As risks intensify, Nigeria’s regulatory bodies and other stakeholders have launched an ambitious national effort to close the actuarial skills gap. From regulatory mandates to educational reforms and international collaborations, OLUWAKEMI ABIMBOLA explores how this push signals the country’s preparedness for future uncertainties

For a country of over 200 million people, Nigeria has fewer than 30 qualified actuaries, indicating a huge personnel gap that needs to be filled and the risks the nation has become susceptible to as a result of this gap amid the rise of artificial intelligence, climate change, geopolitical tensions and the evolving nature of financial products.

According to the Executive Secretary of the Financial Reporting Council of Nigeria, Dr Rabiu Olowo, the actuarial profession is uniquely positioned, through its deep foundations in mathematics, risk modelling, and financial foresight, to lead in these uncertain times.

The job of actuarial professionals cuts across the financial sector, from risk assessment and financial modelling to insurance, pension management and more. An actuary compiles and analyses statistics and uses them to calculate insurance risks and premiums, design insurance products and manage investments.

The need for actuaries came to the fore recently when the National Insurance Commission issued new guidelines for insurance companies with annuity portfolios.

The circular, dated January 29, 2025, signed by Director (Innovation & Regulation) A.I. Adamu, issued to Managing Directors/CEOs of all life insurance companies, mandated firms to have at least one qualified actuary responsible for asset-liability matching analysis and implementation of its adoption by the investment team of the company.

A part of the guidelines read, “An insurer that does not have an in-house qualified actuary shall make arrangements for a qualified one from an external actuarial firm to take on the ALM responsibility on its behalf for an interim period of no more than two years, subject to the Commission’s approval for an extension for two or more years thereafter.

“The appointment of an in-house or external qualified actuary, who shall sign off all ALM reports as required by the provisions of paragraphs 3.4.3, 7.3.1, and 8.1.5(m) of the Prudential Guidelines, shall be subject to the prior approval of the commission. ALM Reports: Companies are required to submit ALM reports to the commission quarterly, with requirements outlined in the circular, such as required actions by insurers depending on the results from specific analysis applying guidance provided in the NAS Standards of Actuarial Practice.”

Despite these mandates, regulatory bodies acknowledge that compliance can be hindered by a significant gap in local expertise. Even after issuing the directive on annuities, NAICOM lamented the poor actuarial capacity during a recent visit from a World Bank delegation.

Speaking at the University of Lagos during a career advocacy session with newly admitted postgraduate students of the Department of Actuarial Science and Insurance, the Head of the Directorate of Actuarial Standards at FRC, Mr Olasunkanmi Ayinde, said that the Council, under the leadership of its Executive Secretary/Chief Executive Officer, Dr Rabiu Olowo, was determined to reverse the trend and promote the study and teaching of actuarial science in Nigeria.

He said, “The less than 30 actuarial professionals in Nigeria are unacceptable. South Africa has almost 2,000. In Nigeria, we have about 60,000 chartered accountants; we have about 40,000 bankers and 9,000 registered insurance professionals. But we have fewer than 30 actuarial professionals in Nigeria. Some of them are even foreigners. There are 28 of them in Nigeria: five Associates and 23 Fellows. You can see that we have problems on our hands.”

Ayinde pointed out that every insurance company in Nigeria, as well as regulatory bodies like the Central Bank of Nigeria, National Insurance Commission, National Pension Commission, and National Health Insurance Authority, should have at least one or two actuarial scientists.

Speaking at the 2025 Nigerian Actuarial Society annual conference themed ‘Creating Value and Building Resilience in an Evolving Industry’, held in Lagos this past week, the FRC boss noted that the capacity gap directly affects the nation’s ability to manage pension funds, price risk, value liabilities, and attract investment.

He noted that today’s actuaries are not only designing insurance products or calculating pension liabilities; “They are modelling the financial implications of climate change, anticipating demographic shifts and healthcare trends, supporting financial stability through stress testing and solvency analysis, and advising on digital risks, cyber threats, and the ethical use of AI.”

On the regulatory side, actuaries are needed to answer questions on how to “value assets in an increasingly intangible economy? How do we protect public interest while fostering innovation? How do we integrate risk, sustainability, and resilience into long-term economic planning?”

To build actuarial capacity and integrate actuarial principles into financial governance, a national push has been put in place involving the NAICOM, FRC, the National Pension Commission, the Big Four firms, and others under the Nigerian Actuarial Development Programme.

NADP is aimed at nurturing talent and supporting universities to grow the next generation of actuaries.

At the regulatory level, the FRC boss noted that the Council has concluded the exposure of the Draft Nigerian Actuarial Practice Regulations 2025, which proposes the adoption of International Standards of Actuarial Practice to be fully integrated into Nigeria’s regulatory framework and offers of bursaries to FRC staff to pursue professional actuarial qualifications.

“Additionally, we provide examination fee refunds for any Nigerian candidate who passes any exam from IFoA, SOA, or CAS. We also support mentorship and career development programmes for top MSc. Actuarial Science students across Nigerian universities.

