An Interview with Wenjun Zhu
By Expanding Horizons Editors
Expanding Horizons, June 2024
Expanding Horizons recently had the opportunity to interview Wenjun Zhu, the winner of the Society of Actuaries’ (SOA’s) third Actuarial Science Early Career Award.
Expanding Horizons (EH): Congratulations on winning the SOA Actuarial Science Early Career Award. Can you tell us about your background?
Wenjun Zhu (WZ): Thank you! I was born in 1990 in Huainan, a small and historic city in the eastern part of China, known for its cultural heritage and as the birthplace of tofu, which was created more than 2,000 years ago by a prince in the Han Dynasty. From 2007 to 2011, I studied actuarial science for my undergraduate degree at Nankai University, home to one of China’s most esteemed actuarial science programs. Notably, this program was established with the support of the SOA in the 1980s. To further strengthen my mathematical foundation, I also studied mathematical science as my second degree. After graduating from Nankai in 2011, I embarked on a Ph.D. journey in actuarial science at the University of Waterloo, supervised by Professor Ken Seng Tan and Professor Lysa Porth. I graduated in 2015, after which I returned to my alma mater in China as an assistant professor. Since 2017, I have been serving as an assistant professor in Nanyang Business School (NBS), Nanyang Technological University (NTU), Singapore. I obtained my FSA and CERA credentials in 2019.
EH: How did you get into the profession?
WZ: My entry into the actuarial profession was serendipitous yet sparked by a strong passion for mathematical problem-solving. In the summer of 2007, my grandpa, a seasoned auditor, suggested that I explore actuarial science as a career path. After research and conversations with my relatives in the insurance industry, I understood that actuaries are professionals who use mathematics to model and manage risks, which I found incredibly cool. During my undergraduate study, I started to take SOA exams, such as P, FM, etc., and was involved in several undergraduate research projects. It was during that period that I realized the excitement and challenges that research could offer.
In 2010, I attended a seminar by Ken Seng, who was visiting Nankai at the time. He introduced his collaborative work on optimal reinsurance with Professor Jun Cai. I was deeply inspired by Ken Seng’s talk and amazed by how powerful mathematical tools can be used in solving challenging insurance questions. This was the catalyst that drove me to apply for the Ph.D. program at the University of Waterloo. And that’s how my academic journey into the actuarial profession commenced.
EH: What are your research topics?
WZ: My research is deeply interdisciplinary, with a primary goal of developing effective actuarial and statistical tools in evaluating and measuring risks, focusing on areas of climate change, agricultural insurance and longevity risk management. For instance, a significant part of my work is dedicated to developing more efficient and sustainable risk management strategies for weather-related risks. This involves enhancing actuarial models for agricultural risks, providing viable solutions for all stakeholders—including the policyholders (e.g., agricultural producers, corporations), insurers, reinsurers and governments—to navigate adverse weather events. In addition to this, my research agenda has expanded to explore the financial implications of longevity risk on stock and bond markets, and the intriguing intersection of climate science and actuarial science.
EH: Did you receive any support that has substantially helped you in your early career?
WZ: I’ve been incredibly fortunate to receive invaluable support. During my Ph.D. and early career, Ken Seng and Lysa were unwavering mentors who always enthusiastically encouraged and inspired me. Their adventurous spirit and intellectual brilliance nurtured my curiosity for the unknown, encouraging me to push the boundaries of research.
I’m still deeply saddened by the sudden passing of Ken Seng, who I’m particularly indebted to. His long-lasting guidance and support have profoundly shaped my life. Without his mentorship, I would not be the person I am today. Ken Seng’s influence extends far beyond his role as a distinguished researcher; he was a visionary educational reformer and a dedicated actuary who was always passionate about supporting and improving the actuarial profession. Though he left us too soon, his legacy in actuarial research, education and practice will continue to inspire and endure.
I’m also grateful for financial support from the SOA James C. Hickman Scholar program, which was instrumental during my Ph.D. studies, allowing me to focus on research without the worry of financial constraints.
Additionally, the research environment at Nanyang Business School is truly exceptional for young researchers. The school provides generous start-up grants and access to a platform for engaging with world-class scholars with different types of expertise from around the globe. These interactions have facilitated effective idea exchange and stimulated many exciting research projects.
EH: What are your most important academic achievements?
