Insights into Challenges and Opportunities in Life Insurance Industry
Explore the challenges and opportunities in the life insurance industry, focusing on demographic changes, population projections, and evolving demands. Discover how actuaries are adapting with new products and regulatory restraints to meet customer needs effectively.
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Presentation Transcript
Challenges and Opportunities IN LIFE Insurance Industry CILA 24thNovember 2015 N M Govardhan
CILA 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 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 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 Qualitative Changes Information Age Instant Service Digital Revolution-Smart Phones Technological Improvements Social Media Environment Political Economy
ACTUARY Protection Savings- Endowment-ULIPs Living Benefits-Money Back Wellness Benefits-Health Insurance Retirement benefits-Pensions
ACTUARY 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 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 Marketing-Distribution Channels Competition-Industry-Financial sector Corporate governance Image Public Perception Topline-Bottom Line Market share Claims Management
Chief Executive Shareholder Value Risk capital Economic Capital Organic and Inorganic growth Investments Personnel Planning-Strategy Publicity
Chief Executive 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 Funds- Customer behavior New Innovative Products Improving automation Insurance Apps
Chief Executive 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 Policyholder Perspective Regulations- Guidelines Responsibility for Health and Growth Principle Based-File and Use Self Governance Consultation with Industry Chief Executives- Appointed Actuaries-Financial controllers
REGULATOR 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 Information Age Social Media Changing profile of Work and Careers Product Design Living Benefits Health Insurance Pensions Data for efficient Risk management
Challenges & Opportunities Risk Management Derivatives-Options and Guarantees Analytics-Big Data-Social Media Modelling Investment Pensions Reinvention of Annuities
Challenges & Opportunities Non Traditional Risk Based Capital Enterprise Risk Management Call Centres-Mobile Apps Business Processing Units Investment Managers Financial Services
Challenges & Opportunities Modelling Econometric Models Projections Software Research Probability applications Medico Actuarial Investigations
