The Insurance Act, No 38 of 2021, is set to repeal the Insurance Act No 27 of 1997 once the Minister of Finance and National Planning passes a Statutory Instrument for its commencement. The Pensions and Insurance Authority (PIA) has hailed the Act as much anticipated and progressive for the industry. This article zooms in on some immediate benefits in the Actuarial space. Specific reference is made to sections 69 and 72 of the new Act, where it will now be mandatory for every insurer to appoint an Actuary.
Insurance and reinsurance companies need to know the possible risks from insuring an individual or company. An Actuary is a business professional who analyses the financial consequences of risk and uncertainty. Actuaries are commonly known to work in the insurance industry. Insurance companies rely on actuaries to determine risk for many types of insurance, including life, property, liability, auto, home, and other plans. An insurance Actuary analyses financial risk; this analysis helps insurance companies design insurance policies while invariably guaranteeing external stakeholders’ interest.
With this Act, Actuaries will be able to define and carefully evaluate risks for respective companies properly. They will thus assist the insurance companies in making informed pricing decisions that are commensurate with the risk assumed.
In addition, the Act explicitly outlines a schedule of regulatory reports to be presented on the financial conditions of the licensed insurer for supervision purposes.
Actuaries will benefit the company by:
- Improving the risk assessments
- Increase insurance companies’ investment portfolio
- Managing the financial reserves of the company
The Act is a breath of fresh air for aspiring actuaries in Zambia. In the past, prospecting candidates typically had reservations to pursue the actuarial qualification as they had questions such as:
- Is it a worthwhile profession in the Zambian Economy?
- What job opportunities exist?
- Are there any qualified Actuaries in Zambia?
- Is this the right path for me?
All these concerns are valid; however, the new Act will directly or indirectly address some of these concerns by potentially providing the following benefits for actuarial students:
- Job creation/demand
- Better career prospects
- Mentorship Programs
- Study support (enable them to not only hold academic certificates but professional certificates as well)
About seven years ago, Zambia did not have any institutions that offered a degree in Actuarial science. There were also very few local professionals who could give guidance on the profession. However, today the University of Zambia and the University of Lusaka offer Actuarial Science programs at both undergraduate and postgraduate levels. There is also the Actuarial Students of Zambia, a platform for actuarial students to learn and exchange from each other.
Students and professionals can also become members of the Actuarial Society of Zambia, which will enable them to expand their network. This shows that there has been significant growth in the knowledge and understanding of the actuarial profession in Zambia. With the new Act’s enactment, institutions will have a wider talent pool to source staffing needs.
By Raiza Sibongile Mtamira,
Treasury Officer at Klapton Re