Photo: April 30, 2019. From left to right, Emiko Yoneda; Dirk Nieder, FSA; Akiko Kawamura; Chuanfeng (Sam) Huang, FSA
When I was young, my world revolved around the city of Cologne, Germany. I was brought up there and completed the German equivalent of a master’s degree at the University of Cologne. I then continued my studies and earned the German equivalent to a Ph.D., referred to as Dr.rer.nat. The Dr.rer.nat. degree becomes part of your name, and after graduation, I was addressed as Dr. Nieder. During my travels, I sometimes need to explain to a flight attendant that I am not equipped to assist in medical emergencies, albeit I may be able to help the pilot solve any mathematical problems with navigating the airplane.
One of the exams as part of the Dr.rer.nat process required me to research and present on reinsurance, and I found the topic so exciting that I decided to pursue a career in it. So, it was a logical next step to join Kölnische Rückversicherungs-Gesellschaft (Cologne Re), which was established 175 years ago in—you guessed it—Cologne as the first professional reinsurance company in the world.
I was confronted with my first experience of different cultures when working with a U.K. life insurer on a project. German people typically address each other, especially in business life, with the formal “Herr/Frau” title. My boss hence called me “Herr Nieder” during our discussions, and I also would address him formally when we talked. I was surprised when my boss asked me what my first name was right before a meeting with the management of this U.K. life insurer. We then addressed each other by our first names throughout the meeting, only to fall back to the formal “Herr/Frau” titles right after the meeting.
Despite joining a reinsurer that operates internationally, it was a year into my working life before my Cologne-centered life plan got disrupted: The board member responsible for our operation approached my desk one morning and asked me to follow him to his office. This was a first for me, and I trust you can imagine the thoughts that went through my head when I followed him. It turned out that the board member was offering me an overseas assignment in Singapore (relief!). Taiwan had relaxed entry restrictions to foreign life insurers in its local market, and I was to be seconded to strengthen our actuarial team with the aim of supporting these insurers (our clients) in setting up their operations in Taiwan.
My first cultural challenge in Asia occurred during my first client lunch at a Chinese restaurant in Singapore. I was looking forward to this event, as it was my first client contact in Asia, and I loved Chinese food. However, I was more than puzzled by the dishes that were served during the lunch: They were everything from century eggs to shark fin soup, which was still seen frequently on menus at that time. I had never seen such dishes before!
Through this experience, I learned there are fundamental differences between the Chinese food that was adapted to German tastes and authentic Chinese food. It was an experience that followed me to many other countries—I was not as confused when the pizza at an Italian restaurant in downtown Seoul was served with a free helping of kimchi.
My upbringing in Cologne did not prepare me well for the cultural differences in social distances. German people have a preferred interpersonal distance of about an arm’s length, even for close friends. Japanese people, on the other hand, are said to feel comfortable with a distance that is only half of that, and Japanese people who live in crowded cities, such as Tokyo, feel comfortable with even shorter social distances. Thus, I experienced that an additional person could always squeeze themself onto a train in Tokyo, whereas people who want to board a half-full train in Germany are asked to take the next one.
The social distances in South Korea are supposed to be even greater than the social distance preferences in Germany. I was caught by surprise when I experienced minimal social distancing and brief handholding during dinner events and the following karaoke. I remembered the famous saying, “When in Rome, do as the Romans do,” and kept an open mind.
Germany did not have an actuarial qualification based on a formal education program when I graduated from university. But I felt that my academic education and professional training would suit me well to support the intended development of innovative products in Taiwan. We worked with companies to develop products such as dread disease, disability and long-term care. But I learned there are differences in actuarial approaches. During my studies, I learned to use Zillmerisation, which allows us to increase the amount of future net premiums in the valuation to recoup initial acquisition and administrative costs.1 Taiwan was very much under U.S. influence at that time, which also extended to the actuarial principles used. So, I learned about the full preliminary term approach, which achieves a similar effect to Zillmerisation.
I realized there is a much larger world compared to what I learned during my academic years, and I consequently started taking the Society of Actuaries (SOA) actuarial exams. Admittedly, I felt somewhat frustrated that none of my academic achievements were recognized, and that I had to pass (again) courses on basic calculus and statistics. The topics became more challenging and interesting as I progressed through the exams. There was a strong focus on U.S.-specific aspects in several exams, which was OK as long as it enhanced my knowledge. But I struggled with the National Association of Insurance Commissioners (NAIC) model regulations, which I had to know by heart for the exams but to which I never expected to be exposed in my career. Yet, others may have found this aspect of the exam process to be a benefit, depending on the work path they chose.
While education standards seem to have converged in many countries, it appears to me that mutual recognition among actuarial associations is more of an exception rather than the rule. As I see it, this can put limitations on actuaries who want to work globally, and everyone with an international focus should be aware of such potential limitations. I cannot help but wonder about the positive outcomes if the actuarial associations could agree on core requirements that would be recognized by all qualified actuarial associations. Additional country-specific modules—and possibly language requirements to qualify for local work that requires regulatory approval—could be added to the core requirements.
My thinking process was challenged when I spent less time on actuarial questions and more time on business-related issues. My entire academic education was focused on framing problems and finding unique solutions. The existence of multiple solutions was considered undesirable and indicated the need to reframe the problem.
