June 19, 2024 • 45 mins
My guest for Episode 93 is Annie Tay, FIAA, FIA, CERA, Senior Advisor at Meanwhile.
The theme for the episode is 𝗗𝗶𝗴𝗶𝘁𝗮𝗹 𝗧𝗿𝗮𝗻𝘀𝗳𝗼𝗿𝗺𝗮𝘁𝗶𝗼𝗻.
Annie and I explore the following topics:
✅ Manufacturing and reviewing global insurance products
✅ Developing financial strength methodologies for life insurance
✅ The underlying drivers of strategic restructuring
✅ The pathway to Merger & Acquisition (M&A) transactions
✅ The role actuaries play in M&A transactions
✅ Lessons learned from a 56-jurisdiction acquisition
✅ Working in quantitative risk management as an actuary
✅ Digital transformation and its relevance for actuaries
✅ Recent market developments involving digital transformation
✅ Business problems being solved by actuaries in Fintech
✅ Developing a life insurance product on the blockchain
✅ Digital transformation opportunities for actuaries beyond insurance
If you are interested in learning about digital transformation, you want to listen to this.
My Website: maverickactuary.com
The theme for the episode is 𝗗𝗶𝗴𝗶𝘁𝗮𝗹 𝗧𝗿𝗮𝗻𝘀𝗳𝗼𝗿𝗺𝗮𝘁𝗶𝗼𝗻.
Annie and I explore the following topics:
✅ Manufacturing and reviewing global insurance products
✅ Developing financial strength methodologies for life insurance
✅ The underlying drivers of strategic restructuring
✅ The pathway to Merger & Acquisition (M&A) transactions
✅ The role actuaries play in M&A transactions
✅ Lessons learned from a 56-jurisdiction acquisition
✅ Working in quantitative risk management as an actuary
✅ Digital transformation and its relevance for actuaries
✅ Recent market developments involving digital transformation
✅ Business problems being solved by actuaries in Fintech
✅ Developing a life insurance product on the blockchain
✅ Digital transformation opportunities for actuaries beyond insurance
If you are interested in learning about digital transformation, you want to listen to this.
My Website: maverickactuary.com
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Welcome to episode ninety three of Livewith a Maverick. My name is Dominic
Lee, founder of Maverick Actuary.We are content community. Our mission is
to maximize the impact and value ofquand professionals on a global scale. The
goal of this series is to educateour community on the most relevant themes in
(00:21):
actuarial science, risk management, andanalytics. The theme of today's discussion is
digital transformation and we are very excitedto have with us our guest for today's
episode, Annie Tay. Annie isa senior advisor at Meanwhile, the first
and only life insurance company denominated inBitcoin. So welcome Annie. Hey,
(00:44):
thanks very much, Tom. Howare you doing. I'm doing great as
always, big time differences here.So it's the afternoon for you. Still
just yeah, I'm still very squarelyin the morning for me. But I'm
doing well. Good start to theday, so fantastic. Thanks thanks for
inviting me to be part of yourvery group. It's been first and fantastic.
(01:06):
I mean it's always been my aspiration, so thank you. Great.
Yeah, I saw your LinkedIn postalrighty, okay, well how do you
want to play this? Yeah?So there's lots to give an opportunity to
introduce yourself. Well, I'm yourstandard. Actually, I traditionally trained myself
as from Getro Science School in Australiawith Acquar University, where a lot of
(01:32):
very good actors come from. Idon't know whether it's still US, but
it's it's where a lot of actorsmy generation in Australia comes out. I
really specialize in economics and finance andI've been I've been traveling around the world.
I mean my first job, youknow, three weeks into the job,
I was sent to Indonesia to doan embedded value So that's like my
(01:56):
first foray into the international side ofthings from Australia and and when I qualified,
I decided to backpack. And agentleman called Mark Turner also happened to
be an act three who's a consultantfor Telling Us at the time, said
why don't you just go to theUK, get paid and do some good
work and get trained. So Iwent to Telling hers the UK straight straight
off from my qualification and never wentback. Really, I've been traveling around
(02:22):
as an actually globally working and lotsof global institutions for the last twenty nine
years, primarily in the emergency andopposition side, doing restructuring and you know,
building values and you know, doingstuff. And it's been fun this
career, this profession has been amazingfor me. That's awesome. So are
(02:43):
you from I never asked you before. Are you from Australia? Ah?
So, I was born and mybirthplace is born here, which is a
pretty large island, not as bigas Greenland, but it's a mixture between
Malaysia Indonesia, and so my forefathersare from the Jungles of Borna. Okay.
(03:05):
Interesting. Interesting, You're from Jamaica, So yeah, I understand.
Oh yeah, yeah, I'm froman island probably so yeah. So you
know you purpose it by saying youtalked about the travel. You've obviously worked
in different places. You're working onmergers and acquisitions across several territories. And
(03:28):
something interesting I've found about your backgroundare observed observed about your background is that
the breath of experience in your previousroles, You've had such a rich group
of experiences and if we were totalk about them, I think we'd be
here all day. So there's particularI want to actually want to ask about,
and that stood out to me.There are your roles that met Life
(03:50):
and am Best. Those two Ithought were interesting. So how do you
come across those roles and and whatexperiences do you gain from each of those
roles? Well, those are someof the best places, you know.
All these roles are really global rolesand touches upon a lot of jurisdictions and
(04:12):
cross border jurisdiction. So firstly,how do I get into these roles with
Matt Life, I was part ofR. Gav Let's start with the invest
because the Best was done before MetLife and am Best came about. Because
when I was in telling US,I did a lot of majors and a
position on market valuation exits, soa lot of realistic balance feet because when
you buy a company you have tohave that value. Now you don't use
(04:35):
these book value and the luck invalues that traditionally at the time of solvency
one. But I think in theUS and Japan it's too quite a book
value basis. But I had todo the market valuation. I did a
lot of realistic balance feed as partof it, part of my work,
and it was a very easy transition. When in Best wanted to open up
(04:56):
the Life credit life credit space warfor their rating, and I naturally put
in because I knew the kind oflike projections on realistic balance sheets, and
that was credit rating, understanding thecap flows and understanding the real time value
or the realistic value rather than thebook value, which is you know what
(05:17):
happened thirteen years ago when you firstwrote a policy. So that was a
natural turn because they needed someone andI was a natural fit. And it
just literally opened up the whole lifecredit for invest around the world except the
US. But I spent a lotof time in a place called Old Week
where the HQ of Investors working withthe guys, the guys in vest on
(05:42):
the BAKAR, which is their capitalcapital adequacy model for the life insurance sector.
They had. They had a PNCvery well done, you know that
dominate that market. But it wasthe life that they wanted and it was
it was a good fit then then, I mean, obviously with the best
I went into reinsurance RGA through afriend and it was an inspirational THEO called
(06:09):
Para Thomas, who took me underhis wings. Literally over the last twenty
years my career was literally helped byhim. And he put me in RGA.
He looked at me and just goyou need to go to career,
a career. The career at atime for RGA was one of the bigger
entity, much bigger than the UKand there was a bit of a problem
(06:29):
there with critical illness protection business.So then he sent me to a career
thinking I look at him to goback and from career, met Life spun
off the Asia pac wanted to setup a base there and met Life owed
LGA at the time, and thatwas the transition into the Medlife Group Madlife
(06:50):
International. And again that's just acrazy career versus the whole of Asia pack.
Then after during the financials with theAlico event or the AIG event,
you know, we had to buyAlico, which is the AIG Life insurance
section of the business. Fifty ardcountries and amazing you know, from Lebanon
(07:15):
to Yemen to Pakistan to the WestWestern European and all this, so yeah,
it was it was fun. Yeah, you talked to one of the
things I saw you with MetLife youtalked about manufacturing and reviewing products. So
what products kind of were those?So as an actually there it was regional
(07:39):
approval process for all the products asan actually, so you have to you
know, approve all the products,make sure they're profitable, make sure it
falls under the kind of like riskparameter of net life appetite. So it's
all the products from traditional protection towhole of life to traditional So I would
say almost over a thousand products hadto come through US. I myself personally
(08:01):
had to deal with Career which turnsup products like like no Tomorrow, like
a sausage machine, and they hadto review it every year. China and
Japan and all the variable annuities andothers, working with some very strong experts
who who I rate very highly inthe industry. So yeah, I mean
it's all the life products that that'swithin the region. And following that,
(08:24):
as I headed off the protection businessfor Metmath International, it was all the
protection business that were critically on thosepa and stuff like that. So again,
you know, this product side isactually very interesting because not only do
you look at it from a technicalperspective, making making sure they don't they
don't they don't lose money or thatmake money, but also linking up with
(08:48):
the distribution guys, you know,going skiing with them, partying with the
City Bank, guys and explaining howmortality experience works when when they're selling products,
you know, I don't they wouldlike to know what what's the basis
of all? That was a greatfun I mean even today I still keep
in touch with this guy. Thatsounds like a great experience. Now you
(09:09):
didn't mention yeah, yeah, yeah, I approve I approve it. So
you know you you didn't mention thatone of your ears of expertise is exits
and mergers and acquisition M and Atransactions. So fundamentally, when you think
of M and as at least frommy perspective not really being deep in that
(09:30):
area, you think it's either onecompany is being absorbed by another or two
insts are emerging. But but thecore thing there is that there's a strategic
restructuring that happens. So before weget into the details of some of the
work you did around the exits andthe M and A transactions, like what
are the what from your experience,what are the primary motivations or drivers for
any strategic restructuring. I'm going tobe a little bit controversial here. I'm
(09:56):
not going to use the textbook versionbecause my experience has not shown that it
is a textbook version of the textbookversion here. What I meant is,
you know you have a playbook,a list of a list of potential companies.