“Our ‘Catch Them Young’ initiative has already reached over 10,000 students across seven universities and eight secondary schools. We believe resilience starts with talent, and talent must be identified early. In collaboration with the Federal Ministry of Education and the Federal Ministry of Industry, Trade and Investment, we will be spearheading the design of a bold national policy framework to provide federal funding for actuarial education at tertiary and postgraduate levels. Introduce actuarial science as a subject at the senior secondary level; integrate actuarial concepts within primary school social science curricula to spark early interest.”

Beyond the long-term development of capacity, actuaries are being called upon to respond to more complex, emerging risks, ranging from climate volatility to artificial intelligence.”

Addressing the gathering, the Commissioner for Insurance, Olusegun Omosehin, who was represented by the Deputy CFI, Dr Usman Jankara, highlighted the challenges, such as climate change, cyber threats and health system vulnerabilities, as areas where actuarial professionals are needed.

He said, “You are key to designing effective risk management strategies and developing products that meet the evolving needs of our society. At the National Insurance Commission, we are committed to fostering a regulatory environment that supports innovation, protects policyholders, ensures transparent and fair processes and promotes long-term industry sustainability. We are strengthening our supervisory framework, encouraging digital transformation and supporting inclusive insurance. We also recognise the power of collaboration. Our partnership with the Nigerian Actuarial Society, including recently the discount rate committee, and the issues of regulatory directives, such as the supplementary annuity guidelines, remain central to our strategy for building a more resilient industry. The monthly discount rate data, for example, has improved the accuracy of liability and risk management, among others. It has also standardised and brought consistency and reliability to liability calculations across the industry.

“Another major milestone from our collaboration with NAS is the supplementary annuity guidelines.  Looking ahead, the opportunities are vast. The integration of AI, Big Data, and predictive analytics is transforming how risks are assessed and managed. Of course, the African Continental Free Trade Area agreement has also opened new doors for regional insurance solutions. Furthermore, given Nigeria’s youthful tech study population, the country is well-positioned to thrive in digital insurance. To seize this opportunity, we must invest in talent, uphold global standards and foster a culture of continuous learning and ethical leadership while exploring new opportunities such as InsurTech as part of our strategy and the National Insurance Commission in this regard. The guidelines for InsurTech operation in Nigeria have been concluded, and they’re about to be issued.”

The NAICOM boss added that the Commission has also launched its Capacity Development Initiative.

“However, there are a lot of challenges, one of which is funding. We are actively engaging development partners such as the Africa Re Foundation, GIZ, UNDP and other international donors to secure funding and support for this initiative. While these efforts are ongoing, it has become imperative for the Nigerian insurance industry to bite the bullet and commit to deliberate actuarial capacity development in Nigeria. I therefore call on all stakeholders, particularly insurers, actuaries and educators, to continue to work together to build a resilient industry that is inclusive and value-driven. We must continually champion policies that support actuarial development, encourage research and ensure that our industry remains a pillar of economic stability and social protection,” he said.

The Managing Director/Chief Executive Officer of AIICO Insurance, Babatunde Fajemirokun, lending his voice to the conversation, said, “Insurtech opened new exciting frontiers for actuarial practice, especially in the area of dynamic pricing, innovative risk pooling mechanisms and predictive modelling, and that is one thing we are keen on developing. These demand that actuaries expand their tool kits.”

Fajemirokun added that the traditional actuarial models must adapt to incorporate alternative data sources and new risk assessment frameworks to remain relevant in this changing landscape.

“These developments demand that actuaries expand their toolkit beyond traditional statistical methods to embrace data science and machine learning techniques.

Nigerian Actuarial Society members have a unique opportunity to bridge the gap between technical actuarial soundness and customer-centric design, ensuring that innovative products remain financially sustainable while delivering genuine value to consumers,” he asserted during his presentation titled ‘Insurtech as a Catalyst for Value and Resilience.’

Highlighting the roles of actuarial professionals amid rising risks, an associate professor from the University of Illinois, Tolulope Fadina, said Nigeria faces rising climate-related disasters, especially floods and droughts, with most losses uninsured, thus amplifying the economic burden.

Fadina, who has over 15 years of experience in research in financial mathematics, actuarial science, and risk management, said, “Climate risks in Nigeria are real, rising, and unevenly distributed. Data gaps and limited modelling hinder proactive planning. Vulnerable populations face the greatest exposure and least protection. Low insurance penetration widens the protection gap. AI and geospatial tools can enhance risk detection and planning. A coordinated national strategy is urgent. Integrated efforts on risk policy, infrastructure, and climate finance are needed.”

Corroborating the observation of the President of NAS, Jolaoluwa Fakoya, said Nigeria needs its actuarial professionals to get value in these uncertain times.

“As actuaries, our role goes beyond analysis; it extends to leadership, stewardship, and innovation. This conference is a space for us to reflect, retool, and reimagine how we add value and build resilience in everything we do. Our profession is a calling to build resilience, equipping businesses, institutions and communities to thrive amidst uncertainty and change,” he noted.

Ultimately, stakeholders across government, academia, and industry agree: closing Nigeria’s actuarial gap is no longer optional; it is foundational to ensuring resilience in an increasingly complex financial and risk landscape.