Virtual Program 

Summit Open - David Whittle

David Whittle to open the 2024 All Actuaries Summit

Plenary

Opening Keynote: Ann Sherry AO

Ann is one of Australia's leading business executives with a career that spans Government, Banking and Cruise Tourism. She is an active philanthropist with a passion for improving opportunities and removing barriers for women in STEM and sport, and supporting opportunities for Indigenous Australians.

Ann is the Chair of UNICEF Australia, Enero Group, the Port of Townsville and Queensland Airports Limited. She is the Chancellor of Queensland University of Technology, a Non-executive Director of National Australia Bank and a Member of Sydney Harbour Federation Trust.

Beginning her working life as a Radiographer, Ann became First Assistant Secretary of the Office of the Status of Women in Canberra before moving to the banking sector initially in HR roles, then in CEO roles with Westpac NZ, the Bank of Melbourne and most recently with Carnival Australia.

The Australian Government awarded Ann the Centenary Medal in 2001 and in 2004 she was awarded an Order of Australia. In 2015 Ann was named as the overall winner of the Australian Financial Review 100 Women of Influence Award.

Plenary session.

Plenary 1: Life and Income Insurance - the protection in danger of being left behind?

Naomi Edwards (chair), Suzanne Smith, Brett Clark and Phil Fraser

All actuaries understand the power of life, disability and TPD insurance. But for many Australians, these products are increasingly out of reach, whether due to costs, recent changes in super, complexity or lack of understanding about the product. This high powered panel, including the head of APRA’s life insurance division, the leader of Australia’s largest life insurance company and the CEO of Australia’s only life insurer owned by a super fund, will discuss where life insurance is heading and their ideas to make it more accessible and sustainable.

Sustainability Challenges Within Critical Illness (CI) Insurance due to Medical Advances and a Principle Based Response

Presenters Jayesh Bhana (chair), Matthew Paul and Brad Louis

The life industry has been facing sustainability challenges, with recent focus on correcting sustainability of retail disability income insurance (DII).

Critical illness insurance faces all of the issues that compromised DII product design and more. Critical Illness is the most complex insurance product with a vast array of medical definitions – making it particularly sensitive the definitions being able to withstand changes in medicine.

Changes in medicine have already seen changes to customers needs for trauma insurance, and a general drift away from its intended purpose is evident. The speed of medical change means that, without appropriate consideration and planning, the divergence of the trauma products from member needs will accelerate . Without change, the current product not align to societies needs.

While medical advancements create significant challenge, the good news is that medical advances have created opportunities too and challenges for insurers and their customers.

Our session will provide local and international insights and examples to support the case that there is a sustainability challenge in CI, how medical advances challenge sustainability in critical illness, provide a set of principles to assess and manage risk associated with CI product design in the face of medical advances, and will ask and answer “Is it possible to design critical illness to protect against the challenges resulting from medical advancements?”.

Concurrent session.

Finance Transformation for Insurers

Presenters Alfie Qiang, Roger Chan, Michael Wong and Victoria Xie

As regulatory and financial reporting requirements become more intricate, an increasing number of insurance companies, recognise that the key to tackling these challenges lies in embracing process automation, including controls and governance. In our session, we will present our perspective on the primary drivers of transformation and the associated challenges within the insurance industry. We will then delve into some of the insights derived from a recent market survey on automation in insurance processes in the Asia Pacific region. We will also discuss considerations for designing a successful insurance transformation program, reflecting on key lessons learned and emphasising the importance of adopting a comprehensive technology, people, and process framework. Lastly, we will share a real-life example of a financial transformation in the reporting process, offering attendees a better understanding of potential solutions to challenges and effective strategies for the financial transformation. We hope to provide insights into the primary challenges encountered by insurers post IFRS17 and the key components that lead to an optimal outcome in a successful financial transformation.

Concurrent session.

Epigenetics: The hidden key to understanding health and insurance risk?

Presenters Christelle Oosthuizen and Poonam Vala

Epigenetics refers to changes in gene expression that occur without altering the primary DNA sequence. Genetics is the study of heredity and collectively our genes are made up of DNA which is in turn made up of molecules A, G, C and T, and it is the specific arrangement of these molecules that are interpreted as genes. The word epigenetics comes from the Greek word epi, meaning above and gene, to literally mean anything on top of or above the level of a gene. The biological purpose of epigenetics is to control gene expression, in other words to turn genes on or off. Whereas our DNA or genetics are static, in other words, they do not change throughout the course of our life, our epigenetics will change.

