For this edition of Into the Business, Estimator travelled to Amsterdam to interview Susanne van den Dolder and Wouter Elshof, two graduated econometricians who are currently working at Milliman.
Could you introduce yourself and tell us where you are from and what you studied?
Susanne: I’m Susanne van den Dolder and I started working at Milliman in March this year. I studied in Groningen for five years and I did both my bachelor and my master and some other courses that I liked in the faculty of mathematics.
Wouter: My name is Wouter Elshof I am originally from Brabant. I also studied econometrics in Groningen, but it was a long time ago. I then moved to Rotterdam, did an internship at Robeco and then I moved to the actuarial world as an actuarial consultant working at Deloitte. I studied actuarial science at the University of Amsterdam seventeen years ago and then I became a consultant financial risk management for financial companies and other financial institutions.
Did you start working here directly after your studies?
Susanne: Yes, I did. This is my first job. I was at the Landelijke Econometristendag (LED) where I spoke to one of our colleagues and during this conversation, I got really interested in Milliman because of how content focused the company is.
Wouter: I started working at Milliman nine years ago and five years ago I became a partner and I’ve been leading the offices of Milliman in Amsterdam and Brussels. Since last year we’ve also opened a new office in Luxembourg.
Can you tell us what Milliman does?
Wouter: First of all, we are a global company as we have offices in Europe and worldwide. We, as a team here, are taking care of the Benelux area and what we do in a broad sense is that we give advice to financial institutions mainly on financial risk management, which is everything that has to do with risk management, consultancy tool regulations, economic capital, capital management but also actuarial reporting. We for example do a lot of IFRS 17 nowadays, which is a new reporting standard for insurance companies, and we do a lot of work on mergers and acquisitions. We were for example, in some way or another, involved in all mergers and acquisitions that have happened in the last few years in the Benelux area by providing actuarial diligence. Since we also work in the risk management area, we give advice on risk management and work on model development for example creating financial risk management models for insurance companies, either by deriving cash flows models or deriving very high-tech risk models to quantify their market, insurance or operational risk.
What studies have your colleagues in Milliman done?
Wouter: Most of them have studied econometrics or actuarial science and some have studied physics.
That’s something different you would say?
Wouter: No, it is exactly the same. Whether you want to model atoms or you want to work on equity: it is white noise. The same kind of models are used in both areas, we therefore just look for smart people with a quantitative background. Econometric students, besides meeting these requirements, could also work in the mathematical or science field because people can learn very quickly and it’s therefore more important to have the skills rather than the knowledge. There is a big gap between what you learn in university and what you learn in practice. University students are, for example, still not taught about negative interest rates which is a big part of our work at the moment. You therefore need to be smart in order to close this gap; smart people always have something to do.
Susanne: And from a start-up perspective, in the beginning you learn a lot and you only have the basic knowledge to understand the mathematics that you’re doing and the models that you are making. What you learn on the job is the meaning behind all these models. As a matter of fact, you have a lot of colleagues you can ask questions to if you don’t understand the meaning behind your work and they usually have a very good explanation on why something should be the way it is, allowing you to learn a lot in the beginning, because the gap between university and work is indeed very big.
Can you tell us how you ended up working at Milliman?
Susanne: Well first I wanted to write my master thesis at Milliman, but I discussed with my professor the subjects that I wanted to do and by that time there was a place at the insurance company Univé. I wrote my thesis over there, in cooperation with my professor and I visited Milliman a couple of times in the meantime. I talked to a lot of people and I had already met about ten or twenty of them before I started working there, giving me a good feeling that I wanted to start working here.
