Introduction
The Nigerian Actuarial Society (NAS) is the premier Nigerian actuarial professional body established in 1986, which has not developed the capacity to qualify actuaries by examinations but has criteria for admitting members into the society (having five classes of membership, namely Student, Analyst, Associate, Fellow, and Honorary). The qualified actuaries got their qualifications from different professional bodies abroad, and the students are not writing a common standard of examination conducted by one professional body abroad.
NAICOM has called on “NAS to lead the way in shaping the future of the Nigerian insurance industry” during the 2024 Annual Insurance Industry Conference held on 26th June 2024, as reported by the Business Today newspaper. This is an acknowledgement of NAS’ pivotal role in the self-regulation of its actuaries, which is a welcome development. The above is reflected in NAICOM’s recent circular on annuity underwriting effective 1st February 2025, which directed life insurers to have at least one qualified actuary responsible for Assets-Liability Matching (ALM) analysis and implementation, using NAS Standards of Actuarial Practice (NSAP) on annuities as a guide for pricing, valuation, and ALM reports of annuity portfolios. NAICOM defines a qualified actuary as a Fellow of NAS, but an Associate of NAS may take up the role of an in-house Qualified Actuary only for the purpose of ALM analysis.
Read also: How UK-IFoA accreditation will close Nigeria’s actuarial gap
According to Wikipedia, an actuary is a professional with skills in advanced mathematics, probability and statistics, finance, economics, financial accounting, and computer science to deal with the measurement and management of risk and uncertainty in insurance, pensions, finance, investments, and other industries and professions.
Shortage of Actuaries in Nigeria
The shortage of actuaries in Nigeria will be exacerbated further (with only nine qualified actuaries registered in NAS out of its over 71 members) when NAICOM’s circular is implemented for the following reasons:
The circular implies that the qualified actuaries from foreign countries (e.g., South Africa, Kenya, etc.) who had been working for Nigeria’s financial sector (e.g., during the recent implementation of IFRS 17) will need to register with NAS before they can practice in Nigeria.
It is obvious that the foreign actuaries are working for actuarial consultancy firms abroad, and they were only seconded to work for the Nigerian insurance companies on behalf of their foreign firms.
These foreign actuaries may not be readily available for the Nigeria market any longer since NAS will only register actuaries and not the consultancy firms.
Some NAS’ actuaries have already retired or are near retirement.
NAS’ actuaries are already engaged with companies or actuarial consultants in Nigeria, so how many of them will accept leaving their current employment to join the insurance companies?
The circular requires companies to recruit actuaries on a permanent basis, the cost of which is too high when recruiting from abroad.
The NAS’ associate members are also very limited in number.
Read also: NAICOM sees new Consolidated Bill boosting economic growth
Cost-effective actuarial training program in Nigeria
In January 2024, the University of Lagos (Unilag), in partnership with NAS, achieved the Institute and Faculty of Actuaries (IFoA) UK accreditation for its postgraduate M.Sc. degree program in actuarial science as a pathway to IFoA qualifications. This will provide successful students with six exemptions from the IFoA qualifications. This could be the fastest and most cost-effective route for NAS to develop common qualifications and increase its qualified actuaries in the medium term, like the route the Chartered Insurance Institute of Nigeria (CIIN) took in collaboration with CII London before conducting their own examinations in the early 1990s.
Conclusion
Unilag is the second university currently being accredited in Africa by IFoA, which is a rare privilege and opportunity for Nigeria. Thus, this program needs to be fully supported, not only by NAICOM and the insurance industry but also by the federal and state governments, including TETFUND, to ensure that adequate funding and sensitisation are available for the training of Nigerian actuaries over the medium term.
Dr Pius Apere (PhD/FCII): (Actuarial Scientist and Chartered Insurer), Chairman/CEO Achor Actuarial Services Limited.
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