You look at the annual reports andyou look at this, you look
at that, and you say,ah, this is a good fit because
you know this is the same product, or we can we can merge this
(10:18):
product and stuff like that. Mybig m and as generally never happened like
this. Mn A to me islike a relationship. How a relationship happens
when you decide to marry someone,Well, how do we decide is it
an arrange marriage? Arranged marriage willbe an an now will be similar to
(10:41):
in an MNA storre scenario will beduring a financial crisis, the IG came
down, met Life was asked tobuy them up, Silicon Valley Bank in
the UK when when it went downand just we see us say get your
citizens hut ready, that's your jobpick it up. And that's coming from
(11:03):
the government or the regulator. Youknow, do you do your kind of
like corporate suitizen responsibility. But that'skind of like one one way of looking
at potentially how MNA works, andother ways. When you're sick and tired
of a partner, you just wanta divorce. It's what in the M
(11:24):
and A world we call it anon core strategic asset. So again investment,
you know, this is how divestmentworks. A lot of them is
often non core. Often it strains, it hurts, it needs more capital.
You just can't support it animal andyou just have to go and someone
buys it up. The other wayis potentially a natural love you know,
(11:46):
over dinner to CEOs have dinner andhey, it wouldn't it be a great
idea if we join up, youknow, we'll get bigger or we can
get into this. And that's howanother MNA would work. So that's that's
naturally a lot of relationship build behindthe scene, and that's my experience of
it. That's a really effective way. It's always good to use an analogy
(12:07):
that's relatable at least to most people. Hopefully. No, Yeah, that
was very good. That was verygood. So now you've obviously been involved
in these M and A transactions,So how would you describe the pathy.
Of course, when you have astrategic restructuring, it fundamentally starts with well
evaluation is obviously a really integral partof that. So but there's I imagine
(12:30):
that there's a valuation, the restructuring, and then there's a number of things
in between. So how would youdescribe the pathway to an m and a
transaction from valuation to strategic restructuring.I think of strategic restructuring is the overarching.
If the story does not align,if the strategy doesn't align, no
matter what valuation looks like, itwill not happen. So as a truly
(12:52):
we have to be realistic and behumble enough to now that our calculating does
matter because it's about the money,is about the fine. But at the
end of the day, the softmatter will make that will make that happen.
I think this is this is howI think at a high level this
happens. So don't expect the calculationto be the be all and enal,
(13:15):
not at all. The price isthe base. Then you negotiate. I
like you, Yeah, I'll doa bit of a cut here. I
don't like you. I'm gonna makeit hard for you to get in right.
But the strategic fit and the strategicmindset has to happen between the two
parties for a marriage to happen ordivorced to happen. Yeah, so you
(13:39):
know, so just thinking of itin terms of what you're doing, like
your level of involvement as an ACTUARYAI imagine that you're involved with the valuation.
So is that essentially like just lookingat reserves like those quantifying liabilities like
what goes on? No, no, no, no, no, no,
this is this is a stigma.I actually don't just do liabilities.
Actually, don't just do pricing.Actually don't just do that just you know,
(14:03):
I don't know do data pleansing.This is this is very very specific
to our job. This is partof our court deal set. There are
some actors who do who would revampas investments, who create investments. My
role has always been at a managementand strategic role, so you know,
making the whole thing work. Ithas to have the right price, It
(14:26):
has to have the right covenance andstructure, It has to fit into the
right company and the right the rightkind of spot. It has to create
value. So my side of itis more looking at the whole thing.
But my core skial is finance andvaluation. I know how money makes money
and I know where the value is. But it doesn't mean just that you
(14:48):
know, the products have to fit, the distribution channel has to buy in.
If the agents hated it and they'regoing to run off, the valuation
suddenly drops. So yeah, Imean, actually cover all spectrum of it
if we really want to, youknow, we stick to our coose guilds
and we actually extend beyond that.And that's what actually is are not just
(15:11):
liabilities. Liabilities can be done byAI and computer systems. Yeah, so
like what like if you were togive me I know, you talked about
it being much broader than valuation,Like if you were to give me a
specific just trying to get a senseof, you know, what role you
played as an actuary in these typesof projects. So like if I imagine
that there are several different, likeyou said, several different tasks and things
(15:33):
around the strategic nature of that,Like, what's an example of something that
you'd be asked to do specific toone of these transactions. So one of
the things that Japan that was mykind of light lead to bring it in
as part of Live Article acquisition.It was, you know, making sure
the valuation makes sense so that youknow, at the press level, you
(15:58):
can convince the analysts that in avery convincing way, and we actually know
the kind of under the bonmit tomake the story credible. So it's actually
helping the kind of equity analysts andthe pressed to actually understand why we're buying
those those entities. Other than that, also looking at the news of products
(16:18):
that AIG has or ALFO has andhow does that work with MetLife products going
forward. So we had a productsteam in terms of distribution, all sorts
of distribution channels all around the world. In Bangladesha the largest agency force,
right, and how do you bringthis together? You know, and how
do you merge how do you workwith all the distribution channels across all these
(16:42):
jurisdictions and making it fit into theMetLife medlife channel. These are all our
skill sets. And I mean Ispoke about my first My first role in
met Life was in product approval anddistribution channel. So I draw on this
to then go into the Mantrissone acquisitionand understand the different channels and understand the
(17:03):
dynamics, understand the products and thedynamics. And it's not one person alone,
It's that the world of consultants wereinvolved the whole of MetLife and it's
Alico. Guys were all involved.It was it's definitely like it's not possible
for one person, but I helped. I was the coordinator of all that,
(17:23):
the facilitator. And the reason whyit actually makes sense is because we
understand the dynamics, we can connectit that well. One thing I have
to ask, because you mentioned withthis acquisition, he said, it was
a fifty six fifty six jurisdictions withinthis acquisition, so you must have learned
some interesting things. Is there anythinginteresting you learned, like from a geographic
(17:45):
about you know, one jurisdiction versusthe next, anything interesting you're willing to
share? Fifty five or fifty sixdepending on definition. I think cultures are
different. But what the really impressedme was when I dealt with the Lebanese,
the Lebanon alicoteam. I had thisimpression that, you know, typically
women are general quieter and all thisand all of a sudden boom, you
(18:08):
know, the the Lebanese lead wasn'tthis female actually who just literally just don't
what about this? What about that? Is this? What a delight?
You know? Someone who actually knowswhat she's talking about and actually engages and
and understand the bits and pieces toactually work as opposed to fitting quietly nodding
or not knowing what's going on kindof things. So that really was a
(18:32):
surprise. I didn't expect Lebanon womento be so amazing, especially especially in
a financial service spector. You know. Also, I mean different cultures like
Bangladesh. I mean I never beenthere, and I suddenly realized how how
kind of like diversities and how bigit is the Middle East. What a
(18:52):
gem and it is so underrated atthe time. You know, it's like
who are they And it's suddenly whayou know, you've got number one,
number two market share. Yeah,that's lots to learn. And compared to
Greece, compared to Ireland, whichI'm used to interns of the market,
it was so much more pality.Yeah, and I'm actually looking forward.
(19:14):
We're having an episode on the MiddleEast later on in the season, so
I'm looking forward to that. Sothanks progressive, Like they they have the
ability to drive a Rose Royce atany time they want. You know,
we're still on a Toyota Honda.You know. They just go for the
best of the death at all time. Yeah. Well interesting. So yeah,
(19:37):
so the theme of today's question isdigital transformation. And you know,
you've made a kind of a bitof a you've had a bit of an
inflection point in your career and you'vehad a career transition into quantitative risk management,
and that coincides with digital transformation.So when I was thinking of the
theme for this episode, I thoughtthat made sense because we've talked about some
of your broad experiences as an actuary, not just limited to the cour there's
(20:00):
course sets, but probably more closeto that world. And then in today's
world, of course working in acompany that's doing something really innovative with bitcoin.
So I thought that digital transformation waslike a really central point to that,
or a central theme. But beforewe get into that, I mentioned
that you had a career transition inthe past decade or so into quantitative risk
management. So how you describe quantitativerisk management? Well, well, I
(20:26):
actually do we quantify risks, right. We calculate the price of the risk
by the auto insurance premium the liveinsurance premium. So it's a very natural
move and the trigger to that moveis really because of solvency two. When
the regulation changed, then it hadto have someone to actually do the risk
management side of it, both onthe qualitative and quantitative side. It was
(20:48):
a very natural selection to go intothat space. If if you're kind of
like the in a situation where youcan now in the risk management space.
