Climbing the Ladder

Photo: istock.com/jamesteohart

With more than 30 years of work experience, Mohamed Hassan Kamil, FSA, is a well-known figure in the insurance industry in Malaysia. He has been at the helm of Syarikat Takaful Malaysia Keluarga Berhad (Takaful Malaysia), the first Takaful operator (Islamic insurer), as group chief executive officer since 2007, and he has propelled the company to be one of the top Takaful operators in the world.

Prior to leading Takaful Malaysia, Hassan Kamil worked in the United States from 1987 to 1994 after graduating with a Bachelor of Science in Actuarial Science and Master in Business Administration from the University of Iowa. Upon his return to Malaysia, he held several key positions at multinational insurance companies, including chief operating officer, chief actuary and chief financial officer.

Hassan Kamil is also a fellow of the Society of Actuaries (SOA) and a chartered life underwriter.

How do your actuarial skills translate to thriving in the role of CEO of an Islamic insurance company?

As a group CEO and a qualified actuary, I have the analytical skills and industry knowledge to comprehend the technical aspects of managing an insurance company, and I translate this knowledge into strategic initiatives and use it to achieve a competitive advantage. My actuarial skills provide me with the insights to push the business forward and revolutionize the way data and analytics are used to drive the financial performance and operational and network efficiencies of the company. My actuarial skills have helped me make quick decisions, as I  understand the financial implications of all key decisions ranging from asset investment to the pricing of large risks. Even though I am qualified as a life actuary, I spend a considerable amount of time on property & casualty (P&C) matters because my company works in both the life and P&C businesses. I find many similarities in the two different classes of businesses, as my life actuarial skills also apply to risk assessment and underwriting for P&C products.

Takaful Malaysia has grown successfully, as I am fortunate to have a team of qualified professionals to steer the company to a higher level with sustainable financial performance. The Transformation Program, which I introduced in 2008, was one of the key factors behind the strong performance of the company. We witnessed a tremendous increase in our market capitalization—more than 25 times over nine years, with return on expense (ROE) in excess of 30 percent. Suffice it to say, we successfully set the benchmark in the insurance industry, outperformed our industry counterparts and were the top publicly listed company under the financial services sector as a whole.

Has being an actuary held you back or propelled you forward in becoming a CEO?

Becoming a qualified actuary is not an easy career path. As one of the first Malaysians to qualify as an actuary, then rising to the position of a group CEO of an Islamic insurance company, I have faced multiple challenges during my 30-year career. It was not smooth sailing. Nevertheless, being an actuary has never in any way held me back from achieving my goals.

Having trained and worked in the United States, I strongly believe that I positioned myself with the right credentials, skills and experiences from the start. Additionally, upon returning to Malaysia, I was fortunate to hold several key management positions at multinational companies, which equipped me with the necessary exposure and opportunities for advancement. The experience gained has been a contributing factor in accomplishing great milestones and remarkable achievements at both personal and professional levels.

Experience has taught me how crucial it is to think outside the box and constantly be innovative to set myself apart from others. It takes more than just technical skill and industry knowledge to grow profitability and lead the pack. I need to know how to evolve and enhance our product offerings and services to keep up with rapidly changing consumer demands as well as technological advancement.

Tell us something about your business that most actuaries don’t know.

In Takaful Malaysia, the management (operator) is the custodian of the risk funds, and we receive a fee as the operator of the risk fund. Our customers are referred to as “participants.” As the operator, we are tasked with managing the claims, underwriting and all other insurance functions. This is the Islamic insurance company business model, where the risk funds are segregated from the shareholder’s fund. Under this model, the management of the company will act as the “operator” to manage the Takaful fund on behalf of the participants, and it will be entitled to a wakalah (“service”) fee for the services provided. This model also provides a unique concept of surplus distribution to the participants and shareholders from the surplus of the risk funds. By contributing Tabarru’ (i.e., cost of insurance) into the common Takaful fund, both the participants and shareholders may be entitled to the share of underwriting surplus, if any.

The takaful business is governed by shariah (Islamic) principles where investment and the type of clients need to comply with the Islamic governance. We are not allowed to underwrite clients conducting businesses that are not in line with shariah governance, such as gambling and brewing alcohol. This is not a major barrier in Malaysia, where the majority of the population is Muslim, but it can be an issue in countries where Muslims are a minority.

What did you enjoy most when you first entered the actuarial profession?

