Jos Berkemeijer

Presentation 'Leadership & Actuaries' by Jos Berkemeijer at 'Actuarieel Podium", September 27, Zeist, The Netherlands.

Transcript

1. Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 1 September 27, 2016 Actuarieel Podium September 27, 2016 @ Jos Berkemeijer Are you part of the future or the past?
2. Classic view on Leadership Interactive Olympic Warming Up! Give it a try… Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 2 September 27, 2016 Vision, Goal Focus Structure Responsibility Firmly in the saddle Strategy Sail …the wind Keep your head above water Timely Execution Help, Control
3. Agenda Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 3 September 27, 2016 1. Classic view on leadership 2. Actuarial leadership, Key statements 3. Personal leadership experiences 4. The many faces of leadership 5. Actuarial leadership 6. Actuarial work field, Holistic view 7. Actuarial leadership, Future outlook
4. Actuarial leadership Key statement 1: Estimates Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 4 September 27, 2016 Jane, Born in 2016 Pension year: 2091 ONLY IF … P(X | X1 ,X2 ,X3 ,..) 1. I think it’s ethically and professionally responsible, to estimate Jane’s average investment return and mortality rate with a 95% confidence level for the next 70 years or more
5. Actuarial leadership Key statement 2: Life expectancy Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 5 September 27, 2016 2. Within the next 30 years new anti aging medicines will improve life expectancy with more than 10 years © DW2 (2016) The Food and Drug Administration has approved human testing for what could be the world’s first anti-aging drug: metformin
6. Actuarial leadership Key statement 3: Manage your own life ending? Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 6 September 27, 2016 3. By 2050 most elderly will be able to manage their own life’s exit strategy (pro)actively To provide a decent pension for my children, I’ve asked my hospice to keep me alive forever, as my pension is $ 300 per day and my nursing costs are only $ 150
7. Actuarial leadership Key statement 4: Robo actuaries Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 7 September 27, 2016 4. By 2030 most standard actuarial advice and reports will be handled by Robo Actuaries Facts…… • Computerisation 35% of current UK-jobs are at risk • Actuaries 20Y-Likelihood of automation: 15%. • The future is for 1. Data scientists 2. Machine learning (predictive models) Robo Actuary (2030)
8. Personal leadership experiences Get out of the box! Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 8 September 27, 2016 When I applied for…. Concern Actuary Insurance director Pension fund director Supervisory Board member Fintech Managing Partner I was asked: Aren’t you more a department manager? an actuary? an insurance director? a director? a board member than a scrum team member? Be(come) Who You Are Never put people into boxes!
9. Personal leadership experiences Who am I? Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 9 September 27, 2016 Family Hobbies Social Professional Interests Actuarial Actuary Board Member Supervisory Board Member Strategic Advisor Lector Software Developer Husband Father Caregiver Friends Networks Professionals, Volunteers Student
10. Personal leadership experiences Who are YOU? Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 10 September 27, 2016 Family Hobbies Social Professional Actuarial Interests YOU
11. Personal leadership experiences Stephen Covey: ‘Green & Clean’ Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 11 September 27, 2016 1. Set Target 2. Define responsibility 3. Offer help 4. Accept failure 5. Success
12. The many faces of leadership Leading by example | Leadership types Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 12 September 27, 2016 Is there one type of leadership that fits the actuarial profession best? Obama Mother Teresa Einstein
13. The many faces of leadership Einstein as an actuary role model? Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 13 September 27, 2016 S = W + P + M Success = Work + Play + Keeping your mouth shut Einstein’s leadership Principles 1. Try not to become a man of success. Rather become a man of value. 2. An expert is a person who has few new ideas A beginner is a person with many.
