While we cannot foretell what the future has in store for us, the best we can do is to mitigate the financial risks associated with such events !
Bhavna Verma, our next pathbreaker, Appointed Actuary at IndiaFirst Life Insurance, is responsible for overseeing all aspects of the actuarial function including regulatory reporting, as well as financial and insurance risk management.
Bhavna talks to Shyam Krishnamurthy from The Interview Portal about the significance of life insurance in a rare event such as Covid when many families received significant financial relief from life insurance companies.
For students, the foundation of the actuarial discipline is mathematics and statistics, so keen interest in these areas is necessary because they are the progressive building blocks to solve complex real-world problems
Bhavna, can you explain your background to our young readers?
Born and brought up in New Delhi, I completed my school and college education in the capital city of India. Growing up in a middle-class family of working parents, my primary focus was always on excelling in Academics whilst being moderately active in extracurricular activities of public speaking and dancing. As a subject, Mathematics and numbers always had a special place in my heart and a special mention in my performance reports in school. This led me towards opting for the Commerce stream in Classes 11th and 12th.
What did you do for graduation/post graduation?
I completed BA (Hons) Mathematics from St Stephen’s College, Delhi University. My keen interest in Mathematics and Commerce prompted me to pursue some additional certifications in Mathematical Finance and Applied Statistics whilst in college, which also landed me a summer internship at ICICI Bank, Mumbai which was the first corporate experience for me.
What were some of the key influences that led you to such an offbeat, unconventional, and uncommon career as Actuary?
As I was finishing my graduation and almost everyone around me was preparing to crack the CAT and land in a premier B-school, I was looking for a core qualification to establish my subject matter expertise for a long-term career.
It was exactly at this time that I happened to meet someone who worked at the Life Insurance Corporation of India, the largest life insurer in India. Not an actuary herself, she spoke very highly of the barely known actuarial profession at the time as a niche area of work, a well-regarded and well-paying job and could be very well suited to someone of my academic background.
I got interested, did my independent research and concluded that the course was worth a shot, being a beautiful amalgamation of all the subjects I fancy such as applied mathematics / statistics, economics, business, financial mathematics and accounting.
How did you plan the steps to get into the career you wanted? Tell us about your career path
Once I made up my mind on attempting the actuarial examinations, I prepared wholeheartedly for the first sitting and tasted early success. The actuarial program usually works on a learn and earn model, so I started looking for jobs at that point and landed a full-time role in actuarial consulting in the health insurance domain. A year later, I transitioned to life insurance actuarial consulting as this was a more sophisticated area of actuarial work. The first half of my career was therefore spent in renowned multinational actuarial consulting firms which provided a strong study support system in the workplace, rigorous on the job training, exposure to projects spread across various geographies including the Indian life insurance market and a wide network of actuaries worldwide. I also kept getting through the rest of my actuarial examinations steadily in this period and qualified as a Fellow of the Institute of Actuaries of India and the Institute and Faculty of Actuaries, UK in the year 2013/14. I also transitioned to becoming a mother in the year 2013, so the personal and professional milestones nearly coincided.
Soon after Fellowship and many years of acquiring expertise and providing actuarial advice, I wanted to experience working in a business which led me to move with my young family to Mumbai to join Kotak Life Insurance, the life insurance arm of the prestigious Kotak Group. The next 6.5 years were insightful for me working in a rapidly expanding business as Head of Actuarial Reporting (second in line to the Appointed Actuary) and subsequently, Head of Enterprise Risk Management (second in line to the Chief Risk Officer), where I was able to add value through my technical experience, process expertise and strong communication skills developed over my years in consulting.
As Covid passed through and our family expanded further, I happened to be offered a role as Appointed Actuary at a smaller but again rapidly expanding life insurance company. I leaped at the offer knowing it will be the logical culmination to my carefully designed career, being the highest position in the actuarial department in a life insurance company. The Management Committee role is challenging, exciting and action packed where I lead a team of 35 actuaries and aspiring actuaries and play a central role in company strategy.
How did you get your first break?
The first job came through with a completely independent search of available entry level actuarial roles which were limited at the time, online applications and interview process.
What were some of the challenges you faced? How did you address them?