I don't think it's just quantitative quantitativehelp because this is our edge, but
we also have to understand the qualitativeand the enterprise risk management framework across the
(21:10):
insurance pension as management sectors of finance, insurance, operational, strategic and and
reputational risk and so on those pillars. It takes a lot of experience to
bring that all together. And ifwe were to be able to quantify that
into one single number, which issolvency in the life space, that's what
(21:30):
we do as a living and itwas a very natural progression. But also
it's it's also praise to our coursethen mm hmmm, so yeah, natural
you mentioned, you know, Ifigured as much very natural transition. I've
always said that actuaries are in someways risk managers. Of course, some
(21:52):
of that qualitative stuff, things likepurchasing insurance, may not and it may
not be the course skill set,but of course actuaries have to wear a
risk manager had many times, especiallyin certain rules. But in terms of
the space that you're in now,you know what what inspired that transition from
I guess where you were, saya decade before, to where you are
now? What was it? Wasthere a catalyst, something that kind of
(22:17):
led you in that direction. Promotion? It was a promotion and they're paying
for it, right, you know, that's that's a progression. I mean,
it was just a very simple promoved across that and someone had to
do it, and someone had tostitched these risks together. So the correlation
risks across the metrics of the differentpillars and also the build. At the
(22:40):
time, financial risk was the problematicone. It wasn't operational risk. Today
it's probably more operational risks, butat the time financial risk is. It's
horrible. You know, interest ratesfor year zero, especially outside of the
US, what do you do?You know you priced at three percent five
percent, You've got guarantees, sothey needed and actually who had the financial
(23:00):
risk management core skills to manage thosebooks and report those books, measure those
books with the team and knowing howthat works. You know, the interest
rates to currency risk, Oh mygod, you know all these were breaking
up. Now it's so much betterbecause we're so much more trained. We
have to put the asset side ofthe kind of like vehicles and products to
(23:22):
actually has this. But at thetime it was almost like we were just
fixed interest and all hells broke loose. Do you know what happened to the
currency? Vice never heard of currencies? What I had to go back to
school in twenty ten to understand howswat book management works, right, the
detail of that. So it's everlearning, it's market moves and now it's
(23:45):
on operational arrests. How do youquantify cyber risk? How do you quantify
third class of risks and supply chainrisk? That's our core skills. We
have to break it down. Interesting. So going back to the still transformation
topic of digital transformation, yeah,or to start with fundamentally, what does
digital transformation mean to you? Digitaltransformation is a very ciche work word.
(24:12):
I think I'm actually going onto adigital transformation insurance conference where I'm a keynote
speaker in Hong Kong next week,and I bet you most people have different
view as to what transformation means.So what I'm going to use is actually
a framework that I've got from amanagement consultant for salesforce, and I guess
(24:32):
you know who sell forces. Agentleman called Jeffrey Moore and his book on
Understanding the Zone to Win. Hekind of brings this type of evolution of
companies into four zone performance zone numberone, productivity zone, the transformation zone,
and the incubation zone. And thereis actually a phase of evolution there.
(24:53):
Performance is your traditional med life,you know, Lincoln and all this
work. You just quarter to quartertargets, they just close, no change,
So that's not transformation, that's justtraining the machine. The productivity zone
is when you actually had to cutcosts, streamline automate, you know,
(25:17):
push push the burry a little bitin the hands. Again, that's not
transformation, that's just automation. That'snot changing anything but just sweepings up and
make get rid of redundancies. Andthen I'm not going to go to transformation.
I'm going to explain what incubation meanson innovation. Innovation is nascent,
it's very startup, is this idealstage of it's not really real yet,
(25:38):
there's still a proof of concept.But transformation where it's really going to keep
up. The change of the companyis the ten percent of the revenue that's
going to be one hundred percent isgoing into a different space and dominate this
as a new new kind of likecompany. I meanwhile, it's a great
example. It goes from a groupof concept innovation. So it's a whole
(26:00):
digital economy in the ecosystem of lifeinsurance and no one has been there.
So it's literally a true transformation forfor insurance business from the conventional space straight
into digital space and the digital economy. I mean, do you do your
catch I I don't you know,I use credit cards all right? Maybe
(26:27):
in your my start, I don'teven need to have everything is transception online.
You know, everything is on yourapp. So that's the digital side
of transformation. But transformation is literallya pivoting from the old to a completely
new and not just simply automating aprocess. That's transformation for me, and
(26:49):
I think that's that's how I wouldinterpret your free more so on framework as
well on transformation. Yeah, soyou mentioned I think you you partially understand
that you talked a little bit aboutlife insurance, but you know, just
take this again fairly broad question islike why is why is digital transformation relevant
for actuary specifically? MM it createsa new space of work for us.
(27:12):
If everyone is also crowded in valuingI don't know all of life policies or
lost ratio loss reserving for auto insurance, you're going to be too crowded.
I mean, what is going onthe transformation is amazing opportunity for us as
actions as a profession, we haveto feel set. We just have to
(27:34):
apply them in a different, differentproductol and different environment. Yeah. That
I couldn't agree more and I knowwe'll we're going to talk about that a
little bit further on about some ofthose opportunities. But now, since you
transition into quantitative risk management, youspend time in a couple of fairly more
more modern environments and insurre tech andfintech. So what based on your experience
(27:59):
in those in those spaces, whatare the most significant developments in digital transformation
playing out in those that you've seenplayout in those spaces today? Yeah?
I mean, as I explain,innovation is about testing out things, isn't
it? And what I'm seeing quitea lot on is the unchain and Web
three world. You know, aworld where it's completely unchained, whereas you
(28:22):
know, we're too many of theinsurance companies are almost all of them are
still off chain, except the likesof meanwhile in one or two. So
that's really big right now. Youknow, how do you how do you
create a payment system on chain?How do you use the blockchain technology is
a producal for smart contracts. Youknow, we see a lot of actories,
especially coming out from Canada, lookingat smart contracts of insurance or insurance
(28:49):
kind of contracts, or credit lendingcontracts, financing contracts and bring it into
a smart contract where it's so automatedyou just don't have an administrator trying to
figure out and remember what the covenanceor what the courses are. I see
a lot in the ESG, alot of and you know, those climate
change studies, liability stress testing andall this I also seen, maybe because
(29:12):
of just the way I tend towant to look at things, I see
a lot of actories of involved infinancial inclusion, accessibility of you know,
because we're now having the technology tomake it cheat but quick efficient on the
pro unit, you can start applyingthis into the mass without the cost of
(29:33):
having an advisor going in or anagent you know meeting you and having two
hours of their time doing it andhigh commission. These are all technology where
as long as you've got a walletor online account, things are possible as
long as there's the internet as well. So it's a lot of financial inclusion
happening as well, and a lotof very good work by the pioneers the
(29:57):
actress who are pioneering or this.I'm very proud of it. I'm very
proud of the profession. Great.We may be mavericks, but we're doing
things differently. Yeah, I've mentionedcan you talked a bit about you know,
the blockchain, you're using the termof chain, and there's an episode
we did just have mention to everyoneanyone who wants to get some more details
(30:18):
on that episode forty four web isentitled Web three Blockchain and NFTs and the
guests there he talked about distributed leisureof technology and he got into the details
of that. So if you wantmore details, that's a great resource to
look at. One follow up Ihave is specifically we talked a bit about
in shore tech fame. We kindof love them together in short tech fintech,
(30:38):
but I know a lot of actuariesworking in short tech. But I
know I don't know as many wellme personally, not to say that they're
not working in fintech. Anything uniqueabout fintech that you're seeing now, I'm
just curious because that's that's a spaceI'm not really familiar with. Yeah,
intro tech is a subset of fintechin my mind, and anything to do
(30:59):
with payments, anything to do withdistribution channels and all this that may not
necessarily be insurance. Like I've gotan actually right now who's doing stable kinds
of fintech too, on a paymentsystem on chain, just purely with with
organization who to make it happen reallyquickly and cheaper than going through hundreds of
(31:21):
middle persons between your MasterCard to themerchants. You know, this is fintech.
It may not necessarily have an insuranceelement to it, but it's in
the financial system. It's a financialproducle. Quite a lot of things happening
then, actually in the payment side, custodian side, organization side, esg
(31:41):
on financial tranceptions, curb and prices, oh, on tech something. This
actually just came to me and Ihope I'm not going too far our skift
cares. When we think of payments, one of the things that frustrates me
and I'm hoping that somebody is solvingthis problem is you know, when you
reverse transactions and it takes like sevento ten business days. I always wondered
(32:04):
why. I mean, I'll seumeI would hope that someone is working on
that problem, but it's just sofrustrating. With some of the bigger institutions,
the more kind of traditional institutions,you make a transaction and you reverse
it and it takes seven not alwayssometimes it's forty eight hours, twenty four,
but sometimes it's seven to ten,and I just can never understand why
it takes that long. It justis just ridiculous to me. And it
(32:29):
also costs a lot, right Whereaswith the unchain, if it's done,
I mean, it's just one onepoint to another point, there's no middle
person involved. That's that's the scarybit. You're gonna have a lot of
distruption going on because what happens toall these midile guys when the payments becomes
(32:51):
on chain. That's the resistance.Yeah, so yeah, you just answer
the questions just because people they're they'rethey're historically I've been there, and you
know, I guess it's my livelihoodyou're going to Yeah, you know,
if you're in one of those ones. So trying to break that kind of
like infrastructure, unless you start fromscratch, is you know you've got a
(33:13):
lot of resistance. Yeah, actuallythat's yeah, that's very helpful. But
it's good to know that at leastto some degree, that there's going to
be alternatives. No, yes,so I meant yeah, so I mentioned
that you're not the senior advisor.Meanwhile, I know you've had other rules
there. And that's the first andonly insurance company denominated in bitcoin. So
the first the natural question I haveis you know why, like what something
(33:36):
must have inspired you? I wouldimagine to start this, to start our
co found I guess this company.So I think co found a company.