WZ: Over the past decade, I have been working with my coauthors on designing sustainable and viable index insurance programs. Index insurance is a promising risk transfer tool to hedge against extreme and systemic weather risk. However, large basis risk and low demand accompany existing index insurance contracts, creating major challenges in developing a commercially viable index insurance market. For example, one of my recent papers about weather risk management and index insurance proposes an optimal index insurance design framework that embeds machine-learning algorithms into expected utility maximization problems, with a focus on reducing basis risk, so that insurance demand and social welfare can be increased.[1] My research demonstrates that the resulting index insurance reduces basis risk, increases farmers' utility, is less reliant on government subsidies and improves social welfare. A few insurance companies are interested in implementing such index insurance programs.
This year, I was part of an interdisciplinary team that achieved a significant milestone by securing the highly prestigious Singapore Ministry of Education (MOE) AcRF Tier 3C grant (2023–2030). This grant supports our ambitious vision of establishing a pioneering Climate Transformation Programme (CTP). The primary objective of this program is to develop, inspire and accelerate knowledge-based solutions and educate future leaders to establish the stable climate and environment necessary to support resilient, just and sustainable societies in Southeast Asia (SEA). The CTP will serve as a unique climate research initiative, bringing together a diverse team of international researchers and innovators from various disciplines. Together, we will undertake cutting-edge investigations of the changes to climate; the resulting environmental, economic and health impacts; and the potential to develop innovative adaptive solutions. The grant is led by Professor Benjamin Horton from the Earth Observatory of Singapore (EOS) at Nanyung Technological University Singapore. As one of the 32 Project Principal Investigators (PIs), I take pride in contributing to this endeavor, specifically focusing on narrowing the protection gap through the implementation of sustainable risk financing solutions.
EH: Any personal philosophy regarding actuarial teaching?
WZ: I firmly believe that academic excellence can only be achieved via a beneficial interplay between teaching and research. My approach to actuarial teaching centers on igniting students’ curiosity and fostering a love for learning. I draw from my research experiences to enrich the teaching process, aiming to nurture critical thinking and problem-solving skills. In addition, I also try to incorporate interdisciplinary perspectives and integrate the latest research findings into my curriculum design.
In a rapidly evolving landscape marked by artificial intelligence and disruptive technologies, my teaching philosophy emphasizes the creation of an inclusive and student-centered learning environment, where students are empowered with a comprehensive skill set. While technical proficiency, exam success and credentials are important, I hope my students’ university life can go beyond these aspects. Therefore, at Nanyang Business School, I strive to equip them with soft skills, including efficient time management, project coordination, teamwork and leadership, as well as effective communication. As such, I aim to empower students with the tools they need to succeed, not just in securing a job, but in building a fulfilling career.
EH: Do you have any advice for young actuaries and young researchers?
Sure. I have four pieces of advice. First, be comfortable with risks and transfer risks into opportunities. Embrace uncertainties; learn from setbacks and view them as stepping-stones for growth and innovation. Second, I would encourage them to ask bold questions and tackle challenging problems. It’s through these ambitious pursuits that breakthroughs often occur, pushing the boundaries of knowledge in the actuarial field. Third, I would encourage young researchers to strive to connect their work to real-world problems, ensuring that their efforts contribute to the betterment of our world. Finally, I would encourage young researchers and actuaries to acquaint themselves with the tools of artificial intelligence and machine learning, which are beneficial in navigating the era of digital transformation.
EH: What challenges did you encounter as an actuarial researcher?
WJ: As an actuarial researcher who mainly conducts empirical studies, I find data availability and quality has consistently presented significant challenges, especially when the research focus is on developing countries. Overcoming the hurdles of sourcing reliable data has been a persistent aspect of my research journey.
Another noteworthy challenge I’ve encountered is the increasing demand for interdisciplinary research in actuarial science. Traditionally rooted in fields like statistics, demography and finance, actuarial research now frequently intersects with emerging disciplines such as computer science and climate science. This shift has opened new avenues for exploration but has also introduced complexities in collaboration. Engaging with professionals from diverse backgrounds requires effective communication and the ability to bridge gaps in knowledge and terminology. While this can be challenging, the experience is simultaneously thrilling, as it fosters a dynamic and rich research environment.
EH: Why and how do you think the insurance industry should support academic actuarial research?
