Actuary India March 2015

8/16/2019 Actuary India March 2015

1/60

VOL. VII • ISSUE 3 MARCH 2015 ISSUE Pages 60 • ` 20

For Private Circulation Only


2/60

Employment Opportunity


3/60

3

C O N T E N T Swww.actuariesindia.org

For circulation to members, connectedindividuals and organizations only.

Disclaimer : Responsibility for authenticity of the contents or opinions expressed in any materialpublished in this Magazine is solely of its author and the Institute of Actuaries of India, any of its editors,

the staff working on it or "the Actuary India" is in no way holds responsibility there for. In respect of the

advertisements, the advertisers are solely responsible for contents and legality of such advertisements and

implications of the same.

The tariff rates for advertisement in the Actuary India are as under:

Back Page colour ` 38,500/- Full page colour ` 30,000/- Half Page colour ` 20,000/-

Your reply along with the details/art work of advertisement should be sent to [email protected]

ENQUIRIES ABOUT PUBLICATION OF ARTICLES OR NEWSPlease address all your enquiries with regard to the magazine by e-mail at [email protected].

Kindly do not send it to editor or any other functionaries.

Printed and Published monthly by Gururaj Nayak, Head - Operations, Institute of Actuaries of India at ACME

PACKS AND PRINTS(INDIA) PRIVATE LIMITED, A Wing, Gala No. 55, Ground Floor, Virwani Industrial Estate, Vishweshwar Nagar Road, Goregaon (E), Mumbai-63. for Institute of Actuaries of India : 302, Indian Globe Chambers,

142, Fort Street, Off D N Road, Near CST (VT) Station, Mumbai 400 001. • Tel +91 22 6784 3325 / 6784 3333

Fax +91 22 6784 3330 • Email : [email protected] • Webside : www.actuariesindia.org

Chief Editor

Sunil Sharma

Email: [email protected]

Editors

Kollimarla SubrahmanyamEmail: [email protected]

Raunak Jha


Puzzle Editor

Shilpa Mainekar


Librarian

Akshata Damre


COUNTRY REPORTERS

Krishen Sukdev

South Africa


Frank Munro

Srilanka


Anshuman Anand

Indonesia

Email: [email protected] Laurence Smith

New Zealand


Rajendra Prasad Sharma

USA


Nauman Cheema

Pakistan


Andrew Leung

ThailandEmail: [email protected]

Vijay Balgobin

Mauritius


Kedar Mulgund

Canada


FROM HE DESK OF PRESIDENMr. Rajesh Dalmia ............... ............... ..... 4

FROM HE DESK OF CHIEF EDIORMr. Sunil Sharma .............. ............... ........ 5

17H GCA INRODUCORY ADDRESS

By Mr. Rajesh Dalmia, President, IAI ....... 6

17H GCA INAUGURAL &KEY NOE ADDRESSBy Mr. . S. Vijayan, Chairperson IRDA ........ 8

2015 AGFA & 17H GCAPARICIPAN’S SURVEYSUMMARY REPORBy Mr. Vinod Kumar ................................. 11

REPORAGE

• 2015 Actuarial Gala Function and Awards(AGFA) by Mr. Ashish aneja .............. ..19

• Plenary Sessions by Ms. Kruti Patel ........ 20

• Concurrent Sessions on Life Insurance

by Mr. Sachin Jain ..................................23• Concurrent Sessions on

Enterprise Risk Managementby Ms. Shristy Agarwal ..........................28

• Concurrent Sessions onGeneral Insurance & Health Care Insuranceby Ms. Mithali Zaveri ............................34

• Concurrent sessions onPension & Othersby Ms. Preeti Chandrasekhar ................37

EVEN REPOR

• e Number Champsby Mr. Khushbu Shah ............................40

• IAI Student Eventby Mr. Varadaprasad Jagannathan ........ 41

•

SUDEN COLUMN

• Enterprise RiskManagement (ERM)by Mr. Sonjai Kumar.....43

• Pension Obligation Risk andBank’s ALM: e Case ofIndian Public Sector Banksby Mr. Saket Hishikar ...........................45

FROM HE PRESS

IANS : Regulator must now Ensure Flow ofInsurance Money into Infrastructure ..............51

FROM HE DESK OF CHAIRPERSON

• 2015 AGFA & 17th GCA Organizing GroupMr. D C Chakraborty ................................52

• Peer Stakeholder and InternationalRelations Advisory Group –Mr. K. Subrahmanyam ............................53

MARKE UPDAES

Life Insurance Industry Update by Mr. Vivek Jalan .............................................55

ANNUAL SUBSCRIPION NOICE Year 2015-16_10 03 2015 ................................. 57

SHILPA’S PUZZLES ............................58

EMPLOYMEN OPPORUNIY.......

ECGC invites application for the post ofAppointed Actuary ...............................2 & 59

United India Insurance Co. Ltd.invites applications for the post ofAppointed Actuary ............................................44

3the Actuary India March 2015


4/60

FROM THE DESK OF PRESIDENT'

D ear Members,I found it hard to believe that wehave more than 80 members who

are le only with one paper. More thanninety percent of these are le with oneSA paper. I am sure that every-one of

these know the dierence between aqualied actuary and a student membereven if he/she is an associate member. edierence is parallel reected in thecommercial world in terms of salary/promotions etc. Yet, when the Instituteconducted workshop in SA2 and SA3 thismonth, we had registrations running insingle digits. I would urge the students totake the qualication seriously and put inall eort to qualify. I at the Institute woulddo anything that can help you qualify.

Please write to meSome of you who were present at theseminar would have heard me outliningthe things that are on the cards. I wouldtake this opportunity to highlight some ofthe key aspects of the strategy. It is aknown fact that India lacks qualiedactuaries. Yes, today we produce nearly 30qualied actuaries in a year and yet that isnot enough. Aer 15 years of opening ofInsurance sector our membership has just

gone up from 220+ to 280+. I do hear thatthere are no opportunities or no jobs foractuaries. I disagree to that. Not long ago,I used to hear the same when we used toproduce 4/5 actuaries in a year. ere isshortage and it is a matter of concern. UShave 22,000 actuaries in a population of320 million and yet I understand that UShas shortage of actuaries and more thanthousand vacancies exists. Now thatactuarial skill set is in demand beyondtraditional elds, this shortage is going toexists for long.

In the profession, we need to address thisand there cannot be an easy solution to

this. ere has to be a multi-prongapproach to this issue. We need to facilitateour members who are stuck with theexams. e Institute would hold coachingclasses for students so that they can clearthe papers faster by learning fromexperienced actuaries. I would request you

to take advantage of these initiatives andqualify as a fellow at the earliest. ecoaching classes for SA2 and SA3 arealready announced. e students who failshould get counselling opportunities sothat they can learn from their mistakes. Wehave made counselling available from CAto SA levels for all papers so that studentscan clear the papers faster. I would requestyou to take advantage of these initiatives.Please note that counselling can also be

taken on phone in case you are unable totravel.

At SA level, student faces a lot of dicultydue to lack of study materials. Institutewould focus on the same so that we cancreate our own study material which wouldmake it easier for future students to appearfor SA papers. However, at this level ofexamination, a student is expected to gobeyond the study material even though wemay bring out with a comprehensive studymaterial.

Of course, we need to attract the righttalent with potential to qualify as anactuary. erefore, there is a need that itshould be marketed to the right students sothat we attract right talent. Besides, theentrance exam should be such that it ltersand allows right candidates who are likelyto become an actuary. We currently havelarge number of students (though notqualied actuaries where short fall exists)and not all of them can be employed in the

traditional actuarial eld. erefore, manyof them end-up in broader elds and it isrequired as actuaries need to be involved in

the broader areas, going beyond thetraditional ones. It is important that werecognize broader areas where an actuarialstudent is likely to work and futureactuaries are likely to be employed.

We need to focus on professionalism.Many of the professional standards weredraed more than a decade ago and it isimportant that they get reviewed moreoen. Other professional bodies acrossthe world do undertake such reviewsperiodically. It is a high time that we notonly undertake such a review but alsointroduce standards for various otherissues facing appointed actuaries andother practicing actuaries. You would seemore action in these areas in the time tocome. e dra on CPD scheme is out and

we welcome your comments on the same.Very soon we would announce an interim version of CoP scheme which wouldundergo further changes aer a detailedreview.

I argued last month that this is the year ofchange. True to that spirit, it is the rsttime we saw the regulator, IRDAI,convening a joint meeting of CEOs andIAC to take their views before releasingthe dra regulations for public comment.

We, at the Institute, welcome this initiativeand congratulate the chairman, Mr.Vijayan, for such a nice initiative. is isimperative that the regulator takes the view of the industry and other stake-holders before draing such regulations.

I am lucky to be here in this era of changeacross the world. is is an interestingphase of change where the impact oftechnological revolution is greater thanthe industrial revolution. is would alsoimpact the actuarial profession and it willundergo signicant changes in the future.Let’s hope that we adapt to these changes.

