Ken Mungan
Principal
Milliman
Excellence in Financial Services
While most consultants lament that there are no big ideas to drive consulting growth, don't tell that to Ken Mungan, a principal and leader of Milliman's financial risk management consulting practice. Looking ahead, he would like his 75-person practice to be at the center of overhauling the retirement savings process for every person in the world. His practice grew by about 20 percent in 2008 and continued on that pace through the first quarter of 2009, though he's cautious about whether that growth rate is sustainable given market conditions.
Since 1998, Mungan has lead a team advising insurance companies on ways to better manage their risk. "The goal of the practice, in the beginning, was to address a basic problem we saw in the industry. Our clients were selling products that provided guarantees to their clients, but the insurance companies were not protected against market risk," Mungan says.
He says they were investing in overly complex instruments that carried significant risk, especially during a potential financial crisis. Mungan's approach was to simplify the process by providing total transparency and encouraging lower-risk investments. That foresight has provided significant credibility for him as he tries to tackle his next big challenge: changing how people across the globe save for retirement.
"The last generation largely retired based on a pension model. And that model is largely gone. It has been replaced with what I see is a retirement savings model, but savings does not constitute security," he says. "Savings are vulnerable to a prolonged Wall Street downturn. And as people continue to live longer, the odds are increasing that people will run out of money."
For the last few years, Mungan has pushed for a consortium of institutions (insurance companies, fund managers and administrators, etc.) to offer an insurance product with a lifetime guaranteed annuity, with the risk spread out over multiple companies. While historically, the mega-life insurance companies have refused to work together, that mindset is changing as they increasingly realize that financial institutions can fail, he says.
—Jess Scheer
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