An insight to consulting at EY Actuarial

EY Actuarial provides advice to mostly pension funds and insurance companies for their actuarial problems and challenges. Often highly mathematical and complex issues, the job is suited perfectly for econometrics graduates. SECTOR had the pleasure of interviewing two of its employees, Jonathan Bergh and Erik Lucas. Jonathan studied econometrics at the VU and studied to become a mathematics teacher afterwards. After a year as a teacher, however, he decided to change to the world of business instead. At EY Actuarial, he found a job with diverse projects in fields such as data analytics, pension and asset management, and ample learning opportunities. Erik studied economics and worked at a consultancy that specializes in compensation and benefits. After that, he followed training to become an actuary and switched to EY Actuarial.

Jonathan and Erik, thank you for being here with us today! Could you talk about a project that you are currently on?

Erik: I have been working here for a year and a half now, and have actually done one project so far for Nationale Nederlanden (NN), which was about IFRS-17.

Jonathan: IFRS-17 is a global framework for accounting that allows for the comparison of insurance companies worldwide. Before, comparing an American insurer with say, a German one was difficult as they followed different national rules for accounting, making the comparison of balances difficult. 

Erik: Since 2022, it has been mandatory for insurers to account for and report by IFRS-17 standards. However, because it is still new, insurers have little experience with these new rules, and it consumes a lot of time to adjust to them and work by them. I was hired by NN to help them in their transition. Specifically, I tested new IT systems to see if their output was in line with the IFRS-17 principles. This project is our team in a nutshell: we help companies transition to new laws or frameworks.

Do you also provide training or guidance to work with your new product?

E: Clients often develop their own projects or acquire them from software development companies. So in this project, we only tested the product. It leads to interesting findings, as it made an enormous amount of calculations, while it was implemented in little time. Often, things go wrong and we address these issues to the client and discuss if changes are necessary or not. So that could be considered as guidance. Also if they make a change themselves, we would like to know how and where, and help them with that as well.

What kind of projects does EY Actuarial specialize in?

J: EY mainly has an assurance and a consultancy department, and the actuarial team belongs to consulting. We do, however, often support the accounting department.  Sometimes they do large projects and have to make complex estimations of cashflows when they are unable to calculate the exact figures. But our work mostly comprises consulting in the field of pension and insurance. Other teams do similar work but for different fields, such as banking. Our team focuses on the Dutch market, but employees are often sent to foreign departments of EY if there are shortages there.

E: It is true that we focus on pension and insurance, but we also help banks and companies outside of the financial sector. The skill set of an actuary is useful for solving many financial problems.

J: Clients often come with questions such as about the new Dutch pension law. They involve a legal part, but also actuarial and IT components. We therefore often work in interdisciplinary teams. It is great to join forces with different specializations.

What is the best part of your job?

J: Each day is different. I currently do five projects and at the beginning of the day I only have a global idea of what has to be done. During the day, I could be called about a project while being busy with another one, to figure something urgent out. Sometimes I have a meeting with the team where I share what I am currently on in my projects. I enjoy being a part of those. There are all sorts of teams and I am part of the team of life-insurance and non-live. A presentation could be about a benchmark, and then we discuss and compare multiple insurance companies and trends among those. 

What I also enjoy is the overlap between qualitative and quantitative work. I am currently working for an unemployment insurer, where my background in econometrics proves useful. I have to calculate the probability of an insuree having an accident and becoming fully or partially incapacitated, and then how that would reflect on the company's balance sheet. This results in a report on whether the insurer has sufficient funds to cover all potential damage payments. So I calculate all sorts of things, but I also write reports. This combination of tasks is what I like best.

Which programs and programming languages do you mostly use?

J: It differs. Erik does more programming than I do, and he uses all kinds of languages. Myself, I use a lot of Microsoft Excel and sometimes Python.

E: Python, but at NN the common language was R. For visualizations I mostly use Power BI, although I prefer Tableau myself. In other departments such as technology consulting, Alteryx is used. SQL is also common. In our department, however, we mostly use Python and a bit of R.

J: The programs used depend on the team of course. The data analytics team 

Does EY provide training to its staff in programming or other subjects?

J: At EY, employees follow a mandatory amount of training each year. We have a website, comparable to Canvas at your university, with all kinds of modules. There are modules about programming, but also some about finance which I found useful for my work as an actuary: I did not know that much about swaps, for instance. 

E: By the way, EY also invested heavily in a large language model comparable to ChatGPT, which is called EYQ. Employees expressed their desire for such a tool for their work, and EYQ is used very often for all kinds of tasks, such as writing e-mails or code, and even solving errors in code. You can also feed EYQ a document and have EYQ check it for grammar and language, layout or consistency. 