An example of the problems that can occur with multiple solutions comes from the field of differential equations. Think about a brigade of soldiers marching in step across a bridge, as occurred at England’s Broughton Suspension Bridge in April 1831. Their rhythmic marching amplified the frequency of the natural vibrations of the bridge, and the resonance was strong enough to make the bridge vibrate until it collapsed. From a modeling perspective, the occurrence of such an “unstable” solution must be avoided.
This challenge became obvious when I started my MBA education and we were given our first case studies in class. I was, of course, looking for “the” correct solution to the case study. Imagine my confusion when the case studies triggered intensive discussions that did not converge on one solution, but allowed for opposing solutions. It was an important learning experience to look not only for “my” unique solution, but to appreciate the enrichment that comes with multiple, sometimes opposing, solutions provided by peers.
I appreciated the importance of languages when I moved to Japan for my second overseas assignment. This importance goes beyond the fundamental question of whether you just purchased mustard or toothpaste at the supermarket, which cannot be distinguished when you don’t know the Japanese characters.
Japan is a country with high-context communication that focuses on underlying context, meaning and tone in the message. A “no” may be conveyed through silence, hinting at difficulty or switching the topic. Saving face for other people is essential, and criticism is rarely voiced in public. Emotions are not shown, and honorifics are crucial to show respect. Business cards are treated with respect, reflecting the seniority of the counterparty and formally presented using two hands while bowing the head.
German communication, on the other hand, is low context—it is direct and task-oriented. Contributing expertise is seen as important, even if it contradicts the hierarchy.
At the beginning of my first Japanese language lesson, my Japanese teacher asked me how I wanted to be addressed. As we communicated in English, I offered my first name, Dirk. The immediate response was, “OK, Dirk-san,” which translates into “OK, Mr. Dirk.”
Among many aspects of Japanese people and culture, I learned—during the Japanese language lessons—that the word “difficult” in Japanese (in phonetic spelling: muzukashii) has the meaning of “impossible,” rather than the German meaning of “may not be easy, but doable,” and the phonetic expression “hai” has the meaning of “I am listening to you,” rather than the commonly used translation “yes.” These different interpretations on their own can make a big difference when discussing projects.
Most languages and cultural preferences will be on a scale between the high-context Japanese and the low-context German. It’s important when communicating with people from other cultures to be aware of the relative differences between your culture and theirs. Learning a language is key to understanding these differences. It is not necessary to master a language perfectly, but it will help enhance your cultural understanding. In fact, just putting in the effort to try to learn the language earns the respect of locals.
Goals are important in life, from both personal and professional perspectives. When I became responsible for the life/health markets in North East Asia, which comprises Japan, Korea and Taiwan, I set a goal to climb the tallest mountains in my area of responsibility. These are Mount Fuji in Japan (3,776 m), Mount Halla in South Korea (1,947 m) and Mount Yu in Taiwan (3,952 m). I was, of course, lucky that Nepal was not part of this area.
I was touched when my team members, who became aware of my goal, suggested that we do the climbs together. It was indeed a great experience to see how team members assumed roles that were different from their roles in the office as we climbed. I saw leadership skills that I had not previously experienced and most likely would never have seen without the climbs.
Working globally results in many new professional experiences. But there are potential challenges that should be considered before moving to another country.
A temporary overseas assignment, such as an ex-pat assignment to a different country, offers increased professional responsibilities and brings great opportunities to widen one’s personal horizon. The motivation for such assignments is typically a short-term local need, and a return to the home office is inevitable. The reintegration at the home office can be a challenge after having been exposed to exciting developments and increased responsibility abroad. Peers at the home office may also have had better opportunities to work toward the next position on their career path.
In the case of a permanent move, the work field may be limited due to the locally required actuarial qualifications and language requirements. Hence, the field of work should be carefully chosen. A return to the home country could be challenging if the necessary actuarial credentials are not maintained and working experiences in the home country are valued more.
I lived for about three years in Singapore and four years in Japan. For the last decade, I have spent one-third to half of my working time in Asia every year—mainly in Japan, South Korea and Taiwan—working with our local teams to support our clients. It has been a truly enriching experience that exposed me to new cultural experiences and professional challenges.
I still vividly remember when we developed a pricing model in Korea for a product that paid a second cancer diagnosis benefit for people with a recent history of cancer, and the subsequent interaction with our client and (indirectly) the regulator. It had not been done before, and we were excited after we received regulatory approval.
Today, COVID-19 affects my life as it does for most people. I have been “grounded” in Germany since April 2020 due to the travel restrictions implemented to contain the spread of COVID-19. You can read about my experiences as a traveling actuary in articles published in Reinsurance News.
Tools such as WebEx, Microsoft Teams and Zoom became the new standard, and they provided a much-needed alternative to in-person meetings. Still, there is a human element missing when having a virtual meeting. The element is difficult to describe and may perhaps be best understood by people who claim that digital audio lacks the warmth of vinyl records. Virtual tools will play a role going forward, but I am convinced that personal contact in a post-coronavirus world will resume both in personal and business spaces. There continues to be a lot of potential for actuaries who desire to work globally to face their own professional and personal challenges.
Statements of fact and opinions expressed herein are those of the individual authors and are not necessarily those of the Society of Actuaries or the respective authors’ employers.
- 1. This method was described in an 1863 paper entitled “Contributions to the Theory of Life Insurance Reserves” by August Zillmer (1831–1893). ↩
Copyright © 2021 by the Society of Actuaries, Schaumburg, Illinois.