MR. RAJESH DALMIA

4 the Actuary India March 2015


5/60

It gives me immense pleasure to

connect with you post 17th GCA.is was the 17th Successive Global

Conference successfully conducted inIndia by the Institute of Actuaries of India.It was a massive event with representationform all across the globe. More than 700people attended the conference held inMumbai. Te Conference wasinaugurated by Mr. S Vijayan,

Chairman, IRDA. ere is always scopefor improvement; however, I must say thiswas a grand success event given thechallenge of managing such a largenumber of attendees. ere was wide varieties of papers presented by Indianand overseas speakers. e Event wastruly a global event. Te Current Issue ofActuary India has a pretty good coverage

of the various Plenary and Concurrent

Sessions. It is intention of the report

writers is to provide readers a feel of the

event, even for those who could not attendthe events. I would like to thank all thereporters for putting their eorts to takenotes during the seminar and put togetherthe minutes of the proceedings.

e Union Budget for the FY2016 hasreally paved a way for attracting FDI in themarket hopefully leading to higherinvestments resulting into signicanteconomic growth. e passage andapproval of the Insurance Amendment

Bill is likely to take the Life insuranceIndustry in India to a new horizon. eBudget made an announcement to raisethe overall limit on health insurance to Rs.25,000. e additional deduction limit forinsuring parents is also revised to Rs.25,000 and to Rs. 30,000 if your parentsare senior citizens. is is likely toimmensely benet the industry and

FROM THE DESK OF CHIEF EDITOR

buyers to take health coverage in a tax

ecient manner.Finally, I on behalf of the Indian ActuarialProfession and Actuary India team wouldlike to congratulate Ms. Pournima Gupteon her appointment as Member Actuary,IRDA. is position was vacant for a longtime and I am very condent, given hersignicant insurance experience in Indiaand overseas, this appointment willimmensely help industry, profession andthe eventually policyholders. I wish her all

the best and great success in her new role.e nancial year end is coming closerand it’s going to be a busy season foractuarial community. erefore, withouttaking too much of your time, I would liketo sign o to spare you more time to workon new products settings for valuationand reporting.

We invite readers to respond brieflyto our articles and to suggest new

features with letters to the editor.

Kindly mail your responses on

[email protected] with your

name & contact details. Appropriate

responses will be published in

Actuary India magazine with theapproval of competent authority.

MR. SUNIL SHARMA



6/60

elcome everyone, here ! Iwelcome the Chief Guest ofHonour – Mr. Vijayan. I knowhim and have interacted with

him when he was the LIC Chairman. Iwelcome distinguished guests, speakers,members of IRDA, actuaries and all ourmembers & non-members. We have beenhosting this function successfully for thelast 17 years and this is our 17th GCA.Many thanks to all of you for taking timeout and travelling long distances to comeand attend this conference here, whichtells us that this is a signicant thing that

we are doing and we should continueto do it. I am honored, we all are reallyhonored by having so many guest speakerswho have come to share theirexperiences, their expertiseand I would request all of you,whichever topic of interestyou have, to really contributeto these sessions by askingquestions, by contributing yourpoints of view to the discussion.Unless it is interactive, the

learning doesn’t crystalize. Soit should not be just one way.Whenever you are attending thesession, I would request you toparticipate in that.

Dilip Da did cover this topic,however, I wanted to just dwell a littlebit more on it. Being a statistician beforeI becoming an actuary, I was talking toquite a few of my statistician friends about“expect the unexpected” and they werequite intrigued about it. All of you know

that expectation by denition wouldinclude even the extreme events in itscalculation. So they were quite intriguedas to what it means! Even the linguistwould nd it very dicult because themoment you expect, then it doesn’tremain unexpected anymore. So whatdoes it mean – expect the unexpected! Asyou all know by now that we actuaries areexperts in bringing concepts from aroundthe world and coining a magical word tocreate mystique out of it. So in short, this

“expect the unexpected” is nothing but the“black swan” which you must have read.2008 events have very famously coinedthis word. e question is, why is it so

important? Black swan event! And what isit that we are trying to achieve here in thisconference around that. If we look at thehistory of mankind, the pace of growth,learning/innovation that we are havingtoday was unmatched over thousands ofyears of history. We are fortunate to bein this era, which is witnessing this paceof growth. Internet & inter connecteddevices have really impacted the worldaround us signicantly and it is going tobring out further changes. What does itmean? It means it’s a great growth, greatlearning, great innovations and all that

is happening, but along with it there arehidden risks, additional risks which areout there, which one needs to see and

prepare for it. e 2008 event, the way itspread across the world was unbelievable.Its ripples were felt across the world andthe way central bankers and politiciansfrom across the world came together toght against it, to take the economies out

of it was again unparalleled. We actuariesneed to prepare ourselves for risks whichare going to come in this era. We areknown to understand the risks, quantifythem & we are known to manage the risks.Insurance companies too take the risksfrom other sectors & manage it! at iswhere we need to focus and we need toprepare ourselves for these unknown risks.Some of these unknown risks for examplewould be in the health sciences,we havebeen ghting a war with bacteria for yearsand yet today you have bacteria which are

multi drug resistant and very complicated.So this war is going one step ahead againstus. Another example would be Global

warming and we yet don’t know what theconsequences would be. We have seen justglimpses of it till now. Cyber threats, cyberwars again are just glimpses of it, becauseonce you get into inter connected deviceswhich talk to each other than a computerbug can paralyze the entire system acrossthese devices. Probably some of these arestill expected because we know about it,that’s why I am talking about it. Some ofthis will be unexpected, that’s where thechallenge lies, I won’t be able to talk aboutit right now because even I don’t know.But the tools, techniques that we learn, the

analytical thinking that we apply wouldhelp us whenever it arrives to identify,manage and prepare ourselves for it.

And I hope even if one of youcan expect the unexpected aerthis conference, the purpose ofthis conference will be achieved.It will be a small contributiontowards that direction.

Friends, I would like to talkabout the challenges that Indianactuarial profession is facing& how we at the Institute andCouncil have planned to goabout dealing with it. I amfortunate enough that I havegot Council members, many ofthem are supporting me and we

are all prepared to act and tackle thesechallenges. A signicant challenge isstrengthening the professionalism. WhenI say professionalism, it’s somethingprobably all of you understand what itmeans or you probably know in your

heart what it means. However as aprofession its importance and impactcomes from what our customers,and others who see us, say about us.Yesterday I was having a discussion withMr. Vijayan – Chairman of IRDA andone of the comments he said was,“Twoactuaries don’t agree on anything!.” Whatdoes it mean? Is it good? Is it bad? It’scoming from a regulator, it’s coming fromour customers. I still recall when around2 years back, I was having a discussion

with the Secretary – Ministry of Finance.And he was telling me that, you know Iget really surprised, two actuaries givingme a number and they dier by more

W

17TH GCA PRESIDENT'S ADDRESS

INRODUCORY ADDRESS made by MR. RAJESH DALMIA President of Institute of Actuaries of India (IAI), at

17th Global Conference of Actuaries on 2nd February, 2015



7/60

than 100 crores. Why does it happen, whycan’t we agree on it? I think it’s a challenge;it just doesn’t work like that. I had beenappointed as actuary of Life InsuranceCompany. I’ll give you a simple example.ere are two life insurance companiesselling an identical product, having almostidentical experience. Liability of the two

policies sold by these two companies willnot be equal. Should not that be equal!Again some of this is impacted probablyby the regulations that we have in thiscountry. So if I take this example further,say rst company invests heavily in equityagainst that liability, another companydoesn’t invest in equity! e state ofregulation today may very well give alower liability and lower capital numberfor the rst company. ough all of youand myself would agree that the risk of therst company will be probably higher than

the second company and probably capitalrequirement overall should be higher forthe rst company. e profession needsto work with the regulator, with otherprofessional bodies like ICAI to addresssome of these issues and I would requestthe Chairman that probably we shouldmove towards market consistent, riskedbased solvency framework so that somethese things can be ironed out. Good thingis that an ordinance has been passed, soprobably that allows the regulator to have

far more manoeuvre than it was in the past.Besides regulator, the profession needsto put in place stronger professionalismprinciples so that some of these thingscan be addressed. In this year we will seenew CPD scheme, new COP scheme isgoing to be launched. As I speak, actuarialprofessional standard on CPDs is probablyon the website now for public commentswhich got passed by the Councilyesterday. We would have to introducemechanisms which can probably improve

the quality or if the quality is alreadygood then at least give second assurance,an additional assurance to all the partieswho are relying on the work of actuariesspecically in a certication role. WhenI say certication role then work doneby appointed actuaries or work doneby consulting actuaries under AS15 iscovered in that. So the profession will worktowards strengthening and introducingnew mechanisms which probably auditsthe work of actuaries. Second focus areawould be member services. We have largenumber of students and the statisticsgiven by Dilip Da a few minutes backclearly show the tilt, that we are hardly