Wouter: I was working at Towers Watson when I joined Milliman. What was important for me was the global aspect of the company because of the volume of assignments we receive. If we, for example, see a lot of Asian investors who are willing to enter the Dutch market, we wouldn’t be able to work with them if we didn’t have offices in Beijing and in the U.S. This global aspect is also very important if you want to broaden your view, see how companies in other parts of the world are working and learn from them. If we encounter a problem and no one in the Netherlands has an answer to it, I can reach out to all my European, Asian and U.S. colleagues and get an answer very quickly. Something else that made me join Milliman is the fact that decisions are made at a local level. Since the company is global but the decisions are made locally, it gives us a lot of room and a lot of entrepreneurship opportunities. Entrepreneurship is very important here because we want to create something with each other without having to constantly ask the others. We are global but at the same time very local. Something else that was very important to me was the fact that I don’t like to know what I will do next year. You will have almost no recurrent work when joining Milliman which can sometimes be challenging. You are usually quite sure of what you are going to do in the next three weeks, have little sense of what you are going to do in the next two months and have no knowledge of the later stages. This was one of the reasons why I wanted to join the company, and this is the core business of Milliman. We are going to Barcelona next month with all the European companies and most of the Asian companies in order to all do to the same thing, that is: financial risk management for financial institutions.
Susanne: The workload is also very different for everyone. You for example only know what you will do in the next 3 weeks and maybe 2 months, allowing for a lot of variation in your work. Today you can work on the Solvency II regulation, building or improving a model and tomorrow you can do something completely different, such as mergers and acquisitions.
What is the most interesting project you’ve worked on so far?
Susanne: I just started working and I have done five projects so far. In those projects, I worked with colleagues who are more experienced and who could help me. I really enjoy the project that I’m working on right now, I am currently programming a model that would allow the standards required by the new IFRS17 regulation to be met. I really enjoy programming and learning on the job.
Wouter: For me it changes. I think that what is interesting right now is that we are being part of the consolidation of the Dutch insurance market and that the types of clients that we work with are changing. In my first years of work, I mainly worked for insurance companies whereas now we do a lot of work for private equity firms. Both types of companies have very different cultures, making it fun and challenging at the same time, we learn from them and they definitely learn from us. If we look at our client base now, it is spread out between private equity firms, insurance companies, banks and other institutions. This broad client base comes with challenges due to the differences in cultures. I can for example work on a merger and acquisitions but on the other side I’m also an actuarial function holder, allowing me to be a second line actuary and having to review the actuarial and financial risk aspects of an insurance company and having to regulate everything and talk to the supervisory board and the different stake-holders.
Do you have a typical day routine?
Susanne: I don’t have a routine; every day is different. You have a routine for a couple of weeks because you are most likely working with the same client but you can sometimes work 4 days a week at the client whereas other times you can work 4 days a week at the office, it differs from day to day. I know what my work is but it’s not always at the same place. You never know what next week will bring.
Wouter: You know what you need to do in the next few weeks and sometimes for longer if you work on long-term projects. I always get asked what the average duration of a project is and I always say that it depends, a project can be a week but it can also be two years. I once went to a client and started working on a project, I later rolled into a new one and ended up working with this client for six years. Sometimes it’s hard to see where one project ends and the other one starts.
Susanne: You only have a routine for a certain period of time since your routine changes when you start working on new projects. Next week I’m going to our office in Brussels because I’m helping to make a model for a software developed in Paris.
Can you tell us what skills are valuable in your field?
Wouter: In our framework we make a distinction between professional skills such as presentation skills or technical skills and entrepreneurship. For us it’s very important for people to be entrepreneurial. We, as I said, don’t have a recurrent business so we need to create business and our vision is that this should be done by everyone. We also offer professional training as we have external coaches that train us and not only provide us with econometric skills but also soft skills. But it is important that people take the opportunities given by the market. People shouldn’t have the mentality that they should sit and wait for someone to tell them what to do. Here in Milliman, people start looking for work by themselves. We, for example, very often receive emails from colleagues asking for work as it’s not fun to just sit and wait. If you are here you also better do something challenging, we therefore like people to make their own decisions which is also part of being entrepreneurial. Another important skill is communication. Communication is important for us because we constantly need to talk to people and explain our work. We do very difficult work and the people that we work with have different backgrounds and different knowledge. You can really see that when doing a project because you sometimes start by explaining your work to the chief actuary who is very content driven and to whom you show a presentation with a lot of formulas and then you slowly move your presentation to the management level and you change your way of communicating. Your report evolves; sometimes what was in the first two pages of your first presentation will be in the appendix of the last version. You also need to work with your colleagues, and you need to be cooperative.