I'm I'm the cheapish officer that wasbrought in because they needed a what they
call it goat old person or aveteran to go in. The two co
founders are tech tech tech brothers fromthe Silicon Valley, and I didn't have
(33:58):
much of a life insurance. It'skind of like background. There were technologists,
entrepreneur and they wanted to find outhow to It's opportunistic, perhaps to
find where things needs rebuild, andinsurance has always have this reputation of being
lagged, slow, not moving,inefficient, blah blah blah. And the
(34:19):
shows just this space in particular becauseit hasn't been done. A lot of
the property and casualty side, thewallets, the cyber risks, and all
these lots of people in that space, but no one has done the wrong
life insurance space. And I thinkNativity to some extent used the guts to
do it. And I wish Ithought about it. I really did.
(34:40):
And also another thing is it's backedby Sam Oltman and Google Ventures. Now
you'll wonder why on Earth with thesetwo parties our actors come and get involved
in insurance. I mean, insuranceare traditionally you know, your Mass,
Nutralia, Mad Life, your reallyold school guys doing it. And why
(35:00):
are these two parties coming in.It's fascinating. I mean these are people
who want to change change kind oflike the way things are done traditionally.
That they know the infrastructure that's available, the technology that could be done,
but the pathways and the complexities ofit. I think experience cannot replace you.
(35:21):
It's it isn't a complex, complexbusiness actually have a lot of roles
to play in this type of thingbecause we need to navigate, but we
also need to understand the fundamentals ofhow these things work before these tech does
that actually code it? Because theywill be no, and that's important.
Yeah. So when I describe thecompany, I give a very simple description.
(35:43):
It's life insurance denominated in bigcoin.But how would you describe the companies?
There more to it done that interms of you know, the products
and or is it just fundamentally justkind of traditional same products but just different
absolutely same products, different Productal know, you want to exchange money, it's
the same thing. I want toexchange from USD to the GBP the pounds,
(36:07):
that's the outcome I want, ButI don't want to go to eight
days of being passed around? Howdo you move that? From point A
to point b? Is the pointA point B is the same, It's
just a producol inside you're upgrading toa new technology and new platform, a
new way of doing things. Okay, so all the actuarial work is essentially
(36:27):
kind of same principles fundamentals more orless, nothing like that part is not
fundamentally at least or systemically. Yeah, the formulas and methodology is unchanged.
But the problem is with bitcoin,as you know, there's no long term
careor so how do you do evaluationwithout a valuation interest rate term structure?
You know, there's a lot ofthings missing. Is this a currency?
(36:47):
Is this an asset? Where doyou find the access to back this thing?
Where do you find their liabilities?And the amazing thing is, because
this ecosystem is so new in thedigital economy, that's just how much opportunity
for not a sactories, but anyonereally to actually go in and say,
let's create a long term assets,Let's do an ETF, let's do a
(37:08):
fixed interest. It's like going backto you know, old age of creating
this stuff, but in a differentplatform with a different type of you know,
it's a paper currency, you gowith a digital encryption. Mm hmm.
So we talked about I guess fundamentally, like you said, the main
(37:30):
thing is how you get from pointA to B. It's it's unchained versus
off chain. So that makes alot of sense to me in terms of
I would imagine or how I howI would think of it in terms of
from like an efficiency perspective, froma digital transformation perspective. That's obviously that
seems to be the core challenge thatyou're seeking to solve with this venture.
But are there ather any other specificchallenges that that you see, that you've
(37:53):
seen in or the founders whoever inthe company, I've seen unaddressed in the
market that the company's specific seeking toaddress, or would you say it's primarily
mainly just that, you know,being on chain versus off chain. No,
there's a lot of things. Youknow, you've got the assets that
missing because insurance is a liability drivenbusiness. We don't have the afset ecosystem
(38:17):
the capital markets. So when theETFs came out from black Rock, it
was that would be once one littlestep for MENCA, you know. So
it's yeah, I mean that's stillso much to do. So much.
I mean just the fact that youknow, how do you pay tax on
this? Do you pay you know? How do you bring it into a
(38:38):
state, how do you bring howdo you put this in corporate? This
into will? Is this a legitimateinsurance contract? There's just so much toot
trying to piece together. So yeah, I think it's it's a place like
where you've got a new territory andyou have to go in and build a
(38:59):
house and build a cinema and geta supermarket. It's just so much to
do that, and it's it's excellentfor the generations that are coming or even
now to actually explore because you know, it's not just about calculating my ability.
Yeah, so that's that's okay,that's very helpful. One thing I
want to follow up on with thatis like when I think of, like
(39:21):
some of the insured texts, someof the problems that they're trying to solve
is just insurance is too for instance, it's too cumbersome, Like even something
as simple as a policy application.When I think of doing a policy application
with a one of the larger legacycompanies versus you know, you have to
go on the phone do all thesethings, whereas with some of the insured
text I think you can just doit fairly quickly on your phone. Like
when when I guess you could saywhere the phunders were thinking of this company
(39:45):
other than just the unchained opchain,like just thinking of the primary the fundamental
drivers for actually even saying we shouldstart this company, other than just wanting
to you know, put things unchainedand think of the efficiencies there where they're
are there were there any other driversfor the insane in other words, incentives
to start like your company. Imean, you're in that generation where you
(40:07):
wanted the language to be simple,right, you want a language to speak
your language, I mean the languageitself. If you look at the mean
while application the language itself is you'renot not your leader is you don't you
know it's not a lawyer lawyer tryingto put in if they're there or here
with blah blah blah. You don'tget that. You know, it's just
(40:28):
very straightforward, very clear. Ifit's not clear, you get compoints.
You know, it's it's meant tobe understandable for those clientell and make it.
Customer experience is number one and weall know that. And the reason
why Apple is such a great,great demand is because the design is fantastic.
The product is great, you know, but you don't see a lot
(40:50):
of those cumbersome ones come out becauseno one wants to use it, no
matter how cheap they are. Soabsolutely, I mean the Queen slate help
because the company was a clean slate. What a lot of companies, conventional
companies could not do was actually changethe process because no one dares to break
it. If you break it,you're dealing with a secred cow. So
(41:15):
that that kind of like zone isnot conducive to transforming into a zone that
is truly transformative because no one daresto change that. But the problem with
that is it's going to be acode at moment when if someone actually does
that and drives all the new generationof customers out there to this type of
way, those that did not changeor could not evolve, they're just going
(41:37):
to die down. That's what wecall runoff. Yeah, yeah, yeah,
yeah, No, customer experience iscritical for sure, absolutely. Yeah.
Now, earlier we talked a bitabout the you know, the opportunities
when we talked about digital transformation andwhy it's rather than for actuaries. One
of the things you mentioned is kindof expanding. You never said you never
(41:58):
use this term, but I'm justgoing to use like the pie, I
guess in terms of where we canplay and where we can add value.
So what are you what are someexamples of areas where digital transformation as open
doors for actuaries, specifically beyond insurance. Well, I've mentioned about the web
three environment, the digital environment beyondinsurance. You know, I'm going to
(42:21):
be a bit controversial here. Alot of thirty years ago it was my
generation to go to banking, Ithink, or even investments. Now it's
becoming quite common, at least wherewhere I come from, in you know,
outside of the US. Actually alot of them are here. Some
of them are actually on you know, space leasing, you know, satellite
(42:44):
leasing and all thes, just infrastructure, building, project finances and all this.
It's been there, you know,It's it's no longer that novel.
And the thing is, we reallyhave to look look at where where we
can add value and where we willfeel challenged and we will we will apply
our skill set in a way thatis going to last for another twenty thirty
(43:06):
forty years. I think I wouldencourage, you know, people to actually
look beyond that. I mean,I'm in my fifties, so I'm I'm
okay, I can retire and Ican still hang on to this conventional world.
It's still going to be there forthe next time fifteen years. But
for those those that were looking at, you know, the trajectory of the
long run, I look beyond theconventional I would say, look beyond that
(43:30):
there's so much to do. Imean, one of one of the fascinating
things is a colleague of mind.His son is also naturally is doing computer
games and gaming, and that's tenyears ago gaming because of scenario testing,
all the kind of stimulation and others. How how how how amazing is that?
