Increase in demand for actuaries
Demand for actuarial skills in South Africa is increasing at a rapid pace, particularly with new legislative compliance requiring a greater actuarial function in insurance companies. While the supply of graduate trainees is probably adequate, there is a s
This is according to Craig Falconer, Executive Head of Actuarial for Aon Hewitt South Africa and Chairman of the Africa Committee for the Actuarial Society of South Africa, who says while more actuaries who previously emigrated are beginning to return to South Africa, there is an acute shortage of actuarial skills in both South Africa and Africa. The latest statistics indicate that there are only around 800 fellows in South Africa, with less than 50 across the rest of the continent.
“The statistics across the rest of Africa are particularly alarming. The second highest country in Africa in terms of the number of fellows is Mauritius, which has less than 20. When one considers that Nigeria, with a population of more than 160 million, has less than 10 actuaries, the shortage of these skilled professionals on the continent becomes very clear.”
He says this shortage of actuarial skills is not just a local issue. “Many developed markets have also been struggling with a shortage of skilled actuaries. This has been exacerbated by the introduction of new solvency measures internationally, with Europe having already embarked on its Solvency II framework that requires deeper actuarial analysis by insurance companies. As a result, a number of actuaries in Africa have received attractive job offers from European insurance companies.”
He explains that the actuarial profession is highly mobile as a result of the qualification being recognised internationally. “An actuary who graduates in South Africa is able to practice in countries like the UK, Singapore, Hong Kong, Australia, New Zealand and the US.
“Many education systems across Africa do not support the actuarial qualification, meaning students from other regions need to conduct their studies through the UK or South Africa. This also has a negative impact on the number of students who are able to afford to study and ultimately qualify.
“We would expect this situation to change slowly in Africa, particularly as countries continue to adopt more stringent legislation. For example, the University of Nairobi in Kenya was recently granted exemption status for some earlier exams, which indicates that the necessity of skilled actuaries is gaining prominence. This trend will become increasingly important for any country that has multinationals operating in South Africa and Europe in any significant capacity, as they will start to feel pressure to comply with international standards.”
Falconer says that in conjunction with the increase in legislative requirements taking place globally, the current demand in actuarial skills is set to improve due to new areas such as risk management. While this isn’t traditionally an actuarial field, insurance companies looking to recruit chief risk officers are now beginning to look to actuaries to fulfill this function.”
He says that to meet the demand, it is essential that SA companies continue to offer competitive packages. A recent Salary Survey indicated that salaries for actuaries are increasing at 3% or more above inflation.
“The actuarial profession offers many stimulating and lucrative career opportunities to new entrants and while this is important to ensure the sustainability of the profession, it is also critical that experienced actuaries are offered attractive packages to stay in South Africa so that these skills are retained,” concludes Falconer.
