FRC won’t register AI for actuarial services, says Olowo

The Chief Executive Officer of the Financial Reporting Council, Dr Rabiu Olowo, has said that Artificial Intelligence cannot take over the jobs of professional actuaries in Nigeria because it will not be registered.

He stated that in his keynote address at the 2024 Annual Industry Conference of the Nigerian Actuarial Society held in Lagos, where he also lamented the acute shortage of actuarial professionals in the country.

The theme of this year’s conference was ‘Actuaries and AI: Strengths, Weaknesses, Opportunities, and Threats’.

He said, “From a regulatory point of view, let me assure you that no matter how complex and powerful AI becomes, the human element of actuarial practice can never be obliterated. For clarity purposes, I mean, no matter how perfect AI may be, the FRC will never register AI to replace professional actuaries in Nigeria. So, the jobs of our fellows among us are safe.

“However, associates must brace up for the evolving landscape because it is capable of taking over their jobs. Let me also sound a note of warning that AI is a moving train which every practising actuary must not be left behind.

“The application of AI by professional actuaries will bring about further regulatory checks, including ethical issues and concerns about bias in AI algorithms and decision-making processes. Therefore, we must upscale our use of AI in reviewing and inspecting practitioners’ work or reports. Both regulators and practitioners will incur costs related to acquiring AI applications and upskilling staff.”

According to Investopedia, actuarial science is a discipline that assesses financial risks in the insurance and finance fields, using mathematical and statistical methods.

Olowo lamented that Nigeria had fewer than 50 professional actuaries, saying, “It may interest you to know that we have fewer than 50 actuaries, whereas South Africa has almost 2000.”

To combat the acute shortage and develop actuarial practice in Nigeria, the FRC boss said the council had set up the Nigerian Actuarial Development Programme.

“NADP is established to address the acute shortage of professional actuaries in the country. The programme aims to change the general lack of awareness about the profession. We intend to reach the secondary school level to create awareness and collaborate with NUC to increase the number of universities offering degree programs in actuarial science; currently, only 4 out of 273 universities do.”

According to the FRC boss, NADP will ensure the availability of physical/virtual tuition houses for those writing external professional examinations, support them financially and materially, and collaborate with renowned professional bodies to reduce exam fees for Nigeria. “Additionally, it will support the passage of the Nigeria Actuarial Bill at the National Assembly and the development of Nigerian actuarial tables.

“NADP has already taken off. I inaugurated the working group in early May 2024. The workgroup comprises all stakeholders in the actuary landscape in Nigeria, including representatives from the Nigerian Actuarial Society, the academia, NAICOM, PENCOM, NHIA, the big four firms, Nigerian Insurers Association, PENOP, UNDP Global Actuarial Initiative and the Nigeria Population Commission,” he added.

He stated that the group was coordinated by Mr Rotimi Okpaise.

“The idea behind the programme is to create an all-inclusive platform for developing the profession so that we don’t have duplicated efforts and wasted resources,” he stated.

Olowo also disclosed that the Institute and Faculty of Actuaries, the UK’s chartered professional body for actuaries, has accredited the Actuarial Science and Insurance, MSc programme at the University of Lagos and with that of the undergraduate programme being expected.

“The programme will support and sustain the development of the Nigerian actuarial mortality and morbidity tables beingtechnically championed by the UNDP GAIN/ Milliman Inc. In fact, FRC cannot wait to issue the table out as standards for Nigeria so that we can reduce our reliance on foreign data to handle our local challenges,” he stated.

On the Nigerian Actuarial Charter Bill, the FRC boss expressed support and said it would be willing to work with NAS when it is ready.

“This is a project that must be done as soon as possible. I will encourage the Nigerian Actuarial Society to work closely with the Federal Government of Nigeria and its agencies to succeed in its endeavours. Unlike many developed economies, government is key in Nigeria and NAS may not go far without it. ICAN and other professional bodies have a member nominee in their councils. Such collaboration will be crucial to contribute meaningfully to the actuarial development,” he explained.

He added that the council would soon be releasing the Nigerian Actuarial Practice Regulations 2024 to combat unlicensed professionals in the sector.