around 280 fellows & against which wehave 9000 or 10000 students. Certainlythe fellow members are far limited toserve the interest of this large body. ismeans we need to improve the pass rate ofthe students to increase the pool of fellowmembers. Now how do we do that? So theprofession probably would work towards

introducing more coaching classesespecially in the subjects where the passrates are low, so that students can clearthem. However, if the person doesn’t havean inherent ability to become an actuarythen it is unlikely that this path will serve.So the two prone actions need to be takenaround that. And as I was talking to oneof our UK colleagues day before yesterday,the statistics that he revealed to me wereamazing. When they looked and analyzedtheir data , they found roughly 40% ofthe students who joined them became

qualied actuaries within a span of 10years. at is the global standard whichthey found. However, when they analysedit geographically, the pass rate from Indiawas 6%. 6% of the population who joinsthem become qualied actuaries over aperiod of 10 years. So probably there isa need to strengthen the entry criteriawhich we have, so that we attract the rightstudents, the right kind of talent that weallow to come in to the profession whostarts writing exams. To introduce more

mechanism and facilitation so that thosewho enter the profession can pass papersfaster. e UK body has gone for a dierentsolution. It’s the same problem but thesolution is dierent. ey introducedadditional qualication, analystqualication for these people who arenot able to qualify and who can probablymove in that direction. We are yet to gureout, whether the additional qualicationis going to be helpful for us or not and ifwe should move in that direction or not.

However, we are very clear that entranceexamination for fellowship needs to bestrengthened, coaching classes need tobe introduced. We need to use more ITservices, more technology to improveour services towards members. So that’ssomething which we will be doing overthe course of next year and you will be ableto see that. Some of that will be aroundexamination and some of it towards CPDkind of things that we plan to introduce.Webinar or web based learning which wewill be able to bring to your door-step!

We are a global qualication, we areproud that our students can work in any

geographical part of the world. at alsoputs a lot of burden and responsibility onus in terms of is it still remaining relevantto the word. And as I said earlier, the riskis changing, the prole is changing, soprobably the skill set required by futureactuaries will be dierent than the skillset required by today’s actuary. Globally,

International Actuarial Association,Institute and Faculty of Actuaries,Society of Actuaries, Casualty ActuarialSociety, everyone has started review oftheir syllabus to identify what additionalelements can be added, more importantlyalso what can be deleted. So we will also be joining them to see what needs to be donehere in India.

And last but not the least is transparency.I personally believe that an organizationwhich is transparent has no way other than

to improve, simply because there is a lota responsibility which comes along withtransparency. You cannot be inecient ifyou are transparent. You will be ashamedof yourself. e Indian Governmentgave a great tool to the citizens, to theindividuals – Right to Information. Soeven if an organization is not transparent,a person has right to information to askfor any information that he/she desires.Ministry of Finance, if you go to theirwebsite, have put that tool on the internetsaying that you don’t even have to take anytrouble. Just go to their website and ask forany information that you want. So in casewe falter on our transparency, in case wefalter around anything, I would requestyou all to use right to information so thatwe remain on our toes. is is true for anygovernment organization including us.

So this is the direction where we needto move and I do hope that next year I’llbe here to say that some of these thingswe have achieved and will be probably

looking ahead and creating more work forus, where do we go from there.

Do write to us. You have our email ids;everything is there on our website. Dowrite to us so that we can get to knowwhat it is that you want and how bestwe can serve you. anks for yourpatient hearing! I am looking forward tointeracting with you all and also attendingsome of the sessions. Very interestingsessions are planned and I am personallyinterested in quite a few of them and hope

to see you all there. anks!



8/60


9/60

is necessary. In this regard, we mayconsider what has been reported in thepress during recent Delhi elections that60% of the electorate are earning lessthan 16,000 rupees per month. Unlessthere is a suitable product positionedto attract them, we are leaving out 60%of an urban market like Delhi. Insurers

generally prefer to adopt technology.e preference should naturally resultin saving signicant amounts. ough,Indian insurance market has witnesseddecent reduction in the premium ratesunder protection products especiallyterm life policies and motor policies byoering them through online mode, thesituation is not the same for most otherinsurance products. Apart from salesprocess, convenience and ease of accessfacilitated by the digital technologies

have signicant inuence in persistencyand renewal rates. It is heartening toobserve that persistency rates of insurancepolicies sold through online medium arerelatively higher when compared to thosesold through oine mode. e situationclearly indicates the increased utility tocustomers with enhanced transparencyand cost eectiveness oered by onlinemode. us, making available the optionof carrying insurance related transactions

(sale of policies, premium collections,submission of claims, etc.) usingtechnology should be taken up as a costsaving opportunity for consumers ratherthan for income augmentation of insurers.Actuaries should ensure optimumutilization of technology in design of theproduct, design of the processes includingactuarial valuation. Pricing disciplinecontinues to be an area of focus more so innon-life segment of the business. Recently,the burning cost data is published by

Insurance Information Bureau of India.Such benchmarking is expected toimprove the situation in this area.

In the case of insurance, distribution playsa very important role. Enhancing theavenues of distribution with emphasis oncost eciency by leveraging technologyand existing infrastructure has to befocused. By eectively utilizing technology,we can address the insurance needs oflow income groups as in case of earlier

referred segment of Delhi population.Collection of small premium at higherfrequency (daily, weekly, monthly modes)should be possible when we utilize and

link up the options available by the CSCs,Mobile premium collections, etc.

Quite oen it is observed that insurancecapital is spent on establishing distributionrelationships with large corporate entitiesto leverage their presence or strengthsarising out of their existing customer base.Such relationships shall be approached by

insurers with a view to enhance value tothe end customers rather than to benetsolely for themselves or such otherentities. Not just life insurance, even in themotor insurance business we observe thetrend. Where does the eect of premiumreduction go? Whether it goes to the endcustomers? We should address the issue.Another area of concern is the emergenceof unregulated entities in the distributionspace with relatively opaque remuneration

/ compensation arrangements andquite oen such entities are active andenjoy monopoly in certain geographiesparticularly among low income groupsegments of the society with undesirableconsequences for the insurance industry.Actuaries can play an active role in earlyidentication and disincentivizing suchleakages and sensitizing the insurersand regulators about the increased riskemerging out of such unregulated entities.

Cost of distribution is an important factorin running insurance business and giving value to the customers. During 2013-14,in case of Indian private life insurers, thetotal commission paid to the distributors isaround 5% as against operating expenses ofaround 20%. We observed that marketingexpenses are signicant proportion ofthe operating expenses. If we considerthe operating expenses in respect of rstyear premium collection and relatedmarketing activities, the ratio could be

much higher. ough the operatingexpenses in formative years of a lifeinsurance company could be signicant,but owing to the fact that most of today’slargest private insurers have commencedtheir business more than a decade ago,the level of operating expenses beingobserved highlights the higher xed costcomponent associated to the procurementof business. e desirable situation inrespect of procurement of business isto have higher variable component of

expenses. Variable component shouldbecome higher, that’s the best way ratherthan much higher xed expenses which

supports the business procurementactivity. e situation of non-life insurersin the industry is no dierent in respect ofmanaging their operations. In meeting the

statutory expense limit, many life and non-life companies are facing challenges. Eectof lack of necessary control on expensesis reecting on the premium collected or

benets oered to the customers.Insurance is by nature a complex businessto manage and it requires involvementof professionals from diverse areas likenance professionals, doctors, engineers,legal experts and actuaries’ role is centralin running insurance on sound nancialbasis. Actuaries are expected to ensurecoordination with all business functionsand well versed with the activitieshappening across various functions

of an insurance industry for them toappropriately design / price a product andfor maintaining adequate level of solvencyto honour policyholder liabilities. Indianregulatory regime requires critical roleto be played by the actuaries through thesystem of ‘Appointed Actuary’ and wideranging powers are given to facilitatefullment of their duties and obligations.Owing to the deep understanding ofthe business and skill to analyse thedata, actuaries are better placed to

communicate the issues to be focused in anappropriate and convincing manner. ecommunication includes both internal tothe business organization and also publiccommunication which would facilitate inshaping appropriate public policy.

Emergence of new risks like technology,operational, strategy as also regulatoryis making the actuaries’ job morechallenging. We heard about a new poolcoming in, the nuclear pool. Surprises,

if not crisis, in some of the advancednancial markets have triggered globalinsurance regulatory reform withenterprise risk management and market

consistent balance sheet approachesbecoming central theme as we see inSolvency-II or Insurance Capital Standardof IAIS and imminent global accountingstandards IFRS-4. e message from theseemerging standards is that the role ofactuaries in the management of insurancebusiness is going to enhance further. e

conference facilitated knowledge sharingand healthy debate on topical issues.