14. The many faces of leadership Misunderstanding: Leadership… Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 14 September 27, 2016 is about social & personal change, ethics, attitude & principles, commitment, communication is NOT about • Management • Best expertise • Authority or power • Titles • Having followers is not about YOU, but about OTHERS & YOU
15. The many faces of leadership What is Constructive Leadership? Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 15 September 27, 2016 1. Empathy Your consciousness and competence to recognize and identify social and peoples’ needs 2. Confidence Your conviction that by engaging your partners and network, these needs can be fulfilled 3. Social Capabilities Your power to connect and line up your and others’ strengths and deal with weaknesses 4. Professional Capabilities Your skill to translate expertise of combined disciplines into ‘breakthrough’ new solutions 5. Attitude Your strength to evaluate, learn from others and revise your thinking and approach 6. Stewardship Your Helpfulness, Unselfishness, Perseverance & Flexibility , Helicopter & Birds Eye View 7. Mastership Your power to convince, master principles, accept failure and anticipate the unforeseen JB View
16. Actuarial leadership, Self-reflection Example: Valuing US Pension Liabilities I Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 16 September 27, 2016 Valuing US public pension plan liabilities (2016) Current standard actuarial practice: ≈ 7.5% discount rate Topic Issue Result Action What’s the right discount rate? Framed question? Common Task Force: 1. American Academy of Actuaries (AAA) 2. Society of Actuaries (SOA) Right Approach? 1. Task force planned discount rate advice: ‘default-free obligations’ or ‘risk free rate’ 2. Risk free rate impact: US$ 8.4 trillion underfunding 3. AAA/SOA - Disband task force - Suppress publication of the paper. Leadership? Ethics? Decision Quality?
17. Actuarial leadership, Self-reflection Example: Projection rate variable annuities Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 17 September 27, 2016 How to calculate Dutch variable annuities ? Topic Issue Result Action What’s the right interest projection rate? Framed question? 1. Advice from Task Force New Pension System - Dutch Social and Economic Council (SER) - Dutch Royal Actuarial Association - Dutch Bureau for Economic Policy Analysis (CPB) 2. Advice from Dutch regulator (DNB) Right Approach? 1. Advice Task Force: macro-stable discount rate 2. Advice DNB: risk free rate 3. Dutch Government & Parliament without further discussion decide: Projection rate = risk free rate Leadership? Ethics? Decision Quality?
18. Actuarial leadership, Self-reflection Example: Customer Risk Information Regulation Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 18 September 27, 2016 A fund's past performance does not necessarily predict future results US SEC Past performance is not a guide to future performance Dutch Authority for the Financial Markets (AFM) 2002 Past performance is not a guarantee of future results 2006 Risk Meter Key investor information provides insight into the nature and risks of the mutual fund offered
19. Actuarial leadership, Self-reflection Example: Customer Risk Information Regulation Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 19 September 27, 2016 What is more risky Bonds or S&P-500 ? Meanwhile… • Actuaries are practicing a popular song of Simon & Garfunkel • Or perhaps the song of the regulator? S&P-500 US Bonds 10Y S&P-500 US Bonds 10Y 1928-2015 11.4% 5.2% 19.8% 7.8% 2013-2015 15.7% 1.0% 15.5% 9.9% Yearly Return Yearly Risk (SD) Period
20. Actuarial leadership, Self-reflection Example: Prudent Person Principle Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 20 September 27, 2016 How to apply the prudent Person Principle (PPP) for Dutch Pension Funds? Topic Issue Result Action DC Pension funds are forced by law to decrease investment risk for their members as the pension date approaches (mandatory life cycle ). Framed question? Lobby of individual actuaries and organizations. PPP should be an open norm. The risk attitude of the members should be leading. Right Approach? 1. Pension funds may use another principle than life cycle if they can underpin that. 2. Dutch regulator DNB has the last word…. Leadership? Ethics? Decision Quality?
21. Actuarial leadership, Self-reflection The Long Term Investment Communication Dilemma Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 21 September 27, 2016 Confident, but not Informative Informative, but not confident Inv X 10 Inv X 41 Inv X 14 Inv X 0.7 Inv X 2.5 Inv X 10
22. Actuarial leadership, Self-reflection The Long Term Investment Communication Dilemma Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 22 September 27, 2016 Informative, No risk framing Inv X 10 Inv X 11 Inv X 4 Inv X 2.5 Inv X 7 Alternatives? Skip estimates. Only communicate a range of constant fixed return outcomes Any other alternatives?
23. Actuarial leadership, Self-reflection Conclusion Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 23 September 27, 2016 Where are the actuaries?
