ACTUARIAL SCIENCE IN KENYA A STUDENTS PERSPECTIVE

Talk by Daniel Mutuku, JKUAT, B. Sc. Actuarial Science on the occasion of the Kenyan Actuarial Convention held at Laico Regency Hotel on the 17th July 2009.
Good afternoon all. It is indeed an honour to be accorded this chance to speak to so highly esteemed a people. As previously stated my name is Daniel Mutuku, from JKUAT, Juja Campus, reading actuarial science. I also serve my fellow students as the chair of our association, the Jomo Kenyatta University Actuarial Students Association (JKUASA), Main Chapter. To know more about JKUASA, please visit us at http://www.jkuat.ac.ke/stacs/jkuasa The title of my talk does raise questions, I believe. What would a student want to say about the profession; would it be technical, or broad focused? Hopefully by the end of this, the message will have gone home. To begin with, let us all understand the core of what we do. We are a profession. The Longman dictionary defines a profession as a form of employment, especially one that is possible only for an educated person and after training and that is respected in society as honourable. Gordon and Howell (1959) use a number of adjectives to define a profession: Knowledge, personal skill to application of this knowledge, and standards of professional conduct. My understanding of a profession, intertwined with the definitions mentioned, lies in the fact that a profession exists to serve a public purpose. Actuarial science borrows a lot from such disciplines as Mathematics and Statistics, and the concepts of probability and compound interest. With this knowledge, it was possible for the early actuarial thinkers to begin work on the thought behind our profession. We do owe them gratitude for their immense contribution to the development of actuarial concepts. These minds include John Graunt, Abraham de Moivre, Laurens Tonti, James Dodson, Daniel Bernoulli, Frank Redington and many others for such theories as Life Tables, Survival Models, Life Insurance, Risk Theory, Graduation of Decremental Rates and the Theory of Immunization. May I also affix Kenyan examples for bringing these concepts for application in Kenya, for the benefit of the local mwananchi? Sundeep Raichura, Ambrose Dabani, James Olubayi, Tavaziva Madzinga, Linus Makhulo, Leslie Okudo and Abednego Mureithi, as some of the actuarial torchbearers and, Prof. Romanus Odhiambo, Dr. Patrick Weke and

others for drawing up and implementing the syllabi for the same in our universities. Kindly note that these lists are not exhaustive. Here in Kenya, this profession has had a long, albeit steady, rise to the present state. We do know that TASK was incepted in 1993 and re-launched in 2005. The public has been inquisitive regarding this profession, being a relatively new idea in this part of the world. We have seen the cut-off grades for regular program university entry shooting up due to the large number of students showing interest. The universities have responded and so far the studies are offered at the Nairobi, JKUAT, Maseno, Kenyatta and Kiriri universities. The financial job market has absorbed actuarial graduates in various sectors as life and general insurance, pensions, fund management and banking. I read a wide, even wider, berth of relevance for our skill in the Kenyan financial sphere. The question thus beckons: Where do we go from here? First we need to make the term the profession a song. By this I mean look at yourself as a part of this grand idea called the actuarial profession. Let us have this mindset: I am an actuarial student, an actuary, an actuarial professional, having my own professional pursuits, bearing in mind that my greater purpose is to be a member of this profession. And that the profession has given me an occupation, what shall I give back to it? These two statements invoke a salient attribute: Togetherness, also called unity. The principle of unity, also synonymous with oneness, has been tested, tried and proven. Great feats in history, such as Alexander the Greats conquests, have been accomplished by people coming together with a common purpose plus the will to achieve. With a similar thought train, we will be able to effectively serve the public purpose. We shall look at problems in our nation and seek solutions as one profession. We shall venture into unchartered financial waters, prudently of course, and make sense of happenings. We shall eventually faithfully administer our obligation and build our name for a larger presence in this society. A common actuarial joke goes: An actuary is someone who would rather be completely wrong than approximately right! It must have been that the value of prudence was in major display from the actuarial community. This value does have a strong relation with integrity. Integrity was well implied by William Farr, in 1853, when he said that actuaries are gentlemen. Id wish to add and ladies! This followed the question, by a parliamentary select committee in the UK, on whether financial reports were accurate. It is splendid that our profession stems from such a history. What we need to do is to continue making this

