THE WAY FORWARD FOR ACTUARIAL SCIENCE IN GHANA

An Actuary is a professional who assesses the financial risk of a particular situation primarily using probability theory, financial theory, computer science and mathematical theories. Per the nature of their work, actuaries undergo a rigorous educational training process which focuses on areas including; Probability, Mathematics, data science, finance, Insurance, economics, accounting, computer science and communication. Actuaries are needed in almost all institutions in order to minimize the riskiness of their activities which might lead to financial loss. But they are in very high demand in the financial sector especially the banking and insurance industry. FYI: Actuaries are responsible for the pricing of your insurance policy. 

Chartered Enterprise Risk Actuary (CERA) is the highest qualification one can attain as an actuary. As of today, August 2017, there are only 4000 CERA holders in the world due to the rigorous qualification process one has to go through. 

In 2016, Times ranked actuaries as the 19th highest paying profession in the USA, with a median base salary of $115,000. Careercast.com in 2013 as well ranked the Actuarial profession as the best job in the USA with a median salary of $91,211 and a projected growth rate of 29.21%. And in the UK, the average graduate salary is £33,000 according to High fliers research. The CNN on May 23, 2012 reported Actuarial Science as one of the four college degrees with relatively 0% unemployment. These data and articles speaks volumes on the importance of the Actuary’s work.

But the same cannot be said about the profession here in Ghana. Insurance has been in Ghana for a very long period, with Enterprise being over 90 years on the Ghanaian insurance market. Today Insurance contributes about 2% of the GDP of Ghana and with the Insurance act of 2006 (Act 724), which separates life insurance companies from general business insurance, the number of industry players within the insurance industry has tripled but yet the actuarial science graduate struggles to find his way out on the job market.

Most companies like to employ the services of consultants due to the high cost in maintaining a permanent desk for the Actuary in the office. I will recommend the National Insurance Commission for their intervention on the matter by making it compulsory for insurance companies to maintain two actuarial desk in their office. But frankly speaking, it is not enough for promoting the profession. 

Most countries like the USA, UK, Canada, China, South Africa (just to mention a few) have an actuarial body that is responsible for training, licensing and modulating the Actuarial profession. But here in Ghana, to be an Actuary you need to join one of these Actuarial bodies outside the country (preferable institutes are the American Society of Actuaries (SOA) and the UK Institute and Faculty of Actuaries (IFOA)) with their exorbitant subscription fees and exams fees. This does not encourage Ghanaian Actuaries to stay in the country. Hence, lack of knowledge of the profession by industry players in the country as such lack of essential data to the country. Example, as of today Ghana do not have a life table, our insurance companies and Pensions companies depend on data from South Africa and Australia for their analysis and calculations, which is unfortunate. I will charge the Actuarial Society of Ghana and the NIC to up their game.

Today there are 7 universities offering Actuarial Science degree in the country (which should tell us the demand of Actuaries in the country is increasing) with the University of Ghana and UPSA being the freshest schools to include the course in their curriculum in 2013 and 2016 respectively thereby leading to the increase in Actuarial graduates in the country. But with the lack of knowledge on the skill set an Actuarial graduate possess by corporations like the NSS, graduates are placed into areas which are not related to their field of study, hence making the graduate doubt his importance in the country. I think the various departments handling Actuarial Science needs to liaise with industry players to enable graduates secure at least National Service posting into some of these actuarial related companies in order to heighten peoples interest in the course. Corporations as well that know the role of the actuary towards the growth of their company, tend to demand for qualified Actuaries like an associate or a fellow of a recognized actuarial body, a status most graduates do not hold. Hence leaving no room for Actuarial trainees in the country.

Again, the Actuarial Society of Ghana has been quite for quite too long. They need to be heard on issues concerning risk and insurance on the Ghanaian financial sector. Like the collapse of UT bank and capital bank, like the Minister of finances decision on using a Single Treasury Account, like how the collapse of these two banks will lead to default of insurance premiums and the consequence on the individual policyholder as well as the insurance companies. This will draw people’s attention on some of the training actuarial graduates receive, hence accord them the respect desired.

Recently, the IFOA, SOA and the Canadian Society of Actuaries conducted a joint research on the reason why the rate of growth in life expectancy in the UK, USA and Canada has slowed down and the effect on pension companies. The ASG can do same by carrying out other researches pertaining to the financial services in Ghana. Early this year, the ISSER revealed that only 10% of university graduates are able to secure jobs within their first year after graduation which is alarming. It is therefore the responsibility of the various professional bodies within the country to reach out to the public and make them understand what their graduates bring to the table if they are serious about promoting their profession. If the ASG is able to meet this obligation, the number of graduate seeking to travel outside the country is going to reduce significantly.

