Rapid globalisation and expansion has laid bare myriad opportunities, and actuaries are urged to play an important role in tapping these opportunities, said speakers at the 16th Global Conference of Actuaries held in Mumbai, India in February. The event, organised by the Institute of Actuaries of India, highlighted the critical role of actuaries and also re-emphasised as in previous years the huge demand for them in India.
Demand for actuaries is increasing and Mr T S Vijayan, Chairman, IRDA, in his keynote address, said that in order to keep pace with the demand, increased publicity of the profession could be one measure to attract talent.
He also urged actuaries to stay committed to public interest in insurance product development and sales and not be swayed by short-term profit making goals.
Globally relevant and locally compatible
Mr David Hare, President, Institute & Faculty of Actuaries (IFoA) spoke on the changing role of the actuary and stressed that actuaries should ramp up their roles to wider facets and build strong communication skills in order to remain relevant in the dynamic business environment even as the growing number of professional statisticians, financial engineers and complacency could be potential threats to the profession.
He also gave a brief introduction of the Certified Actuarial Analyst which is a new actuarial qualification and membership category from the IFoA. It would potentially help promote and publicise actuarial science and the value it adds to the society and also help the profession attract diverse and fresh talent.
Concurring, Mr M Karunanidhi, President, Institute of Actuaries of India (IAI), said the education system should ensure that the skills acquired by actuaries are globally relevant and locally compatible.
Innovation, out of the box thinking, embracing technology and optimisation are the need of the hour. He stressed upon the fundamental fabric of insurance products which is offering protection and “serving the public interest” and the vital role the actuarial profession can play in a move towards sustainable insurance, encompassing environmental, social and governance issues in its realm.
Contribute to robust and resilient financial system
Mr Arup Chatterjee, Senior Financial Sector Specialist. (Insurance and Contractual Savings), Asian Development Bank, said that actuaries are part of the solution to the notable problems in the financial markets in Asia and can support the design of innovative financial products aided by sound underwriting decisions and ensure the implementation of international financial standards and best practices.
He added that they can contribute towards the evolution of a robust and resilient financial system that can effectively preserve financial stability and contribute to balanced growth and development in Asia.
Cooperate for better financial results
Mr M M Chitale Chairperson, National Advisory Committee on Accounting Standard (NACAS) & Ex-President, The Institute of Chartered Accountants of India (ICAI) discussed the need for co-ordination between actuaries and accountants.
In case of financial statements preparation for life and general insurance business, the role of actuaries emerges as a part of certification of insurance liabilities. Hence, the credibility of financial statements would be determined by the ethics and value system of both the accountants and actuaries. He stressed upon the need for adequate disclosure of actuarial basis changes from year-to-year and its impact so the accounting principle of consistency is upheld.
The status of life and non-life sectors in India
Turning to the industry locally and globally, Mr Vivek Kuruvila, Head of Life and Health Client Markets, India, Swiss Re, urged insurers, reinsurers and the current regulator to work in synchronisation in the given rapidly changing environment. He stated that there is a need to look beyond mathematical exactness and account of emerging trends in making decisions.
Mr John Holden, CEO, Canara HSBC Oriental Bank of Commerce Life Insurance Company India, presented his ideas on the changing insurance distribution paradigm and the interactions between greed, fear, complacency, confusion, remorse and pride when an insurance product is offered for sale to a consumer. He also noted that mis-selling results in stricter regulations, increased cost of compliance and weeds out the bottom layer and hence it should be guarded against.
Ms Asha Nair, Director & General Manager, United India Insurance Co Ltd, spoke at length about the problems in the general insurance industry, its large underwriting losses and the difficulty in selling non-life insurance due to its annually renewable nature.
She also mentioned that there are myriad products in the market with various terms and conditions which the consumer is not aware of until a claim arises. This dearth of public awareness leads to mis-selling and customer trust-deficit issues persist. There is a need to adopt a customer-centric, quick service approach, innovate and ensure rapid alignment with regulations in order to strengthen the non-life insurance industry, she said.
The 16th Global Conference of Actuaries was organised by the Institute of Actuaries of India (IAI) in Mumbai in February with the theme of “Evolving Frontiers, Exciting Prospects”.