Actuaries of Our Time

Interview with George A. Zumanu

Q1. What motivated your decision to study actuarial science?

Growing up, my very deep fascination about applying Mathematics to business and finance coupled with my great interest in subjects like Mathematics, Statistics and Economics led me to an actuarial career.
I was introduced to the profession by my elder brother Dela, who was a participant in the First International Actuarial Conference (First International Professional Meeting of Leaders of the Actuarial Profession in English-speaking Africa) held in Accra in September 1999.
Also, SNEB Asamoah, my high school mathematics teacher in Achimota School also shaped and influenced my decision to be an actuary.

Q2. Which qualification route did you follow and what were the challenges? -
Any specific paper that proved challenging in the course of your qualification?

I read a Bachelor of Education degree in Mathematics and Economics in the University of Cape Coast and in order to get a head start in my actuarial career, I enrolled for a Master of Science degree in Actuarial Science at the Heriot Watt University in the United Kingdom. A major challenge on the examinations of the Institute and Faculty of Actuaries was the Continuous Time Finance content on the Core Technical CT8: Finance Economics.

Q3. What is your primary practice area and what influenced your choice of this practice area?

My main practice area is Investment. I guess it was largely influenced by my prior experience in investments and my CFA background. However, I must admit that there were very very few opportunities in life and pensions practice area in Ghana. I am open to new challenges and other practice areas.

Q4. Which other practice areas do you engage in?

In addition to investments, I am also involved in pensions,academia & research and some life practice.

Q5. So how does a typical day for you at work look like as an actuary?

I work as an investment portfolio manager and I am also in management, so my days vary greatly and that is a nice part of my job. I wish my job involved a lot of travel but my clients are based in Accra so I do very few travels.

On a management level, a typical day might consist of leading the team to achieve client investment objectives and our firm's corporate goals.

On the investment level, the start of a typical daywould consist of reviewing business and financial news and reports to determine their impact on managed portfolios. As an investment actuary, I either directly manage investments or provide advice on the management of investments with the focus to managing risk and maximizing returns. These clients may be in operators in other actuarial practice areas like insurers or pension's schemes seeking to match assets to their liability profile in order to minimize risk. I also advise companies on how to implement strategies that minimize risk and maximize the returns of their investment portfolio in line with regulation.

On a daily basis, I interact with the financial markets (money market, capital markets: stocks and bonds) on behalf of my clients. I apply actuarial models and techniques to trade investment and financial assets; measure and analyse investment performance and decisions and portfolio management. Also, I am involved in buying and selling assets, investment analysis and portfolio management. I develop investment strategies and advise on the longer-term characteristics and implications of different investment strategies. Investment actuaries also develop investment indices for passive investment management of some portfolios. Actuarial techniques are ideal for use in measuring investment performance.

Occasionally, on the investment banking and corporate finance, I apply my actuarial skills in forecasting and assessing risks in estimating whether a capital project is financially viable to ensure maximum return on an investment.

The concept of risk is essentially critical and central to investment decision making: this is where actuarial analysis come in.
On the academia and research side, I prepare to lead very interactive, discovery-led and practical actuarial lectures.

Q6. What are the challenges you encounter in your actuarial engagements?

A critical challenge is the lack of awareness and understanding of the role of actuaries in Ghana. It's even more surprising that most of the people who need actuarial skills and services do not appreciate the role of actuaries.
Also, data is highly unavailable and unreliable for modelling and analytics.

Q7. What do you make of the future of actuarial practice in Ghana and Africa at large?

There are very great actuarial prospects and potential for Ghana and Africa because as a developing economy, we find ourselves in a condition where we need to cautiously and carefully make financial sense of future with respect to long term cash flow uncertainties and risks as well as take advantage of the opportunities in risk.
However, stakeholders (like government, regulators, market operators, practitioners, the ASG, training institutions etc.) need to get actively involved and lead the way.

Q8. Regarding actuarial capacity, do you think the key industry players, ASG and NIC have done enough and what would you advise.

I am very glad the ASG in recent times has shown a great deal of proactivity in terms initiatives that encourage a high level of involvement and participation by members. Thumbs up to the ASG. The ASG must collate ideas from members and publicly comment on social economic issues of actuarial interest. In recent times in Ghana, the ASG could or should have commented publicly on issues like one time premium of the NHIS, new pensions reforms, the investment policy of the tiers two and three of the new pensions reform, NIC's new risk—based solvency regulations, etc.
In promoting actuarial capacity in Ghana, the NIC (and other regulators) must make it mandatory and enforce the set-up of an actuarial function with clearly specified standards in terms of skill set and experience in firms that require actuarial skills.
The ASG must lobby regulators and legislature in this direction. For instance, The ASG should lobby government to set up an independent Government Actuary's department to advice government on all matters that have an impact on uncertain long term cash flows like NHIA, Single Spine Salary Structure.
Also, the ASG in partnership with educational institutions must have a well- documented strategy to provide training for required actuarial skill set.

Q9. What would you propose companies that employ the actuarial skill set should do to also promote actuarial capacity development in Ghana?

Most times we limit actuarial employers to the life offices, general insurers and SSNIT. We must involve other employers like investment advisors, pensiontrustees, banks, government and anywhere there are financial consequences of risk through awareness creation, lobbying, regulation and legislation. These employers must make conscious efforts to set up actuarial functions and create training and development opportunities for their actuarial staff because in the long run it's beneficial to the employers. They must recognize that actuarial skills are very critical beyond core actuarial roles to management roles.

Q10. Finally, what do you make of actuarial education in Ghana and what would be your advice to students?

As an actuarial educator, I have come to release that most actuarial programs are taught as a mere combination of Mathematics, Statistics, Economics, Computer Science and Business subjects. However, actuarial science is a unique body of study that applies concepts in those subjects and thus must be taught with that applicative and practical inclination in mind.
Mostly, these actuarial applications are not emphased in the training, leaving students with the only theoretical side of Mathematics, Statistics etc.
Actuarial programs should be tailored to meet the professional examinations so students can easily connect with the professional exams. Finally, to actuarial students, the actuarial profession is veryintellectually stimulating and with time will be very financial rewarding in Ghana.Thus, I will advise all students to work hard despite the current challenges to be a part of the actuaries of our time.