How much of your working time do you spend in the office, from home or with clients?

E: Roughly an equal amount of time for all those places. You could work one day in the office, one day from home and visit a client on the third day. Also, EY has a policy that allows employees to work four weeks per year remotely. Last year, I worked four weeks from an Airbnb in Southern France, for example.

J: The flexibility at EY is great. I like to work in the office and be around my coworkers, but others only come to the office once per week. Sometimes I go to clients, but sometimes we do all the work over Microsoft Teams.

What are the core activities of EY Actuaries, and how does this department differ from others within EY?

J: Well, our department can be divided into two main areas: consultancy and accountancy. In the accountancy section, the focus is primarily on auditing financial figures. Our department, on the other hand, falls under the consultancy section. However, we occasionally assist the accountants in conducting audits. For instance, if we audit a bakery, it's straightforward; you just count the sales. But as insurers, we deal with various estimations. We need to set aside funds based on predictions of mortality rates, accident frequencies, and so forth. We assess these estimations and primarily engage in advisory work, with actuaries specifically targeting the insurance and pension markets. However, we also have other departments that perform similar functions, albeit for different sectors such as banks or non-financial institutions. Our focus is primarily on major insurers and pension funds in the Dutch market. Occasionally, our colleagues lend a hand to our counterparts in England, France, or Germany when they're short-staffed. So, what sets us apart is our focus on insurance and pensions.

E: Yes, that's correct. Although our focus primarily lies on insurers, it doesn't mean that insurers are our only clients. We also provide consultancy services to banks and even companies outside the financial sector. However, insurers are truly our core speciality. This is because the skills actuaries learn are closely related to aspects such as pensions and insurance premiums. For instance, consider calculations for IFRS 17, which involve many actuarial computations.

J: What's interesting is the collaboration aspect. Take, for example, a client such as an insurer or pension fund facing a particular issue. Now, pension funds are dealing with the new Future Pension Act that they need to implement. There are various regulatory aspects involved, so our legal department comes into play. We need our IT professionals to build the necessary systems. And of course, our actuaries are essential; they act as the bridge between the regulations and the execution. This often requires us to work in interdisciplinary teams to solve our clients' problems. The value lies not just in being knowledgeable in one area but in combining different expertise. It's fascinating to collaborate with other departments in this way.

There was a period in the news when EY was planning to split off its consultancy practice. Do they happen to know what consequences this would have for the Actuarial Department?

E: Yeah, so, it was going to be split, but in essence, most people would lean towards assurance. Indeed, most would opt for the Assurance department. Sarah suggested that we would become an essence of slash accountancy company, with a new consultancy branch being split off, and most of the actuaries would indeed go to assurance. I had to pause for a moment because it had been a while, and only a handful of people would go to consultancy. This depended on various partners; some preferred to stay in assurance, which made sense based on the clients they served and the topics they covered. But for some, it made more sense to move to consultancy due to specific client needs or topics they handled. But overall, I would say, I think 80% would stay with assurance, so you'd have the largest team. The majority of the team would stay together, but we would lose a portion, which most people found quite disappointing. But discussions were had about it, and it was still quite far in the future when we received the news that it wasn't going to happen. So, ultimately, nothing concrete happened.

E: Yeah, so, it was going to be split, but in essence, most people would lean towards assurance. This depended on various partners; some preferred to stay in assurance, which made sense based on the clients they served and the topics they covered. But for some, it made more sense to move to consultancy due to specific client needs or topics they handled. But overall, I would say, I think 80% would stay with assurance, so you'd have the largest team. The majority of the team would stay together, but we would lose a portion, which most people found quite disappointing. But discussions were had about it, and it was still quite far in the future when we received the news that it wasn't going to happen. So, ultimately, nothing concrete happened.

J: The underlying concept was simple: imagine you're an accountant at a firm, and you're forbidden from offering advisory services. If a company like Google hires us as accountants, we wouldn't be able to provide them with relevant IT consulting services. So, the idea was to split the roles, allowing us to maintain our accounting services while a separate entity handles advisory work. However, executing such a division in a large company like ours, particularly with our partner-based structure, is legally complex. Even within our department, determining who goes where poses a challenge. For purely accounting roles, the division is clear, but for many other departments, it's not so straightforward; perhaps a third or two-thirds of the group would need to be split. This complexity led the senior partners at EY to decide against it collectively. You might have come across this in the Financial Times; it was indeed a costly venture. Nonetheless, I believe it was valuable for EY to explore this avenue first, considering the ongoing relevance of the issue and its potential implications.

