The Cabinet Committee on Economic Affairs (CCEA) had in July given its in-principle approval for the listing of insurance behemoth Life Insurance Corporation of India (LIC).
The IPO of the state-owned life insurer is part of the government’s efforts to raise Rs 1.75 lakh crore through disinvestment in the current financial year.
Speaking at an event to mark Actuaries Day, Agrawal said amid global challenges, India has continued to develop as an emerging economy with a financial system that has matured, deepened and achieved scale.
The needs of this emerging India are in many ways different, he said, adding the insurance sector, over the two decades since the introduction of competition and regulation, has matured with 69 insurers today as against only eight in 2000.
“A majority of these have crossed their initial breakeven phase. Once the proposed listing of LIC happens, about 60 per cent of the insurance industry business would be with listed entities. The sector as a whole has been growing at a pace significantly higher than that of the overall economy,” he said.
Currently, there are four listed life insurers, and two in the non-life segment. State-owned re-insurer is also listed on bourses.
Agarwal further said in the development of new solutions needed by this emerging India and its maturing insurance sector, the actuarial profession have a key role to play.
Perceptions of risk have heightened on account of the once-in-a-century pandemic, he pointed out.
“Other global risks are also looming, large climate change concerns and rising incidence of catastrophic events have sharply raised awareness of environmental risks.
“Further, with the increased pace of technological change and innovation, new ways of carrying on businesses and engaging in individual pursuits are constantly emerging,” he said.
While no historical data are available in respect of these, he said, the financial risks on account of the same would nevertheless need to be managed.
New forms of cyber risks, as well as new transport solutions such as autonomous vehicles, and space travel are a few examples, he noted.
Therefore, he said, by continuing to expand the application of actuarial methods within traditional areas such as insurance, annuities and benefits, there is a need to engage with emergent risk areas as well.
Fertile ground for cultivating innovative approaches to assess and manage such risks is already available in the form of ever-growing volumes and variety of data, coupled with the enhanced ability to connect secondary and tertiary data points across activities almost on real time basis, he said.
Actuaries can help raise a bountiful crop of new solutions by actively engaging with businesses and technologies to identify new opportunities, and address emerging challenges, the official added.
Even within traditional areas like insurance and pension, actuaries can enrich risk management if based on inclination and aptitude, individual trained actuaries consider joining other departments like finance, marketing and underwriting, he added.
