Simon Dai - Partner, Deloitte Hong Kong

Simon Dai - Partner, Deloitte Hong Kong

How long have you worked as an actuary?

I’ve been working as an actuary for 21 years.

Which markets have you worked in as an actuary?

My main focus is the Hong Kong market, including domestic companies and foreign companies that are registered and operating in and out of Hong Kong. I also have a broader team that works in the greater Chinese markets. 

If you could have one superpower, what would it be?

 I would like to know everything, including the future. 

What do you see as key characteristics of innovative actuaries?

People who are curious, open minded, and not afraid to break things.

Actuaries come from a very educational background, and they progress through all these exams and systems that don’t encourage learning by trial and error. It makes them nervous to experience what they perceive as ‘failing.’ Breaking something doesn’t mean failing, but some people will see it this way. 

What factors do you believe influence the impact actuaries can have within their organizations? 

I think executive messaging is the most important attribute an actuary can have in order to be more influential. It’s also a skill I think many actuaries lack.

I’ve been in this field for a long time, and in my experience actuaries struggle to communicate a business message to a group of executives in a way that gets to the ‘so what’ of what they’ve done. Being able to connect the strong analytical skills and results with business decisions would make actuaries more influential.

What are some key ways you see the actuarial profession evolving in the next few years?

I think there are three things.

  1. The first is embracing data science and the possibilities coming from those techniques. Fields like machine learning and AI should also be embraced, and I think many professional actuarial bodies are beginning to introduce these into their CPD systems.

    In my experience, I’ve found that just because actuaries have statistical training doesn’t mean they know a lot about statistics. Data scientists, they really understand statistical science and the technology associated with data and statistics.

    I think the actuarial profession needs to really embrace this new world that opens up when you use data effectively. 
  2. Process improvements absolutely must happen because many actuaries are still engaged with unnecessarily manual processes, like pricing or reporting. Meanwhile, the world is becoming more complex with changes like IFRS 17 and risk-based capital regime changes, which introduce a different quantum of computations that people must do.

    If we stick to the manual processes, actuaries don’t use their skills where they should. So I can see this being a massive change in the years to come.
  3. Actuaries will work a lot more with non-actuaries.

    Technology is one driver; it will push actuaries to work more with data, and therefore data scientists. Financial reporting is another; actuaries will need to start working a lot more with accountants as a natural impact of the reporting regime changes that are happening. 

Despite there being significant collaborative potential between data science and actuarial science, the two expert fields don’t always mesh in insurance. How do you believe they can work together more successfully?

On the softer side, creating a community where both exist.

In my team, I have data scientists and actuaries working together on projects we’ve deliberately set up to promote collaboration and innovation.

I also believe a foundational introduction to what the other does is important. I hold introductory sessions where data scientists explain data science, what they do, how they train, how they promote continuous learning, all that - and then actuaries do the same. I think at the end of the day it comes down to leadership. If you want people to work together then you forge creative environments where they can do that. 

Who, in your view, is the most impactful innovative actuary you know and why?

There’s a gentleman I worked with quite often in my younger days named Dennis Stanley. He had the vision of creating an actuarial calculation engine at the time when no one did, and I think he started with the idea of doing it as an ALM engine instead of a liability only engine, and that was really advanced thinking back then. His passion for creating something to push the profession forward has inspired me throughout my career. 

Another person who inspired me early on is a gentleman called David Wilkie. People know him because there was an ESG model, Wilkie’s model, named after him. He was a British professor, highly innovative, and was the first person to apply these economic scenario generator techniques to an insurance problem. 

What type of innovation is actually impactful? 

I think the most impactful innovations are the ones that create business value, whether that be creating value for shareholders or for customers.

I think the customer part is the most important part, because that’s why the insurance industry exists in the first place: serving the needs of the general public. Innovation needs to be thought about in such a way; not only technology, but also how it impacts real customers.

What advice would you give an actuary looking to be more innovative in an impactful way?

My advice would be, don’t look at the world retrospectively, don’t think about what happened in the last ten years, think about what will happen in the next ten.

Be courageous about embracing the views that you’ve got. Some actuaries might be skeptical about that advice, but I think you need to be courageous to become an actuary in the first place.