Two years, 12 countries: Global Actuarial Initiative building much-needed risk management capacity

联合国开发计划署 ’s Insurance and Risk Finance Facility and Milliman launched the Global Actuarial Initiative (GAIN) in September 2022 to build actuarial expertise in developing countries. The goal was to help governments and the insurance industry to better manage increasingly complex risks.

September 2024 marks two-years of GAIN, now active in twelve countries and with detailed roadmaps being implemented in eight. 4,000 pro-bono consulting hours contributed by more than 140 Milliman volunteers/ambassadors and more than 50 external volunteers has provided capacity-building programs for the insurance industry and regulators, supported the development of public policies and toolkits, and participated in mentorship programs.

GAIN interventions take a holistic approach driven by local stakeholders. These range from support on short-term capacity-building trainings to longer-term strategic policy changes to develop more sustainable in-country actuarial capacity and skills. Interventions to increase the supply of actuaries have included educational and tutoring courses delivered to actuarial professionals and academic leaders, as well as support through mentorship programs. Efforts to create greater demand for actuaries have included advocating for regulators and the public sector to develop actuarial expertise in governments, and not only in the private sector.

The program has seen particularly strong engagement from regulators in tackling the challenges faced by their industry in recruiting and retaining actuarial talent. There is a genuine drive to pursue the development of homegrown actuaries as regulators recognize increasing demand for technical expertise arising from regulatory reforms. Around the world, regulators are building their technical capabilities to ensure that they are able to carry out effective supervision.

Key actions have resulted from GAIN’s close ongoing work with regulators. These include the development of public policy documents requiring insurers to set up in-house actuarial functions, conduct of trainings for actuarial and non-actuarial regulatory staff on technical topics, development of best practices relating to supervision of actuarial work at regulatory offices, and opportunities for peer learning sessions through regulatory roundtable discussions.

In Ecuador, GAIN has already commenced capacity-building trainings to staff of the Superintendency of Companies, Securities and Insurance (SCVS) on pricing and reserving of life and non-life insurance products, which are the initial modules of an 11-part training series.?

“The application of actuarial competencies can lead us to more efficient and effective supervision, ensuring the stability and solvency of the insurance sector through the implementation of risk-based regulations,” says Natalia Márquez , National Director of Technical Control of the SCVS, highlighting the importance of participating in these training sessions.

Similarly, in Ethiopia, GAIN has delivered training to officials of the National Bank of Ethiopia (NBE)? and a regulatory directive that spells out the role of actuaries and the need for actuarial functions in insurance companies is expected to be rolled out. An Actuarial Capacity Development Framework will be developed to grow the actuarial functions within insurance companies. This will require buy-in from insurance companies to commit to hiring for the actuarial role.

“Obtaining the greatest actuarial qualification may take some time, but we need specialists who can do actuarial analysis at all stages especially the preliminary stages,” says Belay Tulu.

GAIN has also supported the Nepal Insurance Authority (NIA) with the issuance of landmark policy guidelines released in May 2024. The new guidelines mandate that insurers, reinsurers, and micro-insurers set up actuarial analysts’ function within their respective institutions. GAIN is providing toolkits to help insurers implement the guidelines, including actuarial study support templates and best-practice documents on setting up an actuarial function. UNDP has also hosted orientation programs for insurers to discuss the practical implications of these guidelines.

“Since the main focus of NIA is the development of new innovative products to promote insurance uptake to combat new emerging risks including climate-related risks, and given the risk-based capital solvency framework and risk-based supervision that have been implemented recently in the Nepalese insurance sector, there is a huge demand for technical expertise and skills like actuaries,” says Pujan Dhungel Adhikari, Director of NIA.

As GAIN’s implementation has deepened in specific regions, the program has taken stock of common challenges faced by developing countries. GAIN has been conducting regulatory roundtable discussions to give regulators within regions the opportunity to be part of peer-to-peer learning sessions. A two-day regulatory roundtable conference was held for Latin American countries in March 2024 in partnership with the International Actuarial Association (IAA) and supported by Access to Insurance Initiative (A2ii). It was attended by 300 participants, including representatives from 18 countries. The roundtable program for Asian regulators built on this successful Latin American event, advancing GAIN's objective of making the program available to more people in the region.

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Monday, 25 November, 2024 16:00 – 17:30 CET/ 10:00 - 11:30 EST.

This joint UNDP and Milliman webinar will unpack the strains of colliding crises on current risk management toolkits. Insurers, regulators, actuaries, and development organizations will share insights and tools for decision-makers on better understanding and managing risks. Areas of discussions will include the importance of accurately pricing new risks, developing innovative insurance products and? the role of? regulatory frameworks.

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