These presenting skills, and knowing what to present to who, is also something you learn here a lot then?
Susanne: You start communicating with the client and you need to be able to explain the choices you made and why you made them. The head actuary will definitely ask some questions about these choices and you can discuss these with them, that is the start. Of course, I won’t start by explaining my choices at the management level, but you start with a team and slowly move up there.
Wouter: But what is important is that at Milliman, everybody is client-facing. People can be in the office for a long time, but juniors are also brought to meetings. Besides, many of our projects are performed at client-site, since that makes it easier to communicate with them. So, we are not ‘hiding’ juniors here in the office.
Susanne: And you will also not be the only one working on the project, so at the beginning you have a team with you when going to clients. But quite soon, you are also able to make your own choices in the process. Besides, the communication is not only in spoken words to the client, but it is also important to be able to write down what you’re doing and what the model is doing.
I can imagine this can be quite difficult for econometricians.
Susanne: They are indeed not trained for it during their studies but are definitely able to do it! During my entire studies, I barely had to do any presentations, but I learned it fast here.
Wouter: Luckily, many of our clients are also econometricians, so they understand a lot of what we do. However, it also means you have to be on your best, since they will notice those mistakes. I used to work as a pension consultant, where I had to explain my work to non-econometricians, and there clients used to be much more critical at my models. Models can of course differ from reality, and the people at the pension funds then usually said they did not believe the model to be right. At an insurance company, they ask more technical questions and know more about how models work.
Is working here stressful?
Wouter: It can be, especially when the job has to be done in a very short time period. But these are also projects where you learn a lot. We always have deadlines and many projects need to be done because something is going on and needs to be fixed, so it is important to finish on time and do good at the same time. Our business model is made up of projects that are both important and urgent, that is why people hire us, so there can always be stress.
How do you see the future?
Wouter: We hope to grow of course, but not much faster. We want to keep people here, so we look for good people, but growth is not the most important part. If we ask our people when we are most successful, most do not mention profits. Employees value high-quality work, want to do projects that actually matter and want to work with nice and smart people. The growth we do want, is getting work in other sectors. In the past, we also did projects for housing and energy, and even managing nuclear waste, which is very interesting. So there is growth in that sense, and as we say, for smart people there is always something to do.
So Milliman was one of the main partners of ECD, what did you expect from students attending the case and interviews?
Susanne: I think if the students want to go to our case, they are probably very curious and interested. A case should always be fun and students should learn from it, but we do not have any very specific expectations.
Wouter: And people that like a challenge and like the idea of not knowing what you will be doing next year. There is nothing wrong with wanting to know what you’ll be doing, but that is not what we look for here. But during the case, it is mostly important to find out what you want to do. When I finished my studies, I went to look at many different options: doing a PhD, working as a strategy consultant, at an investment bank, there are so many choices.
Susanne: Yes, since you have so many options as an econometrician, it is most important to look around very well.
What is the biggest advice you have for econometrics students?
Susanne: Start talking! Ask the right questions to the companies you might be interested in. Try to understand what the company is doing and find out if you find their work interesting. In that way you can find the right fit.
Wouter: And also think about how much content-minded you want to be. This makes a big difference between consultancy companies, so you need to know how close you want to be to the econometrics study. If you really want to work on the theoretical side, do a PhD. We still work very practical. You don’t have to do econometrics during your entire life, but this is a decision students need to make themselves. Find out what makes you happy!
Susanne: For example, I always wanted to solve all problems during my studies and got very motivated when I didn’t succeed at once, that is why I wanted to work on the content-side.
Wouter: When we have projects here, I always make a team of two types of people: those who know a lot about the subject and those that want to know more about it. That is what keeps it fun. I still have to mention one thing! I also used to be active in my student association.
Susanne: Me too! And we also have a great ski trip. When I started working here, it was just before the yearly ski trip. We went to Austria for a long weekend, which was very nice.
Wouter: And next month we will go to Barcelona with the entire office!