Emmanuel Sackey 

Actuarial Science Student 

University of Ghana

Sackey143@gmail.com

Five Things You Are Definitely Not Qualified To Do

Dear Liz,

I like your empowering point of view. I've been through a lot of B.S. in my career so far. Right now, I'm job hunting but I don't have any confidence.

I keep thinking that everybody else who applies for any job that I'm also applying for is probably more qualified than I am.

I know I have skills and qualifications and I've always done a good job at every job I've had, but I've also lost jobs for political reasons and I've been laid off when my previous company owners lied to me and everyone else about the company's financial health.

So, you could say my mojo is in the basement.

I'm applying for a lot of jobs and getting a few interviews, but I'm afraid they're not going to think I'm qualified.

Have any advice for me?

Thanks Liz,

Morgan

Recommended by Forbes

Dear Morgan,

Almost every job seeker worries "Will I be qualified enough for the jobs I'm pursuing?"

They worry about these things, too:

"Will the hiring manager like me?"

"Will I make the right impression?"

"Will there be other candidates who are smarter or more accomplished than I am?"

Most job seekers are way more qualified than they think they are.

I've been an HR person since 1984. For all those years I've been interviewing people who were nervous about their qualifications. I like to remind people that if they weren't qualified, they would never have gotten the interview.

Just because someone doesn't decide to hire you doesn't mean you aren't smart and capable.

Some managers won't hire you specifically because you are so smart and capable that it freaks them out!

However, there are a few things you are not qualified to do -- and I want you to stop doing these things right away.

1. You are not qualified to decide that you shouldn't apply for a certain job opening because you don't have all the Essential Requirements listed in the job ad. Apply anyway! There's no downside.

2. You are not qualified to put a box around yourself and decide that there are only a few job titles you can go after.

3. You are not qualified to conclude that just because you've had some tough experiences during your career, therefore you are damaged goods or a less-than-spectacular candidate. That's not true! Let every hiring manager decide for themselves whether you are their cup of tea, or not.

4. You are not qualified to say that whenever you apply for a job, there must be somebody else who is a better candidate than you are. You're not going to meet the other candidates, in all likelihood. Don't compare yourself to them. You are the perfect new hire for a manager who sees your talent, and that's the only kind of manager you want to work for.

5. You are not qualified to put yourself down. Other people will try to put you down. You need to counteract that negativity by putting yourself up!

Keep these thoughts in mind, Morgan:

1. Not every hiring manager or every employer deserves you. Only the people that get you, deserve you!

2. If you don't get a job that you apply for, it doesn't mean anything. It's not a reflection on you. The job might have been all wrong for you. Forget about it and move on.

3. Whenever you worry about your qualifications, remember that everybody feels nervous and insecure at times.

One time I spoke on a panel with a guy who had won a Nobel prize. Before the panel presentation we were all standing around backstage and the Nobel prize winner said "I hope I don't say anything stupid on this panel."

The rest of us panelists cracked up.

"Dude," we said, "Please, say something stupid! That will make the rest of us feel more comfortable."

Everybody worries about making a good impression at times. You have no one to impress. Forget about impressing a hiring manager. If they like your brand of jazz, magnificent! If they don't like it, God bless them. They should live and long and happy life, but they aren't the right manager for you.

All the best to you Morgan -

Liz

Liz Ryan is CEO/founder of Human Workplace and author of Reinvention Roadmap. Follow her on Twitter and read Forbes columns. Liz's book Reinvention Roadmap is here.

Copied

BEFORE YOU WRITE THE ACTUARIAL PAPERS

Starting my program in Actuarial Science, like most colleagues of mine at the time, I didn’t have an in depth knowledge about the course. All I knew back then was the profession pays well as Norra will put it. I remember there was a time where a lecturer came to keep us busy during a class whiles our lecturer for the course was out doing something for him, he asked us; ‘why have you decided to limit yourselves at an early stage in your educational life. Actuarial science is a specialization course so you should have done your first degree in somewhere else and later focus on the Actuarial at your master’s level or something’, he said. Advancing in the program I realized Actuarial science as a specialization course wasn’t entirely true like the lecturer made it sound or look. It is just like any profession (eg. law and medicine) where there are branches for you to specialize in. Actuarial Science is never a ‘straight jacket profession’.

