many initiatives, including forming the Young Actuaries Network, assisting with the update of the Image of the Actuary website, and sponsoring speed networking sessions at meetings. Most recently the AOF has piloted a series of podcasts, produced webcasts, and is involved in a study on future opportunities for the profession. Their plans for the future continue to evolve.

Annual Meeting Opening Session Draws Huge Crowd; Kicks Off a Day Filled with Activities

The Grand Ballroom at the Sheraton was filled to capacity. Attendees were treated to a variety of information and presentations during the Annual Meeting Opening Session.

President Donald J. Segal took center stage with several other actuaries. The group shared their personal reasons as to why they volunteer, the importance of giving back to the profession they are passionate about, and invited others to share their talents and expertise by volunteering.

Their testimonies served as a segue to announcing the following award recipients:

Distinguished Volunteer Service Award Recipient:

• Thomas S. Terry

Presidential Award Recipients:

• Richard S. Foster
• Lawrence J. Sher
• The SOA Staff

2011 Outstanding Volunteers:

• Joan C. Barrett
• Jeremy J. Brown
• John G. DiMeo
• Stephen A. Eadie
• Thomas P. Edwalds
• Sandra E. Ellis
• Jerry F. Enoch
• Mary R. Hardy
• Christian-Marc Panneton
• Anna M. Rappaport

Segal welcomed 10 past presidents, President-Elect Bradley M. Smith and Incoming President-Elect Tonya B. Manning.

After a rousing round of applause for the award recipients, Smith talked about the achievements of The Actuarial Foundation, focusing specifically on the 48 scholarships awarded (the most in any single year); the Building Your Future program (thanks to the generosity of the profession and corporate sponsors, donated sets of this program are in the hands of more than 5,000 teachers in all 50 states); and the Matching Gift Challenge Campaign (for a limited time, every first-time donor who contributes $50 or more to the Foundation will have their gift matched–dollar for dollar–through this campaign.

In his presidential address, Segal bypassed the traditional "what was accomplished this year" speech and instead, focused on three things he learned during his presidency. Focus on your professional development; take responsibility for your own career; and remember that the actuarial profession "is not just about the numbers." It's the context around the numbers that's important. Segal closed with thanking everyone for their contributions during his presidency.

Nick Bontis, Ph.D., and keynote speaker, energized the crowd with his entertaining and educational take on managing the onslaught of information we all face each day.

Women should develop reputation of credibility and leadership

In order to maximize their impact, women should cultivate a presence over time, so when they talk, people listen to them as a key influence, said Jo Miller, CEO of Women's Leadership Coaching, Inc. Miller spoke to members Tuesday at the Women and Leadership: Becoming a Person of Influence session. "Invite yourself to the table," she told attendees. "Don't wait to be invited to speak."

Miller discussed what she called the fundamental truth, "our behavior teaches people how to treat us." She encouraged the audience to influence others in every conversation they have. "How you behave can truly make an impact," she said. The session covered numerous ways for women to gain buy-in for ideas, enhance their credibility and make a larger impact.

Acting In The Public Interest

Today at the 2011 SOA Annual Meeting, those who attended the "Acting In The Public Interest" session were treated to a lively and informative discussion on the pension underfunding problem and the alternatives available to state and local government short of a financial meltdown. The panelists proposed a Public Pension Funding Authority as the preferred means of addressing the pension underfunding crisis through a Sovereign Debt Resolution Mechanism.

The session also explored the age-old tension that all professions face: what does it mean to act in the public's best interest and whether or not actuaries following the applicable laws, rules and/or regulations, as well as complying with actuarial standards, is sufficient to be considered "acting in the public interest."

Standing Room Only At Complexity Science Session

What do deterministic chaos, behavioral economics, fractal geometry and genetic algorithms have in common? They were all discussed today at an SOA 2011 Annual Meeting session about complexity science that was so well attended, it was standing room only.

Emerging complexity science techniques provide an interesting alternative to traditional actuarial methods. The introductory session covered several of the complexity sciences and provided examples of how they can and are being applied to actuarial problems.

SOA 2011 Annual Meeting. Great Attendance! Great Speakers! Great Sessions!

More than 1,900 people are taking part in the SOA 2011 Annual Meeting & Exhibit, which opened today in Chicago. Attendees include members from across the globe, new associates, fellows of more than 50 years, middle-management actuaries, senior-level executives, and actuaries from every practice area. This year's event features keynote speakers Nick Bontis, director of the Institute of Intellectual Capital Research, Inc., and four-star Gen. Stanley McChrystal, who will offer his leadership lessons from the field. The meeting offers more than 100 sessions on topics from retirement security, health care reform and emerging technologies to innovation in product development, implications of demographic trends on investments, and principle-based approaches to pricing.

For the first time, members will be able to access meeting information via the Annual Meeting app, featuring session descriptions, presenter bios, the meeting schedule and more. And, they'll be sharing their experiences via Twitter, @SOActuaries, hashtag #SOAAnnual. A social media center is new this year. Attendees can brush up on their LinkedIn, Twitter and Facebook skills, get some training, and create their accounts with help from SOA staff. In addition, sessions have been extended to 75 minutes – something previous attendees requested. One of the top reasons people attend the Annual Meeting is the opportunity to network – at the Presidential Luncheon, general reception, the numerous section breakfasts, and a variety of sessions.

At every turn, there will be a chance to grow, learn and connect at the SOA 2011 Annual Meeting & Exhibit.