You know, he enjoys gaming,he enjoys game game, you know,
(43:52):
those those games, and he's inthe job that uses his mathematical skills
to do that. But I thinkwith this absolutely beyond beyond this, and
I cannot predict. I mean,AI is now pass. You know,
those who are in AI should havesomething by now. Generally it's just no
(44:12):
longer that new. So where doyou go, you know, cognitive biometrics,
genetics. Yeah, interestingly enough,I did actually have an episode on
esports about maybe a month or twoago. So absolutely absolutely, I mean,
if you love to play games,you know, how amazing is it
to work in that environment day inand day out without your parents shouting and
(44:35):
screaming and they get a day job. Yeah, he's being paid a lot
more than many actions, I know, for sure, for sure, for
sure. Yeah, And so yeah, I think we're one hundred percent aligned
on that and that's one of thereasons want to have you on is just
love to talk to actuaries who areyou know, championing that message of exploring
wider spaces. And you know,this has just been really good conversation and
(45:00):
just again want to thank you Annie. I've learned a lot and I'm looking
forward to sharing it with the community. I know everyone else will learn as
well. I know you're officially amember, You're alive with the Maverick Alumna.
I'm very proud to be to beone of you guys. Now,
thank you very much, and thankyou Dominic for all the work you're doing
(45:20):
bringing awareness to the profession and havingthat curveble thinking and kind of like outside
of the box thinking that's infallible.If everyone's doing the same thing, it
would be very sad. Yeah,fully agree. Well, I have a
wonderful rest of your evening. Annie, Thank you, and you too,
have a great day. Take care, byebye.
Welcome to episode ninety three of Livewith a Maverick. My name is Dominic
Lee, founder of Maverick Actuary.We are content community. Our mission is
to maximize the impact and value ofquand professionals on a global scale. The
goal of this series is to educateour community on the most relevant themes in
(00:21):
actuarial science, risk management, andanalytics. The theme of today's discussion is
digital transformation and we are very excitedto have with us our guest for today's
episode, Annie Tay. Annie isa senior advisor at Meanwhile, the first
and only life insurance company denominated inBitcoin. So welcome Annie. Hey,
(00:44):
thanks very much, Tom. Howare you doing. I'm doing great as
always, big time differences here.So it's the afternoon for you. Still
just yeah, I'm still very squarelyin the morning for me. But I'm
doing well. Good start to theday, so fantastic. Thanks thanks for
inviting me to be part of yourvery group. It's been first and fantastic.
(01:06):
I mean it's always been my aspiration, so thank you. Great.
Yeah, I saw your LinkedIn postalrighty, okay, well how do you
want to play this? Yeah?So there's lots to give an opportunity to
introduce yourself. Well, I'm yourstandard. Actually, I traditionally trained myself
as from Getro Science School in Australiawith Acquar University, where a lot of
(01:32):
very good actors come from. Idon't know whether it's still US, but
it's it's where a lot of actorsmy generation in Australia comes out. I
really specialize in economics and finance andI've been I've been traveling around the world.
I mean my first job, youknow, three weeks into the job,
I was sent to Indonesia to doan embedded value So that's like my
(01:56):
first foray into the international side ofthings from Australia and and when I qualified,
I decided to backpack. And agentleman called Mark Turner also happened to
be an act three who's a consultantfor Telling Us at the time, said
why don't you just go to theUK, get paid and do some good
work and get trained. So Iwent to Telling hers the UK straight straight
off from my qualification and never wentback. Really, I've been traveling around
(02:22):
as an actually globally working and lotsof global institutions for the last twenty nine
years, primarily in the emergency andopposition side, doing restructuring and you know,
building values and you know, doingstuff. And it's been fun this
career, this profession has been amazingfor me. That's awesome. So are
(02:43):
you from I never asked you before. Are you from Australia? Ah?
So, I was born and mybirthplace is born here, which is a
pretty large island, not as bigas Greenland, but it's a mixture between
Malaysia Indonesia, and so my forefathersare from the Jungles of Borna. Okay.
(03:05):
Interesting. Interesting, You're from Jamaica, So yeah, I understand.
Oh yeah, yeah, I'm froman island probably so yeah. So you
know you purpose it by saying youtalked about the travel. You've obviously worked
in different places. You're working onmergers and acquisitions across several territories. And
(03:28):
something interesting I've found about your backgroundare observed observed about your background is that
the breath of experience in your previousroles, You've had such a rich group
of experiences and if we were totalk about them, I think we'd be
here all day. So there's particularI want to actually want to ask about,
and that stood out to me.There are your roles that met Life
(03:50):
and am Best. Those two Ithought were interesting. So how do you
come across those roles and and whatexperiences do you gain from each of those
roles? Well, those are someof the best places, you know.
All these roles are really global rolesand touches upon a lot of jurisdictions and
(04:12):
cross border jurisdiction. So firstly,how do I get into these roles with
Matt Life, I was part ofR. Gav Let's start with the invest
because the Best was done before MetLife and am Best came about. Because
when I was in telling US,I did a lot of majors and a
position on market valuation exits, soa lot of realistic balance feet because when
you buy a company you have tohave that value. Now you don't use
(04:35):
these book value and the luck invalues that traditionally at the time of solvency
one. But I think in theUS and Japan it's too quite a book
value basis. But I had todo the market valuation. I did a
lot of realistic balance feed as partof it, part of my work,
and it was a very easy transition. When in Best wanted to open up
(04:56):
the Life credit life credit space warfor their rating, and I naturally put
in because I knew the kind oflike projections on realistic balance sheets, and
that was credit rating, understanding thecap flows and understanding the real time value
or the realistic value rather than thebook value, which is you know what
(05:17):
happened thirteen years ago when you firstwrote a policy. So that was a
natural turn because they needed someone andI was a natural fit. And it
just literally opened up the whole lifecredit for invest around the world except the
US. But I spent a lotof time in a place called Old Week
where the HQ of Investors working withthe guys, the guys in vest on
(05:42):
the BAKAR, which is their capitalcapital adequacy model for the life insurance sector.
They had. They had a PNCvery well done, you know that
dominate that market. But it wasthe life that they wanted and it was
it was a good fit then then, I mean, obviously with the best
I went into reinsurance RGA through afriend and it was an inspirational THEO called
(06:09):
Para Thomas, who took me underhis wings. Literally over the last twenty
years my career was literally helped byhim. And he put me in RGA.
He looked at me and just goyou need to go to career,
a career. The career at atime for RGA was one of the bigger
entity, much bigger than the UKand there was a bit of a problem
(06:29):
there with critical illness protection business.So then he sent me to a career
thinking I look at him to goback and from career, met Life spun
off the Asia pac wanted to setup a base there and met Life owed
LGA at the time, and thatwas the transition into the Medlife Group Madlife
(06:50):
International. And again that's just acrazy career versus the whole of Asia pack.
Then after during the financials with theAlico event or the AIG event,
you know, we had to buyAlico, which is the AIG Life insurance
section of the business. Fifty ardcountries and amazing you know, from Lebanon
(07:15):
to Yemen to Pakistan to the WestWestern European and all this, so yeah,
it was it was fun. Yeah, you talked to one of the
things I saw you with MetLife youtalked about manufacturing and reviewing products. So
what products kind of were those?So as an actually there it was regional
(07:39):
approval process for all the products asan actually, so you have to you
know, approve all the products,make sure they're profitable, make sure it
falls under the kind of like riskparameter of net life appetite. So it's
all the products from traditional protection towhole of life to traditional So I would
say almost over a thousand products hadto come through US. I myself personally
(08:01):
had to deal with Career which turnsup products like like no Tomorrow, like
a sausage machine, and they hadto review it every year. China and
Japan and all the variable annuities andothers, working with some very strong experts
who who I rate very highly inthe industry. So yeah, I mean
it's all the life products that that'swithin the region. And following that,
(08:24):
as I headed off the protection businessfor Metmath International, it was all the
protection business that were critically on thosepa and stuff like that. So again,
you know, this product side isactually very interesting because not only do
you look at it from a technicalperspective, making making sure they don't they
don't they don't lose money or thatmake money, but also linking up with
(08:48):
the distribution guys, you know,going skiing with them, partying with the
City Bank, guys and explaining howmortality experience works when when they're selling products,
you know, I don't they wouldlike to know what what's the basis
of all? That was a greatfun I mean even today I still keep
in touch with this guy. Thatsounds like a great experience. Now you
(09:09):
didn't mention yeah, yeah, yeah, I approve I approve it. So
you know you you didn't mention thatone of your ears of expertise is exits
and mergers and acquisition M and Atransactions. So fundamentally, when you think
of M and as at least frommy perspective not really being deep in that
(09:30):
area, you think it's either onecompany is being absorbed by another or two
insts are emerging. But but thecore thing there is that there's a strategic
restructuring that happens. So before weget into the details of some of the
work you did around the exits andthe M and A transactions, like what
are the what from your experience,what are the primary motivations or drivers for
any strategic restructuring. I'm going tobe a little bit controversial here. I'm
(09:56):
not going to use the textbook versionbecause my experience has not shown that it
is a textbook version of the textbookversion here. What I meant is,
you know you have a playbook,a list of a list of potential companies.
You look at the annual reports andyou look at this, you look
at that, and you say,ah, this is a good fit because
you know this is the same product, or we can we can merge this
(10:18):
product and stuff like that. Mybig m and as generally never happened like
this. Mn A to me islike a relationship. How a relationship happens
when you decide to marry someone,Well, how do we decide is it
an arrange marriage? Arranged marriage willbe an an now will be similar to
(10:41):
in an MNA storre scenario will beduring a financial crisis, the IG came
down, met Life was asked tobuy them up, Silicon Valley Bank in
the UK when when it went downand just we see us say get your
citizens hut ready, that's your jobpick it up. And that's coming from
(11:03):
the government or the regulator. Youknow, do you do your kind of
like corporate suitizen responsibility. But that'skind of like one one way of looking
at potentially how MNA works, andother ways. When you're sick and tired
of a partner, you just wanta divorce. It's what in the M
(11:24):
and A world we call it anon core strategic asset. So again investment,
you know, this is how divestmentworks. A lot of them is
often non core. Often it strains, it hurts, it needs more capital.
