Challenges and Opportunities
IN
LIFE Insurance Industry
CILA
24th November 2015
N M Govardhan
CILA
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THREE PRISMS
ACTUARY –Technical Professional Perspective
Chief Executive-OVERALL Perspective
Regulator- Customer INDUSTRY Perspective
Demography
• Changing Demographics
• Demography deals with the study of both the
Quantitative and Qualitative aspects of the
human population. Quantitative aspects include
composition,density,distribution,growth,size and
structure of the population.Qualitative aspects
are the sociological factors such as
education,qualityof life, ,development, diet and
nutrition, social class,wealth,well being ,health.
Population Pyramid of India
Population Pyramid: 2001
Projected Population Pyramid: 2026
Impact on Population
Projections 2001-2026
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1.2%increase per year
Decline in Crude Birth Rate 23-16
Decline in Crude Death Rate 7.5-7.2
Effect - decrease in population<16
Effect - increase in population 16-60
Effect - increase in population>60
DEMOGRAPHICS
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459 million between 13-35
333 million literate young indians
62% of literate youth live in villages
66% of population<35
Average Indian in 2020-29 years old
Average USA&CHINAin 2020-37 years old
Average W Europe in 2020-45 years old
DEMOGRAPHICS
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Qualitative Changes
Information Age
Instant Service
Digital Revolution-Smart Phones
Technological Improvements
Social Media
Environment
Political
Economy
ACTUARY
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Protection
Savings- Endowment-ULIPs
Living Benefits-Money Back
Wellness Benefits-Health Insurance
Retirement benefits-Pensions
ACTUARY
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New Products-Regulatory Restraints
Options and Guarantees
Risk based Capital-Solvency II
ERM-Enterprise Risk Management-Economic
Capital
• With Profit Committee-Policyholders Bonus
• Shareholder Value-Embedded Value-Appraisal
Value-MCEV-New Business margin-Guidelines
• IRR
ACTUARY
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Financial Condition Report
Business Analytics
Risk Management
Modelling –Economic scenarios
Stress Testing
Communication Board Public
Sales Presentations
Investments -Strategy
ACTUARY
• Mortality- Morbidity tables
• Valuations-Practice Guidelines-Regulatory
constraints
• Solvency
• Apointed Actuary Role-Responsibilities
Chief Executive
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Marketing-Distribution Channels
Competition-Industry-Financial sector
Corporate governance
Image –Public Perception
Topline-Bottom Line
Market share
Claims Management
Chief Executive
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Shareholder Value
Risk capital
Economic Capital
Organic and Inorganic growth
Investments
Personnel
Planning-Strategy
Publicity
Chief Executive
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Demographic Shifts
Longevity
Instant service
Information Age
Digital Revolution
Mobile Banking Insurance
Apps
Dematerialisation
Chief Executive
• Investment Risk & Return
• Inflation proof assets –Flexi drawdown
• Stringent Regulations-Pension FundsCustomer behavior
• New Innovative Products
• Improving automation
• Insurance Apps
Chief Executive
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Paperless Office
Improving market share
Retaining customers-till Pension payments
Assessing & Reducing operational costs
Assessing Key Drivers of Performance
Targeting best practices –Industry leadership
Integrated Outlook
Analytics-Big Data
REGULATOR
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Policyholder Perspective
Regulations- Guidelines
Responsibility for Health and Growth
Principle Based-File and Use
Self Governance
Consultation with Industry –Chief ExecutivesAppointed Actuaries-Financial controllers
REGULATOR
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INSURANCE Penetration-GDP-LIVES
Development of Industry
Financial Inclusion
Micro Insurance
Investments
Taxation-Service Tax-Tax on savings in addition
to IT-Reliefs & Rebates-TEE
REGULATOR
• Interaction with PFRDA,SEBI, RBI,Government
• Clear Long term Regulations-guidelines
• Consultation with Institute of Actuaries,
Chartered Accountants,Company secretaries
• Marketing Officials
• Policyholders Associtions -NGOs
REGULATOR
• Regulations –Ensure stability
• Positive Catalyst in Growth and increased
Penetration
• IAIS Core Principles
• Corporate Governance
• Global Best Practices
Challenges & Opportunities
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Information Age
Social Media
Changing profile of Work and Careers
Product Design
Living Benefits
Health Insurance
Pensions
Data for efficient Risk management
Challenges & Opportunities
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Risk Management
Derivatives-Options and Guarantees
Analytics-Big Data-Social Media
Modelling
Investment Pensions
Reinvention of Annuities
Challenges & Opportunities
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Non Traditional
Risk Based Capital
Enterprise Risk Management
Call Centres-Mobile Apps
Business Processing Units
Investment Managers
Financial Services
Challenges & Opportunities
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Modelling
Econometric Models
Projections
Software
Research
Probability applications
Medico Actuarial Investigations
• THANK YOU