ALTERNATIVE MARKETS FOR ACTUARIES Insurance Regulatory Authority ALTERNATIVE MARKETS FOR ACTUARIES Presented by: George Odera 28 th November 2014

“You should not remain in your comfort zone; if you want to make it big, you must challenge yourself, get out of your comfort zone, and succeed in doing well outside of your comfort areas.”- Rohit Sharma Insurance Regulatory Authority ALTERNATIVE MARKETS FOR ACTUARIES

Insurance Regulatory Authority ALTERNATIVE MARKETS FOR ACTUARIES Agenda 1.Qualification Path 2.What do employers look for? 3.Traditional Roles 4.New Ventures 5.Parting thoughts

1 Qualification Path. Insurance Regulatory Authority ALTERNATIVE MARKETS FOR ACTUARIES

1. Qualification Path Insurance Regulatory Authority ALTERNATIVE MARKETS FOR ACTUARIES There are different actuarial bodies offering exams that lead to a qualification. *Most common in Kenya- IFoA (UK) and SoA (USA). Rigorous and intensive set of exams. Later stage exams possibly shape the practice area you will specialize in: *Health and Care *Life Insurance *Pensions *General Insurance *Finance and Investments *Enterprise Risk Management New qualification introduced-Certified Actuarial Analyst (CAA). (Link last accessed 27/11/2014) Once qualified, the opportunities are endless.

2 What do employers look for?. Insurance Regulatory Authority ALTERNATIVE MARKETS FOR ACTUARIES

2. What do employers look for? Insurance Regulatory Authority ALTERNATIVE MARKETS FOR ACTUARIES There’s a fine line between intellectual excellence and professional competence. Good grades can earn you a job but cannot keep you in one if you are not competent professionally. The Actuarial Profession requires actuarial students to complete a Work Based Skills (WBS) Log before they are signed off as qualified actuaries. Why? Thousands of graduates pour into the job market annually. Most Kenyan universities now offer Bsc Actuarial Science & you will be competing for limited job slots. What makes you stand out from the rest?

What do employers look for cont. Insurance Regulatory Authority ALTERNATIVE MARKETS FOR ACTUARIES Technical/Analytical skills Obtained from the professional exams. (CTs, CAs, STs, SAs) Communication skills – most employers have complained about this. Good comm. skills acquired from the professional exams and lots of practice. (CA3) Soft skills- ** If you have this it is a big plus! Acquired from professional exams (CA2) & continuous practice. Most software is freeware.

What do employers look for cont. Insurance Regulatory Authority ALTERNATIVE MARKETS FOR ACTUARIES Critical Judgment/Teamwork Obtained from professional exams (CT9) & work experience. What do all these imply?- The Actuarial Professional exams are well designed to equip with the necessary analytical skills to handle various tasks. Work Based Skills is designed to ensure that you can merge theory with practice. You need to have additional self drive to know things work!

3Traditional roles. Insurance Regulatory Authority ALTERNATIVE MARKETS FOR ACTUARIES

3. Traditional Roles Actuaries have worked in ‘traditional roles’ in the past. Life InsurancePensions Health & Care** General Insurance Non traditional roles are emerging and there’s a ‘gold rush’ by different professionals to take up these roles. Actuaries ought not be left behind. Insurance Regulatory Authority ALTERNATIVE MARKETS FOR ACTUARIES

4New ventures. Insurance Regulatory Authority ALTERNATIVE MARKETS FOR ACTUARIES

Insurance Regulatory Authority ALTERNATIVE MARKETS FOR ACTUARIES 4. New Ventures We need, as a profession, to move out of our comfort zone and take up emerging/new roles that could benefit from our expertise. What are some of the new roles that are emerging? Micro-insurance &agricultural insurance Regulations Risk Management Programming Education

Insurance Regulatory Authority ALTERNATIVE MARKETS FOR ACTUARIES New Ventures Cont. Micro-insurance & agricultural insurance Micro-Insurance is targeted towards the low income segment of the population. Different from conventional insurance products are characterized by low premiums & Limited benefits. Pricing is key and micro-insurance products can increase the insurance penetration in the Kenyan market. Actuaries have a role to play! Multinational insurance firms have entered the market-Prudential (UK), Barclays Life. Qualified Actuaries are setting up consultancy firms. They have identified the potential in our market! Demand for agricultural insurance is increasing (Crop and Livestock). The govt, through the State Department for Livestock, is developing an asset based insurance cover for pastoralists in semi-arid areas -Turkana and Marsabit.

Insurance Regulatory Authority ALTERNATIVE MARKETS FOR ACTUARIES New Ventures Cont. Regulations The regulatory landscape is changing across the world. What’s happening around? Kenya- Risk Based Supervision (RBS) and Risk Based Capital Model (RBCM), Quantitative Reporting Templates (QRTs) UK-Solvency II, Ban on Gender as a differential pricing factor, Concordant and Moratorium on the use of genetics in insurance. South Africa –Solvency Assessment and Management (SAM) These new regulations provide actuaries with an excellent opportunity to get involved in.

Insurance Regulatory Authority ALTERNATIVE MARKETS FOR ACTUARIES New Ventures Cont. Risk Management Firms have realized that risks are ‘real’ and they ought to set up risk management functions. How have they been surviving? Classic examples of companies that have been caught out. Actuaries are best placed to take up the roles of risk managers. The actuarial principles on risk management are applicable not just to insurance and pension industries but to other industries as well.

Insurance Regulatory Authority ALTERNATIVE MARKETS FOR ACTUARIES New Ventures Cont. Programming System are being automated, computer power has greatly increased. People are moving online - Retail, Communication, Social and Professional Networking. A lot of actuarial work can be automated to increase efficiency. Actuaries need to get more involved in programming. IRA has formulated an Electronic Regulatory System (ERS) that will facilitate the implementation of RBS and submission of QRTs.

Insurance Regulatory Authority ALTERNATIVE MARKETS FOR ACTUARIES New Ventures Cont. Education Local universities are yet to get accreditation for exemptions from actuarial professional exams. Actuaries need to be engaged in possibly revising the university syllabus and aligning it to that of the profession. Get involved in lecturing roles (part time or full time) **Contributes towards Continuing Professional Dev. (CPD)

Insurance Regulatory Authority ALTERNATIVE MARKETS FOR ACTUARIES 5. Parting thoughts Let us work towards being competent professionals who add value to all our stakeholders. New opportunities and roles exist which actuaries can take up. Systems are automating the way things are done, we need to think how we can use this to our advantage as a profession. Lets get out of our comfort zones and go that extra mile!

Questions? Insurance Regulatory Authority