A rapid rise in demand of actuarial professionals is taking place at the back of tightened legislation that requires more diligent management of risk in the financial sector across the world but supply of these skills is not catching up at least in the short term.
This view was offered by Craig Falconer, Executive Head of Actuarial for Aon Hewitt South Africa and Chairman of the Africa Committee for the Actuarial Society of South Africa. Falconer observed that the shortage of actuarial professionals was acute in the African continent and to a certain extent South Africa.
He noted that while more actuaries who previously emigrated were beginning to return to South Africa, the figures were still not looking good. The latest statistics indicate that there are only around 800 actuarial fellows in South Africa, with less than 50 across the rest of the African continent.
He said demand for these professionals was rising rapidly at the back of new legislative compliance requiring a greater actuarial function in insurance companies. While the supply of graduate trainees is probably adequate, there is a shortage of actuarial practitioners with relevant experience.
“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.”
Falconer said this shortage of actuarial skills is not just an African 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 added that the actuarial profession is highly mobile because the qualification is largely internationally standardized. “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”.
He said 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.”
Falconer urged companies to offer competitive packages to meet this demand. 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,” said Falconer.