24. Actuarial leadership, Opportunities The need for Strategic actuarial help Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 24 September 27, 2016 Anybody that can help with systemic risk? CEO CFO Strategy Mountain Meanwhile… in the actuarial rabbit hole One second…, and I’ll be able to estimate the mortality rate 150 year ahead and in 15 decimal places! Sea of Risk
25. Actuarial leadership, Opportunities Example of where actuarial help is needed Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 25 September 27, 2016 • Actuarial key question: is modest speeding a positive or negative risk factor? • Developing mature risk models: actuarial help is needed Wireless Insurance Dongle Car Insurance: pay-how-you-drive Safe Driving
26. Actuarial leadership, Opportunities Actuaries are the binding factor !?&%&@# Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 26 September 27, 2016 Big Data Systemic risk Regulatory Risk Model Risk Parameter risk Economic Risk Models Behavior Risk Models Robo Advice New Solidarity Crowd/Community - Funding - Longevity Solidarity - Disease Solidarity - Investing Medical Care - Efficiency - Waiting list reduction - Disease Management Communication comprehensibility tests Bitcoin Gamification Cooperation Risk
27. Actuarial leadership, Opportunities Where do actuaries add value? Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 27 September 27, 2016 Questions ‐ How to enlarge the scope of institutions that can benefit from actuarial expertise? ‐ Time for a CLO? ‐ What do we need to qualify actuaries for C-level functions? ‐ How to overcome being identified as bringers of bad news?
28. Actuarial leadership, Opportunities Push or pull strategy? Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 28 September 27, 2016 • Personal growth: a combined Push-Pull strategy • C-Level ambitions are fine, but remember you have to be asked… • When you give advice, it’s hard to ask for help! • Who is your coach? Actuarial space Leadership space
29. Actuarial leadership, Connecting the dots Classic lateral thinking for managers Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 29 September 27, 2016 The Nine Dot problem Link all 9 dots using four straight lines or fewer, without lifting the pen and without tracing the same line more than once. Question What’s the probability an actuary can link all dots? Answer: Bayesian approach, adding implicit conditions P(linking all 9 D | L<=4 & Straight |Keep pen on paper | No double lines | Actuary) = 1 Solution: Think outside the box!
30. Actuarial leadership, Connecting the dots Conditional thinking for actuaries Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 30 September 27, 2016 Link all 9 dots using one straight line, without lifting the pen and without tracing the same line more than once. Solutions 1. Place the dots in a straight line and draw the line with your pen 2. Use an extreme fat pen Lesson New solutions (innovation!) appear by studying and varying the implicit conditions Solution: Think outside the circle! The Nine Dot problem
31. Actuarial leadership, Connecting the dots Big Data, Incomplete Data Modelling Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 31 September 27, 2016 Big Data Set Chaotic, Noise Pattern search Filter irrelevant data Testing Related data dots? Incomplete data? Model assumptions Connect the dots Check relevance Project, Estimate Add Scenarios Add Behavior Realistic Model? Result Optimal Model Facial keypoints detection N e w e c o n o m i c , behavioral & s c e n a r i o m o d e l s Example
32. Actuarial leadership, Connecting the dots Big Data, Incomplete Data Modelling Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 32 September 27, 2016 There are two kinds of actuaries: those who can extrapolate from incomplete data
33. Actuarial leadership, Shift & Focus Managing risks before the decimal point Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 33 September 27, 2016 1,000,000,000.001 Risk Management Before the Decimal Point After the Decimal Point Systemic risk Behavioral models Economic scenarios Decision model Systematic risk Conditional risk Small, manageable risk Irrelevant risk
34. Actuarial leadership, Shift & Focus Models: Mathematical or Economic & Behavioral? Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 34 September 27, 2016 Adding Rabbits Math teacher asks six year old Johnny: "If you have 200 rabbits and you add another 100 rabbits, how many rabbits would you have?" Johnny…: "I think the answer is 337 Sir". Math teacher: "No, Johnny. That's the wrong answer. Try again. Johnny takes another five seconds: "Still probably 337 Sir" " "No Johnny, wrong again. You know nothing about mathematics!". Immediately Johnny answers: "And you know nothing about rabbits Sir"
35. Actuarial leadership, Shift & Focus Client or Self Centric Thinking & Communication Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 35 September 27, 2016 Client Centric  Simple Self Centric  Complex “If you can't explain it simply, you don't understand it well enough." - Albert Einstein Heliocentrism Geocentrism
36. Actuarial leadership, Shift & Focus Product development from a clients perspective Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 36 September 27, 2016 Expert view Client view Globalization, Expectations, Social dynamics, Learning, Apps, Games, Speed of change, etc.