Traditionally, there are about six practice areas an Actuary can specialize in: Finance and Investment, Life Insurance, Health Insurance, Pensions, General Insurance and Risk management. Finance and investment affects all aspect of the economy. Due to the volatility of prices on the capital market, making gains and accruing funds of companies creates a high degree of risk for these companies. In healthcare, most countries are now looking for new and effective ways of restructuring the welfare of the state to meet the changing needs, demands and expectations of their changing population. Pensions schemes are greatly affected by legislation (reforms in SSNIT since 1946 CAP 30) and the investment market which we know to be volatile is also unpredictable. Life and General Insurance has also seen tremendous changes since their inception in Llody’s Coffee house in London and the great Babylonian era of shipping respectively. Charging the right rates and maintaining an appropriate reserve is key to the survival of these industries. Risk management is an everyday thing in all companies irrespective of your line of business. These works and changes in events is the reason for the existence of the Actuary. So like I said, my lecturer was not entirely right in his comment since students of Statistics, Mathematics and engineering are also in a good position to writing and passing the Actuarial professional exams and becoming Actuaries.

Like other top-ranked professions (such as law and medicine), one must pass a set of examinations to achieve professional status as an actuary. These we know are organized by associations and societies whose regulations and standards are jurisdiction based. The Ghanaian society of Actuaries recently (2017) achieved a full member status with the International Actuarial Association (IAA) but it is yet to start conducting its own exams, so we still have to write the exams as offered by other societies outside Ghana; preferably the IFoA (UK) or the SOA (US). But before deciding which one to join, there are but few factors I will like you to consider:

·        What is your preferred practice area?

·        What system or qualification will you like to adopt?

·        Courses you must have covered.

Preferred practice Area

Though as a student Actuary, the idea of selecting a practice area may seem like a rush decision since the same or similar preliminary courses are taken at the early stage of the actuarial exam structure with specialization coming in at the fellowship level, this topic is of prime importance especially when you are considering to practice in the United States. In the US, there are two large bodies who are in charge for regulating the actuarial practice as well conducting exams for student Actuaries. They are the Society of Actuaries (SOA) and the Casualty Actuarial Society (CAS). While the CAS focuses on general insurance, the SOA focuses on life insurance, pensions and investment. But in the UK and Australia, the Institute and Faculty of Actuaries (IFoA) and the Institute of Actuaries Australia (IAA) respectively are the sole bodies in charge of the profession in those countries. The exams structure towards the award of an associateship status of the SOA and the CAS is given as follow;

SOA Exam	CAS Exam	Exam Title
P	Exam 1	Probability
FM	Exam 2	Financial Mathematics
MFE	Exam 3F	Financial Economics
MLC	LC	Life Contingencies
C	4	Construction and Evaluation of Actuarial Models
-	ST	Stochastic Processes/Statistics
-	Exam 5	Basic Techniques for Ratemaking and Estimating Claim Liabilities
-	Exam 6	Regulation and Financial Reporting
-	Online Course 1	Risk Management and Insurance Operations
-	Online Course 2	Insurance Accounting, Coverage Analysis, Insurance Law, and Insurance Regulation
FAP	-	Fundamentals of Actuarial Practice
APC	-	Associateship Professionalism Course

In addition to passing the above mentioned exams, both CAS and SOA students need to have Validations of Educational Experiences (VEE). This simply means the subject has been sufficiently covered in University. These include:

• ·        VEE - Economics
• ·        VEE - Applied Statistics
• ·        VEE - Corporate Finance

Fellowship

To become a fellow with the CAS, a student needs to first of all qualify as an associate and then pass the following exams as well;

• ·        Exam 7 - Estimation of Policy Liabilities, Insurance Company Valuation, and Enterprise Risk Management
• ·        Exam 8 - Advanced Ratemaking
• ·        Exam 9 - Financial Risk & Rate of Return
• ·        Online Course 3 - Insurance Accounting, Coverage Analysis, Insurance Law, and Insurance Regulation

An Associate of the SOA can also be promoted to become a Fellow by choosing a specialty track:

• ·        Corporate Finance and ERM (CFE)
• ·        Quantitative Finance and Investment (QFI)
• ·        Individual Life and Annuities
• ·        Retirement Benefits
• ·        Group and Health
• ·        General Insurance

UK

In the UK, the Institute and Faculty if Actuaries are the only body in charge of the operations of the operations of Actuaries with offices in Edinburgh and London. To qualify as a Fellow of the IFoA, one needs to pass 15 exams conducted by the institute. Nine Core Technical papers, three Core application, Two Special Technical and 1 special application. Their exams structure is as follows;

Core Technical		Core Application
CT 1	Financial Mathematics	Actuarial Risk Management	CA 1
CT 2	Finance and Corporate Reporting	Models documentation, Analysis and reporting	CA 2
CT 3	Probability and Mathematical Statistics	Communication	CA 3
CT 4	Models
CT 5	Contingencies
CT 6	Statistical Models
CT 7	Business Economics
CT 8	Financial Economics
CT 9	Business Awareness

Qualifying in the above mentioned papers will qualify one to become an associate member of the Institute. CT 1-8 is a three hour written paper whiles CT 9 is an online exam. CA 1 is a two written paper with three hours each. CA 2 is a one day assessment. CA 3 is an online paper split into two folds; a presentation and an online exam.

