Actuarial Landscape in Kenya

With 65 qualified actuaries and close to 10,000 actuarial students, the Kenyan actuarial market is poised for growth Ezekiel Macharia

The Kenyan insurance sector has grown significantly over the past few decades. In fact, it is bigger than Nigeria’s industry, even though Nigeria is the largest African country by population. With regard to actuaries, Kenya has the second-largest group of fully qualified actuaries in Africa with 65 fellows (South Africa is first with 1,732 qualified actuaries).

The key employers of actuaries in Kenya are insurance, pension and consulting companies. There is also a big push to recruit actuaries in the banking sector due to International Financial Reporting Standard (IFRS) 9 requiring banks to calculate default risk on their loans. For instance, at my consulting company, Kenbright, we frequently talk to banks to see where we can help in assessing risk. So, IFRS 9 has helped the market appreciate the role of actuaries and contributed to the growth of the actuarial market. International recruiters and multinationals also have come to recruit in our East African market. In the past, 80 percent of actuaries used to go abroad in the diaspora, and now the numbers have reversed and we have more representation at home.

In terms of areas of practice, our market is focused on long-term health care. Kenya is a young country with an average median age of 20. Out of the 50 million lives, only 4 million are older than 60. There are new products, such as long-term care, that are currently being developed with the help of our pension and insurance sector teams.

Health insurance was launched in Kenya just 20 years ago, and it used to be part of personal accident insurance before becoming its own market. The national health insurance fund has grown tremendously, and combined with the health insurance market, they have about $1 billion collected income per year. These markets are only serving about 4 million lives, so there are conversations around universal health care, which is a big area of opportunity and an item in the United Nations sustainability goal.

In the pension area, there are different contribution schemes that use actuarial expertise on the asset side to determine the risk of investments not meeting the expected obligations.

With regard to key barriers in our market, having a low gross domestic product (GDP) per capita is a challenge, coupled with the unwillingness to pay out of that limited GPD. These factors reduce the amount available for risk-taking and the number of actuaries who can be hired in the insurance sector. Nevertheless, many actuaries (including actuarial students) in Kenya have become entrepreneurs and have created a market for risk. They have gone into agriculture, micro-insurance and index-based insurance. With climate change, we expect agriculture insurance to be key in Kenya.

Actuarial Body in Kenya

Kenya has 65 qualified fellows of the U.K. Institute and Faculty of Actuaries (IFOA), which has mainly been driven by the efforts of the Kenyan government. Eighty-five percent of the actuarial market in Kenya is part of the IFOA, while few belong to the Society of Actuaries (SOA). The government has been sending at least five master’s students to the United Kingdom for training every year, and that program alone has helped develop 35 fully qualified actuaries.

When I started studying for this program, there were only six fully qualified actuaries in Kenya, and I was the 12th student to qualify as a fellow actuary. While most of the actuaries before me qualified after taking a master’s course in actuarial science in the United Kingdom, I was able to qualify through self-study. I started university in 2003 and qualified as a fellow in 2013. There was not much support to help me study for the actuarial exams at the time. Today, some of the actuaries in Kenya are offering support and mentorship in the actuarial community, and some have become lecturers and teachers. Even the qualified actuaries living abroad have been very supportive of the Kenyan actuarial market.

Kenya is part of the East Africa Community (EAC), which includes Burundi, Kenya, Rwanda, South Sudan, Tanzania and Uganda. While Kenya has about 50 million lives, the entire community has around 150 million. Other EAC countries do not have as many actuaries as Kenya, so we are trying to see how we can help develop actuaries in this larger community as well.

The Actuarial Academy of East Africa was started to provide mentorship, training and tutorials to support the various actuarial markets. Each of these markets also has an Actuarial Society—in Kenya, we have The Actuarial Society of Kenya (TASK). TASK is a member of the International Actuarial Association (IAA), which has been instrumental in the growth of the number of actuaries in the country.

For six years I held a seat on the TASK council, but now I am focusing on the Actuarial Academy, as we believe mentorship is what will best help future actuarial talent. Even though we only have 65 qualified actuaries, we have accumulated close to 10,000 actuarial students over the past 10 years. A lot of students are hesitant to venture further into the actuarial field for fear of not making it due to the exams being difficult and the environment not being conducive to pass them. So, students end up going into related fields such as accounting. There is a big gap that we hope the Actuarial Academy can help bridge.

Kenya Actuarial Academy

The Actuarial Academy will be a virtual program that offers mentorship and tutorials to support the actuarial education process. Our hope for the future is that by the time a student is done with university, they will have completed at least half of the actuarial exams.

Some of the virtual trainings the academy will offer will be videos on different topics developed by qualified actuaries. We envision a virtual framework where actuaries across the world contribute to the content for our students. While we want to develop professional actuaries, we also need to have actuaries in the education sector help us develop the actuarial syllabus and engage with students. In 20 to 30 years, our ultimate goal is to create our own examination system in Kenya.

TASK has hosted an annual actuarial convention with about 400 people in attendance where actuaries showcase what they are doing. For the past two conventions, we have had people outside of Kenya attend, such as actuaries in other markets like Tanzania and Uganda. This has helped kickstart the conversation around making Kenya an actuarial center of excellence for actuarial capability through the Actuarial Academy that other countries can also learn from. I am leading these efforts for the academy, and we have two other directors who support us. We have received funding in the past two years from the IFOA, but we are looking to get more funding and support from actuaries around the world to build our actuarial training material and content.

Connecting to other actuarial associations and education institutions will help address the hesitancy that students have regarding entering the actuarial profession. It also will help build camaraderie among actuarial institutions as we work together toward the common goals of increasing knowledge, educational opportunities and successful career paths.

Ezekiel Macharia is group CEO and chief actuary at Kenbright in Kenya.

Statements of fact and opinions expressed herein are those of the individual authors and are not necessarily those of the Society of Actuaries or the respective authors’ employers.

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