Need actuaries in non-life firms too: Irda chief

Vijayan said it was imperative that actuaries in companies not just looked at innovative products, but priced it fairly as well

An actuary is the need of the hour, not just in life insurance but in general insurance companies too, according to T S Vijayan, chairman of Insurance Regulatory and Development Authority (Irda). An actuary, in an insurance company, helps assess risks and price an insurance product, accordingly.

Speaking at the Global Conference of Actuaries here on Monday, Vijayan said the demand for actuary professionals had increased not just among insurance companies, but in other sectors as well.

Vijayan said it was imperative that the actuaries in companies not just looked at innovative products, but priced it fairly as well. “We support innovative products. However, the actuary should ensure that the products are fairly priced and the policyholder’s interest is protected. It is a reasonable expectation of Irda that the customer gets a fair deal,” he said.

Talking about product pricing, the Irda chairman said rationalisation was needed in pricing of products in non-life industry and companies should not merely chase the top-line.



Industry sources said several general insurance companies had been providing aggressive discounts in segments like group health and fire-engineering due to which the loss ratios and underwriting profits would be affected.

On the issue of making broking channel mandatory for banks wishing to sell insurance, Vijayan added they were engaged in a dialogue with banks to ensure a smooth transition. “We do not want to make any abrupt change and would not stop corporate agency renewals that are on the anvil. Our motive is to ensure we do what is best for the policyholder,” he explained.

At present, life insurance companies are mandated to have an appointed actuary. However, general insurance companies also appoint actuaries for assessing their product risks.

An actuary in an insurance company helps assess a risk and price it accordingly. Apart from insurance companies, accounting firms and pension firms also employ actuaries. In India, there are about 280 fully qualified professionals in actuarial science, while the actual demand is for 1,000 professionals.

To be a qualified actuary, one needs to be accredited by a body like the Institute of Actuaries of India, apart from pursuing courses in Actuarial Sciences from an institute. This is done after a prospective candidate clears all 15 papers in actuarial science and gets a fellowship. However, companies also appoint individuals who have passed 10 out of 15 papers as an associate in the actuarial department.

Vijayan explained that to ensure that young people get into the profession, Irda has also put in age limits for individuals to become actuaries.