By obtaining epigenetic information from a non-invasive saliva sample, an insurer can:
- attain information about an insured’s current health and wellness statuses
- resulting from their environment and behaviour (for example diet, exercise, alcohol, and drug use),
- while steering clear of the perceived unfairness of unchangeable genetic information.
It can also contribute to accurate risk classification, an alignment of interests between insureds and insurers while upholding the essential regulatory norms of information symmetry and transparency.

In this presentation spanning life and healthcare practice areas, we explore the ethical, legal, and social implications for life insurers and healthcare funders when using epigenetics: to enhance the accuracy of underwriting, pricing, and managing insurance risk; or o for targeted managed care interventions (to name a few uses).

Practical outcomes for the audience include an understanding of:
– What epigenetics is, how it differs from genetics, and why the distinction between genetics and epigenetics is important.
– What your epigenetic clock refers to, how it is determined and how it can be used by insurers. – How epigenetics affects your health outcomes, i.e., to what extent your health can be affected by environmental and behavioural factors.
– How your epigenetics can be tested, the accuracy and costs of epigenetics tests, and how the possible benefits for insurers compare to the additional costs of using epigenetics.
– Possible applications for life insurers and healthcare funders, how the applications differ between them, and risks involved.
– Case studies of insurers that have tried to or are currently using epigenetics, which demonstrate the practical uses of epigenetics in the life and healthcare industry.

Concurrent session.

Plenary 2: Knowing your Risk can Change your Future: the fight against hereditary disease

Presenters Sophie Scott OAM (chair), Krystal Barter, Jessica Chen and Prof David Thomas

How can actuaries help families take control of their hereditary risk of disease? Where are the next great scientific, medical, and technological advances coming from in the field of genetics? What do these developments mean for industries like insurance and superannuation, and for actuaries working in the health sector? This session will be chaired by award-winning journalist and former National Medical Reporter for the ABC, Sophie Scott. Speakers are Professor David Thomas, CEO of Omico: the Australian Genomic Cancer Medicine Centre and inaugural Director of the Centre for Molecular Oncology at UNSW, Krystal Barter, founder of Humanise Health and a passionate genomics advocate, and actuary Jessica Chen, as they deep dive into innovations in genetics and bio-tech and analyse the impact on our work as actuaries, key industries and businesses, and the rest of society.

Plenary session.

Is Individual TPD Fit for Future?

Presenters Nicole Marshall (chair), Matt Noyce and Mark McClenehan

In 2013-14, the Australian life insurance and reinsurance market was plunged in darkness, enduring some of the largest financial losses of the last two decades due to poor claims experience for group TPD products. Ten years on, we ask whether something similar is happening for individual TPD today, or are we jumping at shadows? Is experience really worse than expected, and if so, why? Will TPD become the next IDII? We examine the evidence and consider the various villains that may lurk in the shadows. Between mental ill-health, anti-selection, the link between disability and TPD claims, large sums insured, economic influences and longer notification delays, there is no shortage of possible pitfalls for actuaries to consider. But before locking up individual TPD with group TPD and individual DI, shouldn’t we consider all the evidence? Surely every insurance product has the right to a fair trial? What lies ahead for Individual TPD - a bright future or a cold winter?

Concurrent session.

 

Plenary 3: Investment Markets below the Surface?

Presenters Douglas Isles (chair), Sam Killmier and Suzie Riddell

In this session, investment actuary Douglas Isles takes us beyond daily market moves to explore investing through the thematic lens of the Summit. We think big by exploring the benefits of scale, with a very large asset owner who talks to outcome advantages, with a view to considering how smaller organsiations can still harness some of their thinking. We look at living better via a journey of positive stewardship impacts, and reconciles the debate between being a good custodian of capital and achieving good returns.

Plenary session.

Keynote: Sophie Scott OAM — Harnessing Neuroscience for peak performance

Plenary session.

Protecting the Public Interest in Insurance Pricing

Presenters Kirsten Flynn and Martin Mulcare (chairs), Colin Priest and Dale Jackson

Recent regulatory interventions in insurance pricing have highlighted issues in established practices, which have not met customer and community expectations. Regulators in Australia and overseas have introduced stricter requirements for insurers to safeguard consumers’ interests such as the introduction of product design and distribution obligations in Australia and consumer duty obligations in the UK. Further, the regulators conducted reviews into insurers’ pricing practices that uncovered several shortcomings in how insurers met their pricing obligations towards customers. In this context, and with the rapid advancement of technology and data capabilities, what are the responsibilities of insurance professionals, including actuaries, to protect the public interest in insurance pricing? This question was explored by a working group of actuaries. In this session, we will discuss principles for consideration and to inform a pricing process, discuss responsibilities of insurance professionals and share some reference material which may be helpful to professionals working in insurance pricing.

Concurrent session.