Special Technical		Special Application
ST 1	Health and Care	Health and Care	SA 1
ST 2	Life Insurance	Life Insurance	SA 2
ST 4	Pensions and other Benefits	General Insurance	SA 3
ST 5	Finance and Investment (A)	Pensions and other Benefits	SA 4
ST 6	Finance and Investment (B)	Finance	SA 5
ST 7	Gen. Ins. - Reserving and Capital modelling	Investment	SA 6
ST 8	Gen. Ins. - Pricing
ST 9	Ent. Risk Management

The ST and SA courses are three hour written papers. A pass in two ST courses and a pass in 1 SA course will qualify one to become a fellow of the Institute.

Nevertheless, the SOA and CAS grant exemptions to candidates possessing passes in the IFoA papers.

Mode of Qualification

The two large bodies regulating the Actuarial profession in the US do not grant any form of exemptions to academicians who in one way or the other have adequately covered a particular subject in the University or might have contributed in a way to Actuarial literature aside the VEE subjects. They believe so long as you have been able to either cover the subject in the University or have contributed to the Actuarial literature, passing the exams shouldn’t be a big deal for you, so you need to pass it.

The IFoA on the other hand grants exemptions to these same class of persons provided the syllabus of the subject in question matches with theirs. Irrespective of where you had your degree (either in the UK or outside the UK) the IFoA could grant you this exemptions. Having said that, there are some schools in the UK and outside whose Actuarial Science program have been accredited by the IFoA. With these schools, completion of their Actuarial Science program (typically masters or post graduate diploma) would lead to what is called a bulk exemptions or subject exemptions from some of the papers of the IFoA (typically the CT papers). This mode of qualification to me is one of the fastest ways of becoming an associate of the IFoA and for that matter, an Actuary considering the fact that a masters in the UK usually spans for a duration of 12 months. Some of the programs of these schools could grant an exemption from a subject to as many as 12 subjects (for two master’s course) of the Institute. The following are examples of such schools:

Asia Pacific University	Cairo University
Cass Business School	Central University of Finance and Economics (CUFE), China
Chinese University of Hong Kong	City University London
Dublin City University	Heriot-Watt University
Imperial College London	Indian Statistical Institute, Kolkata
Lancaster University	London School of Economics (LSE)
Nanyang Technological University	National University of Ireland, Galway
Queen Mary, University of London	Queen's University Belfast
Said Business School, Oxford	Southwestern University of Finance and Economics (SWUFE), China
Sunway University, Malaysia	UCSI University, Malaysia
Universiti Teknologi MARA (UiTM) Malaysia	University College Cork
University College Dublin	University of Birmingham
University of Bristol	University of East Anglia
University of Essex	University of Hong Kong
University of International Business and Economics (UIBE), China	University of Kent
University of Leeds	University of Leicester
University of Limerick	University of Lisbon
University of Liverpool	University of Manchester
University of Mauritius	University of Oxford
University of Southampton	University of Technology, Mauritius
University of Warwick	University of Waterloo
University of York	University of Zambia
Zhongnan University of Economics and Law

Source: www.actuaries.org.uk

You can read more about the kind of exemptions granted by these schools on either the IFoA website or the Universities website.

Preliminary Course before the Exams

Regardless of the mode you decide to use to get to your destination, there are some preliminary courses that an Actuarial student needs to have covered extensively at the Undergraduate level. These courses are not mandated by the society or the Institute but are necessary in helping your pass the papers. Considering the costive nature of the exams, it will be unfortunate to register and spend hours of preparations and to come out without nailing it. With most of the Universities offering Actuarial Science at the master’s level as well, they mostly look out for students who have extensive knowledge in these subjects before giving them an offer to study with them. Key among these courses include:

• ·        Calculus (preferably three semesters of calculus)
• ·        Statistics (at least 3 semesters of probability)
• ·        Computing (any programing language)
• ·        Linear algebra

These courses are not exhaustive but knowledge in them could go a long way in making you excel in your actuarial papers.

There is no short cut to becoming an Actuary, therefore if it must be done, it must be done right. Following this path, we are all going to be pushed over and above our limits and over our comfort zone. But as the Greeks will put it pathemata mathemata; if you are not hurting, you are not learning.

I wish us all success on this great journey of ours.

Emmanuel Sackey

Actuarial Science Student, UG

Sackey143@gmail.com