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It takes an average of 8 years to produce an actuary - transforming South Africa’s smallest profession

29 March 2022 Actuarial Society of South Africa

Of the 2.1 million people employed in South Africa’s formal finance sector in the third quarter of last year*, actuaries constituted less than 0.1%. This is because there are less than 2 000 actuaries in South Africa, most of whom are members of the Actuarial Society of South Africa (ASSA).

An actuary is either an Associate Member of ASSA (AMASSA) or a Fellow of ASSA (FASSA). Student members and technical members are not actuaries and may not use this title.

In an environment where demand for actuarial skills significantly exceeds supply, the unemployment rate for South African actuaries is zero, according to Mike McDougall, CEO of ASSA. Compounding the shortage in South Africa is the emigration of actuaries to countries trying to meet their own growing requirements. ASSA’s membership statistics show that last year some 25 South African actuaries took up employment opportunities outside of South Africa.

McDougall says the demand for actuaries is not unique to South Africa. The United States Bureau of Labor Statistics**, for example, predicts a 24% growth rate in the employment of actuaries in the US from 2020 to 2030, which far exceeds the growth expectations for all other professions.

He points out that South Africa nevertheless ranks among the countries with a high number of actuaries, with the United States (US) and the United Kingdom (UK) the only countries in the world with more than 10 000 actuaries. “ASSA is one of the 10 largest actuarial associations in the world and the largest on the African continent.”

McDougall explains that the actuarial qualification is one of the toughest to obtain, whether in South Africa or abroad. In 2010, ASSA introduced a homegrown actuarial qualification, which meant that actuaries no longer had to turn to the UK for their actuarial qualification.

Approved by the International Actuarial Association (IAA) as a primary qualification, the South African qualification is as difficult to obtain as those offered by professional bodies in other countries, adds McDougall. He explains that once a student member has graduated from university with a degree in Actuarial Science, it takes a minimum of three years to complete the additional requirements to become a Fellow of the Actuarial Society of South Africa (FASSA).

“However, most student members take at least eight years to pass the required 13 technical skills exams and complete the required work-based learning under the supervision of a mentor.”

Actuarial Society of South Africa Membership Figures – Fellows

Year

White

Black African

Coloured, Indian, Asian

Total

Male

Female

 

 

 

 

 

 

 

2006

628

28

23

679

588

91

2016

1149

82

157

1417

1095

322

2019

1228

113

245

1586

1198

388

2022

1 315

142

293

1754

1289

465

 

Transforming the profession

McDougall says while a consistent focus on transforming the South African actuarial profession is showing results, the progress is painfully slow because it takes almost a decade to produce an actuary.

“In 1998, a mere 2.2% of Fellows were African, Coloured and Indian. Today, 24 years later, this has increased to 25%, which means the number of African, Coloured and Indian Fellows is growing at an annual rate of 20%. By comparison the total number of Fellows is growing by an average of 6% a year. While we acknowledge that the transformation of our profession is slow, we are encouraged that the Society’s many transformation initiatives are beginning to make a difference.”

McDougall points out that students who come from disadvantaged backgrounds and who did not grow up with English as their first language face significant hurdles on their path towards achieving Fellowship.

He explains that the journey to becoming a Fellow member of ASSA consists of several stages:

1. Student members are expected to pass three foundation and four core technical skills exams and complete basic professionalism training in order to achieve the Technical member of ASSA (TASSA) designation.
2. A TASSA becomes an Associate member of ASSA (AMASSA), also known as a generalist actuary, on completion of the remaining general skills exams, further professionalism and business skills training and two years of work-based experience.
3. In order to qualify as a Fellow member of ASSA (FASSA), which is the apex qualification, members choose a primary and secondary area of specialisation. They must pass another set of technical skills exams and complete more professionalism training and a further year of work-based learning. Members who select risk management as their secondary area of specialisation also gain the Chartered Enterprise Risk Actuary (CERA) designation.

The table below provides an overview of the demographics of each of the four ASSA membership categories:

 

Black

Indian

Coloured

White

Asian & Oriental

Student

47%

15%

3%

33%

1%

Technical (TASSA)

26%

18%

5%

48%

3%

Associate (AMASSA)

16%

17%

3%

60%

3%

Fellow (FASSA)

8%

13%

2%

75%

2%

 

Strong pipeline of potential actuaries

McDougall says when looking at the pipeline of potential actuaries, by next year the number of black African student members and Technical members is likely to surpass the number of white members on the road to becoming actuaries. The Society currently has 2 767 student and Technical members of which only 1 191 are white.

He adds that, in combination, the number of black African student members and the coloured, Indian and Asian student members as at the end of January 2022 already exceeded the white student members.

Actuarial Society of South Africa Membership Figures – Pipeline (Associate, Technical and Student members)  

Year

White

Black African

Coloured, Indian, Asian

Total

Male

Female

 

 

 

 

 

 

 

2013

1054

463

371

1888

1308

580

2016

1090

971

484

2629

1802

827

2019

1130

1075

589

2767

1840

927

2022

1191

1056

637

2897

1855

1042

 

With the aim of helping struggling student members achieve their qualifications, the Actuarial Society Academy was established in 2016. The Academy provides working student members with educational support as well as soft skills training such as communicating in a corporate environment, balancing work and studying, and coping with the demands of the workplace.

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