An increased number of actuarial professions practicing in the country can help stabilise the financial sector, the Insurance and Pensions Commission acting Commissioner Blessmore Kazengura has said.
Speaking during the fourth actuarial convention of the Actuarial Society of Zimbabwe (ASZ) in Harare yesterday, Comm Kazengura said the commission greatly values the role of the actuarial profession “in our regulated industry.”
He added that an increased number of actuaries practicing in the country can help stabilise the financial sector.
“If the desired level of actuarial capacity is reached, stability of the financial sector can be achieved within the foreseeable future.
“This augurs well with our vision as IPEC, which is ‘A vibrant Insurance and Pension industry contributing towards a safe and stable financial system by 2022’.”
Comm Kazengura said; “With a strong actuarial skills base, the impact of adverse macroeconomic fundamentals on the insurance and pensions industry may significantly be reduced.”
Currently there are only 11 resident practicing actuaries in the country, which is still considered to be on the lower side in view of the evolving regulatory requirements that are now calling for more actuarial input in the operations of the insurance companies and pension funds.
“In particular, the Commission’s directive on Corporate Governance and Risk Management for insurance companies requires that insurers put in place the actuarial function as a key control function,” said Comm Kazengura.
“There is therefore, need for all stakeholders to work tirelessly to ensure that, as a country, we reach the desired levels of actuarial capacity to seize opportunities, which are arising as we change the regulatory landscape of the industry,” he added.
Comm Kazengura implored the ASZ to be more pro-active in view of the changing economic climate, the lessons drawn during the hyperinflation period of 2005 to 2008 and the dollarisation of the economy and deflation experienced thereafter.
“Volatility of financial markets require sound decisions that will not cause a “repeat” of the financial crisis that was witnessed 2008 and prior periods,” said Comm Kazengura.
As a measure to be more pro-active, he encouraged the ASZ to be actively involved in projects of national interest by providing timely advice to Government regarding the development of the sector.
He said actuaries could have provided an advisory role when the monetary authorities debased the Zimbabwe dollar currency by removing 25 zeros prior to dollarisation and should play a similar role should there be a change of currency in future.
“With the skills that we have locally and abroad, I am sure we have the capacity to deliver one of such key national projects, that is, development of our own sector- specific mortality tables and even the national table.
“As part of our mandate to develop the market, development of mortality tables for our country is one of the issues we have given priority. I am to advise that, as the regulator, we have led by example and already identified partners who will offer technical assistance in support of the development of mortality tables,” added Comm Kazengura.
Development of mortality tables will result in improved accuracy of reserves, as well as appropriately priced products.
In support of the actuarial profession, IPEC has since started developing its actuarial team, which will among other key roles collaborate with ASZ, mainly on technical issues regarding the development of the actuarial profession in Zimbabwe.
The commission has also incorporated provisions to monitor the conduct of actuaries into the draft Bills earmarked to amend the Insurance Act and the Pension and Provident Funds Act.
“Meanwhile, the Commission will not hesitate to report the actuaries whom we would have suspected of having breached ethical and professional standards to their professional bodies,” added the IPEC acting commissioner.