attribute second nature. Presence or absence of professional rules shall not be a factor with regard to our conduct. Our standards must remain top-notch. This shall mean that our word is trustworthy, that greater societal responsibility is bestowed upon us, and that the unique brand we are seeking to build is well defined. My high school Maths teacher gave me an interesting definition of actuarial science: Financial architecture. Well-crafted systems do take cognisance of the prevailing situation of the area of application, while adhering to the core principles of the discipline involved. In a nutshell, our nation has its specific aspects. This profession has its basic codes. Lets merge them. Thats where the future of the Kenyan actuarial profession lies. Thats how we are to permeate into the areas in which demand for our expertise exists, but has not yet been discovered. Thats the road to progress and posterity of the profession and our nation. Im happy to note that Kenyan mortality tables are being developed. The idea of Kenyan actuarial professional exams is being followed through by The Actuarial Society of Kenya. Im hoping to see the day when we shall have someone by the title: Fellow of The Actuarial Society of Kenya, doing independent valuations for insurance and pension companies. In view of situation-specific solutions, Kenyan actuarial research, major or minor, that has been done so far needs to be published and made accessible to the entire actuarial community in Kenya. In addition to having Kenyan lecturers, our universities are commended for having students do semester projects for which research is done on Kenya. It would go a long way in infusing Kenyan-ness in the curriculum through inclusion of recent financial developments in our nation. Lets seek the knowledge in its intuitive sense, and then apply it skilfully to the problems affecting us. Through actuarial science, I believe we can give lasting solutions to the poverty issue as well as formulation of strategies to cushion effects of inflation. I call to all actuarial students to collaborate more as a precursor to meeting again in the professional world. I call to everyone in the field to talk more with the public about the profession: its scope, its roles, its history, its relevance. Finally, that we are to bequeath a baton to future actuarial generations is reason enough to create a legacy and leave a lasting heritage. That heritage must include hope. It must involve vision and purpose. It must contain integrity. It must encapsulate knowledge and understanding. It must portray public service. That heritage must be represented by the brand that we seek to build.

I thank God for the abilities he has continuously bestowed upon me. Thank you, Mr. Raichura and The Actuarial Society of Kenya for having this event and giving me this platform. I thank Dr. Mwita, Chairman of the Department of Statistics and Actuarial Sciences, also known as STACS, JKUAT, for the support he has given actuarial students and JKUASA. I thank Dr. Mwalili for working as a good JKUASA patron. I thank Mr. Mungatu from STACS Department for research ideas on actuarial history. I thank Nelson Kabau, Anne Makhulo, Eugene Banja and Anthony Omwenga from Pan Africa Life for the insight they provided me with about the profession here in Kenya. I thank Mr. Ombaka, my high school Maths teacher, for urging me on to take up this course, a decision Ive never regretted. I thank the pioneer Kenyan actuarial students, especially from Nairobi University and NASA for going into the field in a steadfast manner, thus ultimately creating more opportunities for budding actuaries still in university. Of special mention, Id wish to thank the JKUAT administration for making it possible for JKUAT actuarial students to attend this very significant event. The good fruits of your support will transcend vastly across the world. For a soft copy of this script, please visit www.jkuat.ac.ke/stacs/jkuasa. Thank you all.

References
Gordon, R. A. & Howell, J.E. (1959). Higher Education for Business, Columbia University Press, New York Haberman, S. (1996). Landmarks in the History of Actuarial Science (Up to 1919), City University, London Hickman, J. (2004). History of Actuarial Profession, Encyclopaedia of Actuarial Science Lewin, C. (2007). Actuarial History