Actuary vs Apple

Presenters Matt Noyce, Chenthuran Suthersan and Bob Rick Looi

The health and fitness space has benefited from tremendous growth in smart devices, tracking technology and the production of insights to help people to monitor their health and meet their fitness goals. But what happens when a data science actuary opens up one of these devices? What treasures of data lie within an Apple Watch, for example, and can this data be usefully combined with other data sources? As we enter a world of AI-powered wellness, we ask what analysis is possible? For example, we explore how weight management, sleep quality and fitness goals can benefit from: • combining data from wearables with data from other fitness, nutrition and health apps • finding correlations of behaviour with health benefits • comparing the health and fitness journeys of different individuals We consider how actuaries and data scientists can help to gamify behaviour and create accountability so that people can generate positive health, lifestyle and fitness outcomes. We also tackle some of the more ‘human’ questions, such as: • What does my device know about me?! • I don’t track my health data – should I have FOMO?! Using some volunteer actuaries as guinea pigs, we show how actuaries and data scientists can use their analytical skills to gain insights into their health that others cannot

Concurrent session.

Why You Should Not Trust Interpretations in Machine Learning

Presenters Kirsty Hogan (chair), Dr Fei Huang, Xi Xin and Giles Hooker

The adoption of artificial intelligence (AI) across industries, including insurance, has led to the widespread use of complex black-box models such as gradient-boosting machines and neural networks. Although these models offer enhanced efficiency and accuracy, their lack of transparency has raised concerns among regulators and consumers. To address this, interpretation methods from the growing field of interpretable machine learning have gained attention for understanding relationships between model inputs and outputs. However, while stakeholders may possess a certain level of understanding regarding the limitations of these explanations, there is often a lack of awareness regarding the inherent vulnerability of these methods.

This presentation uses an adversarial framework to uncover the vulnerability of permutation-based interpretation methods for machine learning tasks, with a particular focus on partial dependence (PD) plots. This adversarial framework modifies the original black box model to manipulate model predictions for instances in the extrapolation domain, which produces deceived PD plots that can hide discriminatory behaviors while maintaining the prediction accuracy of the original model. This framework can produce multiple fooled PD plots via a single model. By using real-world datasets including an auto insurance claims dataset and COMPAS dataset, our results show that it is possible to intentionally hide the discriminatory behaviour of a predictor and make the black-box model appear neutral through interpretation tools like PD plots while retaining almost all the predictions of the original black-box model.

Drawing on the findings, this presentation will offer suggestions and insights for utilising machine learning models in business decision-making. This includes strategies to mitigate adversarial attacks on Partial Dependence (PD) plots (and other permutation-based methods) and responsible practices for using machine learning interpretation tools.

Concurrent session.

Plenary 4: Digitisation and Your Consumer

Presenters Elayne Grace (chair), Iwan Juwono, Frankie Chan and Lisa Green

Digitisation can be more than enhancing processes and cutting costs. It’s about creating new way to understand and reach your customer, reshaping business models and upending traditional views of the customers experience. In this session actuary Iwan Juwono, Head of Insurances at Grab Insure Business and Frankie Chan, Head of Programme Value Optimisation, Air & Insurance, Cathay Pacific Airways explore how data science and AI is transforming their businesses.

Plenary 5: Fact Meets Fiction: emerging risks unlike you've ever heard

Presenters Vanessa Beenders (chair), John M Green, Win-Li Toh and Prof Alan Duffy

Hear from leading Australian author of thrillers and Non-Executive Director John M Green on the questions you should ask and how you can craft your scenario narratives to better engage management and boards in the risk discussions every organisation needs to have. Joining him in this session is cyber risk expert (and Institute Senior Vice President), Win-Li Toh.

Plenary 6: Safer Homes and Affordable Insurance

Presenters Sharanjit Paddam (chair), Major-General (retired) Jake Ellwood, Sasha Courville, Andrew Hall and Matt Collins

How can Australia create a much-needed housing stock that can be protected now and into the future, using affordable and relevant insurance? Actuary of the Year, Sharanjit Paddam, brings together diverse perspectives to find major solutions for improved living. We'll hear from Andrew Hall, CEO of the Insurance Council; Major-General (Retired) Jake Ellwood, CEO of the Queensland Reconstruction Authority; Sasha Courville, Chief Impact Officer Bank Australia; and Matt Collins, CEO of the Planning Institute.

