By Michel St-Germain, FCIA, CIA President
Just can’t wait to get on the road again.– Willie Nelson
Don’t worry. I have zero intention of becoming a country singer, but like Willie Nelson, I hit the road for a Canadian tour, taking me from Halifax to Vancouver and all stops in between, including Quebec City, Toronto, Waterloo, Winnipeg, and Calgary. This was a virtual tour, of course, taken from the comfort of my home.
The mission of the Canadian Institute of Actuaries (CIA) is to serve its members. And it is in that spirit that the annual tour of actuarial clubs took place. Accompanied by Staff Actuary Chris Fievoli and President-Elect Jacqueline Friedland, I had the chance to exchange ideas with members from across the country and answer their questions. This is a great way to discover member concerns and learn what the CIA can do to promote the actuarial profession.
Actuarial clubs also offer actuaries opportunities to meet up and network. Today I see their role as being even more important, since they provide what we’ve been lacking during this pandemic: human contact. Indeed, I encourage you to join your local actuarial club.
Thanks to these visits, I was able to meet the young leaders of these actuarial clubs. The growth of our profession is driven by these young actuaries, whose technical wizardry comes in quite handy during these virtual meetings, allowing for a good connection despite the distance. We’ve compiled a list of the questions raised during the discussions, and I’d like to share a few with you. I’ll keep my answers short here, but rest assured that these issues are being addressed by several of our committees and task forces.
How is the pandemic affecting the CIA?
At Head Office we remain active and have continued serving our members. Some of our events have gone virtual, including the annual conference (which was staggered over two weeks in November). We’re learning how to take full advantage of conferencing technology and hope to offer members the chance to exchange ideas with one another during this crucial period. From the standpoint of the profession, CIA actuaries are helping maintain the activities of insurers, consulting firms, and regulatory bodies.
How can we promote diversity among our members?
We fully embrace the many benefits that diversity brings us and believe that no one should have to overcome obstacles to realize their full potential. According to the survey of our members, certain groups are underrepresented within our profession and team of volunteers. To remedy this, the Board recently discussed measures that will be put in place in the coming months.
What are the repercussions of the new accounting standards on insurers?
In 2023, Canadian insurers will join the rest of the world in applying these new standards in financial statements. Several sessions were held with members during our virtual Annual General Meeting this past fall. The Actuarial Standards Board and numerous groups within the CIA are preparing documentation to support our actuaries during this transition. We have also met with regulatory agencies such as the Office of the Superintendent of Financial Institutions and Autorité des marchés financiers to ensure that there is a common understanding of how IFRS 17 is being implemented. Actuaries must redefine their role when choosing actuarial assumptions now that these assumptions must adhere to the accounting standards. I’m convinced that we will have a voice in the decisions made by insurers to adapt to these new rules.
Why does the CIA publish public statements?
In addition to responding to the many requests from regulatory bodies, the CIA publishes position statements on subjects of interest in order to advise policy-makers. For example, we have taken positions on improvements to the Canada Pension Plan and Quebec Pension Plan, retirement age, and the importance of disclosing the risks of a changing climate. In recent months we’ve been preparing a public statement on pharmacare. Much care goes into preparing these statements. They reflect the opinions of a wide cross-section of our actuaries who believe that we can contribute to the public discourse. We also believe that these public statements enhance the image of our actuaries.
What should we do to adapt to the new data use techniques and forecasting models?
Insurers now have far greater access to precise data in choosing and assessing transferred risks. New models are in use and techniques are constantly being refined to deliver accurate forecasts. Clearly, actuaries’ roles in this process need to be better defined. The Institute hopes to provide actuaries with training in this area so they can participate in these changes.
Why should actuaries analyze the risks of climate change?
The impact of climate change is troubling. As mentioned above, the CIA released a public statement in September 2019 on disclosing the risks of a changing climate. The regulatory agencies governing insurers in Canada (and elsewhere in the world) have announced that financial statements filed by financial institutions must now disclose these risks. What’s more, Canada’s eight largest pension funds recently called on the companies they invest in to disclose environmental, social, and governance risks, and most other funds are expected to follow suit. The recognized importance of these risks could influence investment choices. Actuaries have the expertise to help assess these risks and gauge their repercussions. In fact, the International Actuarial Association has developed a methodology for preparing climate change scenarios.
What led you to want to become president of the CIA?
I have always gained valuable experience from my various volunteer roles at the CIA and in other organizations. I am convinced that my volunteer work has made me a better actuary. Recently I hung up my pension plan consulting skates, but I still want to contribute to society and give back to my profession. Over the past few months, my role as president has given me the chance to exchange ideas with actuaries from other areas of practice and learn about the stimulating challenges facing them. I enjoyed the virtual tour of actuarial clubs and the opportunity to chat with actuaries from across the country. I can confirm that we share a common vision, which is to use our mathematics skills to contribute to improved risk management in the financial sector. In 2021 I hope to be on the (actual) road again and to have the pleasure of meeting Canada’s actuaries in person.
This article reflects the opinion of the author and does not represent an official statement of the CIA.