We should have 1,000-1,200 actuaries at the earliest: Irdai chairman

Subhash Chandra Khuntia, Chairman, Insurance Regulatory and Development Authority of India (Irdai), believes that the number of actuaries in the country is abysmally low and not adequate for a country of our size, and hence, there is a need to increase the number of actuaries in the country to at least 1,000-1,200 at the earliest.

Currently, India has only 458 full-fledged actuaries. In 2019, there were 439 actuaries and in a year, that number has gone up by just 19.

An actuary is a person who assesses and manages the risks of financial investments, insurance policies, and other potentially risky ventures. In the insurance industry, actuarial practices revolve around analysing various factors related to life expectancy, constructing mortality tables that provide a measure of predictability.

“If we look at the number of actuaries India has, it is not adequate for a country of our size. At present, we have only 458 full-fledged actuaries. There is also a skewed distribution of actuaries in the sector as there are less number of actuaries available for the general insurance specialisation,” Khuntia said.

“Looking at the number of insurance companies we have and the size of our insurance business,which is 1.7 per cent of the global insurance industry and considering the fact that we have 60,000 actuaries globally, I think we should at least aspire to have 1,000-1,200 actuaries in the country as soon as possible,” he added.

He also mentioned that sometimes the regulator finds it difficult to get the required number of actuaries in the insurance industry.

Speaking at the Virtual Actuarial Conclave 2021, Khunti said, there is a need to change to the IFRS 17 accounting system by the insurance sector. Last year, Irdai deferred the implementation of IndAS (Indian Accounting Standards) in the insurance sector until the International Accounting Standards Board (IASB) issues a final amendment to International Financial Reporting Standard 17 (IFRS 17).

The regulator had planned to implement IndAS 117, an equivalent of IFRS 17, and IndAS 109 from April 1,2020  onwards, but the IASB decided to amend IFRS 17.

The regulator is also in the process of introducing risk-based solvency in the insurance sector. Currently, insurers are required to hold assets that are 1.5 times their liabilities. But, once a risk-based capital framework comes into place, the insurers will have to hold capital in proportion to the business they write. If they are writing riskier business, they will have to hold more capital and vice-versa.

Irdai chairman also said that the regulator would like to move over from the file and use system of product approval to use and file system to the extent possible.

“We have already started this in some of the segments and we would like to go further. Unfortunately, this experiment which we tried sometime back, we found that some of the use and file products did not live up to the regulatory requirement,” he said.