Sam Mawoyo discusses practice areas currently occupied by actuaries and actuarial students in Zimbabwe, and examines challenges facing the profession in the country.
The opportunities available to actuaries in Zimbabwe are diverse and too many to be listed in this article. However, I hope that this article will increase your interest in the country and any collaboration that extends from your interest. The profession is alive in Zimbabwe but is facing its fair share of challenges. There are opportunities within the financial services sector for actuaries there, however, to pursue these opportunities and make the most of them, one has to fully appreciate the hurdles they have to get past.
Practice Areas and the Involvement of Actuaries
Actuaries are increasingly finding themselves in a diverse set of practice areas in Zimbabwe. These are mainly the traditional areas of Employee Benefits and Life Insurance where regulation has dictated the involvement of actuaries for a comparatively long time. General Insurance, Health Insurance, Banking and Enterprise Risk Management are considered new territory for actuaries in Zimbabwe where we are breaking new ground.
I will outline the main practice areas in turn below.
Wider fields will be discussed in a future article as this area is very wide ranging. Since I have specialised in general insurance, it is fair for me to be biased towards it and discuss it first!
Actuaries were almost non-existent in general insurance in Zimbabwe until approximately 4 years ago. Our relevance initially started in reserving roles where we were invited to use analytical methods to conduct reserving exercises. Prior to this, most companies set reserves as a fixed percentage of an exposure measure e.g. premiums written with minimal reference to backtesting results or benchmarks. In 2014, the Insurance and Pensions Commission (IPEC), which regulates insurers in Zimbabwe, set out a requirement for independent actuaries to be involved in determining statutory reserves at least once a year for all insurers and reinsurers registered in the country.
Recently, the regulator has set a requirement for general insurers to involve actuaries during new product development. As a result, actuaries have been given the opportunity to introduce and demonstrate the Actuarial Control Cycle to the management of insurance companies.
It has not been easy sailing for actuaries in this field. Challenges exist from; limited appreciation by management of the actuarial skillset, quality of data, limited skills available as well as being perceived as another regulatory hurdle rather than creators of value in business. However, for the glass half full actuary or student, these challenges represent opportunities for a first mover advantage.
Life Insurance and Employee Benefits
Actuaries have been involved in life insurance and employee benefits since time immemorial (yes I’m a millennial and anything that was in operation before Billie Jean was released is prehistoric and immemorial). These actuaries are typically housed in life offices with some consulting actuaries serving areas that require independence.
Actuaries in the Life Insurance space were and are still involved in product development as well as solvency management. Some have taken up positions outside the “actuarial teams” in their companies.
On the Employee Benefits front, actuaries have been involved in the traditional roles of determining benefits, assessing funding levels, determining contribution rates, providing input into investment policies amongst many other roles.
The topical issue for actuaries in Life Insurance and Employee Benefits regards the conversion of insurance contracts and employee benefits from the Zimbabwe dollar to the US dollar in 2009. The conversion is being assessed by a Commission of Inquiry set up by the President of Zimbabwe. To stir up your interest in this topic, actuaries in Zimbabwe had to do work on products and benefits with an inflation assumption of up to 79.6 billion percent towards the end of 2008. The work of these actuaries is being assessed by the Commission on whether policyholders were prejudiced during the conversion process. There will be more on this topic in the coming months as the Commission is set to publicise its findings.
Challenges facing the profession in Zimbabwe
The profession in Zimbabwe is heavily skewed towards students. This state seems to be our Nash equilibrium since most senior students leave the country when they near qualification. Reasons for moving include; better remuneration and standards of living outside Zimbabwe and seeking new challenges amongst other factors.
The students in Zimbabwe therefore continuously lack mentorship from qualified actuaries on how to navigate the exams as well as other career decision making. We have a lot of highly talented individuals stuck at various levels of qualification or who have quit the exams altogether. Most of our students also lack the financial resources to access materials required for progressing towards qualification.
As a result of globalization, our actuaries especially in the consulting space, which employs a fair share of students, are facing competition from nonresident companies and actuaries for business. This has reduced the capacity for the growth of the local firms and their ability to recruit and grow their teams.
Actuarial Society of Zimbabwe
The Actuarial Society of Zimbabwe (ASZ) represents the profession in Zimbabwe. The Actuarial Society of ASZ is a not-for-profit society of actuaries and students that is committed to furthering the profession in Zimbabwe and the world. The Society is governed by a Council/ governing Committee which I have been privileged to sit on. The Council is the governing body of the Society and makes the day to day decisions on behalf of the Society. Members of the Council are voted into biennial terms by the paid up members of the Society at an Annual General Meeting. The council governs the society with reference to a constitution that was adopted by members.
The profession and the Society in Zimbabwe is made up of approximately 200 students who are at various levels of qualification and approximately 8 resident qualified actuaries. There are more qualified actuaries outside of Zimbabwe who are paid up members of the Society. The majority of our members are also members of the Institute and Faculty of Actuaries (UK) and the Actuarial Society of South Africa.
The Society is currently working to develop practice modules for the Zimbabwe market as well as develop areas which actuaries can apply the skills for the benefit of the public in Zimbabwe.
For further details on the Society, to find out about our upcoming events or volunteer to help us, please visit www.zimactuarialsociety.org.zw; email firstname.lastname@example.org or visit our YouTube Channel “The Actuarial Society of Zimbabwe”
For further details on the profession in Zimbabwe or to be put in contact with people in various practice areas, please email me or get in touch via LinkedIn (“Sam L Mawoyo”).
Further details on our Society are on the Actuarial Society of Zimbabwe’s website.
The information and opinions expressed within this article are entirely the authors’ own opinion. They do not represent the views of the author’s employer, professional associations or any other professional body.
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