Young Actuaries' Series

There’s Hope for the Young Actuary Trainee (…RISK IS OPPORTUNITY)

 With great responsibilities

The question of who is an actuary has always been asked at various actuarial functions (seminars, conferences, lectures…) by several people. An actuary is a financial services professional who advises clients on financial matters which involve management of the risks of financial events in the future which cannot be predicted with certainty.

For one to be qualified as an actuary, he needs to pass at least 6 papers (depending on which organising institution). The courses on which students are examined include: Probability, theory of interest, life contingencies, and a couple of insurance, mathematics, statistics and business related knowledge. A prospective applicant must also have some knowledge in computer and ICT

 The number of actuaries globally is known to be relatively small. In the case of Ghana, it was known that there were less than 5 Ghanaian actuaries by 2010. All African countries with the exception of South Africa could boast of just a few hundreds of actuaries (including actuarial trainees). The forest of questions then begins to grow. Does it not pay? Is the profession too risky? Is demand for actuaries too low? Is the road to becoming an actuary too rough? Is their job not relevant? Among several others are questions these situations trigger.  But on the contrary, actuarial science was the number one ranked profession in the United State of America as of the year 2010 and this gives obvious evidence that there are good treasures embedded in the actuarial profession.

Actuaries are involved in a wide range of business activities. The primary areas of actuarial science application include life and general insurance (thus life, property, annuity, casualty…). Nevertheless, actuarial  profession can be described as one without boundaries in the business world since much of life is very uncertain and the actuary is interested in the uncertainties concerning events. This gives rise to the demand of the actuary from the banking through to the health sector.

The high standard of professional education needed to become an actuary has necessitated for relatively high standards of compensation for the profession. Naturally, salaries vary according to qualifications, ability, responsibility, experience, type of employer, geographical area of employment, and the supply and demand situation. In Ghana, as of 2011, the starting salary of a first degree actuarial science graduate ranged from GH¢8400 to GH¢18000 annually. Interestingly most business firms give merit increases to actuaries as they gain experience and pass examinations. Some companies also offer cash bonuses for each professional designation achieved which serves as a great motivation.

As of now one may be inquiring issues within the mind, finding answers to questions as where are the actuaries in Ghana? Good!

Currently (as of 2012), Ghana could boast of just few tens, qualified actuaries (actuaries with fellowship designate). There are three public universities in the country: UDS, KNUST, and UCC with one private university, PUC that runs Actuarial Science as a first degree programme.

There are also quite a number of insurance companies and other actuarial applicable areas that increase the hope of actuarial trainees who wish to seek for employment during and after their programmes.

The country is also in the pipeline establishing societies that would serve as regulatory bodies for actuarial related activities. Conferences, seminars are organized to unite actuaries and prospective actuaries and to enlighten and build up the interest of people aspiring to be actuaries.

A great challenge is then thrown to the young actuary trainee, considering the current state of actuarial science in our country: the number of fully qualified actuaries, the process of becoming an actuary- the examinations, accessibility of information- collaborations and coordination, and a few others.

The road to becoming an actuary, certainly is not as smooth as ‘Golden spark’, yet must be treaded upon to get there. The prospective actuary must be prepared and discipline himself to take all the actuarial exams organized by any of the internationally recognized actuarial bodies such as the Casualty Actuarial Society, the Society of Actuaries and the Canadian Institute of Actuaries to become a fully qualify actuary. This takes a range of 4 to 10 years on the average.  

The strength of every society depends on its foundation. Days ago, in my quest to finding facts to questions on my mind, I resorted to popular and more reliable source- the internet, to know more about the state of actuarial science in Ghana where I shamefully discovered that the official website of the Actuarial Society of Ghana was last updated in 2007, as of Jan. 2012 and has little information about the society itself. As a springboard, this must be seen by the young actuaries as a challenge in restructuring the society and building a solid and reliable information system.

Insurance establishments in the country over the days have kept increasing faster than any other financial institution. However, less than 10% of all the insurance companies’ branches have actuarial department, or even actuarial staff. Most Ghanaian insurance outlet has been preoccupied by marketers instead of actuaries (at least actuarial trainees). The good news now is that, the National Insurance Commission is underway preparing legislations where each insurance company would have at least an actuarial trainee employee  or as a consultant to its company. This is going to be a great opportunity for the young actuarial trainee in that, there is going to be a high chance that he/she would receive a direct employment after school and would also have the opportunity to upgrading in his profession as he works. This is highly lucrative, but it also means the graduate (the actuarial rep. of the company) should be well equipped to meet the actuarial need of the company and be innovative enough to keep the particular company (branch) in business.

The last issue in this series is the issue of life table construction. It is unfortunate that we live in a country but  our premium calculations and determination is based on the studies of the lives of a cohort from other countries such as South Africa, Singapore, and other countries, when the conditions and the factors concerning life varies.