10/60

Te Actuary India – Editorial Policy Version 2.00/23rd Jan 2011

A: “e Actuary India” published monthly as a magazine since October, 2002, aims to be a forum for members of theInstitute of Actuaries of India (the Institute) for;

a. Disseminating information,

b. Communicating developments aecting the Institute members in particular and the actuarial profession ingeneral,

c. Articulating issues of contemporary concern to the members of the profession.

d. Cementing and developing relationships across membership by promoting discussion and dialogue on professionalissues.

e. Discussing and debating issues particularly of public interest, which could be served by the actuarial profession,

f. Student members of the profession to share their views on matters of professional interest by way of articles andwrite-ups.

B: e Institute recognizes the fact that;

a. there is a growing emphasis on the globalization of the actuarial profession;

b. there is an imminent need to position the profession in a business context which transcends the traditional andspecic actuarial applications.

c. e Institute members increasingly will work across the globe and in global context.

C: Given this background the Institute strongly encourages contributions from the following groups of professionals:

a. Members of other international actuarial associations across the globe

b. Regulators and government ocials

c. Professionals from allied professions such as banking and other nancial services

d. Academia

e. Professionals from other disciplines whose views are of interest to the actuarial profession

f. Business leaders in nancial services.

D: e magazine also seeks to keep members updated on the activities of the Institute including events on the variouspractice areas and the various professional development programs on the anvil. E: e Institute while encouragingstakeholders as in section C to contribute to the Magazine, it makes it clear that responsibility for authenticity of thecontent or opinions expressed in any material published in the Magazine is solely of its author and the Institute, anyof its editors, the sta working on it or "the Actuary India" is in no way holds responsibility there for. In respect ofthe advertisements, the advertisers are solely responsible for contents of such advertisements and implications of thesame. F: Finally and most importantly the Institute strongly believes that the magazine must play its part in motivatingstudents to grow fast as actuaries of tomorrow to be capable of serving the nancial services within ever demandingcustomer expectations. Version history: Ver. 1.00/31st Jan. 2004 Ver. 2.00/23rd Jan. 2011

VOLUNTEERING OPPORTUNITIES

IAI invites its fellow members and qualied actuaries of IFoA, UK and IAA, Australia to join in itsVolunteering Opportunities Initiative. rough this platform, members will be able to share ideas, gain abroader perspective and experience of work outside their own specialist area, through networking withpeers, gain CPD hours and be able to give something back to the profession. We invite members who respectthe IAI values and what it stands for and wish to take the profession to newer heights of success throughtheir willingness to share their knowledge and/or skills by working in partnership with peers/colleagues.

If you are interested in applying, please visit our website for more details : www.actuariesindia.org



11/60

id Actuaries ever consider mosquitoes in their risk

matrix?

Probably not or at least not seriously. It appears that, atime has come to consider the “mosquito factor” as one of thesignicant items in the risk matrix as the survey has received anumber of references on mosquitoes as a risk factor at least for allfuture GCA’s!

Apart from few criticisms on dierent aspects of the event andalso suggestions to introspect on the academic value of sessionsand its apparent departure from the theme of the event, it appearsthat participants assigned “value for money and time” to 17th GCAand 2015 AGFA at large. It’s no wonder that organising such anevent earned appreciation from a very large section of the

participants every year, keeping in view of organisational lapsesand aws experienced in similar conferences in spite of theirmuch longer years of accomplishments.

GCA registrations in recent years appear to be more or lessstationary and counted 724 this time. A 95% of registeredmembers turned out as delegates from more than 120 companies/Institutions. ere were 60 speakers from India and abroadtogether enriched the two day conference sessions.

3 3

61 60

153 150

88 79

419394

724686

Registrations Turnout at the Conference

17th GCA-Registration & turn out counts

A ff il ia te s A ss oc ia te s F el lo ws O th er s S tu de nt s T ot al

e survey is limited to 16 questions which were very relevant forthe organisers to understand the pulse of the delegates, however,

there were verbal feedbacks from participants expressing viewsthat the survey is too long to handle and many questions appear tobe irrelevant and out of context for them. is feedback alsoappears very sensible from the point of view of participants aseach delegate might have presented themselves to limited numberof sessions and have exposed to only limited scenarios of theevent. A proposal to overcome these issues might be to reach outto delegates on the spot while sessions are in progress orimmediately aer a session in order to capture the impression ofacademic part of the conference; the overall impressions on theconference may also be collected from the venue by appropriate

methods. Let’s look at such feasible alternatives next time!e respondents of the survey appear to be a good cross sectionalrepresentation of conference delegates, hence the impressions ofsurvey respondents reecting the pulse of the event. Now, let’s

look at the feedback from 154 survey participants questionwise,barring few questions which rated speakers of both plenary andconcurrent sessions.

Q.2 152 respondents

55.9%

36.2%

65.1%

13.2% 5.9%

By e-mail Advertisement

in “The actuaryIndia magazine”

Institute of Actuaries of

India web site

Reference fromsome one

Any othersource

Q.2 How did you come to know about the EVENT(multiple answers possible)

A number of member service initiatives recently rolled out by theInstitute made active members to visit the website frequently isreected in the survey with 65.1% of them have the GCA site asthe primary source of GCA related communications and updates;this followed by regular e-mails from the marketing team alertingmembers about various aspects of the conference includingtimelines. However, few members expressed that such frequent

reminders turned out to be counter-productive for many as theyhave many instances ignoring such mails without reading. emarketing team may need to nd alternative methods to excludethose who have already done their GCA related jobs and alsolimiting the mails with the same objective.

Q.3 152 respondents

8.6%2.6%

17.8%

38.2% 42.1%

59.9%48.7%

2.6%

Q.3 The primary reason/s for attending the EVENT(multiple choice possible)

Being a SpeakerComplimentary entry - Partner’s quotaCPD creditEmployer sponsorshipLearning from deliberationsNetworking opportunitiesThe only major Global Actuarial/Insurance EVENT in a year in India

ere are multiple reasons for participants attending the GCAevent. Many employers favour their actuarial team by sponsoringpart/ full cost of their participation. e CPD credit and

networking opportunities appear to be main reasons for fellowmembers to take part. However, there are quite a good number ofdelegates keen to learn from deliberations as well. e reasons,though multiple in nature appear to serve the purpose of

2015 AGFA & 17H GCAPARICIPAN’S SURVEYSUMMARY REPOR

D



12/60

delegates and most of the objectives of the organisers.

17th GCA- Day 1 17th GCA- Day 1 and

2015 AGFA

17th GCA- Day 2

66.2%80.1%

94.0%

Q.4 Date/s and events you attended the EVENT(multiple ticks possible; please click all dates that

you attended)

It was a vi brant e vent

Nothing glo bal a bout the conference.

Please k eep speak ers on R ole of actuaries in

Non-Traditional areas lik e In vestments too.

Una ble to use credit card to pa y for e vent f or

international participant.

As this was m y rst time attending and register-

ing for the conf erence f rom outside of India, it

was a little length y. If I attend next y ear, I no w

k no w what to expect.

Website could be much better

On the website it w as mentioned that the Student e vent

w ill have sessions on "What an actuar y is?" And how to

answer people when the ask "What w ork do y ou do?" I

could nd that part in the Student E v ent.

Te site w asn't ver y easy to na vigate. Key features lik e

the schedule should be easily accessible.

Te content of the presentations should be enhanced.

Some presentations did not really mak e an impression

and some came across as not v ery well prepared.

Q.6 Cover notes on the website from the perspective of being of use to you (Rating from 1 to 6, 6 being the highest)- 153

respondents

Cover note Average rating

Economic & Demographic trends 4.38

Enterprise & Risk Management 4.24

General Insurance 4.18

Health Insurance 4.02Micro Insurance 3.84

Pensions, Employee Benets & Social Security 4.10

Q.5 Rating (1 to 6, 6 being the highest rating) on Website and admin support

153 Respondents

Website and admin support items Average rating

e Website? 4.68

Details of Speakers displayed on the website 4.72

How smooth was the online payment process for registration? 4.96

If you booked hotel room through the site, how smooth was the process? 4.45

e hotel booking appears to be less hassle-free among all services. ough there is scope for improvement of all above services, 87%of survey participants rated all functions 4 and above which is a good indication. Few comments removed aer nding irrelevant;there are few comments found not related to the question, however, retained.

Comments

75% of survey respondents rated all cover notestogether with ratings 4 and above. Purpose of cover

notes is to share some important updates on economyand insurance market in India in a short format and allratings makes sense.

Q.4 151 respondents

e result cannot be generalised for all

GCA delegates as it was observed that theAGFA participants were less than thosewho have been present during the rst daysessions.



13/60

Far o from airport and local railway stations

Acoustics at seminar halls could be better

It was too cold in the session hall making it too dif-cult to sit at a stretch for more than 30-45 mins.

During the breaks, the space looks too crowded.Sometimes dicult to move properly, especiallyat the rst break on Day 1

I liked the room set-up and the comfortable chairs... more comfortable than you would nd at most

conferences in the US.

