‘The backbone of the insurance sector, actuaries play a crucial role in asset liability management’

Apeejay School, Panchsheel Park alumna Aashima Grover is a senior manager with MetLife, one of the world’s leading financial services companies, providing insurance, annuities, employee benefits and asset management. Managing the US GAAP and local STAT valuation for EMEA countries at present for the US-based company, she has also headed teams working on actuarial software solutions for global clients. Aashima has a rich and diverse experience that includes persistency analysis, mortality analysis, business margin reporting and expense investigation and has also worked in the areas of prophet modelling, asset share and bonus calculations, along with reinsurance and group insurance.

In a wide-ranging interview, Ashima demystifies the world of actuarial services, calling them the backbone for core insurance functions. She also goes down memory lane fondly reminiscing about her schooldays and provides tips for those contemplating a highly-paying career as an actuary professional. Edited excerpts:

Please tell us about your educational and professional journey so far.

I did my schooling at Apeejay, Panchsheel Park.  When I was in class 11, I chose Science but I was clear that having taken Sciences, I didn’t want to pursue a career in either engineering or medicine. So I chose a combination of Physics, Chemistry, Maths, English and Economics. Even at that stage it had become clear to me that Maths and Statistics were my core capabilities. My elder brother had joined the Indian Institute of Technology followed by Indian Institute of Management, Ahmedabad. For my undergraduate studies, I pursued Statistics Honours to begin with, till I discovered Actuarial Science in my second year. At that time it was a new course which could have opened a lot of new avenues for its students because there was a huge demand for actuaries. My parents – my father is a chartered accountant and my mother was a PGT teacher teaching at a government school – did further research that confirmed my hypothesis about the course. So, I decided to pursue Actuarial Science seriously. By the time I had graduated from college in 2007, I had already cleared three actuarial exams that were perceived to be very difficult. I then joined Munich Re in Mumbai as an Actuarial Analyst and after a year, returned to my hometown in Delhi to join Max Life Insurance in the second half of 2008.

I stayed in Max Life Insurance for eight years and worked in a variety of teams within actuarial services such as the experience study team which monitors the mortality experience, the lapse experience and the expense studies of the company. Then I switched to the shareholder reporting team that addresses the profitability metrics which shareholders want to see. Eventually I was into the modelling team as well. So in that span of eight years, I worked in various fields of actuarial sciences. Of course, along with that I cleared a few other exams. So by the time I left Max Life Insurance I had cleared nine actuarial exams.

“Back in 2007, not many people were aware of what an actuary professional does. But today, a lot of people are aware of the profession and have respect for the kind of hard work that one puts in. People are also aware that it is a very high-paying profession. If you Google the highest-paying professions across the world, you will see results like investment banking, top-shot lawyers, and then at number three or four, you will see actuarial science as well.”

-Aashima Grover,  Actuarial professional, Senior manager, MetLife

Many of us might not understand what an actuary actually does. So please tell us a little about the job responsibilities of an actuarial services professional?

Actually, an actuary is anyone who is good with numbers and helps analyse numbers. Why they are particularly preferred in the insurance sector is because insurance is a long-term business. If for example, we talk about life insurance, we are insuring someone for their entire lifetime, at least for a policy duration of 10-20 years. So it’s a long-term liability that the company is taking on its books. Corresponding to that liability, the company has to set up reserves and be prepared that if tomorrow the claim comes, it must be in a position to pay out that claim. So they have to create reserves. As actuaries, we have to monitor on an ongoing basis, the experience of policyholders. We have to come up with new products, price those products and determine what premium rates must be charged to different policyholders depending on their age, occupation, demography and other factors. Also, actuaries play a very important role in asset liability management. So, for example, you have a pool of say one lakh policyholders, you have taken on that liability on your books. So, corresponding to that, you need a matching asset side as well. For example, if in the Covid scenario with multiple claims in a year, there was a possibility of companies becoming insolvent. So, for all these mathematical calculations, actuaries are involved.

As a senior manager with MetLife, what does your job entail on an average day?

Let me rewind a bit. After eight years of Max, I went to a slightly different field. Although it was still actuarialI joined an American IT company called CSC technologies, which is now called DXC. They provide policy administration systems to large life insurance companies. So even in that, actuarial calculations were required. I was with that company for three years and then returned to the core actuarial field. That is when I joined MetLife in 2019. At present I am looking at the European market and am responsible for their US GAAP reporting. MetLife is an American company listed on the New York Stock Exchange. All financial organisations based in the United States have to comply with a regulatory reporting regulation called the United States Generally Accepted Accounting Principles (GAAP). So we have to comply with these accounting principles. So any business that we write, we have to show the profitability in terms of this accounting regime as well. Currently, I’m responsible for the reporting of the European countries. We report the numbers monthly for each of these countries. Once the quarter ends, there is a more detailed analysis that we carry out in which we see how the numbers have moved from one quarter to the other. So when I say ‘moved’ , I mean there could be normal policy movements, new business coming in or exits. There could even be lapses or debts. And there can be regulatory changes within that or we may have revised our assumptions. Say, for instance, we revise the mortality table or the interest rate assumption, given the economic scenario. So for all these things, we calculate their impact and then we present it according to the US GAAP regulation to the shareholder. So basically, we are the backbone that does all the calculations and we present the results in a format to the shareholders with which they can make informed decisions.