I was able to practice my analytical and technical skills in estimating the financial impact of uncertainties. But most important, I helped clients to minimize their risks. Apart from the fact that the profession has a strong employment outlook and projected job growth, the perks of getting the attractive remuneration and rewards, as well as the vast exposure to actuarial work, were among the advantages I enjoyed when I first entered the actuarial profession.

What are the hardest nonactuarial aspects of your job?

The fact that the lives of so many people are relying on my decisions is a big weight to carry. As the group CEO, I have to make some tough decisions that will affect the stakeholders, including both the shareholders and the employees. When you are the CEO, you become the focal point for your management team to refer to, and I must admit that managing people is not easy. However, I believe I know how to get the best out of people. On the whole, it’s a huge responsibility that brings perks and challenges in equal measures. Managing people is not like solving actuarial calculations. There is no single correct answer.

Do you miss doing technical actuarial work?

Frankly speaking, I do not miss the technical aspect. I’ve been in the industry long enough to utilize my analytical and technical skills—so much so that being an actuary has become part of my DNA. I have a very strong actuarial team that relies on my support, and my role as the group CEO does not stop me from practicing what I have learned and gained over the years. It’s a win-win situation for me: In my current role as group CEO, I don’t just look at certain matters from the entrepreneurial perspective; I also look at them from an actuarial point of view.

Is it easier or harder for your appointed actuary to work for you as CEO since you are an actuary yourself?

It goes both ways, to be honest. I have to admit that I set a benchmark for my appointed actuary to meet, since I was a chief actuary previously and know what outcomes I’m expecting. They need to think ahead when it comes to actuarial matters since they know I am always at the forefront of things. Our thinking and approaches to certain matters could be different although we share the same goal, so this is where we combine forces and come out with the best solution—this is the unique advantage that we have in Takaful Malaysia compared to other industry players.

What things keep you up at night?

Work-related matters that could not be resolved during the day sometimes keep me up at night. Being a group CEO is not just about being a business figurehead. Overseeing the financial and market performance, managing people and finding solutions to unresolved issues that require my decisions are some of the things that need my constant attention.

What advice would you give to other actuaries who aspire to become a CEO?

For actuaries who aspire to become a CEO, being a visionary leader is important. They need to have in-depth industry knowledge, but they also need to be able to adopt the perspective of an outsider. They also should have the ability to connect disparate ideas and to communicate energetically and courageously. They should always be looking for synergistic thinking opportunities. Success does not come without working hard—it’s never going to be a 9-to-5 job. I would also advise actuaries who aspire to be a CEO to stay passionate in this journey. Even though it will be trying at times and requires a lot of hard work, the results are worth the effort.

On a more personal note, my success has been a testament of ceaseless effort. I’ve put in years of dedicated service, creativity and innovation.

Will the insurance world still need/want actuaries in 30 years? What types of business will still demand actuaries?

Actuaries will continue to be in demand with the rising consumer awareness of the importance of insurance. However, data scientists are anticipated to play a leading role in the industry going forward, as they can leverage a vast array of tools and techniques at a rapid pace. Although actuaries and data scientists have many skills in common, there are distinct differences among their competencies and working approaches. Data science and artificial intelligence (AI) are progressing leaps and bounds. The actuarial function in the insurance world will be further redefined by AI, as more sophisticated AI systems will handle the routine work of actuaries in the future.

Actuaries will only advance their field and careers if they diversify their skills and knowledge into new areas or sectors of work. They must adapt and acquire new roles. There’s a huge need for actuaries in many different areas, so they need to get into other fields for the profession to thrive. So, yes, actuaries will still play an integral role in the future—mainly in the financial services sector—with skills in finance and probability combined with the ethical disciplines of a well-regulated profession. Opportunities may also open up in new fields, such as risk management.

What are the main challenges for the actuarial profession in Asia?

There are two main challenges: 

1. Talent shortage. Shortage of qualified actuaries remains a challenge, as many developed markets struggle to hire skilled actuaries to fill the available roles. The reasons for this talent shortage are multipronged, from skill set mismatch to the fact that some actuarial professionals are swayed by the vast array of nonactuarial positions available outside of the industry.
2. Role confinement in an organization. Many actuaries are confined to an actuarial division instead of being at the forefront of a business. They are merely working behind the scenes, assigned to dealing with analytical matters and crunching numbers without having greater exposure and a platform to utilize and expand their skills into other areas of an organization. This common practice should be addressed, as organizations need to realize that actuaries should be given the opportunity to play a bigger role.

Copyright © 2019 by the Society of Actuaries, Schaumburg, Illinois.