The Growing Strength of Actuaries in VietnamA look at the development of the actuarial profession in Vietnam over the past 20 years January 2021
Vietnam is a relatively new market for actuaries, with the life insurance market only being about 20 years old. During the early years, foreign experts handled all important actuarial positions, with Vietnamese staff being almost purely nonactuarial. However, there has been significant growth and development in the profession over the last five years, with the Society of Actuaries (SOA) playing a big part. Vietnamese actuaries are now the CEOs of several major insurers, such as Aviva Vietnam and Forward Vietnam. They also hold the role of chief financial officer at AIA Vietnam, FWD Vietnam and Dai-ichi Vietnam. This article explores the development of actuarial science in Vietnam.
Growth of the Actuarial Profession
Decree 76 in July 2016 formalized the role of actuaries in Vietnam. Article 31 provides the criteria to be the appointed actuary of life and health insurers. The qualifications include being a fellow of one of several international actuarial organizations, including the SOA, with either having work experience of at least 10 years in life and health insurance or five years of experience post-qualifying. The appointed actuary also should reside in Vietnam while serving in this role.
The role of reserving actuaries in nonlife insurers (elsewhere called general insurers or casualty insurers) is described in Article 32, which requires the actuary to be at least an associate of the SOA or another international actuarial organization, or have at least five years of work experience in nonlife insurance and have passed at least two actuarial exams of other international actuarial organizations.
Several other articles in Decree 76 relate to the actuary, namely Articles 58 and 76. Article 58 details the process for an actuary to change the actuarial reserving methodology, which includes applying for approval with the Ministry of Finance. Article 76, on the other hand, provides guidance to the actuary for surplus distribution of for-profit products, including the requirement to ensure at least 70 percent of surplus is given to policyholders.
Circular 50 in May 2017 provided additional guidance on a range of actuarial matters. In particular, it discusses the role of the appointed actuary (Article 15) for life and health insurers and the role of the reserving actuary (Article 16) for nonlife insurers.
The role of the appointed actuary and reserving actuary in Vietnam is to:
- Approve new products and certify the premium rates and yearly assessment.
- Certify actuarial reserves.
- Evaluate the solvency ratio on a monthly basis.
- Send reports to the board of directors on any matters that could affect the financial situation of the insurer and propose remedial measures. For issues that could have a serious effect on the insurer’s solvency ratio, the appointed actuary must give a report to the Ministry of Finance.
- Assess the reinsurance quotation and reinsurance agreements before submitting them to the board of directors for approval.
- Fulfill other duties to ensure the insurer’s financial safety.
In addition, the appointed actuary needs to:
- Participate in separating and allocating the annual surplus of the policyholder fund on the basis of fairness, reasonability and observance of the law. At the end of the fiscal year, the appointed actuary shall prepare a written report on financial performance, including profit-sharing and proposing profits to be shared with each group of policyholders.
- Send quarterly or annual reports to the board of directors on the financial situation, forecasted financial situation and investment development, including investment risk assessment and asset-liability management analysis.
Whereas the reserving actuary needs to:
- Separate owner’s equity and insurance premium resources.
- Assess the payment of indemnities.
The Growth in Actuarial Education
Currently, there are two universities in Vietnam that offer official actuarial training programs. These are the first universities in Hanoi and Ho Chi Minh City, respectively, to offer programs:
- National Economics University, Hanoi. Beginning in the academic year 2018–2019, the National Economics University—specifically the Faculty of Economics and Mathematics—officially started the actuary training program. Students complete their studies in English for this bachelor’s-level program. Around 50 students were admitted the first year.
- University of Economics, Ho Chi Minh City. The Bachelor of Science in Actuarial Science program formally began in September 2019 with 40 students in the initial cohort.
The Role of the SOA
The SOA has seen a growing interest in the actuarial profession in Vietnam, with an almost 70 percent increase in the number of Vietnamese candidates taking SOA exams over the past five years. In 2019, more than 220 candidates took SOA exams in Vietnam. This increased interest led the SOA to include representation from Vietnam on its Greater Asia Committee at the end of 2019, which enables the SOA to incorporate programs of benefit to candidates and actuaries in Vietnam.
The SOA visited the National Economics University in Hanoi in July 2018 and May 2019 and met with Huy Nguyen Quang, ASA, deputy head of the Faculty of Mathematical Economics at the National Economics University, and other faculty members. Quang’s work in growing the profession aligns closely with the SOA’s initiative to develop actuarial talent in Vietnam. To this end, the SOA also allows credit for some courses (Validation by Educational Experience, VEE courses) taken at Vietnamese universities that motivate Vietnamese students to follow an actuarial career.
The SOA is one of the major sponsors of the Vietnam Actuarial Conference, which has been held annually in Vietnam for more than 10 years. In November 2019, the SOA sponsored the annual conference in Ho Chi Minh City by inviting the chief actuary of Prudential Thailand, Itt Apiraktivong, FSA, to present on the topics of “Actuary 2.0, Future of the Profession” and “Transformational Leadership.”
In December 2020, the SOA again participated as a sponsor of the annual Vietnam Actuarial Conference, this time with delegates presenting virtually. SOA President Roy Goldman, Ph.D., FSA, CERA, MAAA, delivered welcome remarks, and a former member of the SOA Greater Asia Committee, Kitty Ching, FSA, FAICT, shared her insights on professionalism in an International Actuarial Association (IAA) panel discussion. The SOA Research Executive Committee member Victor Chen, FSA, CERA, FCIA, presented the SOA research study on “Using Data Analytics to Enhance Insurer Operations in Asia-Pacific.” The SOA Greater Asia Committee member for Vietnam, Sean Hsiang Kau, FSA, MAAA, chief risk officer and appointed actuary of Hanwha Life Vietnam, also participated at the event and shared SOA news and updates with the audience at the SOA sponsor booth.
As part of the SOA Greater Asia Committee, Kau is actively helping the SOA support local actuaries and stakeholders in professional or study advancement. Because he is a local expert and a representative of the SOA, he can facilitate collaboration among the SOA and local parties. From time to time, Kau also joins with other local senior actuaries and industry experts to meet with the Ministry of Finance on various local planning and actuarial projects, such as preparing for the formation of the Vietnam Actuarial Society and the development of a local mortality table in Vietnam.
Copyright © 2021 by the Society of Actuaries, Schaumburg, Illinois.