Did you want a career in insurance or in actuaries when you were young?

See, my elder brother Ashneer, he is four years elder, went to IIT Delhi and then IIM-Ahmedabad. So I always had this feeling that if I went into a similar trajectory of engineering and management, there would always be that comparison. And there can be nothing better than IIT Delhi and IIM Ahmedabad in India. So as I mentioned, during my class 11 and 12, and especially when I was doing graduation in Statistics Honours, I realised that Maths and Stats were my core capabilities. So, considering all that, actuarial science was like a normal progression. And when I started writing these actuarial exams, I started enjoying them as well, although the pass percentages were low at less than 1%. It’s even tougher than the CA exams. Actuarial Science is a niche and demanding field because you have to study along with the job and, and the job itself is demanding. In a normal working day of nine hours, for close to six hours, you are doing number-crunching. Back in 2007 not many people in India were aware of this. But today, things have changed drastically. A lot of people are aware of the profession and have respect for the kind of hard work that one puts into it. People are also aware that it is a high-paying profession. If you Google the highest-paying professions across the world, you will see results like investment banking, top-shot lawyers, and then at number three or four, you will see actuarial science as well.

Please share your memories of the time you spent at Apeejay School, Panchsheel Park.

I was always a good student who scored 90% or so without too much stress. If not the topper of the class, I used to be holding the second or the third position. Along with that, I wasn’t a typical only-studious kind of a person. I used to participate actively in a lot of dance competitions and inter-house competitions, annual day functions and all other co-curricular activities that happened in school. In class 11, I remember, we had prepared a dance performance for our seniors. So I was an active student in that respect as well. But yeah, one memory I laugh about is that even though I was a 90% throughout, a lot of the time I used to be compared with my elder brother. On a more serious note, my economics teacher, Madhuri Ma’am, helped me realise that Economics and Maths were my core capability. Also, I have very fond memories of the auditorium of the school. It was fully air-conditioned and a lot of inter-school competitions used to be held there. It may be a very common feature for a lot of schools now but back in the day, between 2000 and 2004, not many schools had that kind of infrastructure. So, it was a thing of pride that we had an auditorium and an Olympic-sized swimming pool. In the summer months, we used to have swimming classes twice a week. Again, this was something not many schools could say at that point in time.

When you began in your profession, LIC was the biggest player in the insurance sector. It has kind of come full circle with an initial public offering (IPO) expected soon. How do you think the LIC IPO will impact the insurance sector in the country?

Frankly, I can’t think of many good reasons why LIC wants to go in for an IPO because I think they have enough funds of their own. Having said that, it must be part of their business plans and expansion plans. Definitely the insurance sector in India has come a long way over 22 years of privatisation. The insurance penetration in India is greater than before. And some of these private players have gained the confidence of people over the years. Two decades ago for many people, even educated people such as my parents, insurance meant LIC. They had this inhibition that if they bought insurance from a private player, when the time of claim came, they wouldn’t get their money. But all these insurance companies have consistently lived up to what they promised in their policy terms and conditions. So that is an achievement in itself. Also, I think the Insurance Regulatory and Development Authority of India is doing a good job in monitoring the way all these insurance companies are working and ensuring that the promises made to policyholders are met. So there is a lot of focus on meeting what you’re promising to the policyholder. The Indian insurance market and industry have definitely come a long way but I would say there are still miles to go.

With your vast experience, please share some tips for those who want to make a career in actuarial services.

I think to sustain a profession like medicine in which you have to study throughout your life or even actuarial science, consistency is the key. Even now, I’m not a fully-qualified actuary. To become a fully-qualified actuary, you need to complete 15 exams and I am 12 exams down as of now, even after having spent close to 15 years in the profession. There will be points in your career where you feel you are putting in much more effort than the returns in terms of money. Or there may be situations where you get that inclination to just quit. In my case, I have two children. One of the boys is nine years old and the other four. So after they were born there was this inclination of quitting such a difficult profession because of course, it’s tough to continue with such a profession and raise kids as well. But then consistency and consistent hard work will definitely pay in the long run. You may not see the benefits in the short term, but believe me, in the long run, it will pay off. Also, don’t let anyone else decide what your strengths are. There can be times where you get managers who feel that you’re not worth it or that you won’t be able to survive the profession. But they can be judging you based on their limited interaction or knowledge of you. But only you can decide what your capability is.

One final question. How did the insurance sector deal with the pandemic that hit the world? Did the industry players come up with some innovative products during this period? How did it impact you at a personal level?

Globally, if you look closely, the insurance sector has been impacted in a positive manner. Although there have been many cases of Covid, the mortality resulting from the pandemic was not that high. So, it did not really hit insurance companies in a negative way. In fact, because of the pandemic, the insurance penetration has increased. In a way insurance is based on the concept of fear. You fear that something may happen to your family or you. So because of the pandemic, and because of the fear emerging out of that, the insurance penetration has increased. Insurance companies have written a lot of new business during these three years, which is positively impacting their books. Personally, for the past two and a half years, I have been in the work-from-home mode. Initially, there were a few hiccups and operational issues. But eventually, it’s working out well.