I wo u ld li k e to see GCA h

a p pening a t ne w and

be t ter p laces e ver y year. Sam

e cen tre is becoming boring

f or

e ver yone and some ne w cen tre wi l l he l p in

a t trac ting in ter-

es ts o f t he a t tending mem be

rs.

Tere were a lo t o f mosq ui t

oes a t t he ven ue inside t he

con-

f erence rooms. Yo u co u ld se

e s pea k ers si t ting on t he s tag

e

s he wing a wa y mosq ui toes /

tr ying to k i l l mosq ui toes

Si t ting in one session ha l l y

o u co u ld hear t he sessions

on

in t he o t her ha l l. Wo u ld be

be t ter i f t ha t didn ' t ha p pen.

I wo u ld s ugges t to ha ve a

hard loo k a t c hanging t he

ven ue. Poor q ua li t y o f room

s, mosq ui to menace, poor

q ua li t y o f f ood ser ved d urin

g t he con f erence - t here is

no reason w h y we ha ve to s tic k

to t his ven ue ne x t

t ime.

IME AKEN FOR REGISRAION

Less thanabout aminute

About 1 to lessthan 2 minutes

About 2 toless than 5

minutes

More thanabout 5minutes

Not applicable(Notregistered on day 1)

Not applicable(Not registered

on day 2)

Totalresponded

GCA-Day 1(2nd Feb’15)

17.33% 20.67% 27.33% 34.00% 0.67% 0.00% 150

GCA-Day 2(3rd Feb’15)

28.95% 13.16% 7.89% 1.75% 6.14% 42.11% 114

Q.7 Registration process time at the counter- 150 respondents

Q.8 Services and venue rating (Rating from 1 to 6, 6 being the highest) 152 respondents

Items Average rating

Eciency of help desk 4.97

Overall ambience at the venue - Renaissance Mumbai Convention Centre Hotel 4.79

Convenience of access to venue 4.43

Networking facilities 4.60

Space availability for movement- Halls and Corridors 4.27

Ease of locating & movement from one Session Hall to another 4.79

Ratings on items such as convenience of access to venue and space availability reecting the reality as the venue is quite far away,particularly for those who are reaching to the airport from other locations. e space availability was also limited due to arranging foodservices within the limited space of corridors. Both are important takeaways for organisers.

Comments

Sometimes the rooms were not marked clearly, had togo to multiple sessions before nding the right one.

e halls were so cramped, smaller in size than lastyear. Water bottles were placed only on one side andhence people on the other side of the hall had towalk out for water. Not enough time to network

with people as sessions were packed

O n D ay 1, t he mo v e me nt o f d e l e g at e s

f r o m t he l e hand si d e d o o r t o t he r i g ht si d e si t t i ng ar r ang e -

me nt w asn' t v e r y c o nv e ni e nt as t he r e w asn' t any s p ac e f o r

me mb e r s t o w al k ac r o ss t o t he o t he r si d e e x c e p t f r o m t he

f r o nt . I t d i st ur b e d t he s p e ak e r s. Al so , l o t s o f mo squi t o e s

i nsi d e t he hal l .

M ai n hal l w as t o o c r am p e d f o r t he e ar l y se ssi o ns.

Ac t ual l y d ang e r o us f r o m a he al t h and saf e t y ( r e )

p e r s p e c t i v e .

N o f av o ur ab l e e nv i r o nme nt t o ne t w o r k .

An incident of breakdown of the system on day1 at the peak time of registration has made quite a good number of delegates waiting formore than 5 minutes at the counter. e issue needs to be seriously looked into by the IT team not to repeat in future



14/60

Q.9 Ratings on 2015 AGFA items (Rating from 1 to 6, 6 being

the highest) 140 respondents

ItemsAverageRating

e Program Structure 4.58

Ambience and Seating 4.59

Dance events 4.54Compering 4.63

Maths Stars Awards 4.58

Magic Event 4.73

Family Videos 4.52

Associate, Fellowship and otherExcellence Awards 4.91

Light and Sound Eects 4.43

ose who were present at 2015 AGFA appear to have enjoyed

most of the events.

Comments

Q.10 Ratings on Plenary sessions (Rating from 1 to 6, 6 being

the highest)- 143 respondents

Plenary sessionsAveragerating

P1- Inaugural 4.32

P2- S2- Diversity and the importance of

promoting actuaries on a global stage

4.38

P2- S2- Current issues on Life Insurance-Global 4.65

P2- S2- Current issues on General Insurance in India 4.21

P2- S2- Current issues on Retirement Benets Practicein India

3.65

P3- S5- Welcome & Setting the Scenario 4.27

P3- S5- Regulatory challenges in Pension industry 4.20

P3- S5- US Dened Benet (DB) environment 4.24

P3- S5- Sum up and Vote of anks 4.17

P4- S6- A brief update on actuarial issues 4.47

P4- S6- IPO in Insurance Industry 4.39P4- S6- Actuaries Role in GI-Challenges andOpportunities 4.33

P4- S6- Maturation of Global Actuarial functions inIndia 4.22

Te seating was too close so lots of disruption

when people enter/lea v e. Almost e v er y one had le

their seats f or the Maths stars awards which were

disappointing...these awards should be gi v en bef ore the

Fellowship Awards so e v er y one is still seated. Magic

show and dancing were en jo y a ble. I f eel the program

topics are lack ing f rom a content perspectiv e and the

indiv idual presentations in each plenar y session had no

real link to each other nor reall y spok e to the "expecting

the unexpected" theme. Te industr y appears to see

GCA purel y as a network ing e v ent at this stage with

little to be gained f rom the presentations themsel v es

and this is a missed opportunit y in m y v iew.

Te Indian dance perf ormances can be a v oided.

Especiall y the Boll y wood dances as such a f ormal

and prof essional e v ent. Also, while pla y ing the

v ideo of the f amil y of students o btaining f ellowship,

it’s usef ul to show the picture of the person who

o btained the fellowship.. We still don’t recognise

the students onl y their f amil y !

I belie v e that last one of the Magic e v ent was not

suita ble f or the prof essional conf erence.

I ha v e attended concurrent sessions, i was seating

in last middle row ....i m not a ble to see an y

speak er as well screen .....as camera man is hiding

the screen and stage height is v er y low ...sound is

pathetic, as half of times mic is not work ing in

those session.

I r e ally lik e d e ac h as pe c t of t he pr og r am

se par at e ly , in par t ic ular , t he pr e se nt at ion of t he Assoc iat e and

F e llow shi p aw ar ds. H ow e v e r , put all t og e t he r , I t houg ht t he

e nt ir e pr og r am w as a lit t le le ng t hy . At t he e nd, t he r e w e r e f e w

pe o ple st ill sit t ing in t he se at s. I t houg ht t he mag ic ian w as

r e ally g ood, as w e ll as t he danc e r s. N ot u p t o t he mar k . e p

r og r amme of G C A ne e ds

a c om ple t e ov e r haul.

D id not unde r st and any t hing t he mag ic ian w as

t r y ing t o c onv e y . M at h St ar s aw ar ds w as a r e ally g ood

init iat iv e .

O pe ning t he bar be f or e t he aw ar ds f or mat hs st ar s

w e r e g iv e n should hav e be e n av oide d. e r e w e r e har dly

f e w le t o a p plaud t he e or t s of t he k ids w ho had be e n

inv it e d s pe c ially f or t his e v e nt . is show e d sc ant r e s pe c t

t o t he e v e nt .

L ig ht s on t he st ag e / s pe ak e r s c ould hav e be e n

br ig ht e r . e qualit y of pr o j e c t ions of t he pr e se nt at ions

w asn' t g ood. I t w as not shar p and w as dull, not br ig ht .

e one s on t he T V sc r e e ns w e r e g ood.

in the same plenary are not necessarily linked to eachother or to the theme of "Expecting the Unexpected". ismakes it dicult for the audience to engage. When introducingspeakers, short introductions are much eective than readingout very long bios. Topics should be more focussed aroundreally relevant and pressing issues facing the industry e.g.

transparent management of with prots business General: Lack of Focus & Research Content



15/60


16/60

Q.12 Attendance on Concurrent Sessions

Concurrent Sessions Responsepercentage

Responsecount

C1.1 Regulations, Actuarial and Business issues (Life) 54.1% 66

C1.2 Behavioural drivers of Mortality experience 45.9% 56

C1.3 Results from Gen Re’s Survey on Critical Illness 40.2% 49

C1.3 Global emerging actuarial issues and the role of emerging markets in meeting actuarial needs 40.2% 49

