Actuaries Around the World: Malaysia

This month, ACTEX continues offering a series of interviews with actuaries from around the world  by interviewing Hassan Scott Odierno BSc, FSA from Malaysia.

Hassan Scott Odierno has been a partner with Actuarial Partners Consulting in Malaysia and involved in Takaful since 1996. His specialties are in life and Takaful consulting. He is the appointed actuary for both Takaful Operators as well as conventional insurers, extending from Malaysia to Mauritius and Kenya to Hong Kong. He has been involved in assisting companies set up Takaful operations from feasibility studies to product and model development and business projections in countries such as Malaysia, Indonesia, Saudi Arabia and Bahrain for both local companies as well as multinationals. He has also been involved in merger & acquisition exercises for insurers in countries such as Malaysia, Taiwan, Thailand, Singapore and Bahrain.

He is a co-author of the World Bank book Takaful and Mutual Insurance, co-author of the book Essential Guide to Takaful and a contributing author to the book Health Insurance in Asia and frequently writes articles and gives presentations on Takaful. He is also the external advisor to two universities in Malaysia to their risk management and actuarial science programs.

Hassan is a Fellow of the Society of Actuaries, and has a Bachelor of Science degree with high distinction in Mathematics from Worcester Polytechnic Institute in the USA.

ACTEX Learning (AL): How many practicing actuaries do you have?

Hassan Scott Odierno (HSO): We have six qualified actuaries with the firm. I am the only FSA, we have one FCAS and four British qualified actuaries. In the Actuarial Society of Malaysia as of December 2015:

Membership Breakdown by Class
Fellow - 148
Associate - 43
Ordinary - 572
Student - 35
Total - 798

Membership Breakdown by Professional Body
Society of Actuaries - 433
Institute and Faculty of Actuaries - 220
Institute of Actuaries of Australia - 51
Casualty Actuarial Society - 54
Others - 40
Total - 798

Some of the Fellow members are currently working outside Malaysia but this gives an idea of the size of the industry.

AL: What is the word for actuary in your local language?
HSO: Aktuari

AL: When was actuarial science first introduced?
HSO: The first several batches of actuaries to qualify in Malaysia was in the mid 1980's, when our office head Zainal Kassim qualified. Before that an actuary with a reinsurer would do the yearly valuation work for the various insurance companies.

AL: What is your favorite part about being an actuary?
HSO: The lifelong learning definitely. Being an actuary in the developing world we get to see a wide range of situations and problems to solve. The current challenge is the implementation of risk based capital (RBC) in many of our markets, particularly how Takaful (Islamic) insurance should implement RBC as the risk profile can be quite different between Takaful and traditional insurance. The exciting part is to take RBC from being a compliance exercise to being used in product pricing, risk management and capital management. Another good thing about being an actuary is to see the positive energy of the actuarial students. I have been fortunate to speak on actuarial science to actuarial science majors in several universities in Malaysia as well as in Kenya and Tanzania and to spend time with actuarial science fresh graduates in countries such as Sri Lanka and Brunei. Unlike the more developed world these students and graduates are entering a market where they need to prove their worth as an actuary as actuaries are not as of yet fully understood or even well known within insurance companies.

AL: Can you share an interesting anecdote from your travels as an actuary?
HSO: I have had the pleasure of so many interesting projects and interactions through our consulting work, such as spending a few weeks in Tanzania helping them develop Takaful insurance regulations, speaking in Lome (Togo) and meeting so many excited and passionate young actuaries around Africa and speaking on the benefits of microtakaful, a subject I am passionate about, at major microinsurance conferences in Africa.

AL: What are some of the main challenges and projects for actuaries over the next 5-10 years?
HSO: In many developing markets in order to develop stability the premium rates for motor insurance is set by regulation (tariff). As the market grows and the insurance companies develop its expertise and data the rates would be allowed to vary based on market forces (detarif). The detarif process for motor insurance in Malaysia will be a main challenge for actuaries here in the short to medium future, as well as developing new markets for Takaful and especially microtakaful to increase insurance penetration.

AL: Who are the main employers of actuaries?
HSO: The main employers of actuaries continue to be insurance companies.

AL: Do the schools in your country have actuarial majors, minors, concentrations or do students study on their own or overseas?
HSO: In Malaysia the actuaries have traditionally been US or UK educated with some Australian and Canadian graduates. Local universities do offer actuarial science though, and have been turning out a large number of actuarial graduates lately.

AL: What is the credentialing procedure like for an actuary in your country?
HSO: To be accepted as an appointed actuary in Malaysia the actuary needs to be qualified from one of the major bodies such as SOA and IFoA.

AL: Do employers support the cost and time of exam preparation?
HSO: Traditional employers of actuaries do, but actuarial graduates working in non-traditional employers such as banks and in risk management departments would not generally be supported very well.

AL: Are there any noteworthy non-traditional actuarial positions?
HSO: Actuarial graduates tend to fare well in risk management departments and banks here as the actuarial degree is well respected.

AL: What is the reputation of actuaries in your country?
HSO: Actuaries are well regarded here, though certainly not as well-known as in the US and UK.

AL: Your company works with many other countries outside of Malaysia, what are the similarities and differences you have seen in the profession during your travels?
HSO: We find a whole spectrum of development in the countries we work in. For instance in Kenya for a long time there were only a small number of qualified actuaries but now each year there are new qualified actuaries. In countries such as Sri Lanka the need for actuaries far exceeds the supply currently whereas in Mauritius actuaries are not as of yet valued to the extent of some other countries. One unifying characteristic is that RBC is coming worldwide and this will require a much larger number of actuaries than currently exists and a larger job scope as well. Whereas traditionally actuaries performed net premium valuations with assumptions set via regulations and pricing using a load up of reinsurance rates, now the actuary needs to perform detailed experience studies (which is not easy with the lack of data in many jurisdictions) and complex calculations for reserves on a gross premium valuation basis and solvency margins. Pricing is now much more complex as well, as we need to ensure the effect of a product on the capital position of the insurer is well understood.

AL: Is there anything else you would like to add?
HSO: Our firm has strong ties with ACTEX. We have contributed to a chapter in the book, Actuaries in Microinsurance and we are developing an e-course in Takaful in collaboration with ACTEX, and we are also working together to distribute exam preparation videos.