Foresight and vision

Hannah Langworth speaks to actuary Thakane Setsabi to find out what this profession is all about, and how a specialist business risk qualification has helped her progress

Can you introduce yourself and your current role?

I have a degree in Business Science, in actuarial science and finance, from the University of Cape Town. I now work in Johannesburg as an actuary at one of South Africa's leading insurance and asset management companies.

What is an actuary?

Actuaries use their numeracy skills to measure the probability of future events so that the risk of them occurring can be effectively provided for. But to me, an actuary is not just a mathematical expert, but a person with special skills of foresight and vision. They think about all the parties and all the potential consequences of a situation, and apply their analytical skills to solve problems for themselves, for other people, for companies, and for countries. We're not just concerned about numbers and profits - there's a huge human element to what we do.

Can you outline your career path so far?

When I started university, I didn't know what an actuary was or what they do. But one of the big insurance companies here in South Africa gave me a scholarship and said I could either study to become an accountant or to become an actuary. I said "What's an actuary?" and they said: "Insurance companies like us employ actuaries to use their mathematical skills to work with complex financial models to assess risks." I said, "Is it difficult?" They said yes. "Is it challenging?" "Yes." "Will I earn a good salary?" "Yes". So then, even though I liked accounting and was very strong in the area, I thought I'd try out actuarial work. My degree turned out to be a lot more complex than I'd ever imagined, but I managed to remain focused and calm, thanks to the support my classmates and I gave each other.

During my final year of university I was looking to relocate from Cape Town to Johannesburg for personal reasons, so moved to work with another insurance company. I was with this company for two years, and then moved to my current company, which is where I finished taking my professional actuarial exams and became a fully-qualified actuary, including taking the CERA qualification.

What is the CERA qualification and how did you find out about it?

I discovered the CERA qualification on the Actuarial Profession website. I was looking for an exam paper for a different actuarial course and clicked on a CERA exam paper accidentally. I liked what I saw and had an immediate connection to it. I felt that it was very relevant to today's business world, and something I would find interesting to study.

CERA stands for Chartered Enterprise Risk Actuary, and getting this qualification equips you to look holistically at all the risks a business faces. You take a more "big-picture" approach than other actuaries might do and look at an organisation's whole portfolio of risks. For example, we measure risks specific to their industry plus ones generally applicable, like those connected to the credit crunch or with terrorism. You learn how to quantify them, monitor and report on them, and mitigate them.

What does working as a CERA qualified actuary involve?

Like other actuaries, CERA qualified ones use statistical tools to consider the likelihood of various events occurring. Working at an insurance company and continuously quantifying their risk exposure, as many CERA qualified people do, you might find yourself considering various events and asking what your company's policy should be on insuring against them. With something like terrorism, where the potential losses could be so high, can insurance companies take on that risk if governments are not well equipped to do so? It's all about discussion, which makes the work all the more exciting for me because it gives me scope as an expert to exercise my discretion and integrity. People often view the actuary profession as very prescriptive, and think that it's all about applying formulas. But it's not necessarily like that.

In my role, I analyse financial risks for my clients, typically big organisations, who could be financial services institutions, retailers, industrial companies, even universities. I look at all the risks that they face, quantify them, and then structure insurance solutions for them around these sets of risks. My job often involves meeting the financial directors of large corporate organisations. Before such a meeting, I would have read the company's annual reports to identify the risks the company currently faces, for example, risks relating to the company's pension fund or their exposure to exchange rate risk. During our discussion, I would alert them to some of the risks they're exposed to, of which they might not be aware, and the financial consequences of these. After the meeting, I'd use both the information that I'd gathered from the reports and from my interaction with the management of the company to create a model of their risks. I'd then talk to various people within my organisation about ways to insure that risk.

What do you see as the most significant risks that businesses face at the moment?

I think businesses often overlook operational risks because they're focused on the risks of stock market movements or terrorism. Operational risks are those to do with the everyday work that everyone does. How often do we take a step back and ask whether we're making the right payments to the right people, whether our processes are keeping up with technology, what we're doing to make sure our systems pick up fraud, or whether staff are well equipped to keep up with changes in legislation? I feel that these risks involved in the things we do at work all the same are always very relevant to organisations because mistakes made here can lead to poor decision making on a larger scale in the long run.

What do you see ahead of you in your career?

I've recently moved to become executive assistant to the managing director of one of the divisions of the company I work for, which is still an actuarial role. I think getting this promotion has a lot to do with the skills that I've acquired through the CERA qualification, particularly an ability to look at organisations holistically and strategically.

In terms of the more distant future, I think this new job will be a passport for me into a management role at a financial institution. I will get an insight into all the intricacies and complexities of running an insurance company, and the tools I need to develop into a business leader. The CERA qualification places you ideally to do so because it teaches you to think laterally. You're always thinking about a lot of things at the same time, not just the balance sheet. You're considering all the information that you need to know about to keep an organisation moving forward. I'm really excited about my future! ν