C2.1 Regulation, Actuarial and Business issues (GI & HI) 30.3% 37

C2.2 Actuarial modernisation 31.1% 38

C2.3 Applying behaviour economics lessons to Health Insurance 32.8% 40

C2.3 Health Insurance: Leveraging of Global Best Practices 19.7% 24

C3.1 Regulation, Actuarial and other issues (Pensions) 22.1% 27

C3.2 Accounting standards on Employee Benets (AS15) 18.0% 22

C3.2 Improving disclosures in nancial statements- Strengthening Corporate governance 13.9% 17

C3.2 Serving the Public interest: Co-existence of Accounting and Actuarial Profession 15.6% 19

C1.4 Current state of Bancassurance 29.5% 36

C1.4 Regulation and impact of life industry 34.4% 42

C1.4 Insurance Education 30.3% 37C1.4 Distribution in Life Insurance 37.7% 46

C1.5 Pandemics and other Catastrophes: managing the impact on your life and health portfolio 27.0% 33

C1.5 Participating Business in India: where do we go from here? 30.3% 37

C1.5 Changing product designs 33.6% 41

C2.4 Problem? What Problem? An heretical perspective on the ageing population burden 28.7% 35

C2.5 A structured approach to dening and identifying risk 29.5% 36

C2.5 Role of Actuaries in ERM 47.5% 58

C2.5 Issues in implementation of ERM in a Non-life insurance company 34.4% 42

C3.3 Takeaways from the study on salary scales of PSU Banks (1947-2013) 11.5% 14

C3.4 Global update on Retirement Benets 14.8% 18C3.4 Canadian Mortality studies 13.1% 16

F r ank As he ’ s p r e s e nt at i o n w as v e r y e ng ag i ng .

I t w as e x c e l l e nt .B e hav i o ur al d r i v e r s o f M o r t al i t y e x p e r i e nc e

b y M .K ar unani d hi w as al s o v e r y g o o d .

A d i e r

e n t r o o m

s e t u p m

i g h t h a v

e f a c i l i t a

t e d m o r

e i n t e r a

c -

t i o n f r o m t h

e a u d i e n

c e d u r i n

g t h e c o

n c u r r e n

t s e s s i o n

s.

S pe a k e rs i n ge ne r a l

we re o k a y is h. S pe a k

e rs w h ic h c a tc h t he

a t te n t io n o f t he a ud ie nce t h ro ug

ho u t t he i r s peec h a re

needed.

I t hin k we ha ve to promote some more session li k e Ma yur has

gi ven .....crisp and wit h ne w t hin k ing ......ot her wise i f ound

most of session repeated.

Comments



17/60


18/60


19/60


20/60

Session 1: Inaugural Session

Chairperson :

Mr. Dilip Chakraborty ,

Chairperson, 17th GCA Organizing Group

Speakers: Mr. Rajesh Dalmia, President,Institute of Actuaries of India; Mr. SVijayan, Chairman, Insurance Regulatoryand Development Authority, India;Mr. K Subrahmanyam, Chairperson, IAI

Advisory Group on Peer, Stakeholder andInternational Relations

Mr. Dilip Chakraborty

Mr. Dilip Chakraborty welcomed theelite gathering of 735 participants,including 34 overseas participants. Hebegan with a brief introduction on thetheme of the conference “Changing Risks,Expecting the Unexpected”. He linkedthe topic to the current situation prevailing

in India relating to economic uncertaintyand political developments. He noted thatthere has been a transformation of theeconomic scenario which has producedspectacular results for the InsuranceIndustry and has resulted in hugeoptimism in the industry. He believed thatthe industry in some sense is EXPECINGHE UNEXPECED. He aptly correlated‘Changing Risks’ part of the theme to thenew risks such as nuclear liability risks. He

emphasized on Actuaries expanding thehorizons in analysing and quantifyingsuch non traditional risks.

Mr. Rajesh Dalmia, urged the actuaries inprocess of understanding and managingrisks to focus and prepare on unknownrisks like global warming, deadly bacteria,cyber wars and threats. He then spokeabout the challenges that Indian Actuarial

Profession is facing and the need forstrengthening professionalism. He thenfocussed on developmental issues likeintroduction/improvement of COP &CPD procedures, introducing measures toimprove the quality of actuarial work, useof more IT to improve services,strengthening entry criteria in theprofession, focussing on changing thesyllabus and introduction of coaching forsubjects with low pass rates. He acceptedthat the profession needs to work with theregulator and other professional bodieslike the ICAI. As regards the Life InsuranceIndustry, Rajesh appealed IRDA chairmanto take steps so that industry moves on tomarket consistent risk based solvencyframework to address the inconsistencyissues.

Mr. S Vijayan, in his key note address

said that the annual GCA event providesan excellent platform to discuss topicalissues where actuaries play an active anddecisive role and also serves the purposeof improving image of the profession in

the country. He gave vital statistics on theIndian insurance penetration andexplained the role of IRDA in addressingthe information asymmetries, ensure

transparency and provide value tocustomers. He spoke about improving thebusiness environment to provide immensegrowth opportunities for Insurance andReinsurance industry. He also explainedthe importance of improving thetechnology penetration, enhancingaordability of products, meeting the

needs of low income groups, improvingthe premium collection modes andfrequency, improving internal andexternal communication, protability ofinsurance companies, importance ofexpense control and need for having selfsustaining products.

Mr. K Subrahmanyam

Mr. K Subrahmanyam presented the voteof thanks expressing gratitude to thespeakers, delegates, and sponsors of theconference.

Session 2: Issues related to the

International Profession & Industry;

Current Issues in Life Insurance,General Insurance and Retirement

Benefits Practice in India

Chairperson: Ms. Fiona Morrison,

President-elect, Institute and Faculty ofActuaries, UK

Speakers: Mr. Nishit Majmudar, CEO,Aviva, Singapore; Mr. G. Srinivasan;CMD of New India Assurance Co.,Ltd.,India; Mr. D K Pandit, Partner, M/S.

K. A. Pandit, India

Ms. Fiona Morrison focussed on thepromotion of actuarial skill set and valuesthat actuaries could bring in the changing

world. She also stated that to be successfulin a world full of change, it is important tobe adaptable and embrace diversity of theindustry in which we work. She also

PLENARY SESSIONS

Venue:

Renaissance Mumbai ConventionCentre Hotel, Powai

Date: 2nd- 3rd February, 2015

Organized by:

Institute of Actuaries of India

Ms. Fiona Morrison

Mr. Rajesh Dalmia

Mr. T S Vijayan

17TH GCA REPORTAGE



21/60

emphasized that the future of investmentsand impact of ageing population are hugechallenges for the industry. Actuarial skillset is vital in nding and implementingsolutions to these challenges which canhelp in supporting and development ofthe insurance industry. She then spokeabout Certified Actuarial Analyst (CAA)

which is a professional qualication basedon technical actuarial skills andunderpinned by membership of aprofessional actuarial body. e worldwiderecognition need and value for actuarialskills in regulation, decision making andrisk management makes CAA a new valuable qualication and careerdestination.

Mr. Nishit Majumdar

Mr. Nishit Majumdar shared his 25 yearsof experience in Life Insurance. He shareda heart touching example before movingto the topic of his presentation about howthe dream life industry looks like.According to him happy customer,wealthy shareholder, satised regulatorand strong distributor are key componentsof dream life industry. To achieve thisdream he highlighted a few things that canbe improved like expanding the planninghorizons, increasing customer focus inlinked business and for improvingpersistency, talent development andcontinuity in profession. His presentationinspired to make customers and otherstakeholders happy.

Mr. G. Srinivisan began his presentationby providing the current status of General

Insurance (GI) industry in India. Hetouched upon the aspects like opening upof the pricing under de-tari regime, leand use system, regulation for policyholder

protection and monitoring solvency andthe grievance redressal mechanism. Hehighlighted the recent developments inthe GI sector in India including the PMsJan Dhan Yojana where in the secondphase covers insurance and pensions. Hediscussed the issues relating to lowpenetration levels, high combined ratios,

low protability and evolving regulations.According to the speaker, despitesignicant changes in GI industry overlast 14-15 years, the penetration level islow and there is tremendous potential inthe years to come.

Mr. D K Pandit

Mr. D K Pandit briefed about the statutoryand voluntary employee benet schemesavailable in India. He linked the denedbenet scheme structure to the 17th GCAtheme. He also spoke on the keycharacteristics of the employee benetschemes available in public and privatesector organisations. He highlighted therole that actuaries play in valuing such

schemes under various statutes andaccounting standards. He addressed theaccounting, investments, legislative andeconomic issues concerning suchschemes. He advised on the need to createa balance between DB and DC schemes,have a real trustee system and pensionprotection fund.