WJ: The industry operates in a dynamic environment with constantly evolving risks and challenges, and academic actuarial research serves as a catalyst for innovation. By actively supporting academic research, insurance companies can tap into the intellectual capital and cutting-edge insights generated by researchers. This collaboration has the potential to drive the development of new methodologies, risk models and strategies that enhance the industry’s ability to navigate complexities and respond effectively to emerging trends.
Additionally, the relationship between the insurance industry and academic institutions contributes to a robust talent pipeline. This collaboration aids in attracting and retaining top-tier actuarial talent. The reciprocal nature of this relationship ensures that the industry gains access to skilled professionals, while academic researchers benefit from practical insights derived from industry experience.
Furthermore, academic actuarial research often addresses broader societal challenges and advancements. By supporting this research, the insurance industry can position itself as a socially responsible and forward-thinking entity. The outcomes of such research may contribute to the development of innovative insurance products tailored to the diverse needs of communities and play a role in mitigating risks associated with emerging trends, including climate change and technological disruptions.
To facilitate and strengthen this collaboration, effective communication between the industry and academics is key. The insurance industry can actively engage with academic researchers through sponsoring industry-academic forums and roundtable discussions, joint projects, research initiatives and so on. Offering access to industry data further enriches these collaborations, ensuring that research remains relevant and impactful.
NTU serves as a great model of successful industry-academia collaboration. For instance, SCOR’s establishment of the Insurance Risk and Finance Research Centre (IRFRC) in 2011 has yielded numerous research contributions in important fields such as longevity risk and cyber risk. Several SCOR-sponsored Ph.D. graduates from NTU are now serving as assistant professors in esteemed universities and are quite active in research. More recently, the Global Asia Insurance Partnership (GAIP) has exemplified the tripartite collaboration between the insurance industry, regulators and policymakers, and academia. As GAIP's key academic partner, NTU collaborates with GAIP via their three-pillar approach—Living Lab, Policy Think Tank and Skills Development—to strengthen the understanding of risks via academic research, to develop solutions to enable this understanding, and to develop the future pipeline of talents for the insurance industry with the vision of building a risk-resilient Asia via a narrowing of Asia’s protection gaps. These partnerships underscore the transformative potential of industry support for academic actuarial research, benefitting both academia and the insurance sector.
EH: What do you see as the biggest challenge of the actuarial profession?
WJ: I think the biggest challenge is attracting top-tier young talent, particularly in the context of rapid technological evolution. Without the best minds, groundbreaking advancements are impossible. The question is how.
The crucial task is to devise strategies that make the profession more enticing. Enhancing visibility, encouraging early engagement through educational initiatives and internships, and adapting to evolving preferences are all very important. In a constantly evolving world, it’s pivotal to effectively communicate the profession’s significance and align this with the values of the younger generation, so that the actuarial field can hopefully secure a pipeline of talented individuals.
EH: What is your vision for the future of actuarial research?
WJ: Given all the aforementioned challenges, I’m optimistic for the future of academic actuarial research. The actuarial profession, which is very vibrant and dynamic, has consistently demonstrated robust adaptability over its 200-year history. Researchers need to conduct innovative and relevant studies, while the industry must proactively stay ahead of the curve, ensuring the continued resilience and relevance of the actuarial field in the ever-evolving landscape of risk management and financial planning.
EH: Do you have any hobbies?
WZ: One of my great passions is reading traditional Chinese literature. My favorite books include The Romance of Three Kingdoms and Dream of the Red Chamber. Among the characters in these classics, I particularly admire Zhuge Liang. He serves as a role model for me due to his exceptional wisdom and loyalty, which I find to be truly valuable qualities. In addition to reading, I also have a love for various sports, including jogging, jazz dancing and yoga. I used to run half-marathons. However, since I became a mother two years ago, most of my sports-related hobbies have been replaced by playing with my energetic baby girl, which keeps me just as active.
Statements of fact and opinions expressed herein are those of the individual authors and are not necessarily those of the Society of Actuaries, the editors, or the respective authors’ employers.
Wenjun Zhu, FSA, CERA, Ph.D., is an associate professor and the deputy director of the Insurance Risk and Finance Research Centre (IRFRC) at Nanyang Business School at Nanyang Technological University. Wenjun can be reached at wjzhu@ntu.edu.sg.