The biggest challenge to conquer in the actuarial profession is the constant need to balance work, life and study. To do well in a demanding work environment as well as progress with examinations requires a tough mindset and tight discipline. The occasional exam setbacks were sometimes hard to get over and required a very strong drive to finish what I started. The rewards, of course, acted as the motivator and ultimately outweighed the grind.
Where do you work now? What problems do you solve?
I work for a life insurance company in Mumbai now. Presently, I am serving as Appointed Actuary at IndiaFirst Life Insurance. This is a position with dual responsibility to the regulator and to the Board. The actuarial function led by me is responsible for product development and pricing, valuation and other financial reporting, financial and insurance risk management. Therefore, the department is instrumental in driving the financial engine of the Company.
To give you an example, life insurance products are long tailed products, with premiums fixed at outset. Pricing of life insurance contracts is done using sophisticated statistical techniques and probabilistic modelling; skills learnt and acquired in actuarial studies and work. Several assumptions about claims expected in the future, policyholder behaviour, economic outlook and target profitability are needed to make projections several years into the future. Thereafter, it is also important to provision for policyholder commitments and continuously monitor emerging experience and take appropriate action.
What skills are needed for your role? How did you acquire the skills?
The foundation of the actuarial discipline is mathematics and statistics, so keen interest in these areas is necessary. The actuarial examinations are well designed to give you progressive building blocks to solve complex real-world problems; I highly recommend self-study and starting full-time work as early as possible. Rigor and self-checks in your work, being an independent worker, taking an active interest in problem solving are other skills that are time savers and efficiency boosters that will drive your growth in the workplace.
Actuarial science is a principle-based science, not a prescriptive science. Therefore, it is very helpful to stay abreast of developments in your industry, financial markets, actuarial markets worldwide to be able to make sound judgements.
Considering the technical nature of the work, one skill that I advocate and can take you a long way is the ability to communicate technical concepts and their relevant applications effectively to a non-technical audience.
At this stage in my career, a typical day is about multi-tasking and juggling between reviewing core work with the team and fulfilling responsibilities on various Company wide initiatives as part of senior management.
What do you love about your job?
What I love most about my work is that there hasn’t been a day when I have stopped learning. Also, being at the heart of insurance, there are various opportunities to extend actuarial insights to other functions such as risk management, underwriting, product development among others, hence the opportunities to contribute are endless.
How does your work benefit society?
They say actuaries make financial sense of the future. Therefore, the actuarial community plays the most critical role in designing financial products that entail long term estimates of risk and uncertainty. The key areas of work for actuaries are life insurance, general and health insurance, pensions, banking and risk management. There are other emerging areas where actuaries are increasingly participating such as data science and data analytics.
I am a life insurance specialist. Life insurance is a critical tool for risk management and financial planning for the future which provides financial relief and assistance when most needed. The importance of life insurance came to the fore in a rare event such as Covid when many families received significant financial relief from life insurance companies.
Hence, every day I work with the underlying motivation that I work in a noble business, by creating products that create certainties for people ,and ensuring policyholder commitments are well protected.
Tell us an example of a specific memorable work you did that is very close to you!
I joined my current organization knowing that the Company intends to go public. While the listing is awaited, the entire experience of filing the necessary paperwork and liaising with various stakeholders in the process was excellent learning.
In my previous role as well, I led some critical implementations of emerging financial metrics specific to life insurance financial reporting and risk management. The process of creating new frameworks bottom up and thereafter embedding these within the larger ecosystem of the organization was challenging and memorable.
Your advice to students based on your experience?
Making a career choice is an important decision that you will live with for a large part of your life. My biggest learning from my personal journey has been to find something aligned with your individual interests and individual priorities, and not just follow the path usually travelled. In fact, I feel that taking the path less travelled has made all the difference for me.
Once you have made up your mind, put in your best effort, stay consistent and make optimal use of the challenges and opportunities that come your way. In every profession, there will be periods of change and stability; in today’s world, I believe learning is a lifelong process in every area of work. Maintaining good relationships with seniors helps who will give you the right guidance at the right time.
Future Plans?
I have fortunately had a well-rounded career spread across geographies and across consulting and industry, considered as the two key facets of the actuarial profession in India today.
The insurance industry in India is going through some very fundamental changes right now and actuaries will continue to have their hands full for the next several years. Therefore, I look forward to building my experience and profile as a senior actuary and industry leader through wider contributions over the next several years.