Session 3: Regulatory Changes in

Pension Industry; US Defined Benefit

(DB) environment

Chairperson: Mr. Rajesh Dalmia,

President, Institute of Actuaries of India,India

Speakers: Mr. Hemant G Contractor,

Chairman, PFRDA, India; Ms. EmilyGingrich, Vice President – AIG Life &Retirement, FSA, American InternationalGroup, USA; Mr. Dilip Chakraborty,Chairperson, 17th GCA Organizing Group

Mr. Rajesh Dalmia welcomed the guests,speakers and delegates on the second day

of the conference. He spoke on theimportance of pensions given the jointfamily system breaking down and how it

becomes a social cost if there is noindividual provision. He highlighted howincreasing longevity and maintainingexpenses is going to be a challenge.Progress in pension industry is slowdespite of introduction of NPS which isthe lowest charge product in the world. Heinsisted on having incentives like tax

breaks to encourage retirement provision.He urged that IRDA and PFRDA worktogether to achieve the common goal offullling the dreams of the people.

Mr. Hemant G. Contractor

Mr. Hemant G Contractor briefed on therole of PFRDA in regulating NPS andother pension schemes. He also spoke onhow PFRDA is actively involved inpromoting NPS to increase the pensioncoverage in the country. He provided keystatistics on the number of subscribersand amount under management for the variants of NPS scheme. He discussed the

challenges in regulation, supervision andpromotion and the measures to face thosechallenges. One of them is includingSvavalamban in phase II of Jan DhanYojana. He also highlighted the role thatactuaries can play for NPS. He also urgedon the need to make people of the countryaware to save for pensions.

Ms. Emily Gingrich introducedretirement security as a three legged stoolwith government provided social security,personal savings and employer pensions(public & private) being the three legs. Sheprovided an overview of the US retirementmarket where the liabilities for public andprivate DB plans exceed the assets. Shediscussed the state of social security andpersonal savings and the need for actuarial

Ms Emily Gingrich

Mr. G Srinivisan



22/60

analyses, nancial literacy, andimprovement of product designs. She alsohighlighted the challenges faced by publicand private pensions and how DC plansare becoming main employer-sponsoredpension vehicle. She spoke on actuaries’role in de-risking of pension plans usingLiability Driven Investing (LDI) strategies.

Mr. Dilip Chakraborty discussed the rolethat actuaries can play in PFRDA. He alsoexplained how actuaries can partner withPFRDA and assist in the accumulationand de-accumulation phase of NPS. Hehighlighted the role that PFRDA can playin managing and regulating the benetdesigns governed by act of parliament orpay commission. He spoke about theactuarial services relating to benetprojections, measurement and disclosures;

asset liability matching, demographicanalyses and investment advice.

Session 4: Updates on Actuarial Issues

Chairperson: Ms. Pournima Gupte,

Member Actuary, Insurance Regulatoryand Development Authority, India

Speakers: Mr. Kunj Behari Maheshwari,

Consultant, Towers Watson, India; Mr. S SGopalarathnam, Managing Director,Cholamandalam MS General InsuranceCompany Ltd, India; Mr. Ankur Agarwal,

Head - Actuarial, AXA Business Services,India

Ms. Pournima Gupte

Ms. Pournima Gupte briefed on the Life,

Health and General InsuranceRegulations. She spoke about how the2013 regulations covered every aspect tobring stable regime for product approval,consistency in designs and good value topolicyholders. She also mentioned aboutthe dra regulation on expenses ofmanagement in life insurance where inthere is a need for all stakeholders ininsurance company to understand thesignicance of prudent expenses

management. She then highlighted the2013 product regulations for healthinsurance along with guidelines forstandardisation which addresses most

Ms. Kruti Patel

is a commerce graduate fromUniversity of Mumbai and a FellowMember of Institute of Actuaries ofIndia

[email protected]

ABOUT THE AUTHOR

concerns of policyholders, standarddenitions and methodologies. Shediscussed about the development ofgeneral insurance industry post Mar12including initiative taken by authority forthe analysis of valuation report andnancial conditions report. She alsoemphasized on the need for strengthening

actuarial department in GI companies.

Mr. Kunj Behari Maheshwari spoke onthe Initial Public Oering (IPO) byinsurance companies. He briefed on thelisting regulations in India including themanner and procedure listed in IRDAregulations, 2011. He discussed the keyconsiderations for Indian insurers and thereasons for them opting for an IPO.Explaining the advantages anddisadvantages of an IPO, he set out theprocedure for IPO and he also highlightedan actuaries’ diverse role in this process

including the key input of Statement ofOpinion on economic value, theunderlying basis and adequacy of reservesto the prospectus. He discussed the choiceof methods and assumptions which aregoverned by Indian Embedded value asper APS10 and the disclosurerequirements.

Mr. S S Gopalarathnam

Mr. S S Gopalarathnam provided detailson the current GI industry environmenton de-taring, pricing inadequacy, variedreserving practices and very little productdierentiation. He highlighted the rolethat actuaries currently play in reserving,pricing, decision making, solvency andasset liability management. He listed the various roles that actuaries can play inbusiness development, managing risks

and technological innovation. Hediscussed the skill set requirements foractuaries to comply with the emergingroles. According to him, the emerging rolefor actuaries is moving from image of‘Controller’ to ‘Enabler’/’Analysts’.

Mr. Ankur Agarwal presented the

actuarial value chain with respect to thebusiness value of each function andwhether it is rule based or involves

complex judgement. Changing businessenvironment in the form of customerexpectations, technology and riskmanagement is unprecedented. He spokeon the transformations taking place ininsurance industry in the form ofcustomer centricity, product strategies,operational agility and regulatorycompliance. He explained the list of globalactuarial functions and how can theyconvert risks to opportunities using theright strategy. Despite of its conventionaland upcoming challenges, actuaries canplay pivotal role in this strategictransformation through propermanagement, innovation, exibility andability to learn and adapt.

e two day conference saw activeparticipation from the delegates andeveryone had a common goal of ‘Servingthe Cause of Public Interest’ to achieve.

Mr. Ankur Agarwal

Mr. Kunj Behari Maheshwari



23/60

here were 5 concurrent sessions onlife insurance, 3 sessions on the rst

day and 2 sessions on the secondday of the GCA. All the 5 sessions reectedthe theme of the conference, i.e.“Changing Risks, Expecting the

Unexpected”.

Session 1: Panel Discussion on

Regulation, Actuarial & Business Issues

Chairperson: Mr. Chandan Khasnobis -Director and Appointed Actuary,IndiaFirst Life Insurance Company Ltd,India

Speakers: Mr. Chirag Rathod - AppointedActuary & Director - Products & Strategy,Canara HSBC Oriental Bank of CommerceLife, India; Mr. B N Rangarajan - ChiefRisk Ocer and Appointed Actuary, ExideLife, India

Mr. Chandan Khasnobis introduced thepanel and gave a brief introduction aboutthe discussions to follow. He briey talkedabout the Life Insurance Industry duringthe last 14-15 years. He also mentionedabout the regulatory changes during 2005,

2010 and 2013 which were aimed atstandardising the products and bridgingthe gap between the products andcustomer’s needs.

CONCURRENT SESSIONS ONLIFE INSURANCE

Venue:

Renaissance Mumbai ConventionCentre Hotel, Powai

Date: 2nd - 3rd February, 2015

Organized by:Institute of Actuaries of India

Mr. Chirag Rathod started the discussion

with the question that how much timeactuaries actually work on looking atcustomer outcomes from the products.Does the customer really understand theproduct and if their needs are actuallymet? He also mentioned that the increasein consumer activism and informationasymmetry is causing a shi towardsprinciples based regulations. e thingsthat are expected from an Actuary arecoming in the form of regulations.

From sales perspective it is moreimportant to know the customer groupsfor which the product does not work thanthose for which it works.

He suggested that the following should beconsidered at the product design stage:

m suitability (the target market)

m the risk and protability andreasonableness of customerexpectations

m exible to cope with customer’schanging circumstances

m a process to regularly reviewcustomer feedback

m focusing on the customer’s full journey and not only the point of sale

m actively engaging customers and notonly going by technical and legalaspects

He concluded by saying that a goodproduct design is necessary but not aguarantee for good customer outcomesand actuaries, being technically sound,have to play a meaningful role inprotecting policyholder’s interests.

Mr. B N Rangarajan raised the followingquestions that we should ask ourselves atthe time of product design:

m Will we buy this product orrecommend to someone we

personally know?

m Does the customer really want thefeatures available in the product?

m How the product will be sold to the

customer?He insisted on the importance ofprotecting the policy which is not onlyimportant for the insurance industry butalso our profession. We should also be in aposition to help if the customer expresseshis concern over the unsuitability of theproduct to him anytime during theproduct lifecycle.

An audience raised questions aroundmutuality in insurance and pooling ofrisk, Mr. Chirag Rathod responded that

insurance business is surely mutual and itis one of the reasons why he has chosenthis career. Regarding the risk pooling, hesaid that pooling is not only for the riskpart but also for other factors such asinvestments and he has seen many caseswhere pooling has benetted thecustomers.

To another question regarding insurancebeing a business of giving and takingmoney, Chirag said that there is nothing

wrong in this, however, insurance businessshould be seen as giving away uncertaintiesand taking certainties in return.