37. Actuarial leadership, Shift & Focus Product development from a client’s perspective Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 37 September 27, 2016 If I had asked people what they wanted, they would have said faster horses You‘ve got to start with the customer experience and work backwards to the technology Steve Jobs Henry Ford
38. Actuarial leadership, Shift & Focus Challenge for actuaries: Networking Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 38 September 27, 2016 Company  Colleagues  CEO/CFO  Receptionist YOU Politics  Government departments  Project groups  Face to face  Cup of coffee Actuarial Space  Actuarial Association  Permanent Education  Research, Publications Regulators  Studies, Projects  Research  Cup of tea Science Space  Partnerships  IT, Communication  Accountants, econometrists  Informal invitations Social  Sports or Chess team  Volunteer work, Friends  Have a drink How much time do you spend on networking?
39. Actuarial work field, Holistic view Discounted space of probable outcomes Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 39 September 27, 2016 σ(E(x,t|e1 ,e2 ,..)),t,it ) ⨋( ∀x,t Discounting Integrating Risk Expected Outcome Event x Time t Events Scenarios Conditions Discount rate Big Data
40. Actuarial work field, Holistic view Focus from an actuarial leadership perspective Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 40 September 27, 2016 σ(E(x,t|e)),t,it ) ⨋( ∀x,t Where to focus? 1. Near future (t < 5, 10 years) 2. Conditions (Bayesian), assumptions, scenarios (e) 3. Strategy: ⨋ = ’Recipes’ optimization strategy Keynes: ‘It is better to be roughly right than precisely wrong.’
41. Actuarial work field, Holistic view Recipes instead of estimates. Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 41 September 27, 2016 Recipes approach examples • Flexible strategies that manage risk • Early warning indicators instead of trigger points • Self adapting profit sharing contracts • Solidarity algorithms based on groups, communities and big data, instead of guarantees • Etc., Etc.
42. Actuarial leadership, Future outlook Challenging beliefs and principles. Examples. Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 42 September 27, 2016 Technical • What’s the impact and meaning of negative interest rates • How risk free is the risk free rate? • How to deal with long-term uncertainty? Model • What are the confidence level and (time)limitations of my models? • Bubbles and Debt in my models? • What is the relevance and value of a model ‐ that excludes parameter, model risk and scenarios? ‐ that does not include economic and behavioral effects? ‐ that is only a prediction on basis of historical data? Advice & Decision Model • Predicting the future, or a long-term advice based on scenarios? • Do I clearly state and discuss the limitations of my advice? • Is my report/advice really ‘discussed’ or only ‘accepted’? • How does my advice fit in a board’s decision model? • Are all stakeholders interests and believes discussed in my advice? • Shouldn’t any advice have a section about the possible effects of premises? • What are my boards believes and how can I underpin or challenge them? • How near can we come to a ‘free of believe’ decision model? How do Black Swans start?
43. Actuarial leadership, Future outlook Building a new generation of actuaries Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 43 September 27, 2016 1951 2016 EMAS 1. State of the art! 2. Ahead?
44. Actuarial leadership, Future outlook Summary of actuarial leadership focus points Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 44 September 27, 2016 2016 1. Take more responsibility: Socially, Personally ‐ Widen the area of influence ‐ Grow and spend more time on personal and professional network ‐ Intensify cooperation with other disciplines 2. Strengthen ‘Soft Skills’ ‐ Communication skills, power to convince, master principles, self-reflection ‐ Empathy power: understanding social dynamics, stakeholders & clients 3. Innovation Build up new client-central products with new adequate regulation principles 4. Adjust professional methods and education ‐ Develop new ‘board decision models’ ‐ From ‘Believes’ to ‘What If, Given Conditions x|y|x’ ‐ From ‘Long term uncertain estimates’ to ‘Short term recipes’ ‐ Including systemic, parameter and model risk ‐ Anticipating on economic and behavioral effects and scenarios ‐ Based on early warning indicators instead of trigger points
45. Actuarial leadership, Future outlook Motivational wrap up! Self-Leadership Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 45 September 27, 2016 1. Make your own leadership plan Without vision and strategy every action or plan is pointless 2. Start networking, learn, generate ideas, evaluate every action 3. Find a boss, promotor and/or coach that makes you grow 4. Work from a stakeholder & client perspective 5. Key values: Responsibility, Respect & Ethics 6. Cooperate and learn from other disciplines 7. Manage the regulatory setting 8. Break with things that stop you 9. Define simple but disruptive goals My next report/advice will look like… 10. Use common sense, KISS, accept failure and success will follow
46. Actuarial leadership, Future outlook Shape your future! Actuarieel Podium ---- Presentation Jos Berkemeijer --- Leadershp & Actuaries 46 September 27, 2016