You just can't support it animal andyou just have to go and someone
buys it up. The other wayis potentially a natural love you know,
(11:46):
over dinner to CEOs have dinner andhey, it wouldn't it be a great
idea if we join up, youknow, we'll get bigger or we can
get into this. And that's howanother MNA would work. So that's that's
naturally a lot of relationship build behindthe scene, and that's my experience of
it. That's a really effective way. It's always good to use an analogy
(12:07):
that's relatable at least to most people. Hopefully. No, Yeah, that
was very good. That was verygood. So now you've obviously been involved
in these M and A transactions,So how would you describe the pathy.
Of course, when you have astrategic restructuring, it fundamentally starts with well
evaluation is obviously a really integral partof that. So but there's I imagine
(12:30):
that there's a valuation, the restructuring, and then there's a number of things
in between. So how would youdescribe the pathway to an m and a
transaction from valuation to strategic restructuring.I think of strategic restructuring is the overarching.
If the story does not align,if the strategy doesn't align, no
matter what valuation looks like, itwill not happen. So as a truly
(12:52):
we have to be realistic and behumble enough to now that our calculating does
matter because it's about the money,is about the fine. But at the
end of the day, the softmatter will make that will make that happen.
I think this is this is howI think at a high level this
happens. So don't expect the calculationto be the be all and enal,
(13:15):
not at all. The price isthe base. Then you negotiate. I
like you, Yeah, I'll doa bit of a cut here. I
don't like you. I'm gonna makeit hard for you to get in right.
But the strategic fit and the strategicmindset has to happen between the two
parties for a marriage to happen ordivorced to happen. Yeah, so you
(13:39):
know, so just thinking of itin terms of what you're doing, like
your level of involvement as an ACTUARYAI imagine that you're involved with the valuation.
So is that essentially like just lookingat reserves like those quantifying liabilities like
what goes on? No, no, no, no, no, no,
this is this is a stigma.I actually don't just do liabilities.
Actually, don't just do pricing.Actually don't just do that just you know,
(14:03):
I don't know do data pleansing.This is this is very very specific
to our job. This is partof our court deal set. There are
some actors who do who would revampas investments, who create investments. My
role has always been at a managementand strategic role, so you know,
making the whole thing work. Ithas to have the right price, It
(14:26):
has to have the right covenance andstructure, It has to fit into the
right company and the right the rightkind of spot. It has to create
value. So my side of itis more looking at the whole thing.
But my core skial is finance andvaluation. I know how money makes money
and I know where the value is. But it doesn't mean just that you
(14:48):
know, the products have to fit, the distribution channel has to buy in.
If the agents hated it and they'regoing to run off, the valuation
suddenly drops. So yeah, Imean, actually cover all spectrum of it
if we really want to, youknow, we stick to our coose guilds
and we actually extend beyond that.And that's what actually is are not just
(15:11):
liabilities. Liabilities can be done byAI and computer systems. Yeah, so
like what like if you were togive me I know, you talked about
it being much broader than valuation,Like if you were to give me a
specific just trying to get a senseof, you know, what role you
played as an actuary in these typesof projects. So like if I imagine
that there are several different, likeyou said, several different tasks and things
(15:33):
around the strategic nature of that,Like, what's an example of something that
you'd be asked to do specific toone of these transactions. So one of
the things that Japan that was mykind of light lead to bring it in
as part of Live Article acquisition.It was, you know, making sure
the valuation makes sense so that youknow, at the press level, you
(15:58):
can convince the analysts that in avery convincing way, and we actually know
the kind of under the bonmit tomake the story credible. So it's actually
helping the kind of equity analysts andthe pressed to actually understand why we're buying
those those entities. Other than that, also looking at the news of products
(16:18):
that AIG has or ALFO has andhow does that work with MetLife products going
forward. So we had a productsteam in terms of distribution, all sorts
of distribution channels all around the world. In Bangladesha the largest agency force,
right, and how do you bringthis together? You know, and how
do you merge how do you workwith all the distribution channels across all these
(16:42):
jurisdictions and making it fit into theMetLife medlife channel. These are all our
skill sets. And I mean Ispoke about my first My first role in
met Life was in product approval anddistribution channel. So I draw on this
to then go into the Mantrissone acquisitionand understand the different channels and understand the
(17:03):
dynamics, understand the products and thedynamics. And it's not one person alone,
It's that the world of consultants wereinvolved the whole of MetLife and it's
Alico. Guys were all involved.It was it's definitely like it's not possible
for one person, but I helped. I was the coordinator of all that,
(17:23):
the facilitator. And the reason whyit actually makes sense is because we
understand the dynamics, we can connectit that well. One thing I have
to ask, because you mentioned withthis acquisition, he said, it was
a fifty six fifty six jurisdictions withinthis acquisition, so you must have learned
some interesting things. Is there anythinginteresting you learned, like from a geographic
(17:45):
about you know, one jurisdiction versusthe next, anything interesting you're willing to
share? Fifty five or fifty sixdepending on definition. I think cultures are
different. But what the really impressedme was when I dealt with the Lebanese,
the Lebanon alicoteam. I had thisimpression that, you know, typically
women are general quieter and all thisand all of a sudden boom, you
(18:08):
know, the the Lebanese lead wasn'tthis female actually who just literally just don't
what about this? What about that? Is this? What a delight?
You know? Someone who actually knowswhat she's talking about and actually engages and
and understand the bits and pieces toactually work as opposed to fitting quietly nodding
or not knowing what's going on kindof things. So that really was a
(18:32):
surprise. I didn't expect Lebanon womento be so amazing, especially especially in
a financial service spector. You know. Also, I mean different cultures like
Bangladesh. I mean I never beenthere, and I suddenly realized how how
kind of like diversities and how bigit is the Middle East. What a
(18:52):
gem and it is so underrated atthe time. You know, it's like
who are they And it's suddenly whayou know, you've got number one,
number two market share. Yeah,that's lots to learn. And compared to
Greece, compared to Ireland, whichI'm used to interns of the market,
it was so much more pality.Yeah, and I'm actually looking forward.
(19:14):
We're having an episode on the MiddleEast later on in the season, so
I'm looking forward to that. Sothanks progressive, Like they they have the
ability to drive a Rose Royce atany time they want. You know,
we're still on a Toyota Honda.You know. They just go for the
best of the death at all time. Yeah. Well interesting. So yeah,
(19:37):
so the theme of today's question isdigital transformation. And you know,
you've made a kind of a bitof a you've had a bit of an
inflection point in your career and you'vehad a career transition into quantitative risk management,
and that coincides with digital transformation.So when I was thinking of the
theme for this episode, I thoughtthat made sense because we've talked about some
of your broad experiences as an actuary, not just limited to the cour there's
(20:00):
course sets, but probably more closeto that world. And then in today's
world, of course working in acompany that's doing something really innovative with bitcoin.
So I thought that digital transformation waslike a really central point to that,
or a central theme. But beforewe get into that, I mentioned
that you had a career transition inthe past decade or so into quantitative risk
management. So how you describe quantitativerisk management? Well, well, I
(20:26):
actually do we quantify risks, right. We calculate the price of the risk
by the auto insurance premium the liveinsurance premium. So it's a very natural
move and the trigger to that moveis really because of solvency two. When
the regulation changed, then it hadto have someone to actually do the risk
management side of it, both onthe qualitative and quantitative side. It was
(20:48):
a very natural selection to go intothat space. If if you're kind of
like the in a situation where youcan now in the risk management space.
I don't think it's just quantitative quantitativehelp because this is our edge, but
we also have to understand the qualitativeand the enterprise risk management framework across the
(21:10):
insurance pension as management sectors of finance, insurance, operational, strategic and and
reputational risk and so on those pillars. It takes a lot of experience to
bring that all together. And ifwe were to be able to quantify that
into one single number, which issolvency in the life space, that's what
(21:30):
we do as a living and itwas a very natural progression. But also
it's it's also praise to our coursethen mm hmmm, so yeah, natural
you mentioned, you know, Ifigured as much very natural transition. I've
always said that actuaries are in someways risk managers. Of course, some
(21:52):
of that qualitative stuff, things likepurchasing insurance, may not and it may
not be the course skill set,but of course actuaries have to wear a
risk manager had many times, especiallyin certain rules. But in terms of
the space that you're in now,you know what what inspired that transition from
I guess where you were, saya decade before, to where you are
now? What was it? Wasthere a catalyst, something that kind of
(22:17):
led you in that direction. Promotion? It was a promotion and they're paying
for it, right, you know, that's that's a progression. I mean,
it was just a very simple promoved across that and someone had to
do it, and someone had tostitched these risks together. So the correlation
risks across the metrics of the differentpillars and also the build. At the
(22:40):
time, financial risk was the problematicone. It wasn't operational risk. Today
it's probably more operational risks, butat the time financial risk is. It's
horrible. You know, interest ratesfor year zero, especially outside of the
US, what do you do?You know you priced at three percent five
percent, You've got guarantees, sothey needed and actually who had the financial
(23:00):
risk management core skills to manage thosebooks and report those books, measure those
books with the team and knowing howthat works. You know, the interest
rates to currency risk, Oh mygod, you know all these were breaking
up. Now it's so much betterbecause we're so much more trained. We
have to put the asset side ofthe kind of like vehicles and products to
(23:22):
actually has this. But at thetime it was almost like we were just
fixed interest and all hells broke loose. Do you know what happened to the
currency? Vice never heard of currencies? What I had to go back to
school in twenty ten to understand howswat book management works, right, the
detail of that. So it's everlearning, it's market moves and now it's
(23:45):
on operational arrests. How do youquantify cyber risk? How do you quantify
third class of risks and supply chainrisk? That's our core skills. We
have to break it down. Interesting. So going back to the still transformation
topic of digital transformation, yeah,or to start with fundamentally, what does
digital transformation mean to you? Digitaltransformation is a very ciche work word.