Session 2 : Behavioural Drivers of

Mortality Experience

Chairperson: Mr. N M Govardhan -Actuary and Former Chairman, LIC ofIndia

Speakers: Mr. M Karunanidhi - ExecutiveDirector, Actuarial Services, RGA, India

Mr. M Karunanidhi’s presentation wasabout how policyholder behaviour aectsthe mortality experience either their ownindividual risk or by impacting the relativerisk of the insured pool. He commentedthat most of the challenges we oen tendto have are due to overlooking some basicsof the insurance business.

Showing the statistics of trends in smoking

habits, obesity & suicide of some countrieshe stated that there is an improvement inthe prevalence trend of smoking (male)and increasing trend in obesity. Using the

T

17TH GCA REPORTAGE

Mr. B N Rangarajan, Mr. Chandan Khasnobis,Mr. Chirag Rathod



24/60

George Akerlof’s “Lemons” model hedemonstrated how the informationasymmetry between the applicant and theinsurer create an unraveling market forboth.

Underwriting reduces informationasymmetry between the applicants andthe insurer. He highlighted that the

primary objectives of underwriting whichincluded minimization of adverseselection, accurate assessment of riskprole.

He also stated that making quick decisions,minimising intrusiveness or underwritingcosts and maximising business aresecondary goals. Simplied underwritingimproves the secondary goals, howeverexperience sometimes tends to be muchworse than originally anticipated. Using

the example of post-level term productexperience he showed how the anti-selective behaviour of people aectsmortality. He also commented that thedemand for insurance is positivelycorrelated with the risk.

He concluded with the following threeopportunities are available to insurers tomanage the overall experience of aninsurance product:

1. Pre-issue stage – improving

sentinels, need based selling,competitive pricing, pre-screening

2. Selection process – soundunderwriting practices, need basedcoverage, reducing informationasymmetry

3. Management of the insured pool – sound claim practices, policyholderretention, encouraging favourablepolicyholder behaviour.

Session 3 (I) Results from Gen Re’sSurvey on Critical Illness

Chairperson: Mr. Richard Holloway -

MD, South East Asia, Milliman, Singapore

Speakers: Dr. Wolfgang Droste - ChiefAdvisor, Asia, Gen Re, Germany

Dr Wolfgang Droste’s presented high levelresults of Gen Re’s 2008-2012 DreadDisease Survey conducted across 8countries namely China, Hong Kong,

Malaysia, Singapore, South Korea,Indonesia, ailand and Australia andlooks at more than one million claims. He

mentioned that dread disease productshaven’t yet reached the popularity in Indiaas in any other Asian market.

He presented the main trends emergingfrom China where A/E for “Death only” isslightly decreasing due to mortality

improvements, however there is a steepincrease in the trend for “AcceleratedDread Disease only” for both males as wellas females. According to the surveyCancer is the leading cause of claims inChina, Hong Kong, Malaysia andSingapore. It is followed by ischemic heartdisease in males and stroke in females.

He also presented the trends in specicincidence rates of cancer, heart attack,stroke and kidney failure. It was interesting

to see the detailed trends of various cancersites. In particular he talked about theworsening yroid cancer experiencefrom Korea and the lessons one shouldlearn from the deteriorating claimsexperience.

To a question from the audience on anyparticular reason for the huge dierencein the experience of thyroid cancer inChina and Hong Kong, Dr Wolfgang saidthat they are still analysing this trend and

as of now he does not think that there areany ethnicity issues involved. Also, theincidence rates are expected to go up ifthere is an increase in medical screening.

ere were other questions pertaining topoor take-up of dead disease products inIndia and re-pricing of dread diseaseproducts.

Session 3 (II) Global Emerging Actuarial

Issues and the Role of Emerging Markets

in Meeting Actuarial Needs

Speakers: Mr. Andrew Rallis - ExecutiveVice President and Global Chief Actuary,MetLife, USA

Mr. Andrew Rallis started his presentation

on Global Emerging Actuarial Issues

and the Role of Emerging Markets in

Meeting Actuarial Needs with a briefabout Metlife background. Using themodel of transformation of Metlife’sActuarial processes he described the

important aspects of the role of theActuarial professionals. He stated thatActuaries need to be seen as trustedadvisors in a company.

Moving on to the systemic importance ofinsurers globally, he discussed about theincreasing number of regulators and theirrequirements including Solvency II. epresentation also covered low interest rateenvironment and how to manage itsimpact on the business. He talked about

importance of scaling and exibilitywithin an organization and to workaround customers’ needs.

He concluded by giving an overview ofkey service oerings of Metlife’s oces inIndia & Argentina. He highlighted theimportance of shared service centres foractuarial talent and global developmentsleading to demand for actuarial services.

To a question from the audience about any

regulatory issues faced while operatingglobally, Andrew Rallis replied that theregulatory issues needs to be handledlocally and because of global Actuarial

Mr. Andrew Rall is, Mr Richard Holloway, Dr. Wolfgang Drose

Mr. M Karunanidhi & Mr. N M Govardhan



25/60

professionalism standards he has not facedany regulatory problems directly.

Session 4 : Panel Discussion on Current

Industry Issues

Chairperson: Mr. Kamalji Sahay -Advisor, GIC Re, India

Speakers: Mr. Sudhin Roy Chowdhry -Ex Member (Life) IRDA, India;Mr. Sushobhan Sarker - Director, NIA,India;Mr. Tomas Mathew - Ex Chairmanin Charge, LIC of India

Mr. Kamalji Sahay talked about theCurrent State of Bancassurance in India.

He started with a brief about how theglobal economic meltdown and the eorts

by the regulator to correct the industry

slowed it down. e new regulationswhich aimed at all products being re-ledresulted in de-growth on the number ofpolicies. He also said that aer thereduction in the number of available plans,a majority of the sales professionals do notnd any new product attractive enough tosell.

He mentioned that bancassurance channelis the star channel for distribution in Indiasince 2005-06. Companies in Indiathought on using the large network ofbanks for distribution of insuranceproducts aer the channel’s success wasobserved in France and Spain. ischannel achieved huge success only inurban or metropolitan areas still itgenerated about 44% of the premiums. Healso talked about the drawback of therestriction on a bank to tie up with onlyone life insurance company. e demandfor allowing banks to have more than one

tie-up was increasing as many companieslost their direct agents with the downslideof ULIPs. Very recently Reserve Bank of

India came up with guidelines on howbanks should sell products of dierent lifeinsurance companies.

He concluded by saying that a lot isexpected from Bancassurance channelalthough it is not that simple as it is yet toperform very eectively. However, a lot of

clarity has come and also the InsuranceLaw amendment ordinance has beenissued by the Government of India whichindicates progress and growth for theindustry.

Mr. Sudhin Roy Chowdhry through histalks threw light on Regulation and itsimpact on the Life Insurance Industry .

He started that with the brief history and

roles of the regulator. e regulations arenot meant to harm the business but arethere to ensure that the industry isperforming the way it should be. He saidthat the Insurance Act was introduced in1938 and since none of the laws are staticregulator came up with an ordinance tochange some of the Acts. He also sharedhis experience of working with aninsurance company and then the regulator.

He said that during the last 2 years theregulator has been successful in correctingthe market a lot. He also mentioned thatone big blunder that insurance companiesdid, while bringing in ULIPs, was to putshareholder’s prots above customer’sinterests which a major reason for ULIPdownslide. He discussed the problemsassociated with ULIPs that were broughtin. at was the trigger when the regulatorthought of correcting the market.

He also listed the salient points of theamendments in the Insurance Act, 1938:

m stricter lawsm more controls and checks for

companies’ investment pattern

m stringent nesm multi-level marketing is totally

bannedm amendment in section 45

He concluded by advising companies toperform within the regulatory frameworkas regulations are to help to industry. Healso said that companies should pack theirproducts nicely and sell with ethics.

Mr. Sushobhan Sarker shared his

thoughts on the Insurance Education. Hesaid that most of the students he has seenhave no family background in insurancewhich indicates insurance awareness is very low. He talked about introducinginsurance in schools and the gaps ineducation. He believed that rather thanteaching through books basic educationshould adopt teaching about insurancethrough lessons. He also said it is verydicult to nd a suitable insurance courseand that insurance education is notattractive. e industry must oer moreinternship and placement opportunities.

Talking about the higher education ininsurance he said that in view of therapidly changing economy and theindustry, the insurance professionals needto regularly update their knowledge. Withthe total demographic change we havemore number of young people and theindustry must try to attract them. He alsosaid that the technology has advanced so itshould be possible for the industry to oer“Instant Insurance”.

He concluded by highlighting theimportance of continuous professionaldevelopment as lot many changes arehappening in the insurance environment.He also stressed on the need of institutionsto come together at least once annuallyand discuss the issues in expandinginsurance education.

Mr. Tomas Mathew talked about theDistribution of Life Insurance Products

in India. He

Actuary India March 2015

Documents