AI in insurance and insuring AI: Navigating regulations, risks and opportunities

Presenters Jonathan Cohen and Kushal Mithal

Artificial Intelligence is having a significant impact on the insurance industry, with rapid development and investment across the value chain. While AI presents opportunities for efficiency and improved service, it also brings new risks and regulatory challenges. We will explore three perspectives on the emerging relation between AI and insurance, with a focus on how regulatory and legislative changes are likely to impact insurers’ own use of AI, change the risk landscape for existing lines and introduce opportunities for new product innovations. We’ll cover:

1. Impacts of emerging regulations and standards on insurance applications: We'll explore the rapidly expanding legislative, regulatory and standards environment. Examples include specific AI legislation in the EU and US, emerging regulations in Australia and updates to existing legislation to explicitly capture algorithmic and AI risks, such as the proposed changes to the Privacy Act 1988 (CMW). Complementing the regulatory development are standards and guidelines on appropriate application and governance of AI, including the ISO 42 group of standards that seek to provide a rigorous framework for system validation and audit, akin to existing standards around Cyber risk.
2. AI-induced risks on existing insurance lines: Here we’ll address the ripple effects of AI on established lines. Examples include the potential for breach of duty claims impacting Directors and Officers insurance, complex changes to liability risk for organisations that include AI in their products and increased risks of privacy and data breaches impacting risk exposures for cyber cover. We'll discuss relevant international developments and examples, including the EU's ambitious Artificial Intelligence Liability Directive, which seeks to update the EU liability framework to make it easier for individuals to bring claims for harms caused by AI.
3. Insurance solutions for emerging AI risks: In this section, we'll cover the potential for insurance products that cover new and emerging AI risks, including existing emerging examples. This includes nascent product-warranty like cover, and cover for consequential losses arising from underperformance of AI models. We'll discuss potential for cover against insurability criteria, and some of the associated likely product, underwriting and claims challenges.

Concurrent sessions.

Data Science Actuaries Shaping the Future

Presenter Amanda Aitken

In an era where data reigns supreme, data science actuaries aren't just crunching numbers—they're shaping futures!

Data Science Applications, as an actuarial Fellowship subject and microcredential, delves deep into modern data science techniques. The subject offers actuaries powerful tools to analyse, predict, and pioneer in this age of information. But how have these tools been implemented in the trenches of traditional actuarial work? By engaging with a panel of former students, this session will unpack the tangible benefits that data science brings to the actuarial table.

Concurrent session.

Australian Private Health Insurance: 20 years from now

Presenters Aliza Yau (chair), Luke Cassar and Nirosana Maheswaran

Over the past 20 years, the ageing population has seen an increase in the use of healthcare services. At the same time, costs per service have increased. These factors have driven private health insurers to increase premiums at a faster rate than wage inflation. At face value, this suggests that the affordability of private health insurance has declined over that time and has become less attractive to healthier people who are less likely to benefit from private health insurance. As healthy people lapse their cover, average benefit costs increase leading to higher premiums again, further conflating affordability issues leaving the private health insurance industry in an unsustainable position. While the COVID-19 pandemic saw an increase in participation amongst the young as well as low benefit inflation, these impacts are unlikely to be permanent. This paper seeks to explore what the Australian Private Health Insurance industry might look like under the status quo in another 20 years, and seeks to answer the following: • How will the ageing population continue to affect benefit levels? • How will affordability pressures impact participation, and in turn, insurance premiums? • What impact will Government incentives like the Medicare Levy Surcharge and the Private Health Insurance Rebate have? • Are certain private health insurers likely to fare better over the next 20 years than others? In exploring these issues, the paper aims to provide private health insurers with an understanding of the key risks to the long-term sustainability of their funds and actions that managers can implement in the short-tomedium term to improve sustainability.

Concurrent session.

Australian General Insurers Navigating Through Pricing Practices Reviews

Presenters Welly Han and Sathish Kanniappan

Pricing promises are representations made by insurers to help customers save money when purchasing insurance policies, provided they meet certain eligibility requirements. Over the past few years, developments have prompted general insurers across Australia to undergo reform and transformation due to failures in delivering pricing promises. This was largely initiated by ASIC, which required several insurers across Australia to conduct a review of their pricing practices. This primarily involves identifying instances where pricing promises were not fully delivered, addressing the root causes, and compensating affected customers. We will explore together: • How these pricing promise developments initially began • The launch of the ASIC pricing promises review • The current state of the industry from a pricing promises perspective • Strategies for enhancing pricing practices in the future

Concurrent session.

Plenary 7: There When Needed - the promise of General Insurance

Presenters David Whittle (chair), Shez Ford and Helen Rowell

Actuaries Institute President David Whittle leads a discussion on the consumer promise of General Insurance. Is the process, payout and the ‘human experience’ of making a claim lining up with the promise made to consumers? Joined by Shez Ford, EGM Consumer at Allianz Australia, and Helen Rowell, David will ask – is it time to rewrite the promise? And what should the new promise look like?

Summit Close - David Whittle

President David Whittle to close the 2024 All Actuaries Summit.