Waterloo READI-ly helping Indonesia meet its actuarial needs

Friday, August 2, 2019

The University of Waterloo, which is among the top universities in the world for actuarial science and number one in co-operative learning, has combined these two things to help build a stronger insurance and pension industry in Indonesia.

Waterloo’s Department of Statistics and Actuarial Science-based Risk Management, Economic Sustainability and Actuarial Science in Indonesia (READI) project has been helping a number of the Southeast Asian country’s post-secondary academic institutions establish co-operative (co-op) programs for the past four years.

“The READI project has been having a significant impact in Indonesia by increasing student enrollment numbers and establishing 13 actuarial study programs with standardized curriculum,” READI Project Director, Jean Lowry, shared. “The number of students writing professional Actuarial Science exams has also been expanded while collaboration between the country’s universities, industries and the national professional actuarial association has been strengthened. The Indonesian lectures have not been left out as they have benefited from intensive in-country and Waterloo-based training.”

Indonesia sits on the ‘Ring of Fire’, rendering it highly vulnerable to natural disasters which over the years have adversely impacted the economic growth and stability of millions of people.

In recognizing the important role actuaries play in supporting the identification of financial risks associated with extreme weather and anticipated coastal damage the Indonesian government in 2012 mandated that each insurance company must have its own actuary.

There was, however, a very short supply of actuaries in Indonesia’s insurance sector at that time with projections showing a need for a minimum of 1,000 actuaries. It was this need that prompted the launch of the READI project in September 2015, with financial support from Global Affairs Canada.

Working with the Government of Indonesia’s Financial Services Authority (OJK), READI is designed to help in the development and implementation of co-operative education programming in the country’s universities to increase their capacity to educate career-ready actuaries able to meet the demands of a clearly identified labour market. This programming involves the private sector in providing suitable, meaningful and structured employment opportunities for co-op students.

“An unexpected but very exciting national level success came with the adoption at the ministerial level of new policies in April 2019 that will allow co-operative education programs to be rolled out at all universities in Indonesia, hopefully leading to job ready graduates in actuarial science and other areas,” noted Lowry.

The first group of co-op students started in 2016/2017, and as of March 2019, READI recorded 738 students (60% female) enrolled in actuarial science programs. It is expected that by 2024 there will be at least 566 graduates of actuarial science programs with another 1155 students still completing the second, third and fourth years of their programs.

The READI project has also engaged industry in Indonesia and in July 2018 held a training session for employers. Participants included members of the Association of Life Insurance Companies in Indonesia which has 56 members (51 life insurance companies and five reinsurance companies) and the Association of General Insurance Companies in Indonesia (with 85 members). The training involved four Canadian Actuaries from companies that have significantly supported Waterloo’s Actuarial Science Co-op program. Success stories, best practices and methods for developing co-operative work programs in workplaces and institutions were shared with the participants.

Universities, students and employers will use the Ministerial Decree to maintain standards for student/industry work-integrated learning arrangements and as a formal reference. The minimum time for the work term is one month or five working days per week for eight hours per day. Work terms are recognized with a credit score equal to one credit or 45 hours of work experience.

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