How does your study of econometrics relate to your work at EY?

J: Particularly, I've found it to be more practically oriented here at EY. In econometrics, there's a significant emphasis on proving the validity of certain calculations, involving a lot of mathematical proofs. Here, it's a bit different. For instance, as I mentioned earlier by the coffee machine, you might interpolate using a method without having to fully prove its mathematical correctness beforehand. The starting points are different. In econometrics, there's a reliance on complete datasets for calculations. Here, it's still a part of the subject, but it's more about ensuring relevant data and integrating separate datasets effectively for analysis. Mathematically, it might be less thrilling than the theoretical aspects of the study, but the practical side is far more exciting. Every outcome of our calculations potentially carries a significant impact since clients may base decisions on them. So, the consequences of our work are more immediate and tangible. In Econometrics 3, my calculations had minimal real-world implications, mainly affecting my grades. However, here, the outcome could influence whether a pension fund or an insurer makes significant decisions, or even lead to new opportunities for us to provide solutions. The objectives of what we do here are quite different in that sense.

E: I haven't studied econometrics, but rather actuarial science. Actuarial science is, of course, heavily focused on preparing you, theoretically, for what you're going to do here. You learn about risk assessment, and how to calculate premiums, and it's all quite foundational. It does prepare you to a certain extent for what you'll actually be doing in practice. For example, you get a few case studies that prepare you for what's important for an insurer. You might have to calculate various ratios, which you already have some experience with, so in that sense, it aligns quite well. However, in practice, there are also very different skills required than what you learn in the study. It's not just about technical knowledge; it's also about communication. How do you interact with people? How do you present a story effectively? Perhaps you need to do that in the study as well, but in reality, it's at a much higher level than what you might encounter in academia.
 

Did you undergo any kind of traineeship before coming here?

J: Essentially, there are two pathways to enter here. Firstly, you can start as a working student, gaining hands-on experience. It's similar to the work I do as a consultant, but only for two or three days a week and with more guidance. Alternatively, you could opt for a thesis internship, where you write a thesis on a specific topic under EY's supervision. Afterwards, you can choose to continue with us or apply directly for a consultant or manager position, depending on your preferred entry time. That's essentially how people come in here. It's not exactly a traditional traineeship, we don't have that. However, there's the opportunity for a working student position. I must say, I would recommend it to anyone, as it provides great insight. If you're uncertain, it's a beneficial step. It's better to spend about half a year getting a feel for things and then decide. You might find a fantastic new job, or realize that actuarial science or consultancy isn't the right fit for you, which is equally valuable.

What does the career trajectory look like for you in the next few years as a consultant at EY?

J: Well, for Erik, it's a bit different than for me, since he's in a different role, but if you look at the typical career path, I believe it usually goes like this: you start as a consultant for about two or three years, then you move up to senior consultant for another two to three years. After that, you typically become a manager, or you might transition out of the company at some point.

E: Some people remain in management positions, but for most, the goal is to advance to senior management. The duration of this progression varies greatly depending on individual goals and performance. While some may become senior managers after a few years, it's less common. Typically, after starting as a consultant, it's almost a rule that you'll become a senior consultant within two years, give or take. Then, after a few more years, you're likely to be promoted to manager. The promotion to senior manager requires writing a business case and demonstrating why you're the right candidate for the role. You need to show how you'll contribute to the company, serve clients, achieve sales targets, and outline your strategic vision for the role. This process is akin to preparing for a partnership, which is the next step. Becoming a partner requires even more significant contributions, including a strong vision, network, and client portfolio.

What skills are needed to grow in this company?

E: I think the ability to explain complex matters well and effectively is crucial. As a consultant, you really need to be able to listen well. At EY, it's ingrained in us not to approach clients with an arrogant attitude, thinking we'll just come and tell them what to do. You really need to listen to understand where their problem lies. You have to put yourself in their shoes. Listening and empathy are therefore important skills.

J: That's actually what I was thinking too. Indeed, as you continue, the commercial aspect may become increasingly important. You need to be able to handle that as well.

E: Yes, but the commercial aspect within EY is really about thinking from the client's perspective, so if you do that, you already know which direction to think in terms of solutions. You can translate that into sales.

And what does that look like in practice?

E: Well, you have to be able to recognize it. Sometimes some people have the budgets but are stressed about certain things because their system isn't in order. Maybe there's a lot of pressure on a certain team to complete a task. And if you can recognize that, you can offer support. Of course, it helps if you have a more personal relationship with the client; they'll trust you more.

