Joseph L Chikonde shares how a chance meeting introduced him to the actuarial profession, and how the skills he has gained complement his work as a valuation surveyor
It was while valuing a real estate portfolio for an insurance company in 2005 that I first met an actuary. I had been a real estate consultant since obtaining a bachelor’s degree in real estate in 1988, and my main line of work involved the valuation of real estate interests for sale, collateral, insurance and financial reporting. I was also involved in property development feasibility and viability appraisals.
An actuary was valuing the insurer and wanted some clarification on the valuation of its real estate portfolio. I had never heard of an actuary, but when I learned about actuarial work, I immediately wanted to know more.
I had always been mathematically inclined and felt that my mathematical potential was underused in my career at the time. Actuarial science resonated with my desire to apply mathematics in the financial services at a deeper and more robust level.
I travelled to the UK in 2006 for postgraduate studies in actuarial science at the University of Kent, and returned to Zambia on graduating the following year.
The local shortage of actuarial skills meant that I was busy straight away, working for a consulting firm. I was so busy that I shelved my IFoA exams at the time; I am now halfway through my Fellowship exams.
My actuarial career has been challenging and varied: I have been fortunate to get exposure to pensions, investments, life, general and health insurance environments. Interestingly, I still find myself undertaking real estate valuations occasionally. I continue to be a Chartered Valuation Surveyor with the UK’s Royal Institution of Chartered Surveyors and a registered valuation surveyor in Zambia.
Valuation is a common strand in both actuarial and surveying practice; at the core of both is the use of discounted cashflows.
With actuarial valuations, though, there is the added complication of incorporating probabilities, deterministically or stochastically, into the values of financial outcomes.
Pensions and insurance in Zambia
There have been several notable developments in the Zambian pensions and insurance sectors since I started my actuarial career. The pensions landscape, which had been dominated by defined benefit (DB) schemes in the private sector, is now dominated by defined contribution schemes. This has kept the actuarial consulting industry busy advising on DB scheme conversions and windups. The main driver is the desire for employers and sponsors to transfer risk to the employees.
The approaching deadline for IFRS 17 implementation has also kept the regulator and the insurance industry busy. The actuarial profession has been training insurers on the implications and processes of the new standards.
Inclusive insurance has been another developing story here. The Financial Sector Development initiative has been sponsoring insurer training in microinsurance and subsidising the introduction of microinsurance products for selected partners. The regulator is also working on coming up with a regulatory environment for microinsurance practice.
I spearheaded the formation of the Actuarial Society of Zambia in 2008. Since then, our community has grown from 12 students to several qualified actuaries and more than 30 students. I am also one of the inaugural board members of the Actuaires du Monde (actuairesdumonde.org), an organisation that helps actuarial professionals to serve the public interest in developing and emerging countries.
Joseph L Chikonde is principal consultant at Mak Associates Consulting Zambia
What role can an actuary play in tax administration? Laban Simbeye gives a firsthand account of his experience
Despite having a good STEM background and a top grade in A-level mathematics, I was not
aware of the actuarial profession until my last year of school. While A-levels are not required in Zambia, they are advisable for students who intend to study abroad. I decided to follow that pathway and gained a place at the University of Brighton – although in the end I attended the University of Zambia in Lusaka, where I studied statistics and economics.
Fresh out of university, I joined one of the ‘Big Four’ professional services firms as a graduate recruit, and then got my first actuarial job at Madison Life Insurance in Lusaka a few years later. Madison was one of Zambia’s two leading life insurance companies, with a diversified product portfolio. As an actuarial analyst, I was thrilled that I was finally able to hold a job title that matched my passion.
From carrying out loss reserving to authorising premium calculations and claim payouts, my job description was as packed as one would expect in a small department – I had only my manager to share the workload with. Then there were the actuarial staples of developing products and providing support in investment and pension strategies. It was an excellent environment for a budding actuary. Among my achievements was leading a technical team that won a key client account with more than 100,000 members, and the launch of the personal pension insurance product.
Change of scene
About a decade ago, I decided to join the tax office of Zambia as a manager in charge of revenue monitoring and forecasting. At first, I was not sure whether my new path would afford me the same job satisfaction. What would be the impact on my career, my professional exams and my work experience as an actuary?
Two months in, I discovered that while the role sounded unusual for an actuary, there was more in common between the two roles than meets the eye. For example, both called for sound application of statistical and actuarial concepts. Early in my career at the tax office, my work revolved around designing complex forecast models for tax revenues – similar in many ways to predicting premium growth or product performance. Where one would expect to find different insurance or pension products, instead I found tax types such as excise taxes and value added tax on a range of products and services. To put things in perspective, there were more than two million taxpayers filing various tax returns; each filing occasion was an opportunity to delve into real-time data and present timely insights to key user groups. To do so confidently, one needed to be not only a programmer, but also an expert statistician and business strategist.
Thinking about what it means for actuaries to apply their skills in non- traditional roles, several possibilities begin to emerge. As the world undergoes rapid technological change and digitalisation, governments are increasingly relying on data experts to monitor, regulate and tax the digital economy. What will be the actuary’s role? This is an opportunity for the actuarial profession to expand its data science track. We need to start thinking about actuarial applications in which our members will continue to be at the forefront of analytics, business intelligence and data science. Our core competencies place us in a strong position to undertake these functions.
As someone who is already at the crossroads of this disruptive process, I can predict that the actuaries of the future will need to be masters of data strategies, leading data integrity and use across a broad range of applications – while maintaining a firm grasp on data governance in a world where the marketplace will increasingly become borderless.
Laban Simbeye is a deputy director at the Zambia Revenue Authority
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