Financial institutions urged to involve Actuaries to tame market risks

By steve umidha

Financial institutions such as bankers and those operating in capital markets have been advised to engage the actuarial profession in order to better run their services and mitigate risks that are constantly changing in the dynamic global and local economies.

“Disruption is the new challenge in banks. We must continue to safeguard ourselves from emerging risks in the sector such as fraud and cybercrime,” said Rose Kinuthia, Chief Risk Officer Kenya Commercial Bank at the 2016 Actuarial Convention held in Nairobi last week.

Traditionally, actuaries are entrenched in the Kenyan insurance industry due to regulatory requirements.

The two-day conference themed ‘Breaking Boundaries,’ sort to find ways of tackling issues, across the industry where actuaries (business professionals who deals with measurement and management of risk and uncertainty) work and where their skills could be used and help current industry problems.

“We should prudently react to current and upcoming changes across the industry and help solve the current problems being faced,” said James Olubayi, The Actuarial Association of Kenya (TASK) council member.

Insurance Regulatory Authority’s (IRA) CEO Sammy Makove, in a speech read by Chief Technical Manager Mrs Agnes Ndirangu, detailed the progress achieved by insurance firms since a guideline that requires underwriters to have in-house actuarial function was issued.

“The need for this is even more crucial as we adopt the risk-based capital requirements now that we are implementing risk based supervision. Actuaries model the impact of future sales and adverse experience on capital levels,” he said.

Nairobi Securities Exchange’s Geoffrey Odundo reiterated the need of a well-functioning financial services system in order to drive and support growth by providing capital, facilitating trade, finance infrastructure and spur innovation.

“Financial institutions play a pivotal role in providing innovative solutions to the significant social, economic and environmental challenges the country faces,” he said.