J: When you build relationships, things also become easier, so if you need something, a specific document or information, but somehow you manage to give the impression of being arrogant, then you're less likely to get what you need compared to if they think, "Oh, Jonathan, he's a nice guy and he has everything in order. If I ask him for something, I always get it right away…" Then everything naturally goes faster, so it's really important to maintain good relationships. This of course applies to your colleagues as well.

E: That's something you naturally pick up during your studies, in a board year or on a committee. That's one of the most important skills you can have. Building relationships, but also maintaining them.

E: Of course, the whole abstract thinking you learn in econometrics is super important. If you can't do that, you probably won't get very far. That's more like the foundation.

J: That's, so to speak, the minimum requirement to get in. Because everyone has a certain level of quantitative analytical skills, otherwise you wouldn't be working here. But once you're in, yes, then all sorts of other qualities come into play. And how do you bring that together? And that ultimately determines where you end up. And of course, there's also an element of luck involved, right? It also depends on the right moment for someone just above you to retire so that you get promoted. Yes, those kinds of things also play a role. But apart from that, if you work hard and do your best, a lot is possible.

What does EY do for professional development?

J: Well, within our department, it's organized like this. You have a counsellor, who is sort of your mentor/supervisor, and you have conversations with them about your ambitions, and where you want to go. You make a yearly plan where you answer questions like: What do I want to learn? Where do I want to be at the end of the year? What are my goals? For example, you can include that you want to pursue actuary training or that you want to do another type of study or course that helps you grow within your development plan. For example, I wanted to improve my English. I've been very active with that, and it was strongly encouraged.

Now, for example, I've written down the goal of becoming a senior consultant, so what I do is I just ask colleagues, "What's missing? Where can I still develop?" We have feedback sessions four times a year, and various relevant things come up in those. For example, I received a number of concrete things I could improve on, and I can now work on those points.

If you're a manager, for example, your goal might be to have more contact with clients or to expand your network. There are always people trying to help you with that. So, there's a whole system built around making sure you can follow your development path. And when you start as a first-year, there is a workshop every month where you learn about various topics, sometimes on substantive things about "What can you do within EY?", but also a workshop like the one Erik gave on "What is your purpose?", so that you think about "What do you stand for? What do you want?"

Yes, and is that in line with what you can do at EY, it's also important that you don't just focus on wanting to move up. That you occasionally also think, yeah, Why am I here? What does this add to me personally? What do I want to learn? So, it's good to make such a yearly plan every year. Then you always stop and think about what the goal is for the coming year.

E: Yes, indeed, what I think is still missing is a sort of mentorship program. But you can also fill that in yourself. For example, just informally talking to a senior colleague like a partner from time to time about how things are going. Someone like that might have been in the field for 30 years and can easily give you a certain tip or trick to further your own progress, something you hadn't thought of yourself or wouldn't have realized until a few years later.

We don't have that at EY, but that's one of the tips I would like to give everyone. Just find someone who's 50 or 60 years old and have a simple coffee chat with them once a month and talk about this and that, and you'll inadvertently get the best career advice.

I think EY should have such a program. It's not there, but I've had it myself. I worked for another employer before this, and I had my supervisor there, who I also considered a sort of mentor, and I also had two other mentors. They were colleagues I didn't directly work with.
 

What makes you special compared to other firms?

J: That's, of course, difficult to compare, because I only know EY, but what makes EY unique for me is the great atmosphere that prevails, and that you work in a nice team where you're encouraged to be yourself and to learn and develop. There's also room for fun. In addition to work, we have a ski trip, drinks, activities, committees, and Christmas events. I find that atmosphere very important, that you go to work every day and think, "Oh, I'm working with colleagues from whom I can learn, but with whom I can also just have a nice conversation." That's very nice. But that will probably be the case at other companies too, but the atmosphere is something distinctive.

E: Yes, I agree. The atmosphere is good. People are generally very friendly, and the hierarchy is quite flat. It's not like at other companies or abroad where you have to go through layers to talk to each other. You can just approach someone directly. You can just send a message to anyone. That's quite common in the Netherlands, but I've also heard from friends who work, for example, at other big fours. I won't mention names. In short, it's very much about the content. But it's also very much about your colleagues.

J: Work-life balance is something they really care about. It's important that you enjoy your work, but that you also have space for your private life and relaxation. I think that's important too. We don't want a company where you work 80 hours a week.

E: Yes, and if it does happen that you work overtime, as a consultant and senior consultant, you can just take those hours back later. Some people have to work quite hard for a few weeks, but at some point, they've also accumulated months of vacation days. So, that is taken into account.

J: But in short, if you're looking for a job later on, EY is a great place to work, and that's not just advertising talk, but it's true.