Liam Smith and his team look after the creation and validation of many of the economic inputs to our actuarial modelling platform, MG-ALFA. He spoke with us about the perils of low interest rates, and the benefits of lunchtime football!
Liam, tell us a little bit about your time at the Phoenix Group.
I’ve been here since March 2016. As a newly-qualified actuary, I was looking for a new Midlands-based role and had heard good things about Phoenix. Working with Economic Scenario Generation (ESG) processes and systems interested me. It’s not a field that many actuaries get involved with, but I knew it was an area which is becoming ever more sophisticated, with potential for even wider use across the business as technology continues to improve. So, I was keen to give it a go and develop my knowledge!
What sort of technical challenges have you been exposed to in the role?
Right from the start, the technical exposure came thick and fast! When I joined Phoenix, the company (just like the rest of the financial sector) was operating against a backdrop of low interest rates. In early 2016 we were starting to experience issues with how our interest rate models were calculating and projecting economic volatility when working with such low figures.
Despite the fact some of these issues were quite new to me, the ESG team are very technically-minded - they spend plenty of time reading technical papers and documentation to understand what’s going on in the wider market. This helps us when it comes to explaining issues to the wider business, and working with our external ESG model providers to specify appropriate improvements to help us move forward.
Can you tell us more about the team, Liam?
They’re a small but very enthusiastic bunch, which is always great to see. I found that although this was classed as a management role, the team already have an excellent knowledge base. The role is mainly about channelling their enthusiasm for wanting to upgrade and improve the different aspects of our ESG tools, and ensuring that we prioritise and meet the requirements of all our stakeholders across the business.
What sort of stakeholders do you work with?
There are always plenty of projects underway at Phoenix and developments in the wider industry which can require changes to our ESG processes. In a role like this, you have to consider the requirements of other teams across the business; for example, changing our approach to ESGs might affect the results which our Planning & Forecasting or Capital Management teams will receive.
A key part of the development and testing cycle is to discuss with those colleagues how they would be affected by ESG changes, and to take any proposed changes through the appropriate governance channels for approval. Some of the conversations get quite technical, so you have to be able to stand your ground in fairly technical discussions with senior actuaries!
What type of skills and interests do you need to enjoy a role like this?
You definitely have to be interested in the technical side of things, and be keen to apply your theoretical knowledge to practical situations. You need to want to understand how our ESG model works and how we might go about improving it - but you also need a pragmatic approach to ensure that model developments are being prioritised appropriately. Sometimes it’s not possible to improve everything at once!
What might be coming up next?
As our asset mix changes over the time, for instance our exposure to equities in different markets, you have to consider whether the behaviour of our models is still appropriate. The team are always looking into other models or methodologies we could adopt, either from approaches they’ve learned about in their studies, or from their research into best practice across the industry, which I think is really impressive.
What’s it like working at Wythall?
I think it’s really good. The last year or so has given me the most progression I’ve had in my career so far, and this is where I’ve felt the most enthusiasm to want to produce my best work. There’s plenty of variety, as you always seem to be working with different teams every time there’s a new project!
Outside of work, the facilities are great too. Keeping healthy is an important thing for me, so I’ll often find myself in the on-site gym or out on the football pitch at lunchtime - sometimes I’ve been known to play four matches per week!
Liam Smith, Qualified Actuary and ESG Manager
If Liam’s story has inspired you to want to come and work with us, we’re always interested in hearing from newly-qualified or more experienced actuaries looking for a new technical challenge. To find out more, take a look at our current vacancies.