THE Actuarial Society of Zimbabwe (ASZ) is working to establish relationships with authorities so that they use actuarial data when formulating policies, businessdigest can report.
Zimbabwe’s erratic weather patterns, unstable macroeconomic environment, poor infrastructure and unpredictable policies have made it ideal for authorities to use actuarial science.
Actuarial science uses mathematical and statistical tools to estimate financial risks in insurance and finance.
In that regard, it uses probability and statistics to define, assess and solve the financial consequences of unknown future events.
At the inaugural six-day Actuarial, Finance, Risk and Insurance Congress (AFRIC) 2023 held in Victoria Falls this week, ASZ president-elect Prosper Matiashe said contributing towards policy was important.
“We realised that we also need to influence policy. So we mostly partner with regulators because we have found that regulators go to the minister who is responsible for that and usually influences a lot of decisions,” Matiashe said, in an interview with businessdigest.
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“We work a lot with Ipec (Insurance and Pensions Commission) on the insurance side. Whenever they issue a circular or policy, we give them technical feedback on the impact the policy on the industry.”
Actuaries often work in the insurance industry, particularly in the life insurance and assurance segments.
However, actuarial science is also used in developing pension plans while studying financial institutions’ liabilities.
Matiashe said the idea was to communicate to authorities that instead of moving a policy, they needed to restructure it based on the data they would have derived through actuarial science.
ASZ has partnered with Ipec in developing mortality tables for Zimbabwe to determine how funeral products could be priced within life assurance.
“We participate in budget meetings. We even prepare our own policy work for the budget. We also help industry bodies,” Matiashe said.
“We partner with accountants and bankers in various forums. We also try to influence them.”
He said in other countries governments had departments dedicated to actuarial science.
Zimbabwe Actuarial Consultants managing director Sonwell Mudzengi said: “For us, taking the lessons learnt from the previous loss of value, the regulator (Ipec) is currently very active in putting up circulars and calling for compliance. In that perspective, the regulator is actually pushing for insurance players to comply”.
Matiashe will officially replace ASZ outgoing president, Tafadzwa Chiduza, next year in March and begin a two-year stint serving in the role thereafter.
One of Matiashe's goals is to increase the number of students studying actuarial science as those licensed are barely above 20 nationwide.