(24:12):
I think I'm actually going onto adigital transformation insurance conference where I'm a keynote
speaker in Hong Kong next week,and I bet you most people have different
view as to what transformation means.So what I'm going to use is actually
a framework that I've got from amanagement consultant for salesforce, and I guess
(24:32):
you know who sell forces. Agentleman called Jeffrey Moore and his book on
Understanding the Zone to Win. Hekind of brings this type of evolution of
companies into four zone performance zone numberone, productivity zone, the transformation zone,
and the incubation zone. And thereis actually a phase of evolution there.
(24:53):
Performance is your traditional med life,you know, Lincoln and all this
work. You just quarter to quartertargets, they just close, no change,
So that's not transformation, that's justtraining the machine. The productivity zone
is when you actually had to cutcosts, streamline automate, you know,
(25:17):
push push the burry a little bitin the hands. Again, that's not
transformation, that's just automation. That'snot changing anything but just sweepings up and
make get rid of redundancies. Andthen I'm not going to go to transformation.
I'm going to explain what incubation meanson innovation. Innovation is nascent,
it's very startup, is this idealstage of it's not really real yet,
(25:38):
there's still a proof of concept.But transformation where it's really going to keep
up. The change of the companyis the ten percent of the revenue that's
going to be one hundred percent isgoing into a different space and dominate this
as a new new kind of likecompany. I meanwhile, it's a great
example. It goes from a groupof concept innovation. So it's a whole
(26:00):
digital economy in the ecosystem of lifeinsurance and no one has been there.
So it's literally a true transformation forfor insurance business from the conventional space straight
into digital space and the digital economy. I mean, do you do your
catch I I don't you know,I use credit cards all right? Maybe
(26:27):
in your my start, I don'teven need to have everything is transception online.
You know, everything is on yourapp. So that's the digital side
of transformation. But transformation is literallya pivoting from the old to a completely
new and not just simply automating aprocess. That's transformation for me, and
(26:49):
I think that's that's how I wouldinterpret your free more so on framework as
well on transformation. Yeah, soyou mentioned I think you you partially understand
that you talked a little bit aboutlife insurance, but you know, just
take this again fairly broad question islike why is why is digital transformation relevant
for actuary specifically? MM it createsa new space of work for us.
(27:12):
If everyone is also crowded in valuingI don't know all of life policies or
lost ratio loss reserving for auto insurance, you're going to be too crowded.
I mean, what is going onthe transformation is amazing opportunity for us as
actions as a profession, we haveto feel set. We just have to
(27:34):
apply them in a different, differentproductol and different environment. Yeah. That
I couldn't agree more and I knowwe'll we're going to talk about that a
little bit further on about some ofthose opportunities. But now, since you
transition into quantitative risk management, youspend time in a couple of fairly more
more modern environments and insurre tech andfintech. So what based on your experience
(27:59):
in those in those spaces, whatare the most significant developments in digital transformation
playing out in those that you've seenplayout in those spaces today? Yeah?
I mean, as I explain,innovation is about testing out things, isn't
it? And what I'm seeing quitea lot on is the unchain and Web
three world. You know, aworld where it's completely unchained, whereas you
(28:22):
know, we're too many of theinsurance companies are almost all of them are
still off chain, except the likesof meanwhile in one or two. So
that's really big right now. Youknow, how do you how do you
create a payment system on chain?How do you use the blockchain technology is
a producal for smart contracts. Youknow, we see a lot of actories,
especially coming out from Canada, lookingat smart contracts of insurance or insurance
(28:49):
kind of contracts, or credit lendingcontracts, financing contracts and bring it into
a smart contract where it's so automatedyou just don't have an administrator trying to
figure out and remember what the covenanceor what the courses are. I see
a lot in the ESG, alot of and you know, those climate
change studies, liability stress testing andall this I also seen, maybe because
(29:12):
of just the way I tend towant to look at things, I see
a lot of actories of involved infinancial inclusion, accessibility of you know,
because we're now having the technology tomake it cheat but quick efficient on the
pro unit, you can start applyingthis into the mass without the cost of
(29:33):
having an advisor going in or anagent you know meeting you and having two
hours of their time doing it andhigh commission. These are all technology where
as long as you've got a walletor online account, things are possible as
long as there's the internet as well. So it's a lot of financial inclusion
happening as well, and a lotof very good work by the pioneers the
(29:57):
actress who are pioneering or this.I'm very proud of it. I'm very
proud of the profession. Great.We may be mavericks, but we're doing
things differently. Yeah, I've mentionedcan you talked a bit about you know,
the blockchain, you're using the termof chain, and there's an episode
we did just have mention to everyoneanyone who wants to get some more details
(30:18):
on that episode forty four web isentitled Web three Blockchain and NFTs and the
guests there he talked about distributed leisureof technology and he got into the details
of that. So if you wantmore details, that's a great resource to
look at. One follow up Ihave is specifically we talked a bit about
in shore tech fame. We kindof love them together in short tech fintech,
(30:38):
but I know a lot of actuariesworking in short tech. But I
know I don't know as many wellme personally, not to say that they're
not working in fintech. Anything uniqueabout fintech that you're seeing now, I'm
just curious because that's that's a spaceI'm not really familiar with. Yeah,
intro tech is a subset of fintechin my mind, and anything to do
(30:59):
with payments, anything to do withdistribution channels and all this that may not
necessarily be insurance. Like I've gotan actually right now who's doing stable kinds
of fintech too, on a paymentsystem on chain, just purely with with
organization who to make it happen reallyquickly and cheaper than going through hundreds of
(31:21):
middle persons between your MasterCard to themerchants. You know, this is fintech.
It may not necessarily have an insuranceelement to it, but it's in
the financial system. It's a financialproducle. Quite a lot of things happening
then, actually in the payment side, custodian side, organization side, esg
(31:41):
on financial tranceptions, curb and prices, oh, on tech something. This
actually just came to me and Ihope I'm not going too far our skift
cares. When we think of payments, one of the things that frustrates me
and I'm hoping that somebody is solvingthis problem is you know, when you
reverse transactions and it takes like sevento ten business days. I always wondered
(32:04):
why. I mean, I'll seumeI would hope that someone is working on
that problem, but it's just sofrustrating. With some of the bigger institutions,
the more kind of traditional institutions,you make a transaction and you reverse
it and it takes seven not alwayssometimes it's forty eight hours, twenty four,
but sometimes it's seven to ten,and I just can never understand why
it takes that long. It justis just ridiculous to me. And it
(32:29):
also costs a lot, right Whereaswith the unchain, if it's done,
I mean, it's just one onepoint to another point, there's no middle
person involved. That's that's the scarybit. You're gonna have a lot of
distruption going on because what happens toall these midile guys when the payments becomes
(32:51):
on chain. That's the resistance.Yeah, so yeah, you just answer
the questions just because people they're they'rethey're historically I've been there, and you
know, I guess it's my livelihoodyou're going to Yeah, you know,
if you're in one of those ones. So trying to break that kind of
like infrastructure, unless you start fromscratch, is you know you've got a
(33:13):
lot of resistance. Yeah, actuallythat's yeah, that's very helpful. But
it's good to know that at leastto some degree, that there's going to
be alternatives. No, yes,so I meant yeah, so I mentioned
that you're not the senior advisor.Meanwhile, I know you've had other rules
there. And that's the first andonly insurance company denominated in bitcoin. So
the first the natural question I haveis you know why, like what something
(33:36):
must have inspired you? I wouldimagine to start this, to start our
co found I guess this company.So I think co found a company.
I'm I'm the cheapish officer that wasbrought in because they needed a what they
call it goat old person or aveteran to go in. The two co
founders are tech tech tech brothers fromthe Silicon Valley, and I didn't have
(33:58):
much of a life insurance. It'skind of like background. There were technologists,
entrepreneur and they wanted to find outhow to It's opportunistic, perhaps to
find where things needs rebuild, andinsurance has always have this reputation of being
lagged, slow, not moving,inefficient, blah blah blah. And the
(34:19):
shows just this space in particular becauseit hasn't been done. A lot of
the property and casualty side, thewallets, the cyber risks, and all
these lots of people in that space, but no one has done the wrong
life insurance space. And I thinkNativity to some extent used the guts to
do it. And I wish Ithought about it. I really did.
(34:40):
And also another thing is it's backedby Sam Oltman and Google Ventures. Now
you'll wonder why on Earth with thesetwo parties our actors come and get involved
in insurance. I mean, insuranceare traditionally you know, your Mass,
Nutralia, Mad Life, your reallyold school guys doing it. And why
(35:00):
are these two parties coming in.It's fascinating. I mean these are people
who want to change change kind oflike the way things are done traditionally.
That they know the infrastructure that's available, the technology that could be done,
but the pathways and the complexities ofit. I think experience cannot replace you.
(35:21):
It's it isn't a complex, complexbusiness actually have a lot of roles
to play in this type of thingbecause we need to navigate, but we
also need to understand the fundamentals ofhow these things work before these tech does
that actually code it? Because theywill be no, and that's important.
Yeah. So when I describe thecompany, I give a very simple description.
(35:43):
It's life insurance denominated in bigcoin.But how would you describe the companies?
There more to it done that interms of you know, the products
and or is it just fundamentally justkind of traditional same products but just different
absolutely same products, different Productal know, you want to exchange money, it's
the same thing. I want toexchange from USD to the GBP the pounds,
(36:07):
that's the outcome I want, ButI don't want to go to eight
days of being passed around? Howdo you move that? From point A
to point b? Is the pointA point B is the same, It's
just a producol inside you're upgrading toa new technology and new platform, a
new way of doing things. Okay, so all the actuarial work is essentially
(36:27):
kind of same principles fundamentals more orless, nothing like that part is not
fundamentally at least or systemically. Yeah, the formulas and methodology is unchanged.
But the problem is with bitcoin,as you know, there's no long term
careor so how do you do evaluationwithout a valuation interest rate term structure?
You know, there's a lot ofthings missing. Is this a currency?
(36:47):
Is this an asset? Where doyou find the access to back this thing?
Where do you find their liabilities?And the amazing thing is, because
this ecosystem is so new in thedigital economy, that's just how much opportunity
for not a sactories, but anyonereally to actually go in and say,
let's create a long term assets,Let's do an ETF, let's do a
(37:08):
fixed interest. It's like going backto you know, old age of creating
this stuff, but in a differentplatform with a different type of you know,
it's a paper currency, you gowith a digital encryption. Mm hmm.
So we talked about I guess fundamentally, like you said, the main
(37:30):
thing is how you get from pointA to B. It's it's unchained versus
off chain. So that makes alot of sense to me in terms of
I would imagine or how I howI would think of it in terms of
from like an efficiency perspective, froma digital transformation perspective. That's obviously that
seems to be the core challenge thatyou're seeking to solve with this venture.
But are there ather any other specificchallenges that that you see, that you've
(37:53):
seen in or the founders whoever inthe company, I've seen unaddressed in the
market that the company's specific seeking toaddress, or would you say it's primarily
mainly just that, you know,being on chain versus off chain. No,
there's a lot of things. Youknow, you've got the assets that
missing because insurance is a liability drivenbusiness. We don't have the afset ecosystem
(38:17):
the capital markets. So when theETFs came out from black Rock, it
was that would be once one littlestep for MENCA, you know. So
it's yeah, I mean that's stillso much to do. So much.
I mean just the fact that youknow, how do you pay tax on
this? Do you pay you know? How do you bring it into a
(38:38):
state, how do you bring howdo you put this in corporate? This
into will? Is this a legitimateinsurance contract? There's just so much toot
trying to piece together. So yeah, I think it's it's a place like
where you've got a new territory andyou have to go in and build a
(38:59):
house and build a cinema and geta supermarket. It's just so much to
do that, and it's it's excellentfor the generations that are coming or even
now to actually explore because you know, it's not just about calculating my ability.
Yeah, so that's that's okay,that's very helpful. One thing I
want to follow up on with thatis like when I think of, like
(39:21):
some of the insured texts, someof the problems that they're trying to solve
is just insurance is too for instance, it's too cumbersome, Like even something
as simple as a policy application.When I think of doing a policy application
with a one of the larger legacycompanies versus you know, you have to
go on the phone do all thesethings, whereas with some of the insured
text I think you can just doit fairly quickly on your phone. Like
when when I guess you could saywhere the phunders were thinking of this company
(39:45):
other than just the unchained opchain,like just thinking of the primary the fundamental
drivers for actually even saying we shouldstart this company, other than just wanting
to you know, put things unchainedand think of the efficiencies there where they're
are there were there any other driversfor the insane in other words, incentives
to start like your company. Imean, you're in that generation where you
(40:07):
wanted the language to be simple,right, you want a language to speak
your language, I mean the languageitself. If you look at the mean
while application the language itself is you'renot not your leader is you don't you
know it's not a lawyer lawyer tryingto put in if they're there or here
with blah blah blah. You don'tget that. You know, it's just
(40:28):
very straightforward, very clear. Ifit's not clear, you get compoints.
You know, it's it's meant tobe understandable for those clientell and make it.
Customer experience is number one and weall know that. And the reason
why Apple is such a great,great demand is because the design is fantastic.
The product is great, you know, but you don't see a lot
(40:50):
of those cumbersome ones come out becauseno one wants to use it, no
matter how cheap they are. Soabsolutely, I mean the Queen slate help
because the company was a clean slate. What a lot of companies, conventional
companies could not do was actually changethe process because no one dares to break
it. If you break it,you're dealing with a secred cow. So
(41:15):
that that kind of like zone isnot conducive to transforming into a zone that
is truly transformative because no one daresto change that. But the problem with
that is it's going to be acode at moment when if someone actually does
that and drives all the new generationof customers out there to this type of
way, those that did not changeor could not evolve, they're just going
(41:37):
to die down. That's what wecall runoff. Yeah, yeah, yeah,
yeah, No, customer experience iscritical for sure, absolutely. Yeah.
Now, earlier we talked a bitabout the you know, the opportunities
when we talked about digital transformation andwhy it's rather than for actuaries. One
of the things you mentioned is kindof expanding. You never said you never
(41:58):
use this term, but I'm justgoing to use like the pie, I
guess in terms of where we canplay and where we can add value.
So what are you what are someexamples of areas where digital transformation as open
doors for actuaries, specifically beyond insurance. Well, I've mentioned about the web
three environment, the digital environment beyondinsurance. You know, I'm going to
(42:21):
be a bit controversial here. Alot of thirty years ago it was my
generation to go to banking, Ithink, or even investments. Now it's
becoming quite common, at least wherewhere I come from, in you know,
outside of the US. Actually alot of them are here. Some
of them are actually on you know, space leasing, you know, satellite
(42:44):
leasing and all thes, just infrastructure, building, project finances and all this.
It's been there, you know,It's it's no longer that novel.
And the thing is, we reallyhave to look look at where where we
can add value and where we willfeel challenged and we will we will apply
our skill set in a way thatis going to last for another twenty thirty
(43:06):
forty years. I think I wouldencourage, you know, people to actually
look beyond that. I mean,I'm in my fifties, so I'm I'm
okay, I can retire and Ican still hang on to this conventional world.
It's still going to be there forthe next time fifteen years. But
for those those that were looking at, you know, the trajectory of the
long run, I look beyond theconventional I would say, look beyond that
(43:30):
there's so much to do. Imean, one of one of the fascinating
things is a colleague of mind.His son is also naturally is doing computer
games and gaming, and that's tenyears ago gaming because of scenario testing,
all the kind of stimulation and others. How how how how amazing is that?
You know, he enjoys gaming,he enjoys game game, you know,
(43:52):
those those games, and he's inthe job that uses his mathematical skills
to do that. But I thinkwith this absolutely beyond beyond this, and
I cannot predict. I mean,AI is now pass. You know,
those who are in AI should havesomething by now. Generally it's just no
(44:12):
longer that new. So where doyou go, you know, cognitive biometrics,
genetics. Yeah, interestingly enough,I did actually have an episode on
esports about maybe a month or twoago. So absolutely absolutely, I mean,
if you love to play games,you know, how amazing is it
to work in that environment day inand day out without your parents shouting and
(44:35):
screaming and they get a day job. Yeah, he's being paid a lot
more than many actions, I know, for sure, for sure, for
sure. Yeah, And so yeah, I think we're one hundred percent aligned
on that and that's one of thereasons want to have you on is just
love to talk to actuaries who areyou know, championing that message of exploring
wider spaces. And you know,this has just been really good conversation and
(45:00):
just again want to thank you Annie. I've learned a lot and I'm looking
forward to sharing it with the community. I know everyone else will learn as
well. I know you're officially amember, You're alive with the Maverick Alumna.
I'm very proud to be to beone of you guys. Now,
thank you very much, and thankyou Dominic for all the work you're doing
(45:20):
bringing awareness to the profession and havingthat curveble thinking and kind of like outside
of the box thinking that's infallible.If everyone's doing the same thing, it
would be very sad. Yeah,fully agree. Well, I have a
wonderful rest of your evening. Annie, Thank you, and you too,
have a great day. Take care, byebye.
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